Eurozone warning: Delta variant and surging cases could spark crisis – stark analysis

Boris Johnson discusses Stage 4 of roadmap out of lockdown

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A new survey by Reuters showed nearly nine out of 10 economists polled warned new Covid variants are the biggest risk to the eurozone, which they currently believe will grow by 4.5 percent in 2021. In addition, the latest coronavirus tracker from Reuters has revealed infections, while in most cases remaining below their historic highs, are rising in all but a handful of European countries. Oxford Economics has also collected data that shows the Delta variant now accounts for most new Covid cases in Britain, Portugal and Austria, and over 40 percent of infections in Germany, Spain and Denmark.

The researchers said the impact on the respected economies is hard to predict at the moment.

However, those countries with higher vaccination rates can take some comfort from the muted rise in hospitalisations and death rates in Britain and Israel.

Speaking in Parliament on Monday, the UK’s newly-appointed Health Secretary Sajid Javid confirmed all remaining restrictions in England will be lifted from next Monday, although he and Prime Minister Boris Johnson have urged the population to continue being cautious.

But in a huge warning from a research note from July 12, Oxford Economics said: “Nonetheless if economies reopen and allow cases to surge, the economic gains could prove illusory if Covid-related absences trigger major disruption to businesses and higher cases prompt greater voluntary social distancing.”

Governments throughout Europe are so far refusing a return to full lockdowns over fears of a repeat of the devastating economic impact and the possibility of denting the strong rebound in activity during the last quarter.

But in France, Emmanuel Macron has announced mandatory proof of vaccination or negative tests for some public spaces, coming days after Portugal, the Netherlands and some areas of Spain reintroduced restrictions.

The French President said all health workers in the country must get Covid jabs by September 15, adding vaccination would not be compulsory for the general public for now but stressed that restrictions would focus on those who are not vaccinated.

He said in a televised address to the nation: “We must go towards vaccination of all French people, it is the only way towards a normal life.”

On Tuesday, France’s Health Minister Olivier Veran told BFM TV: “The virus is doubling every five days.”

The country’s finance minister Bruno Le Maire told Franceinfo radio he now expects the economy to grow by six percent this year, beating the previous five percent forecast.

But he warned that could be quickly revised if the highly infectious Delta variant took a firm grip on the French population.

There are also growing economic fears in Germany, which is home to the EU’s largest economy.

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Officials in the country are adamant Covid measures should remain in place until more of the country has been vaccinated.

But German Economy Minister Peter Altmaier said a new lockdown would be “absolutely the worst thing and to be avoided at all costs”.

The Netherlands has cited the rising Delta variant as the reason for reintroducing strict measures for nightclubs, festivals and restaurants on Friday.

In Spain, the northern Catalonia region has cut bar opening hours and towns in nearby Valencia have been authorised to bring back curfews.

The whole of Europe is keeping a close eye on developments in England when restrictions are lifted from next Monday, with many officials regarding Boris Johnson’s reopening plan as extremely risky.

Workers will still have to self-isolate when notified by an official app – but that has consistently led to significant labour shortages in hospitality and other sectors.

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