In the realm of public health, if countries are forced to lift necessary public health measures (e.g. lockdowns) prematurely because the economic costs of containment are too high, the virus will inevitably begin to spread again and will further damage the economy. When it comes to the European economy, there’s a similar risk of contagion.
The economies of the eurozone are tightly interlinked through supply chains, financial connections and trade relationships. As a result, a slump in a large part of the eurozone will depress growth and employment across the entire region. These dynamics were on display a decade ago during the sovereign debt crisis, but today’s crisis exacerbates them in two ways.