EU braces for economic impact of coronavirus

Brussels: The European Union is bracing for the economic hit from the new coronavirus epidemic, but it is still too early to estimate the magnitude, the bloc’s commissioner for the internal market said Thursday.

Tourism is already feeling the pinch because “our Chinese friends haven’t been coming to Europe for two months,” Thierry Breton told a news conference.

He said supply chains reliant on China, including for the auto, medical, electronic, wood and toy industries, were also being affected. The commissioner spoke after a Brussels meeting of EU economy ministers.

If the disruptions continue, the EU stands ready to deploy economic support measures for virus-hit sectors after another ministerial meeting next month, Breton said.

Right now, however, “it’s too early to say” what those measures would entail. “We are currently analysing the situation.”

He added: “It’s too early to measure the precise impact” from the coronavirus on Europe’s economy.

Italy is the hardest-hit member state, with an outbreak in its economically important north responsible for a dozen COVID-19 deaths.

At a briefing for journalists, EU officials said the bloc was currently in a “containment phase” of identifying infection cases and coordinating on preparedness plans.

One official said the EU was well-prepared and that, while other clusters such as that in Italy may well occur, overall the risk to the bloc was no more than “moderate” because of member states’ capacities to respond.

Closing Europe’s borders – either its external borders or its internal, passport-free Schengen borders – was not seen as advisable or effective, the officials said.

However, there was a possibility that authorities might soon look at cancelling “mass gathering events” such as sporting fixtures, concerts and other opportunities for transmission if it was deemed a good way to slow the virus’s spread.

One official said information from Japan that one Japanese woman appears to have been reinfected with the coronavirus after recovering was worrying and had to be verified.

“That has massive implications for the model that has been constructed” in the EU, the official said.

In a Brussels event hosted by the German Marshall Fund think tank gathering European Commission officials and Asian diplomats and experts, one participant said the virus outbreak was posing a “huge challenge” for China.

“The coronavirus epidemic breaks a path towards a ‘weak China’ scenario,'” the participant said on condition of anonymity, pointing to the risks of internal instability in China and disrupted supply chains.