Rising COVID Cases Hampering Europe’s Recovery

Europe’s shaky economic recovery could be derailed by a rise in new COVID-19 cases, which has led governments to place restrictions that could turn shoppers and tourists away.

As The New York Times reported Tuesday (Nov. 23), some of those toughest restrictions have come from Austria, which this week imposed a 20-day lockdown and made vaccinations mandatory.

However, safety measures in other countries could hamper economic activities, whether that’s France and Switzerland’s vaccine passports or a rule in Belgium requiring people to work from home four days a week.

“We are expecting a bumpy winter season,” Stefan Kooths, a research director of the Kiel Institute for the World Economy in Germany, told the Times. “The pandemic now seems to be affecting the economy more negatively than we originally thought.”

Read more: Protests Heat up Across Europe Over Renewed COVID Restrictions

Two months ago, economists were cautiously optimistic about Europe’s economic recovery. Then a highly-infectious strain of COVID-19 appeared.

Coupled with resistance to vaccines and dwindling support for other measures like masks, and the virus made a comeback. Countries such as Austria, Germany and the Netherlands are now seeing seeing the highest levels of weekly infections of any point during the pandemic.

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As PYMNTS reported earlier this week, the rising infection rates and threats of lockdowns have had an impact beyond just Europe, with payments stocks — the three big credit card companies, along with PayPal and Square — dropping Monday and Tuesday.

“The lower vaccination rates are, the gloomier the economic outlook is for this winter term,” Kooths said.

While around two-thirds of Europeans have been vaccinated, the rates vary greatly between countries. For example, 81% of people in Portugal have gotten shots, compared to just 25% in Bulgaria.

Austria’s lockdown shuts all stores that don’t provide basic necessities, closes restaurants except for takeout and requires people to stay at home. But it’s not clear other countries are ready to follow suit.

“We’re not at that point,” Sajid Javid, the British health secretary, said. He cautioned citizens against complacency, but added he hoped Britons could “look forward to Christmas together.”