The EU Commission anticipates the ongoing economic crisis will translate to massive losses for all of Europe's industrial sectors, a German newspaper wrote. The crisis is hitting Europe faster than expected.
Steel is one EU industry in danger
The current economic crisis would mean unprecedented losses in all European industrial sectors, EU Industry Commissioner Guenter Verheugen told the Financial Times Deutschland on Thursday, Feb. 12.
An internal EU analysis of the crisis' effects described massive production and revenue losses in the construction and manufacturing industries, according to the paper. The announcement comes at the EU's business climate index hit its lowest levels since being introduced in 1985.
Cars particularly hard-hit
The automobile industry has been especially hard hit by the credit crunch, as banks are not lending consumers the money they need to buy new cars, the analysis says according to the paper.
Food supplies could falter in the crisis
The EU estimate goes on to project losses of between 43 percent and 57 percent for the steel industry. Protectionist measures being eyed in China, India, Russia and possibly the United States would exacerbate difficulties the European steel industry.
Agriculture in bad shape
The EU's agriculture industry may also be affected by price instability as economic crisis continues.
"The combination of falling agricultural prices and limited access to credit could have negative effects for agricultural activities in the poorest states," the FTD quoted from the analysis. "This has serious implications for food security and aggravates price volatility."
Despite the threats posed to European businesses, Verheugen said Wednesday that neither individual countries nor the European Union could afford to come to companies' rescue.
"The member states and the commission cannot take on the role of a white knight," he said. "The financial options of the EU and of member states are reaching their limits."
European Commission President Jose Manuel Barroso and Czech Prime Minister Mirek Topolanek, whose country currently holds the EU's rotating presidency, echoed Verheugen's call for nations in the 27-member bloc not to enact measures designed to protect domestic industries or companies.
"If one country takes unilateral measures, the others could do it as well, and we would lose Europe's greatest resource -- the single market," Barroso said Wednesday.
The EU's members are scheduled to meet March 1 to discuss ways the bloc can respond uniformly to the difficulties caused by the ongoing economic crisis.