Lengthy volcano eruption would put economy under a cloud

AMSTERDAM -- Even as Europe's dormant airports sputter back to life, prudent travelers and businessmen should ask: What if Iceland's volcano erupts again?

Because it might. Over and over again, for weeks, perhaps months, scientists say.

The last eruption from the Eyjafjallajoekull volcano in 1821 lasted off-and-on for 13 months -- but back then there were no jet engines to get clogged by ash.

What should the world brace for if ash clouds waft over Europe intermittently for six months or a year, repeatedly closing airports with just a few hours' warning?

A devastated tourist industry. Less out-of-season produce at supermarkets. Businesses forced to improvise. And higher prices on just about everything.

Europe's recovery from the economic recession likely would be set back to zero. Banks and governments, worried about runaway inflation, could tighten credit. Railways and roads would be overloaded with freight and people needing more reliable means of travel.

A BMW plant in Germany and a Nissan plant in Japan were forced to close temporarily this week because the ash prevented the arrival of parts shipments. Prolonged disruptions to supply chains could have a profound effect on manufacturing and global trade.

The psychological effects of the uncertainty could be numbing. As long as the volcano keeps rumbling, few people are likely to risk long delays camped out at airports or trapped in overpriced hotels.

Some people may feel more isolated, unable to escape on a cheap last-minute air ticket. They may think twice about visiting family if it means six hours on a train rather than an hour in the sky. Booking a seat on the intercity express may be a lot harder.

Optimists will see benefits in a slower pace of life and the excuse to pass up yet another business conference. Vacations will be closer to home.

The climate might benefit from the absence of polluting aircraft, although the cancellation of 100,000 or so flights would amount to just a blip on the rising graph of the world's carbon emissions.

National railways are enjoying a boom, with extra trains running from Moscow and Madrid and all points in between. Eurostar added 33 trains since the weekend carrying 165,000 passengers from Britain to the continent, or 50,000 more than usual.

Economically, however, the picture would be generally grim.

Travel and tourism account for up to 5 percent of Europe's economic output. Even if the number of travelers drops by just one person in five, Europe would have to scrap its hoped-for return to growth this year, said economic analyst Vanessa Rossi of the London research institute Chatham House.

The spin-off effects of a sharp drop in travel could wipe off 1 to 2 percent of GDP.

"That basically means we've got a continued recession," Rossi said.

"If it persists, it's quite chaotic. You find ways through it, but it's going to be more costly. This is absolutely bad news at the wrong time. But nobody chooses a volcano to erupt. So that's it."

The International Air Transport Association calculated that the airlines lost $200 million a day during the first five days of the volcanic crisis, and carriers are looking to their governments for support.

Tim Clark, president of the Dubai-based Emirates airlines, said the worldwide airline industry faced the threat of "implosion" if the crisis lasts too long. Without government help, "there won't be many carriers left. You simply can't afford to shut down something the size of Europe," he said.