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July 1, 2021

Europe

EUROPE: Managing the pandemic – what we are watching

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

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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 weekEUROPE: Managing the pandemic – what we are watching 1

France

– The Delta variant is spreading rapidly, representing 20% of all new cases (vs. 10% last week). Still, the daily rate of infections remains below 2,500, and the number of hospitalizations and ICU patients due to Covid-19 has continued to decrease in the last week.

– The government is concerned about the slower pace of first-dose vaccinations and a recent drop in appointments. As a result, the authorities plan to set up walk-in vaccination tents in highly populated areas to facilitate access to the jab.

– Economy Minister Bruno Le Maire has suggested the government could push back France’s legal retirement age from 62 to 64, but the government and the ruling Republic on the Move (LREM) remain divided on reforming the pension system. President Emmanuel Macron will probably announce a decision on the matter next week.

Spain

– Daily cases remain around 3,500, and the Delta variant accounts for around 3-4% of new infections, although the figure is close to 15% in some regions. The government will require UK tourists to show a negative PCR or proof of full immunization to enter the country from 2 July. However, travel quarantines remain unlikely.

– Younger cohorts now account for most new cases, leading some regions to speed up vaccination of the 30-39s and start immunizing the over-20s. Some regions are also bringing forward the delivery of second doses for the 60-69 group.

– The government has reached an agreement on pension reform with trade unions and employers. Beyond measures to delay the effective retirement age (currently at around 64,5), the deal includes a commitment to agree before 15 November on a new formula to guarantee the pension system’s sustainability.

Italy

– Italy passed the symbolic mark of 50mn Covid-19 vaccines administered on 28 June, the same day the whole country became a low-risk “white zone,” and rules on wearing masks outdoors were relaxed. As of 30 June, around 32% of the total population is fully vaccinated.

– The move to relax mask-wearing coincides with growing concerns about the Delta variant, which accounted for almost 17% of total Covid-19 cases in the past month, according to figures released by the Higher Health Institute on 25 June. The Alpha coronavirus variant remains the most widespread, representing 74.9% of cases.

– The Five Star Movement (M5S) plunged into turmoil after a public row between its founder, comedian Beppe Grillo, and former Prime Minister Giuseppe Conte, who had agreed to take charge of the struggling party. The crisis within the M5S – the largest group in parliament – is not expected to affect the stability of Prime Minister Mario Draghi’s coalition government.

Germany

– Concern is rising around the spread of the Delta variant, but the pandemic situation within the country is improving further; the seven-day average of new infections has now fallen to around 500.

– Politicians are debating a change of approach regarding vaccinations, with a greater focus on second jabs to improve protection against the Delta variant; however, the institutional capacity to deliver on this quickly might be limited in Germany’s extremely decentralized political and healthcare systems.

– As Portugal and Russia have been added to the high-risk variant area list, regional state leaders are calling for a tougher approach to checking tests and quarantine requirements once holidaymakers return from summer vacations.

United Kingdom

– The Delta-induced increase in new infections shows no sign of abating and has recently sped up even further; the seven-day average of new cases is now above 17,000.

– New Health Secretary Sajid Javid has promised that once the remaining restrictions have been lifted as of 19 July, there will be no return to the substantive lockdowns of the past. However, some limited restrictions, for instance, on larger events, could remain in place for longer.

– Hospitalizations appear to trail much farther behind new infections in this fourth pandemic wave, which seems to point to vaccine efficacy. Still, the political debate over just which level of pressure on the NHS will be acceptable is likely to remain heated as the government re-opens England.

Greece

– Greece still has a low prevalence of the Delta variant, with just 29 cases recorded to date, 19 of which were in Crete and five in the Athens region. However, experts have said they expect it to account for up to 90% of infections by the end of August due to its higher transmissibility.

– As of 30 June, around 36% of the total population has been fully vaccinated. Officials warned that the Delta variant requires a rate of vaccination of 80% of the population, a target which they said is achievable by September provided citizens come forward to be vaccinated.

– The initial target of reaching around 50% of the 2019 tourism revenue level looks increasingly unrealistic. In its latest monetary policy report, the Bank of Greece estimates that tourism income will come in at EUR 7,12bn in 2021 (around 39% of 2019). The report warns that further flare-ups of the pandemic could result in even slimmer takings.

Poland

– The epidemiological situation remains favorable, and the number of new infections has dropped to just around 100 per day. To prevent the spread of new variants, the government has imposed a mandatory quarantine for unvaccinated travelers from outside the Schengen Area and the European Economic Area. Further travel-related restrictions are likely.

– As the number of first-dose vaccinations is declining, the government is opening up new vaccination sites in pharmacies and shopping malls across the country. The health ministry has also started making telephone calls to unvaccinated residents.

– The ruling Law and Justice (PiS) party and the largest opposition party Civic Platform (PO) will hold their national congresses on 3 July. Jaroslaw Kaczynski is expected to be re-elected as the PiS head, while Donald Tusk could announce his return to domestic politics by assuming a leadership role within PO.

Hungary

– The pandemic continues to recede, with the number of new daily cases and deaths dropping to the lowest levels since summer 2020. Only a few cases of the Delta variant have been detected in Hungary to date, but authorities are concerned about the uncertain efficacy of the Sinopharm vaccine against this particular strain.

– This week, the country is expected to reach a milestone of 5.5mn (56% of the population) vaccinated residents with at least one dose. This will trigger a further easing of restrictions, including lifting the requirement to wear masks in indoor public spaces, removing the limit on the number of people allowed in retail stores, and increasing attendance limits in private events.

– According to Prime Minister Viktor Orban, the government is working on multiple economic support measures to be presented in the coming few weeks to lift the country’s GDP growth above 5.5% in 2021.

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