Southern Europe is the worst affected by the unprecedented COVID-19 crisis, according to the latest Financial Wellbeing Barometer issued by one of the leading debt purchasers and debt collection companies in Europe. 

The research compares and tracks the financial health of consumers across 24 European countries and presents an overall financial wellbeing score for each country – an aggregate ranking that combines scores across three pillars: ability to pay bills, saving for the future and financial literacy, including calculations that considers key indicators relating to consumers‘ debt-to-income ratio.

While the pre-existing household debt and financial instability has been aggravated by COVID-19 in Southern Europe, stimulus measures appear to have protected household incomes in countries like Germany and Austria. Despite ongoing constraints to economic activity in Germany due to COVID-19, the country retains its top position from 2019, followed by Austria and Estonia, while Italy, Spain and Greece have fallen in the rankings.

Southern European consumers have been the worst affected by the COVID-19 crisis, according to the Barometer. Italy’s economy was already performing weakly at the end of 2019 and heavy contractions in employment levels between April and May 2020 hit incomes hard. This has hampered consumers’ ability to pay their bills on time and save – and the country has slid 14 places on the Barometer 2020 and is ranked 23rd among the 24 European countries.

Spain’s workforce relies heavily on tourism, but the industry has been devastated by COVID-19. As a result of worsening unemployment, consumers’ ability to save for the future has been hampered. Combined with declines in respondents’ financial literacy performance, the fall in savings sees the country fall eight places on the Barometer and Spain is ranked 22nd.

Greece, whose unemployment rate is the highest in Europe and whose household net savings rate stood at -15.1 per cent in 2018 (the lowest in Europe), is a non-mover at the bottom of the rankings, scoring poorly on consumers’ ability to pay bills on time and save for the future.

The challenges with the personal financial well-being of Southern European consumers are also proved by a tracker of Deloitte, one of the leading consultancy companies globally, that tracks monthly how consumers behave across 15 countries in the world. The citizens of Italy and Spain have been among the most financially concerned in the current situation 👇 📊.     

The Baltic countries have weathered the COVID-19 crisis better than expected and made strong gains in the Barometer 2020. Restrictions on economic activity have had a significant impact on consumption and employment levels, but relatively low household debt-to-income ratio across all Baltic countries combined with a strong financial literacy performance means consumers from this region are better placed than many to bounce back financially from the COVID-19 crisis. Estonia jumps 17 places in the Barometer 2020 and is ranked 3rd among the 24 European countries. Lithuania is ranked 6th moving up 17 positions from 2019.

It is evident that households in countries that already suffered from financial instability and high unemployment rates going into the pandemic have been worse off in terms of financial health. The research suggests that it is easier for some to achieve financial security than others due to individual financial circumstances and the broader macroeconomic landscape. The conclusion is that consumers with financial education and guidance from public institutions as well as financial services firms, are enabled to make better decisions when it comes to one’s personal finances.