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Wednesday, December 02, 2020

Germany, France impose strict monthlong curbs to rein in virus

The European Union’s two biggest economies will shutter bars, restaurants and non-essential services, while allowing schools and most businesses to operate.

By: Bloomberg | Updated: October 29, 2020 10:00:52 am
France lockdown, France national lockdown, France covid lockdown, covid lockdown France, France national lockdown covid, World news, Indian ExpressPeople wearing masks, walk on Alexandre III bridge in Paris, Sunday Oct.25, 2020. A curfew intended to curb the spiraling spread of the coronavirus, has been imposed in many regions of France including Paris and its suburbs. (AP Photo/Lewis Joly)

Germany and France will clamp down on movement for at least a month, coming close to the stringent lockdowns in the spring as Europe seeks to regain control of the rapid spread of the coronavirus.

The European Union’s two biggest economies will shutter bars, restaurants and non-essential services, while allowing schools and most businesses to operate. The approach by French President Emmanuel Macron and German Chancellor Angela Merkel seeks to strike a balance between protecting public health and avoiding another debilitating blow to the economy.

“Today is a difficult day, for policy makers as well,” Merkel said at a press conference in Berlin. “We know what we’re demanding of the people.”

France’s shutdown will start on Friday, while Germany’s restrictions will take effect on Monday. The moves are part of a series of tighter measures being imposed by governments across Europe, where more than 210,000 people have died from the disease and nearly 6.5 million have been infected.

Germany, the U.K., Italy, Spain and Greece reported record daily increases in cases on Wednesday, while France’s weekly pace has been climbing for the past 26 days.

France’s Curbs

From Friday until at least Dec. 1:

* Bars and restaurants will close
* Domestic travel banned
* No public gatherings
* Non-essential retailers will close
* Companies encouraged to work remotely if possible
* Still open in contrast to spring restrictions:
* Schools to remain in session
* Retirement homes open for visitors

Macron painted a bleak picture of France’s fight against the pandemic, warning that the country needs a “brutal brake” on infections. He said there could be 400,000 French fatalities from the disease in months if nothing is done, and intensive-care facilities will have 9,000 patients — close to capacity — by mid-November, based on current trends.

“The virus is circulating in France at a speed that even the most pessimistic forecast didn’t foresee,” Macron said in an address televised nationally on Wednesday evening. “The measures we’ve taken have turned out to be insufficient to counter a wave that’s affecting all Europe.”

What Our Economists Say

“The options discussed by government so far could strip 0.8-2% off fourth quarter GDP if they stay in place for a month. This is in addition to the 1.1% contraction we are already forecasting for 4Q.”

The French leader opened the prospect of easing some curbs if there’s an improvement in two weeks. The goal of the measures is to lower daily cases to 5,000 — a far cry from the current average of more than 39,000 a day.

Patients in hospitals and occupying intensive-care beds are already multiple times higher than at the start of the first lockdown. Hospitalizations stood at close to 19,000 on Tuesday, compared with just over 2,500 on March 17, according to data from health authorities. Close to 3,000 patients are in intensive-care units, compared with about 700 on the eve of the spring shutdown.

While France is increasing intensive-care capacity, it’s not enough to handle the spread of the disease, Macron said.

“A colossal effort was made with training and investment but it does not suffice to face this wave,” he said. “There’s no magical solution. We can’t build a different capacity in a few months.”

National Effort

European leaders have been forced to relent and revive strict curbs, which hammered economies in the second quarter, as contagion rates soar and hospitals come under strain.

Merkel called for a concerted national effort to fight the pandemic. The partial shutdown was agreed after tense talks with the leaders of Germany’s 16 states — some with less severe outbreaks resisted harsher restrictions imposed on them by the federal government. Tensions were high before the meeting, which was moved forward by two days in a sign of increased urgency.

With the public weary of pandemic measures and protests increasing, the government sought to ease pressure by making available up to 10 billion euros ($11.7 billion) in aid for companies affected by the measures, including reimbursing as much as 75% of lost sales in November.

Germany’s Restrictions

Starting on Monday through end of November:

* Restaurants, bars, nightclubs and similar establishments will be closed
* All leisure facilities, such as gyms, theaters, opera houses, concert venues, fairs, cinemas and amusement parks will be closed
* People will only be allowed outside with members of their own household and one other and gatherings will be limited to * * 10 people; violations would carry penalties
* Citizens urged to refrain from private travel and visits to relatives; hotel accommodation restricted to non-tourist purposes

Staying open:

* Schools and daycare centers
* Supermarkets and hairdressing salons, under existing hygiene regulations

Bloomberg Economics estimated that the impact of the measures will likely be much lower than the April lockdown, but still depress German output by about 0.6 percentage points in the fourth quarter.

After failing to secure new measures two weeks ago, Merkel’s proposal was adopted almost entirely after cases surged since then. The German leader said that 75% of new infections couldn’t be tracked to their origin and hospitals risked being overwhelmed within weeks if trends continued.

But there were still signs of division. The state of Thuringia requested that German parliament be asked to declare a national health emergency and back the measures — largely an effort to check the authority of Merkel’s administration. Officials will gather again in two weeks to assess the impact of the measures.

“I’m thankful that we reached agreement here after long discussions,” Merkel said. “We don’t want to fall into a national health emergency.”

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