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Chairs and tables are piled up on a closed bar terrace in Barcelona, Spain, on Oct. 19, 2020.

Emilio Morenatti/The Associated Press

In Italy and other parts of Europe, the summer felt pretty much normal. The shops, restaurants and beaches were open, and physical distancing and mask rules, while still in place, were often cheerfully ignored. The pandemic seemed to be in retreat, and the financially painful lockdowns were over.

From the start of June until about mid-August, the number of new COVID-19 cases fell to a few hundred a day in Italy and elsewhere. No one seemed to pay much attention in late August when the number began to climb. Governments were in no mood to launch new restrictions. Economic activity was bouncing back after the devastating plunge in the spring, so why mess with a good thing?

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The state of denial generally extended through September, by which time there was no question that an infection resurgence was under way. In Italy (where I live), the number of new cases that month reached about 1,500 a day.

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On Sunday, it hit 11,705 – almost twice the peak seen in March, when most European economies were locked down. In other big countries – Britain, Spain, France – the new daily case tallies are two or three times higher. The only good news is that the death count has been relatively low. But that could change as hospital ICUs fill up again.

Covid-19’s uneven impact on Europe

The effects of COVID-19 will shrink all European

Union economies, with the impact most acute

in tourism-dependent southern countries.

EXPECTED GDP DECLINE, 2020

-5 to -7%

-7 to -9%

-10 to -12%

-9 to -10%

Finland

Sweden

Estonia

Netherlands

Latvia

Den.

Ireland

Lithuania

Poland

Ger.

Bel.

Czech Rep.

Lux.

Slovakia

Austria

France

Hungary

Slov.

Romania

Croatia

Spain

Bulgaria

Italy

Portugal

Malta

Greece

Cyprus

graphic news, Source: Stratfor

Covid-19’s uneven impact on Europe

The effects of COVID-19 will shrink all European Union

economies, with the impact most acute in tourism-

dependent southern countries.

EXPECTED GDP DECLINE, 2020

-5 to -7%

-7 to -9%

-10 to -12%

-9 to -10%

Finland

Sweden

Estonia

Netherlands

Latvia

Den.

Ireland

Lithuania

Poland

Ger.

Bel.

Czech Rep.

Lux.

Slovakia

Austria

France

Hungary

Slov.

Romania

Croatia

Spain

Bulgaria

Italy

Portugal

Malta

Greece

Cyprus

graphic news, Source: Stratfor

Covid-19’s uneven impact on Europe

The effects of COVID-19 will shrink all European Union economies,

with the impact most acute in tourism-dependent southern countries.

EXPECTED GDP DECLINE, 2020

-5 to -7%

-7 to -9%

-10 to -12%

-9 to -10%

Finland

Sweden

Estonia

Netherlands

Latvia

Denmark

Ireland

Lithuania

Poland

Germany

Bel.

Czech Rep.

Lux.

Slovakia

Austria

France

Hungary

Slov.

Romania

Croatia

Spain

Bulgaria

Italy

Portugal

Malta

Greece

Cyprus

graphic news, Source: Stratfor

As a whole, Europe blew it and will soon pay the price. New restrictions such as local lockdowns, tighter mask rules and shorter restaurant and bar opening times are being announced virtually every day. On Monday, Belgium’s Health Minister said his country, which has closed all bars and restaurants for four weeks, faces a “tsunami” of new infections. On the same day, Wales announced a two-week “fire break” lockdown.

Economists and central bankers are now busy rewriting their growth forecasts for the fourth quarter. A double-dip recession has gone from possible to likely, and a lot of businesses, especially service-oriented ones such as retail stores, and their employees are going to suffer mightily. Almost three-quarters of the jobs in the euro zone countries are in the services sector.

The pandemic hit Europe hard in March, when the first lockdowns went into force. In the first quarter, GDP in the European Union (which now excludes Britain) fell 3.2 per cent over the previous quarter, according to the EU’s data agency, Eurostat. In the second quarter, it fell 11.9 per cent, the steepest drop on record.

The third-quarter numbers will be released at the end of October and are expected to show a record rebound in both the EU and the euro zone. As the fresh restrictions come on strong, the numbers are bound to turn negative again. Only a few weeks ago, the European Central Bank had forecast fourth-quarter growth of 3 per cent.

That number has gone out the door. On Sunday, ECB boss Christine Lagarde told an online central bankers' event that “the new coronavirus-related restrictions currently being introduced across Europe will add uncertainty for firms and households.” Andrew Bailey, her Bank of England counterpart, said “the risks remain very heavily skewed toward the downside. … To borrow a phrase from sports, I’m afraid the hard yards are still to come.”

It didn’t have to be this way.

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European governments and health authorities, and those elsewhere, were slow to react to the upswing in cases in mid-August. At that point, tighter restrictions that still fell short of lockdown might have spared Europe from the really tight measures we are seeing now. By trying to keep their economies rolling by avoiding restrictions, governments may have ensured the opposite.

Daily new confirmed COVID-19 cases

per million people

Rolling 7-day average

France

350

300

Britain

250

200

EU

U.S

150

Italy

100

Canada

50

0

Dec. 31

March 11

June 19

Aug. 8

Oct. 19

john sopinski/the globe and mail, Source:

our world in data via European CDC –

Situation Update Worldwide – Last updated

Oct. 19

Daily new confirmed COVID-19 cases

per million people

Rolling 7-day average

France

350

300

Britain

250

200

EU

U.S

150

Italy

100

Canada

50

0

Dec. 31

March 11

April 30

June 19

Aug. 8

Oct. 19

john sopinski/the globe and mail, Source: our world

in data via European CDC – Situation Update

Worldwide – Last updated Oct. 19

Daily new confirmed COVID-19 cases per million people

Rolling 7-day average

France

350

300

Britain

250

200

EU

U.S

150

Italy

100

Canada

50

0

Dec. 31

March 11

April 30

June 19

Aug. 8

Oct. 19

john sopinski/the globe and mail, Source: our world in data via

European CDC – Situation Update Worldwide – Last updated Oct. 19

Another mistake was not going hard on masks and failing to explain that they are an easy and cheap quid pro quo for sustaining an economic reopening. The Italian government insisted on mask use outside the home only a couple of weeks ago. Why so late? Many countries still lack a similar policy.

But the biggest mistake was not devoting more resources to building robust testing-and-tracing systems throughout Europe. Andrea Crisanti, the University of Padua microbiologist who was among the first scientists to discover that about 40 per cent of COVID-19 cases are asymptomatic, has been urging Italian and European governments for months to get in the game on testing and tracing, largely to no avail. The exception was Germany, where the case load is still relatively low (though rising); it has done a credible job in setting up a vast and co-ordinated network of public and private labs.

In an interview Sunday with Italy’s Il Mattino newspaper, Dr. Crisanti blasted the Italian government for its go-slow approach to testing and tracing, even though the government insists its testing rate has improved dramatically. “If we really had invested in tracing and the ability to perform swab tests, today we’d be in a different situation,” he said, citing China, which did nine million tests over five days in one city alone. “We can’t go on another six months with just closures.”

He’s right. The new lockdowns – local now, but possibly national again in the near future – are going to wreck a lot of business and jobs. They are a brutal and painful approach to controlling the pandemic and have all but guaranteed another recession. If testing-and-tracing systems had been bolstered substantially months ago, the new crackdown might not have been necessary.

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