Europe’s already fragile economic recovery is at risk of being undermined by a fourth wave of coronavirus infections now dousing the continent, as governments impose increasingly stringent health restrictions that could reduce foot traffic in shopping centres, discourage travel and thin crowds in restaurants, bars and ski resorts.
Austria has imposed the strictest measures, mandating vaccinations and imposing a nationwide lockdown that began on Monday.
But economic activity will also be dampened by other safety measures — from vaccine passports in France and Switzerland to a requirement to work from home four days a week in Belgium.
“We are expecting a bumpy winter season,” said Stefan Kooths, a research director of the Kiel Institute for the World Economy in Germany.“The pandemic now seems to be affecting the economy more negatively than we originally thought.”
The tough lockdowns that swept Europe during the early months of the pandemic last year ended up shrinking economic output by nearly 15 per cent.Buoyed by a raft of government support to businesses and the unemployed, most of those countries managed to scramble back and recoup their losses after vaccines were introduced, infection rates tumbled and restrictions eased.
In recent weeks, the main threats to the economy seemed to stem from a post-lockdown exuberance that was causing supply-chain bottlenecks, energy-price increases and inflation worries.And widespread vaccinations were expected to defang the pandemic’s bite so that people could continue to freely gather to shop, dine out and travel.
What was not expected was a series of tough government restrictions.A highly contagious strain has enabled the coronavirus to make a comeback in some regions.
“The lower vaccination rates are, the gloomier the economic outlook is for this winter term,” Kooths said.Roughly two-thirds of Europe’s population has been vaccinated, but rates vary widely from country to country.
Only a quarter of the population in Bulgaria has received a shot, for example, compared with 81 per cent in Portugal, according to the European Centre for Disease Prevention and Control.
Before they were ordered shut, stores in Austria were already suffering a 25 per cent loss in revenue for November compared with the same period in 2019, the country’s retail trade association said on MondayAlthough the last shopping on Saturday before the lockdown — stores in Austria are closed on Sunday — was stronger than that day two years ago, the group said, it would not be enough to make up for the losses expected in the coming weeks.
New York Times News Service