COVID-19 is testing plenty of aspects of the conventional wisdoms, including that the United States always bounces back from an economic crisis faster than old Europe. From the oil shock-induced stagnation in the 1970s, to the blasting of the dot-com bubble at the turn of the new millennium, to the 2008-2009 financial crisis, that axiom has always been true. But this time may be different.
After a moment of hesitation early in the pandemic, European countries took decisive action starting in mid-March to contain the virus and set up vast furlough schemes to preserve their economies until reopening could begin. The European Union even decided to take on nearly $890 billion in debt to assist its hardest-hit members. And with European consumption creeping back up, the recovery is underway. In July, EU retail trade volumes were even marginally up year-on-year. And Google data shows that visits to shops and restaurants are now close to pre-pandemic levels.
