The BOK “Intensifies the economic power gap between North and South Europe with Corona 19”

-In the aftermath of the novel coronavirus infection (Corona 19), economic power in the euro area contracted significantly, and the gap in economic power between countries in the region widened further.

According to a report on the’Economic Power Gap Status and Implications in the Euro Region After Corona 19′, published in the Bank of Korea’s Overseas Economy Focus on the 10th, the gap in economic growth rate, unemployment rate, and national debt ratio in North and South Europe caused by the global financial crisis and the European fiscal crisis is corona 19 It turned out that the situation has expanded further.

The growth rate of southern European countries such as Italy (-3.6%) and Spain (-3.1%) during 2019-2021 was significantly lower than that of Nordic countries such as Germany (-1.0%) and Austria (-0.8%). The standard deviation of the growth rate between countries has also more than doubled compared to 2019.

The unemployment rate gap between North and South Europe also widened, as the unemployment rate in Southern Europe, where the economic shock was relatively large and employment stability was low, rose significantly. In Italy, where the proportion of self-employed people is high, and Spain, where the proportion of temporary contract workers, is high, the employment shock caused by Corona 19 was found to be significant. It was analyzed that the widening gap between countries in Europe after Corona 19 was due to the degree of spread of Corona 19 and differences in industrial structure. In Italy, the real economy contracted relatively significantly as strong countermeasures were implemented due to the rapid spread of Corona 19. In addition, the economic loss was greater in Southern Europe, where the proportion of service industries such as food, lodging, and travel is higher than that of Northern Europe, which is centered on manufacturing.

This is a diagnosis that Southern Europe’s economic dependence on Northern Europe has deepened and its growth potential has been greatly undermined. Conflict between the two Koreas intensified as southern European political support for the EU (European Union) weakened. The BOK said, “European single currency system is expected to continue, but the concentration of economic power and mutual dissatisfaction between North and South Europe are challenges to be overcome in the future.”


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