Throughout its history, the European economy has come across numerous crises. The current situation faintly resembles the financial crisis of 2008. However, its magnitude is likely to exceed the then financial collapse.
In 2008, the catastrophe began with the housing market bubble. In this case, the key reason lies in the halt of Russian gas supplies. The Bloomberg agency warns that “eventually the situation with the rise in energy prices may exceed the impact of the global financial crisis of 2008 and the recession that followed it in 2009.” Experts also pinpointed that “both private households and industrial giants, from chemical to engineering concerns, were under attack.” What is more, the sabotage at the Nord Stream gas pipeline has destroyed the hope for any significant Russian gas supplies.
According to the pessimistic scenario provided by Bloomberg Economics, the European GDP may drop by 5%. “This is about as deep as the 2009 recession. And even if that fate is avoided, the eurozone economy is still on track to spend 2023 with its third-biggest recession since World War II, with Germany hit the hardest,” analysts concluded.
