European Economy and Euro 2020 during the Covid pandemic

European economic recovery amid Covid

This is the EU's third crisis in the period of a single decade (the other two being the euro area financial crisis and the migration crisis). Although spending dipped below half in Germany, France, Italy, and Spain during the first lockdown in the beginning of 2020, it bounced back in later months.

Due to the rapid pace of vaccination after a turbulent start, Europe’s economy is starting to recover. Germany recovered during its second lockdown, reaching approximately 85% of its pre-pandemic spending. France also made a similar spending recovery, rising to 80% of 2019’s spending. Spain’s spending, although less than the previous two, still bounced back up to 75%. In Italy, spending reached 70% of the pre-Covid time. French and Italy, especially after being affected the most by the pandemic, made an impressive recovery.

Payouts from the EU’s €800bn recovery package and a push in global trade and activity thanks to the US and China is the reason for a forecast that GDP would grow by 4.2% and by 4.4% in the next two years. Among the pillars of the EU’s economy, Germany’s GDP is expected to climb back up to pre-crisis levels with growth projected at 3.4% and 4.1%. France’s growth is expected to be higher at 5.7% and 4.2%. Majority of EU members are forecast to recover their pre-pandemic GDP by the end of 2022

European economy is slowly getting back to what it was pre-Covid

Although Brexit has impacted trade and investment of several countries, investment is forecast to accelerate in the later half of 2021. Along with the post-pandemic economic recovery, the new EU-UK trade relationship will also become a new normal.

In 2021, international commerce is making a comeback with new FTAs such as the EVFTA and support from the EU for foreign trading companies. One IBC^® predicted that starting a company in Europe to set up a trading route is the ideal business strategy. Businesses should be proactive and seize both ends of the trading route by setting up a company to import from their home country into Europe.

The pandemic has also initiated some lifestyle changes such as working from home and contactless and mobile payments among European customers. This is pushing the market toward integrating more IT and Fintech into their life. Young startups in IT and Fintech are gaining more customers in this market. Setting up a company in the ecommerce or IT service and Fintech field will ensure growth for the long term.

Euro 2020 as a sign for economic recovery

Despite the pandemic not completely gone, Euro 2020 is kicking off with matches hosted in multiple countries. The matches are in Amsterdam, London, Munich and many other places. This year, Euro is different to a normal European Championship or World Cup due to this new hosting setup.

Euro 2016 boosted France's economy by €1.2 billion with more than 600,000 visitors each spending an average of €154 per day. The economic impact this year will be diluted among a dozen hosts. However, on the investment side, the hosts only have to spend enough for a match instead of an entire championship.

A Euro tournament signaling the economy’s recovery

Unlike a normal Euro, quarantine rules are strict and the stadium only allows 50% of the capacity. Even private businesses like bars and hotels will also be subject to rules that significantly limit tourism. However, this year Euro is the perfect example to show how Europe’s economy is recovering or has adapted to the new way of doing business.

European company formation to ride the wave of Economic recovery

Spending is gradually increasing; the government is paying big money for the recovery package to help small and medium businesses; new FTAs signed as well as new policies to find new suppliers to safeguard the supply chain. These are the reasons for One IBC^®’s analyst to predict that foreign trading businesses are very welcome in Europe right now. Exporting to Europe will be a major source of income for the company.

In addition, IT and Fintech companies are also slowly gaining more advantages due to the shift from traditional to digitalized way of working. Consumers in Europe are changing their lifestyle and work habits. One IBC^®’s clients in these fields are gaining major advantages in recent years.

One IBC^® office in Europe and our 10 years extensive experience in the corporate services industry will ensure our clients’ company formation with top class service and competitive pricing. With our professional specialist team, all application and paperwork will be handled quickly and smoothly. In addition, other services such as bank account opening and serviced offices will help digitalize the company’s operation from the beginning.