The world is in crisis. Across the world, governments are taking extraordinary measures to ensure there is a working economy to return to once the crisis has subsided. These measures are necessary and vital for survival, but there will be consequences. The billions and trillions of dollars promised to fiscal schemes will have to be recouped in the future.
In Europe, there was already unprecedented trouble facing the union. In 2016, the United Kingdom held a referendum to leave the EU and conduct trade deals ungoverned by their policies. The British people believed this would give them greater powers over trade, immigration, and other important areas of government. They experienced a hostile reception from the other countries in the EU, and their leader at the time, Mrs. May, was snubbed at important meetings and made to feel like a pariah. Boris Johnson took over the role in 2019, and it seemed a deal could be made to facilitate the UK leaving under more cordial terms.
Then the world was turned on its head as the coronavirus struck in China. Industries across Europe suffered as the trade routes were shut down. Travel was restricted and alternate suppliers were needed by different industries. While this was troublesome, few people could have imagined what was to follow.
As reports came in from Italy signaling the spread of the virus, the rest of Europe still carried on with business as normal. The news was dominated by discussions about the virus, but it seemed inconceivable that whole countries could grind to a halt in a matter of weeks.
Today we find ourselves on lockdown across the world. Travel has halted, and only key workers are leaving their homes to do their daily jobs. There are measures in place keeping jobs open and giving people a feeling of hope. Each country in Europe has different methods to ensure they survive the pandemic, but what happens after the virus has been eradicated or quelled?
There Will be a Recession
Every country in Europe and across the world will suffer some form of recession following the pandemic. It is inevitable, but what should countries, businesses, and individuals be doing to mitigate the effect it will have on them?
Europe and the EU
We have already considered the damage the EU has suffered following the decision of the UK to leave the union. Has the pandemic helped them unite as a union and fight the disease as one? The simple answer is no. The EU has barely made an impact on the decisions taken by the member countries. Germany has its package, as does Italy. The UK and Spain have different measures in place to make sure industries are not destroyed by the pandemic.
In fact, the most compelling effect the pandemic has had on Europe is nationalism. Every man for himself and a rise in right-wing politics means that the borders in place may be difficult to break down in the future. Europe had already witnessed a backlash against the rise of immigration from war-torn countries, and feelings ran high. In 2019 the number of right-wing nationalist votes in the European parliament was the highest ever witnessed.
The EU health ministers did meet twice in early March and arranged for daily phone calls to coordinate plans. However, when the shortage of facemasks became a real problem, France and Germany immediately halted external sales to other countries. One day later, Romania and Hungary followed suit and restricted the sale of PPE.
As the virus becomes more deadly and health concerns arise, it became clear that financial concerns were still the primary consideration for European governments. Europe has become an incohesive ineffective force. Following the crisis, there is a strong indication that other countries may take their lead from the UK and abandon the EU ethos.
The world will look different once this crisis has subsided. China will no longer be a major source of materials for many businesses. Alternatives will have been found, and most people will be reluctant to return to former ties. Businesses will need to be reassessed and made more profitable.
How Can Businesses Mitigate Against Recession?
The most important thing businesses can do is begin now. There are measures that can be put in place to soften the blow of the recession. Businesses should be pared back and be prepared to make changes.
All organizations should take this opportunity to prioritize the gaps that have been unearthed by the crisis. Are there areas of their process that have been hit harder than others, and what can they do about it? How will the recession and the geopolitical situation affect them in the near future?
Business Impact Analysis
In times of stress, there will be areas of the organization that will become redundant. Will this change following the pandemic remains, or can staff be trimmed permanently? There needs to be prioritization and cost analysis. Companies will only survive in the recession if they are running lean.
There will be some important questions to be asked in the next few months, and the answers may need to be harsh. Consider who is the right person/people to make these decisions and appoint them as policymakers.
If you consider the response of some governments to the current situation, you can see the importance of having a relevant decision-maker. Many European leaders have been accused of lacking the backbone to put unpopular measures in place. Nobody wanted to lockdown countries and force people to stay at home. However, that needed to be done if the virus was to be contained. Despite seeing the rapid way that China enforced lockdown Europe still failed to implement measures until weeks after the optimum time.
Now they know a recession is imminent; it is important to begin negotiations about the future of the EU.
