Lockdown restrictions are sweeping Europe again. France’s Emmanuel Macron is the latest leader to impose nationwide stay-at-home curbs, closing non-essential businesses, schools and daycare centers. A surge in Covid-19 infections has also forced neighboring Germany and Italy into Easter shutdowns, as vaccinations still aren’t where they need to be to keep pace with new and more contagious virus variants.
These are undeniably grim times. A rough spring could lead to a lost economic summer, and scar tourism-reliant countries like Spain and Greece. Barclays doesn’t expect the euro area’s gross domestic product to return to pre-crisis levels before mid-2022. With the European Union’s pandemic recovery fund mired in delays, and looming elections in Germany and France, the region’s politics threaten to become more unpredictable and divisive when unity is needed.
