Euro economy burdened by pandemic, seen lagging US and China | Business News

Desy Papper

Cars and trucks drive on a highway in Frankfurt, Germany, on a rainy Friday, Jan. 29, 2021. Michael Probst By DAVID McHUGH AP Business Writer FRANKFURT, Germany (AP) — The European economy shrank 0.7% in the last three months of 2020 as businesses were hit by a new round of […]



Cars and trucks drive on a highway in Frankfurt, Germany, on a rainy Friday, Jan. 29, 2021.




FRANKFURT, Germany (AP) — The European economy shrank 0.7% in the last three months of 2020 as businesses were hit by a new round of lockdowns aimed at containing a resurgence of the coronavirus pandemic.

The drop from the previous quarter was not as sharp as experts had feared. But the official figures released Tuesday couldn’t erase a gloomier outlook for this year: the 19 countries that use the euro are forecast to lag China and the U.S. in bouncing back from the worst of the pandemic.

Tuesday’s figures from statistics agency Eurostat underscored a rollercoaster year of freakish economic data, with a plunge of 11.7% in the second quarter, the biggest since statistics started in 1995, followed by a rebound of 12.4% in the third quarter in late summer.

The winter wave of coronavirus infections has meant new restrictions on travel and business activity, although companies in some sectors such as manufacturing have been better able to adjust than services businesses such as hotels and restaurants.

The German economy, Europe’s biggest, grew by a scant 0.1% in the fourth quarter while France saw a smaller than expected drop of 1.3%. Overall, economists had expected a drop in the eurozone of as much as 2.5%. For the year, the eurozone shrank 6.8%.

The figures arrive amid disenchantment and finger-pointing over the slow pace of vaccine rollouts in the European Union, while the U.K., which has left the EU, started earlier and has vaccinated people at a faster pace.

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