EC: Croatia’s economy to recover from coronavirus lockdown by late 2021

In 2020, the EU economy is expected to contract by 7.4 percent, a historic plunge for the bloc ravaged by the coronavirus pandemic.

As the outbreak across the continent is slowing down, countries are gradually lifting draconian lockdown measures put in place to enforce social distancing and stem the spread of the disease which has killed more than 137,000 and infected more than a million people across the continent, according to figures from the European Centre for Disease Prevention and Control.

How well countries emerge from this crisis will depend on how severely they have been hit by the pandemic, as well as the stringency of their containment measures, Gentiloni said. It will also depend on their openness and how much their economies rely on worst-hit industries.

Above all, the size of the policy support they undertake will be key, he said.

In 2021, a rebound of 6.1 percent is expected in the EU and 6.3 percent in the euro zone.

By the end of that year, only Germany, Austria, Croatia, Slovakia, and Poland are forecast to reach the level of economic activity from the last quarter of 2019.

By contrast, the level of output in Italy, Spain and the Netherlands is forecast to remain more than 2 percent below the end-2019 level, Gentiloni said.

The lowest fall in economic activity for this year is expected in Poland, of 4.3 percent, while the largest falls are forecast for Greece (9.7 percent), Italy (9.5 percent), Spain (9.4 percent) and Croatia (9.1 percent).

Germany is expected to endure a less steep contraction than most member countries and to recover faster to pre-pandemic output levels. Next year the German economy is forecast to rise at a rate of 5.9 percent.

"Still, Germany is set to experience its deepest recession since the war, at -6.5 percent in 2020," Gentiloni said.