EUROPE: Three pandemic management scenarios for the fall

• With levels of activity expected to ramp up after the summer holidays, significant uncertainty remains about the potential impact of Covid-19 across the continent in the coming months.
• Hopes of reaching herd immunity seem to be fading due to the aggressiveness of the Delta variant, while the debate about booster shots is heating up due to fears about waning vaccine efficacy.
• We present three scenarios that try to make sense of the challenges different European governments face as the fall season approaches.

The scenarios provided below are not mutually exclusive, as the management of the pandemic in the coming months might combine some of their elements:

Scenario 1 – Delta attenuated

Under this scenario, governments continue to develop the current strategy of tackling the virus via increased vaccination rates and “light” restrictions, as the decoupling between infections and hospitalizations/deaths continues. Countries best positioned in this regard are those with high cumulative vaccination uptakes, particularly among older and vulnerable populations (see graph below). However, it remains unclear whether the end of the summer holidays will lead to the expected surge in daily jabs after the slowdown in vaccinations in countries such as Spain, Italy, and Greece. The main features of this scenario are the following:

• Vaccination policy : Several countries are already following the “Macron approach,” mandating the use of a health pass to participate in a wide range of social activities (e.g., Italy, Lithuania, Greece, and Turkey). However, such a method is not without challenges: some governments (e.g., UK) are wary of the attached political costs, while others face resistance from trade unions and even courts (e.g., Spain and Italy) to the use of Covid certificates. In certain countries, the imposition of a health pass could lead to protests a-la-France. Regarding third doses, political pressure will be high to provide booster shots to the most vulnerable populations. Still, governments might consider extending them to the general population in the first half of 2022 if studies confirm immunity among the vaccinated is fading. The debate about vaccinating children under 12 years of age will also heat up in the coming weeks, especially as schools reopen.
• Restrictions : Governments would try to keep measures to control the virus within a “soft” range, including mask-wearing mandates, capacity limits for hospitality, and, in certain countries, occasional curfews. Some of the existing rules to travel (e.g., use of health pass and pre-travel tests in some cases) would be preserved, but there would not be an intensification of restrictions.
• Economic support measures : Given the current positive economic data, governments would start winding down the schemes implemented since the beginning of the pandemic, from furlough schemes to fiscal support measures.

Scenario 2 – Delta intensified

In this scenario, hospitalizations increase significantly due to lower-than- expected vaccination rates and surging infections among the youth and vaccinated individuals whose immunity is starting to wane. The main features of this scenario are the following:

• Vaccination policy : Governments would be forced to adopt a much more stringent approach towards vaccination, including the generalization of health passes and, in some cases, the imposition of mandatory immunization for certain professional categories (e.g., medical staff, care workers, teachers). This method would lead to a political backlash in some countries, which some opposition parties would try to exploit (for instance, protests are already taking place in France and Latvia). At the same time, this scenario would accelerate a decision on providing booster shots for the overall population.
• Restrictions : Governments would be forced to adopt more restrictive measures such as curfews, mobility restrictions between cities and/or regions, and more stringent capacity limitations for certain businesses. Some countries might also intensify border restrictions.
• Economic support measures : Governments would be forced to prolong some of the existing support measures, such as furlough schemes for specific sectors, until at least the end of the first quarters of 2022. This situation would also further complicate the ongoing debate in Brussels about the need to revise EU fiscal rules.

Scenario 3 – New variant

Under this scenario, the emergence of a more aggressive variant due to low vaccination rates in certain areas of the world leads to a significant increase in cases and hospitalizations, including of vaccinated individuals.

• Vaccination policy : The reaction by governments would depend on the ability of existing vaccines to at least contain the aggressiveness of any new variant, but it can be assumed that they would feel compelled to adopt even more forceful measures to boost vaccination rates across the population.
• Restrictions : Governments would be very wary of re-imposing nationwide lockdowns given their unpopularity. However, this scenario would probably see the return of more stringent measures such as the closure of certain businesses, the imposition of localized lockdowns, and the re-introduction of border travel restrictions.
• Economic support measures : Under this scenario, governments would have to extend crisis support measures until at least the second half of 2022, compounding the challenges underlined above.