The US, meanwhile, is likely to make up for the lost ground already this year, whereas China’s output has not only fully bounced back – it has already returned to its prepandemic trend. Europe should not be satisfied with such outlook. The euro area needs a stronger investment push to speed up our recovery and catch up with the other large economies.
Otherwise, painful long-term scarring effects will become unavoidable. Public investment is key in this regard – especially in the current low-rate environment, characterised by historically low sovereign debt servicing costs as a share of fiscal revenue. As for the private sector, various surveys and reports show that uncertainty now stands as the largest barrier for private corporate investment.