18 Nov Will Europe’s economies survive the second wave of COVID-19?
European countries are collectively struggling with a harsh second wave of COVID-19. This threatens any economic recovery following the first wave, as hospitals continue to fill and the death toll to rise. And while Asian economies are maintaining a certain level of resilience to the pandemic, it’s a different story in Europe.
We all know by now how destructive the pandemic is for business. Rolling lockdowns, heavy restrictions on socialising and travel constraints are all slowing economic activity. Supply chains in some sectors are entirely cut off and companies are forced to make people redundant or furlough them – depending on the country’s Government assistance. But as the UK, Italy, France, Germany and just about every other European country faces further shutdowns and restrictions, how will this affect the economic recovery?
Breaking down Europe’s second wave of COVID-19
Hospital wards are filling fast across Europe, with a record high number of COVID-19 cases and deaths. This is happening despite the draconian measures taken in the spring of 2020. Government leaders across Europe clearly hope that the current restrictions for the second wave will flatten the curve. Here’s how some key European countries are faring:
- The UK has the highest COVID-19 deaths in Europe
In the second week of November, the UK officially became the first European country to have more than 50,000 deaths due to COVID-19. The National Health Service (NHS) has said that the number of hospitalisations of COVID-19 cases are “seriously concerning” and that the country is heading towards a “very difficult winter.” According to the BBC, hospitals in the UK are currently dealing with more than 10,000 COVID-19 patients, and this is expected to double by mid-December.
- President Macron says hospitalisations are rapidly rising in France
According to a Sky News interview with French Prime Minister Jean Castex, someone is admitted to hospital with COVID-19 every 30 seconds. This is even though France is experiencing a fall in the infection rate. It’s also despite some of the strictest second wave lockdown measures in the world.
Prime Minister Jean Castex told Sky News that the pressure on the country’s hospitals have “intensified enormously.” At the time of writing, French hospitals are dealing with more than 32,638 patients with COVID-19.
- Hospitals are struggling with a rise in cases in Germany
Generally, Germany is considered one of the most efficient and successful in dealing with the first wave of COVID-19. But the country is now facing the challenge of a rapidly increasing second wave.
Figures from the Robert Koch Institute on 16 November 2020 show that COVID-19 cases in Germany have reached a record high (more than 23,542). Berlin is one of the hardest hit cities in Germany. However, Germany is still doing better than many others in Europe and its health minister announced its hospitals will be available to help neighbouring countries.
The health minister Jens Spahn told the Guardian: “It makes us humble and grateful to be able to support our neighbours.” So far, Germany has welcomed COVID-19 patients from the Netherlands, the Czech Republic and Belgium. Germany, like France and the UK, is under lockdown for the foreseeable future.
- Italy is one of the hardest hit with a dramatic spike in COVID-19 cases
Just as during the first wave, Italy appears to be one of the most badly hit by rising cases and hospitalisations. Media reports show that in Naples, there are no more hospital beds and medical staff are resorting to treating patients with oxygen while they sit in their cars.
Luigi Di Maio, Italy’s foreign minister, gave a stark warning to the press: “the situation in Campania is out of control. We need urgent restrictions… people are dying.” Italy currently has more than one million cases, with daily increases of more than 30,000.
- Portugal’s state of emergency will be extended
Cases in Portugal have gone past 200,000 with record high numbers for daily infections. There is also a new record for COVID-19 patients in hospital (2,799). The country’s current state of emergency will be extended beyond 23 November, according to Portugal’s health minister in the Guardian.
Other European countries and COVID-19 cases
Some countries (Belgium, the Netherlands, Ireland and the Czech Republic) are reporting a slowdown of new infections. However, hospitals remain overloaded. In other regions, infections are soaring.
Sweden was an outlier during the first wave, taking a ‘herd immunity’ approach rather than the lockdowns favoured in most other countries. Today, Sweden has a COVID-19 death count per million far higher than other Nordic countries and is fighting a severe second wave.
And if we look further afield at Russia. It has the fifth largest number of cases globally, and has just announced the closure of bars, nightclubs and restaurants between 11pm and 6am until January 2021. It’s unclear whether this will be enough to slow infections, which have reached a record 21,983.
How will the second wave affect European economies?
The economic recovery for Europe following the first wave in the spring was actually better than initially expected. However, the second wave is also stronger than forecast, which has halted the recovery in its tracks. For example, retail sales in the UK rose in September for the fifth consecutive month, due mostly to supermarket and furniture sales. This was better than even the most optimistic analysts, with UK households spending 4.7% more in September 2020 than in September 2019.
Businesses throughout Europe are now beginning to show a slowdown due to the return of lockdown measures. The UK and EU are facing a long winter waiting for growth and for the newly discovered vaccination to help economies recover. With the UK leaving the EU on 1 January 2021, this will increase the poor economic outlook.
This second wave appears to have caught some European Governments out, and while there are big fiscal packages still being rolled out, more is needed. And depending on how the next six months play out with the pandemic, this is likely to continue. Whichever way we look at the situation in Europe, there are tough months ahead.