The euro area economy contracted 15% in the first half of the year. Rapid and powerful economic policy measures have mitigated the damage caused by the pandemic, but there is still substantial uncertainty and recovery will take time.

The corona pandemic has seriously weakened the euro area economy and the outlook remains uncertain. Recovery will be affected by e.g. how successful the balance between the virus and the economy turns out to be, and how quickly confidence improves.

The economic policy measures planned by the new US administration are geared towards fuelling growth. This alternative scenario assesses the possible effects of potential infrastructure investments, tax cuts and the proposed border adjustment tax.

The ’Great Recession’ has lasted seven years now, with a permanent weakening in economic growth. Structural reforms are now needed to kick-start growth.