Europe’s economic recovery at risk as fourth wave of Covid sweeps the continent

Of the “big four” in the euro zone, Germany is most at risk with lower case numbers and higher vaccination rates in France, Italy and Spain.

A crackdown by Covid would only increase the pressure that is already building on the German economy from supply chain problems affecting the auto sector and inflation, which the Bundesbank predicts will reach almost 6 percent.

Berenberg predicts that German growth will now stagnate in the fourth quarter, while Capital Economics warns that Austria’s lockdown will cut 1.5 percent of its GDP if it lasts three weeks.

“We are assuming that some German regions may have to adopt measures based on the Austrian model, but that most of Germany is not completely following the Austrian route,” says Schmieding.

The Austrian lockdown probably cost its economy 117 million euros per day, while the restrictions for unvaccinated people afterwards cost 41 million euros per day, according to Wolfgang Müller from the Institute for Government of the Vienna Center for Election Research.

The capital has now become a polarized place, with the divide between pro and anti lockdown supporters widening.

While Chancellor Alexander Schallenberg did not take office until October after a corruption scandal hit his predecessor Sebastian Kurz and a public vote is not expected until 2023, Müller argues that this will not improve the reputation of both leaders.

“The People’s Party campaigned in the summer that the Covid crisis is over, it is over. That wasn’t entirely true, ”says the professor.

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