May 13, 2021

Europe

EUROPE: Managing the pandemic – what we are watching

BY Carsten Nickel, Andrius Tursa, Antonio Barroso, Luis Cornago

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( 6 mins)

This updated weekly piece provides 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.

Graph of the week

EUROPE: Managing the pandemic – what we are watching 1

France

– The improvement of epidemiological indicators is giving the government confidence to proceed with the next steps of its four-stage lockdown exit strategy. Outdoor hospitality is expected to reopen on 19 May with some capacity restrictions.

– The government has opened up vaccination slots to all over-18 individuals, provided spare doses are available the following day. The authorities are now inoculating more than 600,000 individuals a day, which means they will broadly reach their goal of vaccinating 20 million people by mid-May.

– An opinion poll showed the candidate of Marine Le Pen’s National Rally (RN) potentially winning the region of Provence-Alpes-Cote d’Azur (PACA) in the elections that will take place on 20 and 27 June. However, the RN does not seem to be in a position to win other regions.

Spain

– With average daily cases down to around 6,000, the end of the state of alarm has triggered a flurry of contradictory decisions by different courts over the restrictions adopted by the regional authorities. However, the central government remains unlikely to push for the adoption of a bill to provide more legal certainty.

– The government is making a diplomatic push to make the UK include Spain in its “green list” of quarantine-free holiday destinations. The Ministry of Tourism has signaled that British tourists might be able to travel to Spain from 20 May without a PCR test, pending a decision by the EU on allowing travel from certain third countries.

– Secessionist parties are struggling to form a regional government in Catalonia. A repeat election will be automatically organized if parties cannot reach an agreement before 26 May.

Italy

– Italy will likely revise its nationwide 10pm curfew early next week. The measure has come under intense attack by the hospitality sector and has caused friction within the ruling coalition. Desperate to regain some popularity, the Lega has campaigned for weeks to scrap the measure altogether.

– The government plans to lift quarantine restrictions for travelers arriving from EU countries, the UK, and Israel as early as mid-May in a bid to revive the tourism industry. However, the government has yet to publish any guidelines or further details about its plans for restarting summer tourism.

– The government is expected to approve a stimulus package worth around EUR 40bn by the end of next week. Just like in previous similar packages, the money will be sprayed across multiple initiatives and beneficiaries to meet the requests put forward by the political parties backing Prime Minister Mario Draghi’s government.

Germany

– A long holiday weekend in several regional states will again mean a delayed transmission of the latest data until the middle of next week. Still, the seven-day average of new infections keeps falling and is now heading towards 10,000 cases.

– Two regional states will drop the age and risk-based priority system for any vaccine as of the coming week; after this had been done for the AstraZeneca vaccine, GPs are reporting a run on available doses.

– The federal health secretary aims at offering vaccinations to the age group between 12-18 years by the end of the summer holidays, thus enabling a return to normal in schools as of the next school year – depending on decisions expected from the European regulator by the end of July.

United Kingdom

– Despite the gradual reopening of the economy, the pandemic situation remains largely stable, with the seven-day average of new infections constantly just above 2,000 cases.

– The next round of economic reopening will commence next week, with further bars and restaurants opening; the general travel ban will be lifted, but only 12 destinations have been added to a “green list” with no quarantine required.

– The government’s guidance to work from home could be dropped as early as next month, amid continued progress in the vaccination campaign and political concern for the future of commercial real estate in city centers.

Greece

– While the health system is operating close to full capacity, more restrictions will be eased from 14 May – a day before Greece officially opens to tourism from abroad. The easing allows for free travel between prefectures and a shorter nigh-time curfew.

– The government outlined plans for a contentious labor reform on 12 May, with the aim of securing its parliamentary approval by the end of May or early June. The bill introduces significant changes, including flexible working hours, a new framework to regulate overtime, and new rules for strikes and unions.

– Greece is stepping up vaccinations against Covid-19 of its island residents ahead of the reopening of the tourism sector. The authorities have pledged to fully vaccinate the population of its 6,000 islands by the end of June to boost tourism.

Poland

– The seven-day rolling average of new infections dropped by 13% to around 4,350, which is the lowest figure since October 2020. However, Covid-19-related deaths have increased by 12% week-on-week; the spread of new strains of the virus remains a concern as well.

– Amid an improving epidemiological situation and picking up vaccination, the government is accelerating the reopening. According to the updated schedule, cinemas and theaters will be allowed to reopen on 21 May, while indoor restaurants and various sports facilities are set to resume operations from 28 May.

– The upper house of parliament (Senate) is expected to ratify the EU’s Own Resources Decision on 27 May. A recent opinion poll showed that parties that opposed the bill’s ratification in the lower house of parliament (Sejm), such as the Civic Coalition or United Poland, have been negatively assessed by voters.

Hungary

– The seven-day rolling average of new cases declined by 32% to around 1,100, while daily deaths are down by 29% to around 100. The concentration of coronavirus in wastewater samples is gradually decreasing, which suggests that the pandemic will continue to recede in the coming days.

– The vaccine rollout has been slowing in May as the share of immunized vaccinated residents with at least one shot is approaching 50%. Public demand for AstraZeneca, Sinopharm, and Sputnik V vaccines appears low, and the challenge of vaccinating the targeted 70% of the population might be greater than anticipated by authorities.

– The government has proposed several tax changes for 2022. They include a two percentage points cut in social security contributions by employers; the removal of the special tax for venture capital fund managers; allowing energy suppliers to deduct losses from pre-tax profit for the next five years; and a lower tax rate for revenue from cryptocurrencies.

More by Carsten Nickel, Andrius Tursa, Antonio Barroso, Luis Cornago