By Geoffrey Smith
Investing.com -- Another winter, another Covid surge in Europe – and another lockdown and economic slowdown?
The sense of déjà vu is powerful, but probably not as worrying as it seems. Western societies have both the means and, it seems, the will, to ensure that this is the last time that the question even needs to be raised. Any slowdown due to public health measures over the next couple of months should be brief and shallow.
True, the news is – at first glance – bad. Austria is back in full lockdown for a month, and infection rates in Germany are twice as high as they have ever been. Over the last seven days, the average rate of new Covid-19 cases has run at over 51,000. The picture is the same in the Netherlands and Poland.
Germany is a particular cause for concern. Typically the engine of European growth, any fresh lockdown here would have greater implications for the Eurozone in general. Distracted by national elections in September (as India had been earlier in the year), policymakers are behind the curve. The incoming coalition government – still to be confirmed in office – lacks the authority to act decisively.
Hundreds of millions across the continent who have been vaccinated are shocked to find out that their actions haven’t managed to banish the threat of mass lockdowns to prevent health services being overwhelmed. In part, that is because the forecasts of officials earlier in the year were too optimistic.
“Delta has changed a lot regarding the level of vaccination and natural infection needed to get to herd immunity,” Peter Piot, a virologist who is special advisor to the European Commission, told the Greek newspaper Kathimerini in an interview published on Monday. “That percentage has now risen to perhaps around 90%, when in the beginning we thought it would be around 70%.”
The majority (around 70% of the European population is fully-vaccinated) have found an easy target to blame: the minority of those who have refused vaccination. The data suggests they have a point – infection rates have been highest where vaccination rates have been lowest – in Central and Eastern Europe.
Infection rates have been conspicuously lower in Ireland, Spain and Portugal, which boast vaccination rates of up to 92%, and in Italy and France, where government has been less squeamish than in Germany about temporarily suspending individual rights to incentivize people to get the vaccine. Austria has now ordered the first nationwide vaccination mandate. It is unlikely to be the last.
The growing intolerance, both among policymakers and the population at large, of those who still refuse the jab was pointedly summed up by Jens Spahn, health minister in the outgoing center-right German government, on Monday, who warned that “By the end of this winter, pretty much everyone in Germany will probably either be vaccinated, recovered or dead.”
The subtext was clear: no-one wants to put all life on hold again to cater to people who won’t protect themselves against Covid. It sets the stage for an increasingly divisive sequence of events, as weekend demonstrations against new lockdowns in Europe already made clear.
Fortunately, there is reason to think things will not get too bad. Firstly, all Covid waves have an end, and in Eastern Europe, which the delta-variant hit first, the number of new cases is already clearly on the retreat. Secondly, booster shots provide a simple and effective defense against one of the main causes of the current wave, which is the waning of immunity created by the first wave of vaccinations.
Thirdly, European regulators will – most likely – approve vaccination for children aged between 5 and 11 next week, shutting down another significant channel of transmission and ensuring that schools remain open. Fourthly, one or more of the antiviral pills developed by Merck (NYSE:MRK), Pfizer (NYSE:PFE) and Regeneron (NASDAQ:REGN) (others are still being developed) are all likely to be approved “well before spring,” according to Piot.
Britain, which already abandoned most of its restrictions on social distancing in the summer and which has seen infections plateau rather than spike, has already approved Merck's drug, molnupravir. The EU's regulators hope to approve it by the end of the year.
Finally, of course, the European economy has already largely learned to deal with Covid-19. From flexible working practices to online shopping and social distancing discipline, the hard yards have already been gained. Barring some unforeseen disaster, the Covid Grinch is not going to steal this Christmas.