PARIS (AFP) – Rising new coronavirus cases are forcing governments across Europe to introduce new locks that threaten to delay a return to optimistic growth, economists say say.
The plan was for major vaccination programs to turn the tide on the pandemic, giving free access to users who were locked up after months written at home.
Instead the virus has started a third wave that is more difficult to control.
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French President Emmanuel Macron warned on Thursday that the European Union needed to do more and build its fund to revive an already 750 billion euro ($ 885 billion) virus.
People wearing a mask to prevent coronavirus walking on the banks of the river Seine in Paris, March 24, 2021 (Photo AP / Michel Euler)
The EU made a huge effort after the first wave last year, Macron said, but “following the second and third waves … there is no doubt that we need to add to our response.”
In September, as the economy picked up abruptly after a rapid turnaround in the first wave, it was highly expected that by the middle of this year it would be back on track, thanks in particular to the spread of the vaccine .
Dail 123 billion euros
Just a few weeks ago, the head of the European Central Bank, Christine Lagarde, even spoke of a “strong reversal in activity in the second half of the year. ”
Now the strongest economies in the EU – Germany, France and Italy – have reversed restrictions and the vaccination program in Europe has been cut in a game of blame over supplies.
A man passes a closed butcher shop in Munich, Germany, March 23, 2021 (AP Photo / Matthias Schrader)
Credit insurer Euler Hermes estimates that the EU is now seven weeks ahead of its target of 70 per cent of the population getting vaccinated by the end of the summer, compared to five weeks in February.
He estimates that the delay will cost the bloc’s 27 member states around 123 billion euros this year.
“If you compare us to the US, where the outlook is much more optimistic, we are falling further behind in overcoming this third wave,” said Charlotte de Montpellier, an economist with the Dutch bank. ING.
‘Two distances’ Europe
ING now expects euro growth of 3.0 per cent this year, down more than half a percentage point from the previous estimate.
Most of the growth will come from the third quarter, a little later as well, ING added.
Andrew Kenningham, chief European economist at Capital Economics, said he does not expect the bloc to return to pre-pandemic activity levels by the second half of 2022, a year behind the US.
“We are revising our forecast for eurozone GDP growth due to the resurgence of virus cases, the slow pace of vaccination and the expansion of locks,” Kenningham said.
Circus artists perform in front of the gothic cathedral Duomo at an exhibition with circus workers calling for more support from the Italian government as their activities have been shut down since the start of the COVID revolution -19, in Milan, northern Italy, March 26, 2021. (Claudio Furlan / LaPresse via AP)
“The vision has faded,” said Chris Williamson, chief economist at IHS Markit.
The main Purchasing Managers’ (PMI) chart compiled by IHS Markit for March showed that Germany, the strongest economy in Europe, was outperforming France and northern countries in general were doing better. better than their southern partners – Spain, Italy, Greece, Portugal – who are in danger of seeing their key. tourism businesses choked for another year.
Standard and Poor’s however has decided to keep the eurozone’s growth forecast unchanged at 4.2 per cent for 2021, citing the positive feature of cheap credit.
At the same time, the economy and the people of Europe have embraced the constraints, reducing the impact, said Sylvain Broyer, Europe ‘s leading S&P economist.
