The European Commission has released its Spring 2020 Economic Forecast which includes its projections for economic growth and employment in the euro zone and in the whole of the EU. It foresees that the euro area economy will contract by a record 7¾% in 2020 and grow by 6¼% in 2021. The EU economy is forecast to contract by 7½% in 2020 and grow by around 6% in 2021. Due to COVID growth projections have been revised down by around nine percentage points compared to the Autumn 2019 Economic Forecast.

While short-time work schemes, wage subsidies and support for businesses should help to limit job losses, the coronavirus pandemic will have a severe impact on the labour market. The unemployment rate in the euro area is forecast to rise from 7.5% in 2019 to 9½% in 2020 before declining again to 8½% in 2021. In the EU, the unemployment rate is forecast to rise from 6.7% in 2019 to 9% in 2020 and then fall to around 8% in 2021.

Some Member States will see more significant increases in unemployment than others. Those with a high proportion of workers on short-term contracts and those where a large proportion of the workforce depend on tourism are particularly vulnerable. Young people entering the workforce at this time will also find it harder to secure their first job.

The social impact of this pandemic will require ambitious, sustained and co-ordinated action at European level. Eurodiaconia therefore continues its advocacy and calls on the European Commission to establish a task force or similar to analyse the social impact and to propose responsive actions using all the legislative, policy and financial tools at the European Union’s disposal. For Eurodiaconia’s work around access to employment it is crucial that, alongside the proposals on an Unemployment Reinsurance Scheme Mechanism, work is accelerated on adequate minimum income and that Member States are given guidance on the level of social benefits that will ensure people are able to retain a dignified life.


To find out more about the Spring 2020 Economic Forecast, please visit the Commission’s website.

To learn more about Eurodiaconia’s work on COVID, please refer to our policy briefing and recommendations paper titled “Protecting the vulnerable – supporting our people“.