Covid-19 is delaying many production and business activities in Europe, potentially bringing the region into a serious recession.

Unwanted effects of Italy's unprecedented decision to block national blockade to prevent Covid-19 and the prospect that other countries will follow in Rome's footsteps are expected to pose a major political challenge. and European policymakers, especially economically.

European Union (EU) officials, who have spent years dealing with the 2008 recession, are considering using similar tools more than a decade ago, however, The economy thinks that they are not enough to cope with the crisis caused by Covid-19.

For example, measures to cut interest rates and encourage bank lending will not work if workers do not work and consumers do not shop.

The collapse of business operations was the immediate impact of the blockade order that Italy had just issued. When cash flows evaporate, companies are at risk of not being able to pay their bills, staff salaries, bank debts and taxes. Business leaders and politicians in Italy and other countries in the region are calling on the government and EU policymakers to loosen financial regulations to help companies keep their lives alive. The disease passed and commercial activities returned to normal.

"Everything has stalled and this could lead to serious damage," said Massimo Perrella, chief executive of Poliform Lucernari, a roof window manufacturer in Parma province, northern Italy.

According to him, the current situation is much worse than the 2008 economic and financial crisis. "My company is surrounded by anxiety and insecurity," said Perrella. His company has 24 employees, most of whom are family members.

Richard Kozul-Wright, director of the Office of Strategy and Globalization at the United Nations Conference on Trade and Development (UNCTAD), said it is almost certain that Europe "will fall into recession in the coming months".

"The German economy is particularly fragile, but the economy of Italy and other regions on the outskirts of Europe are also facing very serious tensions as a result of the recent situation," he said, referring to the report. Covid-19.

Some economists say that the European Central Bank's (ECB) interest rate measures do not help much at the moment, but others argue that they also bring certain benefits and that no action will transmit even more alarming signals to the market.

"The ECB basically can't counteract the shock from the epidemic but they can reduce its impact, while preventing the shock from spreading, becoming a more serious recession," said Seamus Mac Gorain, former Bank of England official, commented.

Large Italian companies with strong financial resources and global operations are adapting to the blockade. Tire manufacturer Pirelli & Co. and carmaker Fiat Chrysler Automobiles said it will remain active but will minimize meetings and business trips. But small companies are struggling.

Four restaurants belonging to Antonio Viola's Mammina Holding company have been empty since the outbreak of the disease in Italy, though they were all located far away from isolated areas. At another restaurant in Milan, sales in the past two weeks have dropped by 70%.

"The crisis brings terrible effects," the Viloa company director said, adding that in the coming days, he might have to close all the restaurants where 100 employees are working, if the situation The picture continues to be bleak. "This is a real disaster."

Economic experts are urging governments of the eurozone countries to increase spending to support the economy and reduce pressure on the ECB.

In October last year, ECB President Christine Lagarde called Germany and the Netherlands by name. According to her, the two countries should use budget surpluses to increase investments that help stimulate the eurozone economy.

But although Germany has announced a number of limited fiscal measures in recent days, German officials are still opposed to spending deficits and are trying to ease fluctuations in the business cycle.

The Conservative Party of Germany's Chancellor Angela Merkel, which is particularly skeptical of fiscal stimulus measures, is in the middle of a battle to decide on Merkel's successor ahead of next year's national elections. This makes the German government more cautious in taking fiscal measures.

In the context that decisive policy moves are difficult to implement, regulators and government officials are currently most interested in preventing the economic downturn from impacting the already fragile banking system. of the eurozone and minimize its impact on the affected banks.

In Brussels, ongoing discussions are mainly about how to ensure companies, especially small ones, have enough capital to deal with a sharp decline in sales and business activities.

As the number of nCoV infections continues to rise, European populist politicians are trying to take advantage of the medical crisis to serve their own goals.

For Matteo Salvini, former Italian interior minister, leader of the far right of the Union party, the epidemic is an opportunity to convince people that their pro-European government is failing.

"If (Prime Minister Giuseppe) Conte cannot protect the country and the people of Italy, he should stand aside," Salvini said in late February. "The disease is spreading. I want to ask the government who came and left our country. We have to close the border now."

While the wave of Chinese discrimination is spreading globally, Salvini continues to raise fears about African asylum seekers coming from Libya to Italy. "Letting immigrants to Italy from Africa, where the virus has been confirmed, is an irresponsible act," he announced last month.

At the time, Egypt was the only country in Africa to report a case of nCoV. To date, the virus has appeared in a number of countries in the region.

In France, Marine Le Pen, the leader of the National Right Party (RN), earlier this month criticized the government of President Emmanuel Macron for allowing Italian football fans to watch a match in Lyon. She affirmed that "a border is set up to protect people, regardless of the situation".

Right-wing parties in Germany and Spain have called for the suspension of the Schengen treaty, a deal that allows passport-free travel in 26 EU member states. They condemn European leaders for prioritizing "dogmas" of open borders over the health of the people.

But director of the European Center for Disease Control and Prevention (ECDC) Andrea Ammon said the suspension of the Schengen treaty was "unreasonable from a scientific perspective".

The Schengen treaty provisions allow countries to restore border checks if there are special threats to public policy or internal security. Austria, Denmark, France, Norway and Sweden have carried out border inspections since 2015, when the refugee crisis broke out.

"There have been voices urging border closures in some countries and people like Salvini using it to propagate that migrants should not be accepted," said Andrea Mammone, lecturer in European history. University of London, said. "But that is not entirely true because most cases are concentrated in northern Italy."

"At the EU level, the most important strategy is to prevent panic spread," he said.