Europe Faces New Restrictions Challenging Economic Growth

Europe Faces New Restrictions Challenging Economic Growth

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Key Takeaways

• Europe’s outlook not looking bright as Covid-19 weighs on forecasts
• France, Italy, Germany under new harsher lockdown measures

Europe Faces New Restrictions

The growth forecast for the eurozone is not looking bright, according to economists. The third wave of coronavirus infections is sweeping across EU member states. Countries like France, Italy, and Germany are once again tightening restrictions to curb the spread of the virus. In addition, vaccination delays are fueling concerns of a disappointing season for summer tourism.

France introduced a new four-week lockdown in Paris and several other regions. The third lockdown since the start of the pandemic includes harsher measures. Among those, a stricter 6 pm-6 am curfew which now requires most stores to close and imposes a ban over traveling between regions. Schools, however, will stay open as this has been a priority for the government. Around 20 million people will be affected by the lockdown which entered into force on Friday and covers 16 French departments.

The Covid-19 pandemic in France has been accelerating and has sent the number of new daily infections to over 30,000 in the past few days, an increase of 20% in a single week. The recent rise is the highest since November last year. Italy also announced new lockdown measures last week as a response to a sharp rise in confirmed cases. Bars, restaurants, schools are closed in regions that have more than 250 cases per 100,000 people. Over the Easter holidays, all of Italy will be under this lockdown. In Germany, Chancellor Angela Merkel proposed leaving lockdown restrictions for another four weeks as cases are increasing rapidly. The climb in infections comes right after Germany began to relax some restrictions in late February. The incidence rate on seven days now stands at 103 per 100,000 people. The key metric is used by Germany as a gauge of the spread of the virus.

Difficulties Affect Vaccination Campaign

The vaccination campaign across the EU continues to suffer due to vaccine shortfalls, delays, and uneven distribution. In the EU, about 12 people in 100 have received the first jab of a coronavirus vaccine. The number is less than a third compared to 37 in the US and roughly a quarter of the UK’s rate of 43 people per 100.

European Commission President, Ursula von der Leyen, attempted to ease coronavirus concerns in Europe in a press conference last week where she said the European Union will receive a substantial increase of vaccines for the second quarter. “Now we have to focus on the second quarter and the period until the summer. We know that we can achieve our target to have 70% of the adult population fully vaccinated by the end of this summer,” Ms. von der Leyen said during the event.

The gloomy forecast over Europe’s near-term future undermined by rising Covid-19 cases, lockdowns, and lackluster vaccination campaigns. These are in stark contrast to the bright outlook for the US. On the other side of the Atlantic, President Joe Biden praised the efforts by health authorities over the vaccination campaign which recently surpassed 100 million doses administered and now stands at 125 million.