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A COVID-19 Marshall Plan for Europe

The sheer scale of the economic fallout from COVID-19 justifies extraordinary measures, and nowhere more so than in Europe. Rather than questioning one another's motives, EU member states urgently need to unite behind a joint plan to avert economic disaster.

LONDON – Eurozone finance ministers finally agreed on April 9 to a package of measures to respond to the COVID-19 crisis. But in the face of an unprecedented medical and economic emergency, they need to be much bolder.

The lockdowns imposed in most European countries are economically devastating. Because many businesses are shuttered and almost everyone is confined to their homes, consumer spending has collapsed and economic activity has plummeted. Bankruptcy looms for many companies, unemployment is skyrocketing, and household incomes are cratering.

According to one official estimate, France’s economy is now operating at around two-thirds capacity. Assuming that similar contractions apply throughout the European Union, a three-month lockdown would cause annual output to fall by around 8% – a far bigger shock than in the 2008-09 crisis. Tourism-reliant Spain may be hit even harder.