Some Countries Are Better Armored for Epidemics Than Others
No European country is escaping the economic consequences of the coronavirus, but the pain won’t be divided equally.
Southern Europe, which bore the brunt of the last big economic crisis, will suffer the most. Countries like Greece and Italy depend heavily on tourism and are still suffering the lingering effects of the eurozone debt meltdown over the last decade, including austerity programs that left their health care systems ill prepared for a pandemic.
But even countries regarded as paragons of competitiveness, like Germany and the Netherlands, may turn out to have weaknesses that, until a few weeks ago, were regarded as strengths.
Germany’s automakers, for example, have dominated the luxury car business. But the virus exposed their dependence on sales in China, and now they are closing factories all over the region.
Other countries may have hidden strengths. An economy with lots of companies that can deliver their services digitally, and where employees can work from home, should be relatively resilient. This could be Estonia’s moment; its capital, Tallinn, has a lively digital start-up scene.
The most important economic policy for any country, economists at Oxford Economics point out, is to get the virus under control. That gives the advantage to countries with effective leaders and well-equipped health care systems.