Economics
France, Italy Risk Recession in EU Warning on Virus Impact
- Spike in non-performing loans could follow if outbreak lasts
- Commission officials briefed finance ministers for call
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The coronavirus outbreak threatens to plunge both France and Italy into recession, and the ripples from a prolonged outbreak could incite a “vicious” spiral of declining markets, European finance ministers have been warned.
“A longer and more widespread epidemic could have a disproportionate negative impact through uncertainty and financial-market channels,” according to a European Commission briefing note on the economic impact, seen by Bloomberg. “Cascading effects could stem from liquidity shortages in firms that have to stop production, amplified and spread out by financial markets.”’