Economists say Europe is better able to withstand the winter wave of the new crown virus

It is expected that the EU-wide action restrictions to contain the surge in new coronavirus cases will have a smaller impact on economic growth than previous waves because they target a small group of people: the unvaccinated.

Last winter, the Eurozone was in trouble again economic recession When a wave of infections prompted the authorities to re-implement strict regulations restricting the movement of people, output contracted for two consecutive quarters.

Covid-19 cases have appeared in Europe in recent weeks stand up It reached the highest 14-day rolling average in 9 months and reached record levels in some countries including Germany, Austria and the Netherlands. This makes people doubt the economic recovery of the region.

But economists say that given that almost two-thirds of the EU population is fully vaccinated, it is unlikely that the strict lockdown will be restored, which means that mortality and intensive care unit occupancy rates have not increased at the same rate as infection rates. .

By focusing many of the latest restrictions on people who have not been vaccinated, they believe that the authorities can avoid paralyzing the economy again, while also encouraging those who have not been vaccinated. hesitate Finally got the jab.On Sunday, Austrian Chancellor Alexander Schellenberg confirmed that the federal government is implementing a People who were not stabbed were blocked nationwide, Effective from Monday, and added: “We must increase the vaccination rate. It is shamelessly low.”

Allianz economist Katharina Utermöhl said of the possible economic impact of the new Covid-19 wave on the European economy: “At this stage, we expect consumption to fall, but it will not derail.

“This will be a terrible year again [in-store] Christmas retail sales, but many of them will be transferred to the Internet, we think restaurants, tourism and accommodation will continue to do better. “

Since the recent Covid-19 surge, the number of customers in shops, restaurants and leisure venues has declined. According to data from Google Mobile, retail and entertainment traffic in the Eurozone has recently fallen below pre-pandemic levels, but it is still much higher than last winter’s lows.

This has led to an overall downward revision of the short-term growth forecast for the Eurozone economy in the final months of 2021. But most economists predict that the economy will slow rather than contract.European Commission last week forecast Eurozone growth will fall from 2.3% in the third quarter to 0.8% in the last quarter.

Economists believe that the main reason for the economic slowdown is the supply chain bottlenecks that limit manufacturing output and the sharp rise in inflation that erodes people’s disposable income. Eurozone inflation reached a 13-year high of 4.1% in October.

Berenberg’s chief economist Holger Schmiding said: “I don’t think restaurants will be empty again because the virus will only have a modest impact.” “The biggest downside risk to growth is the supply chain.”

He said that the surge in new virus cases and the new regulations in some countries restricting the access of unvaccinated people to many places and activities may have a “self-correcting” effect by encouraging more people to be vaccinated.

Parts of Austria and Germany have restricted access to restaurants, gyms, cinemas, and sports fields for people who have been vaccinated or who are immune after recovering from the virus-excluding those who have been allowed to enter recently and have tested negative.

A person showing the QR code for online registration of the Hellbrunn Advent Magic Christmas Market in Salzburg
A person showing the QR code for the online registration of the Hellbrunn Advent Magic Christmas Market in Salzburg © Barbara Gindl/APA/AFP via Getty Images

The Netherlands plans to adopt a similar “2G system” after a three-week limited lockdown, in which many public events and leisure venues are forced to close, and restaurants and non-essential stores are forced to close before the evening.

Dutch Prime Minister Mark Rutte said on Friday: “Tonight, we will bring very unpleasant information through very unpleasant and far-reaching measures.” “The virus is everywhere again, so it must be everywhere. Fight.”

Austria’s Schallenberg said these restrictions mean that one-third of the country’s population who has so far opposed vaccination may expect Christmas to be “uncomfortable.” “I don’t understand why two thirds of people lose their freedom because the other third hesitate,” he said.

After the new coronavirus cases in Europe hit a record high of 2 million last week, German Chancellor Angela Merkel said she was “very worried” about the situation and urged one-third of the unvaccinated Germany The population “think again”. Merkel and regional leaders will discuss potential measures to deal with the virus nationwide on Thursday.

In France, the number of coronavirus cases increased by 40% last week-described by President Emmanuel Macron as a “warning sign”. But Anne-Sophie Alsif, chief economist at BDO France Consulting, said that the recovery will “maintain strong momentum this year and 2022 because household consumption remains high and investment and exports perform well”.

Denmark became one of the first EU countries to lift all coronavirus restrictions in September and reintroduced its Covid-19 passport on Friday, allowing access to many indoor spaces and activities.

But Helge Pedersen, Nordea’s chief economist, said that he does not expect this to have a “significant impact” because most of the population is vaccinated and Denmark has strong testing capabilities.

Christian Fürtjes, an economist at HSBC, said that the number of infections in the UK has stabilized at a high level recently, and the latest wave of viruses started earlier than most parts of Europe, indicating that a similar stabilization may soon appear on the European continent.

“If this happens, then most governments will be very cautious about re-imposing the strict lockdown because they are worried about the serious economic impact, and they know that most people are tired of these restrictions,” he said.

Additional reporting by Richard Milne in Oslo, Eir Nolsoe in Paris and Sam Jones in Zurich

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