Recession Looms in Europe as French Demand ‘Call to Arms’

The euro-area economy may be headed for its first recession in seven years as the coronavirus outbreak takes an increasing toll on businesses and consumer confidence.

With Italy attempting a sweeping lock-down across its richest areas and infections nearly doubling in Spain, economists at Morgan Stanley and Berenberg expect euro-zone gross domestic product to shrink in the first half of the year. In France, the central bank now sees output barely growing in the first quarter.

French Finance Minister Bruno Le Maire highlighted his concern, saying Europe needs a “call to arms” to defend the already-weakened economy. The outbreak ...