As the situation is currently, there are no food shortages. Supermarkets and shops did experience panic buying in the first wave of restrictions, but the situation has calmed down since then. But what will happen 3 months from now? In 6 months, will we all still have enough food? Europe needs to examine self-sufficiency regarding food. If there are borders still in place months down the line, the continent will have no choice but to improvise when it comes to supplies.
Food security will become a prime concern as the disease progresses. How can you be sure the standards of preparation are equal across the globe? The simple answer is you can’t. If single countries become responsible for feeding their citizens, they can at least be assured that standards will be met.
Let’s consider the food situation in the UK. An island nation that is currently not part of the EU as it awaits a final separation in December 2020. Currently, the UK is 60% self-sufficient in all foods and 74% in self-produced foods. They only produce 10% of fresh fruit, yet they have 100% of cereal sufficiency.
Overall, these percentages are high for modern countries. Before the two world wars, they had reduced their self-sufficiency levels to between 30% and 40%. This is the reason that rationing was so severe following the conflicts, and they were forced to imply the Dig for Victory campaign. This was designed to encourage citizens to grow their own food and increase food security.
Following the conflicts, self-sufficiency levels rose to 75% in the UK.
With an estimated population of 63 million, it is a fact that the UK could produce far more food than it currently does. A recession could help the nation come together following the rifts that Brexit caused. Months of self-isolation and potential loss of life will help them pull together and rely less on imports. Food will become more seasonal, which is no bad thing, and marginal land can be turned into arable farming land.
The right market signals could give farmers the confidence to produce more food. The British government should commit to improving technology to produce more for less. They can invest in covered production areas to extend the seasonal lifespan of fruits and vegetables. Laser technology can be used to pinpoint individual weeds and make production more efficient and accurate.
The final question must be, in a recession, will the UK lead the way in self-sufficiency? Will they become the beacon of light in what could be a dark and depressing world?
How the Pandemic has affected Family Life across Europe
As the virus spread, families were forced to spend time in isolation with each other. The lack of outside influence would heighten any tensions, and families will have felt the strain. When the recession hits, this will add further pressure on relationships as the world prepares to heal. Money problems will affect most households in Europe, and it is difficult to see how they will cope once the virus has receded.
The key thing for governments to consider is keeping its citizens healthy, both physically and mentally. Businesses and corporations will survive, or they will fail, only time will tell. People will lose their jobs and houses, which will make them vulnerable and anxious. It is important to provide the survivors of the pandemic with something to look forward to. A future without the virus needs to be a rosy one.
The economic downslide will follow the period of uncertainty and isolation, and it will be challenging. European governments need to provide the means to help each other both during the pandemic and after. Encourage the wealthier members of your society to dig deep and help those less fortunate than themselves. Provide tax cuts for charitable donations and appeal to their humanitarian side.
Prepare for Lifestyle Changes
Across Europe, some children are anxious. They have witnessed adults panic buying and acting selfishly in times of panic. They are then restricted to their homes, with these images becoming their last impression of the normal world. It can be hard to understand what their comprehension of the world has now become. You must prepare them for a return to normality and how it will differ to their pre-pandemic lifestyle.
Take pictures of your shopping trips and reassure them that food is now readily available. Explain that following the crisis, everyone will have to make concessions. Financial implications will mean a time of belt-tightening and cuts for everyone. Make this the time to teach them about money management and good financial habits. Don’t make the mistake of shielding them from the truth; you will be doing them a disservice if you do.
Create Business Opportunities
Post pandemic times will provide Europe with an opportunity to grow. Businesses and organizations will have pared back staff, and there will be higher unemployment. The governments of Europe need to make sure that benefits are available to help these newly unemployed people in times of recession. There also should be grants and schemes available to tap into the possibility of creating new businesses. Unemployed entrepreneurs will only flourish with suitable funding. It may not seem the optimum time to consider these types of ventures, but families still need to be fed. Encouraging people to come off benefits and create their own source of income is imperative for growth.
Credit and Debt
Most households will incur debt during the crisis. There should be measures in place to allow them to go forward without repercussions. These are unprecedented times, and the future is very uncertain. A small measure of common sense will go a long way to repairing a damaged world.
The Final Note
Who knows what will become of Europe and the union when the world emerges from this pandemic. The continent has two choices, they can band together and work as a unit, or they can leave the barriers up. Whichever choice the individual countries make, they must look after their citizens. You cannot heal a country or a continent if the people who populate it are intrinsically broken. We are all citizens of the world, and we all must help each other.