Berlin: – Senior German official Joachim Wuermeling warned ‘The aftereffects of the lockdown in view of Coronavirus, have still not become visible. The Banking sector will have to bear a brunt of the lockdown. It is difficult to predict the scope of jolts on the economic level. But the jolt received by the banking sector, while there are indications that the economy is recovering, will be massive.’ Reports of the Coronavirus infections rising again, are being received from the European countries and some of the countries have indicated imposition of a second lockdown. Against this background, the warning of the German official becomes significant.
In Europe, nearly 5.3 million people have been infected with Coronavirus and more than 225,000 deaths have been reported. The pandemic is playing a havoc in the European countries like the United Kingdom, France, Germany, Italy and Spain. The economic aftereffects of the pandemic are also becoming apparent and most of the important groups and institutions have predicted that Europe will be hit will a severe economic recession. A few months ago, Germany and France and the United Kingdom, the leading economies of Europe even declared recession.
In the month of May, a recovery plan of 750 billion Euros was announced, to pull Europe out of the economic crisis. This announcement by the European Union, is considered to be the biggest package announced in the history of the Union. The scheme was named ‘Next Generation EU’, envisaged providing 500 billion Euros in the form of grants and 250 billion Euros in the form of debt. But the warning issued by the German official indicates that the European economy will not recover despite the historic package.
Joachim Wuermeling, is a member of the executive bord of the German Central Bank ‘Bundesbank’. Therefore, his warning is considered to be the inkling of the new economic crisis in the German economy. Joachim Wuermeling has said in his warning ‘Major crisis could develop in many European companies. Therefore, these companies will not be able to service their debts. This will severely hit the banking sector.’ Two months ago, a European Union report warned that the European economy can enter a severe recession with the slide of a whopping 8%. The German official’s warning only endorses the claim.
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