A series of calculations to predict the cost that a contingent will have lockdown enforcement in nine countries of Europe, including Greece by its analysts UBS, after the imposition of the measure in Austria. Such a scenario could lead to stagnation or even shrinking of the eurozone economy in d ‘quarter. In such a case, there will be consequences for European Central Bank, as the chances of extending the emergency pandemic securities program (PEPP) beyond March 2022 increase.
Nine countries tighten measures
Already, lockdown has been imposed on Austria until 13 December, while restrictive measures have been imposed on Germany, the Netherlands and Ireland.
Nine countries are under intense pressure. Indicators show an increase in cases in Greece, Austria, Germany, Belgium, Finland, Ireland, the Netherlands, Slovakia and Slovenia.
The nine countries account for 50% of eurozone GDP and increase cases above or near their previous record, with restrictive measures tightening in the Austria, the Germany, the Netherlands and Ireland so far.
Except for her Austria, imposed lockdown, on Netherlands shops have to close early and in Ireland the opening hours for restaurants and bars have been reduced.
In Germany, Parliament decided last week to end the state of emergency on November 25, which means that universal lockdowns will not be enforceable after that date.
However, states have tightened measures, with access to workplaces and transport done with a vaccination certificate, illness or negative test. In some areas, the unvaccinated are excluded from indoor and dining areas. As the number of cases increases, even stricter measures are more likely in Germany, says UBS, which, however, does not see a global lockdown possible.
The cost of measures
Analysts explain that the restrictive measures no longer cause as much damage to GDP as the first lockdowns. This is because economies have largely learned to operate in the new reality.
However, the measures imposed so far (in Austria, the Netherlands, Ireland, Slovakia, Slovenia and Latvia), it is estimated that they could subtract about 0.15 percentage points from the growth of the Eurozone in the fourth quarter of 2021 (the current UBS estimate speaks of a quarterly growth of 0.8%).
The restrictive measures to be imposed in Germany will deduct another 0.15 percentage points, raising the total cost to 0.30 percentage points.
The scenario for lockdown in the 9 “red” countries
If the nine countries, including the Hellas, UBS estimates that the loss in Eurozone growth for the fourth quarter would be in the range of 0.7-0.8 percentage points, which means that the Eurozone would remain stagnant during this period.
In any case, if the countries of southern Europe are forced to tighten measures, the fourth quarter could even show negative growth.
«If the restrictions are not lifted quickly with the new year, additional financial risks will apply for the first quarter of 2022“, Note the analysts, who point out that if there are restrictions on economic activity, they will be offset by additional support measures for households and businesses.