As the 'full fury' of the virus crisis hits the German economy, the EU plans a trillion-euro escape route for the region.
Julian Satterthwaite reports.
'Full fury' of virus crisis hits German economy
Germany’s economy is now feeling the ‘full fury’ of the global virus crisis.
That’s according to the country’s Ifo institute.
On Friday (April 24) its latest business climate index sank to a record low 74.3.
April’s figure is way below economist forecasts.
The institute said morale at German companies was ‘catastrophic’.
As Europe’s export powerhouse, the country has been battered by the slump in global trade.
Meanwhile domestic lockdowns have squashed consumer spending.
With similar data coming in around the region, the EU is plotting an economic escape route.
Late Thursday (April 23) leaders agreed to build an emergency fund valued at one trillion euros.
Italian Prime Minister Giuseppe Conte said it was a huge step forwards: (SOUNDBITE) (Italian) ITALIAN PRIME MINISTER, GIUSEPPE CONTE, SAYING:"All 27 member countries have accepted, we have accepted, to introduce an innovative tool to react to this health, economic and social crisis: the Recovery Fund.
It will be a fund to drive recovery with common European securities that will finance all the most affected countries, including Italy and other nations.” Not everyone is so sure.
Potentially divisive details are still to be ironed out.
Spain and Italy want the fund to hand out grants.
Austria and others say it should be loans.
Now the European Commission has until May 6 to present a plan, and satisfying both sides won’t be easy.
But no one disputes that major action is needed.
ECB chief Christine Lagarde told leaders that the crisis could knock up to 15% off euro zone economic output.