Teneo logo

September 3, 2020

Europe

EUROPE: Managing the pandemic – what we are watching

BY Antonio Barroso, Andrius Tursa, Carsten Nickel, Wolfango Piccoli

Share on twitter
Share on whatsapp
Share on facebook
Share on linkedin
Share on email
Share on reddit

Report Contents

Listen to our reports with a personalized podcasts through your Amazon Alexa or Apple devices audio translated into several languages

( 5 mins)

In this piece, we provide snapshots of how selected European governments are dealing with the ongoing Covid-19 pandemic. Please do not hesitate to contact us if you want to discuss any of the countries mentioned in more detail.

Italy

– The number of new Covid-19 cases has increased throughout August, with more than 1,300 currently active outbreaks in the country. The government has ruled out a new nationwide lockdown.

– Around 20% of new cases in August were imported from abroad, the National Health Institute reported. A sharp drop in the median age (29 years) of the population contracting the infection during the past four weeks was registered.

– The reopening of schools (14 September) and the regional elections (first round on 20-21 September) will represent two major political tests for the fractious governing coalition.

Spain

– Daily infections have risen to around 8,000 as the return of pupils to school has raised renewed concerns about certain regions’ lack of preparedness to contain the virus. The number of deaths due to Covid-19 has also risen (160 last week), but the figure is far from the levels seen in March.

– Prime Minister Pedro Sanchez is unlikely to re-impose a nationwide lockdown anytime soon, as he has a political incentive to let the regions manage the pandemic. Several regional governments have applied for support from the army to boost their contact tracing capabilities.

– The ruling PSOE and Podemos parties have started to negotiate the 2020 draft budget; both will need the support from Ciudadanos to get the accounts passed in parliament. The government is also likely to extend its furlough scheme until the end of the year.

France

– With around 6,000-7,000 daily cases, the government has made the wearing of face masks at the workplace compulsory. President Emmanuel Macron has suggested a nationwide lockdown would be imposed as a last resort only.

– The government is unveiling today the details of its EUR 100bn “relaunch” plan. EUR 34bn will be devoted to increasing the competitiveness of French firms, which includes a planned tax cut of EUR 10bn.

– Prime Minister Jean Castex has stated that the government is still planning to pass pension reform, but no specific timetable has been suggested.

Germany

– The seven-day average of new infections is slightly falling but remains above 1,000. At this stage, no major new restrictions are being considered.

– Almost half of all new infections were brought home not from traditional holiday destinations such as Spain, but from family visits to Turkey and the Western Balkans.

– Far-right demonstrations and conspiracy theories are creating political concern after a protesting mob tried to force their way into the Bundestag over the weekend.

United Kingdom

– The rising seven-day average of new cases (currently around 1,200) has undermined the government’s calls on employees to return to the office as schools are reopening.

– Employers now have to shoulder 10% of social security contributions for furloughed workers, before the scheme runs out on 31 October.

– The fiscal cost of crisis-fighting has triggered a political debate about hiking capital gains tax and fuel duty, as well as lowering pension tax relief.

Poland

– Despite the falling seven-day average of new infections (currently around 670), the government has banned direct flights to 44 countries at least until 15 September. It is also considering tighter restrictions on large gatherings such as weddings.

– Beyond the broad travel constraints, Poland is expected to maintain a highly-localized approach to applying restrictive measures, which is based on county-level infection rates during the past 14 days.

Hungary

– Record-high levels of new infections during the past seven days prompted the government to reintroduce border controls and restrict entry to non-Hungarian citizens (with some exemptions) as of 1 September.

– The entry ban waiver for the Czech, Polish and Slovak citizens may be “discriminatory” and not in line with the “fundamental principles of EU law,” according to EU Commissioner for Justice Didier Reynders. The dispute over entry restrictions may become another point of contention between Hungary and the EU amid ongoing discussions to link the distribution of EU funds to rule of law compliance in the 2021-2027 budget.

– Unlike in spring, the government appears unlikely to impose curfew restrictions.

Bonus graph

EUROPE: Managing the pandemic – what we are watching 1

The pandemic-induced economic fallout tends to be most dramatic in countries with the highest Covid-19 death rate, such as the UK, Spain, and Italy. While containing the pandemic will be critical to ensure a robust economic recovery, those economies particularly reliant on interpersonal services and where a majority of workers cannot work from home will likely continue suffering in the medium term.

More by Antonio Barroso, Andrius Tursa, Carsten Nickel, Wolfango Piccoli