Why the slowness of vaccination weakens the European recovery

Audio 04:04

An AstraZeneca vaccine against Covid as part of a vaccination campaign in Belgium, in March 2021 © REUTERS

By: Dominique Baillard Follow

9 mins

Vaccination and its many disappointments will be at the heart of the discussions of European leaders tonight, gathered for a new virtual summit.

The stake is the health of Europeans and the economy.

The more the delay accumulates, the more the recovery is compromised.

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Europe is at a turning point.

On the one hand, its economy is rebounding.

This is the good news we learned yesterday: to everyone's surprise, the industry's order books have returned to positive territory.

The monthly index published by the Markit Institute is even at a high not seen in 23 years.

On the other hand, European citizens are once again confined to many countries and especially the majority of them wonder when they will be vaccinated.

The commission delays, reassures and affirms that 70% of the population will have been injected in mid-July.

So there are four months left to achieve collective immunity, is it playable?

In view of the delays in deliveries from AstraZeneca, the main official supplier to the Union, there is reason to doubt.

According to Barclays bank, this collective immunity target will not be reached before the end of September.

With the third wave of Covid-19 raging, such a shift is the disaster scenario for the countries of the south.

This means that they will miss the peak tourist season.

Greece, Italy and Spain could pay dearly for it.

A prolonged confinement as we are experiencing at the moment is also consumption definitely lost, and therefore one less engine for the recovery of the economy.

On the other hand, things are better for the countries of the north.

Germany is prospering, for example, thanks to its industry for export.

Could the woes of vaccination widen the wealth gap within Europe?

This is a risk all the greater as the 750 billion euros of the stimulus fund are long overdue.

Again there is a timing problem.

Not sure that the first promised installments will be released in June as expected.

Several parliaments have still not voted in principle, and some countries such as Poland and Hungary are still threatening to slow down the process.

For Germany, which yesterday approved a record amount of additional debt to finance its recovery, releasing the fund is not a problem, on the other hand for a country like Spain, it is crucial.

Madrid has just revised its growth estimate downwards because of the delay in these payments.

Are the Europeans going to take advantage of the return to growth which is looming in the

United States and which is already noticeable in China?

Tourist countries benefit very little from it, because as long as the Covid-19 is present, neither Americans nor Asians will take the risk of returning to the "old continent".

On the other hand, the locomotive of Europe, Germany is already benefiting from renewed demand from China, its main outlet, and from the United States, the third.

Globally, Europe could benefit from the fallout from the Biden plan.

The positive effects could even offset the damage caused by the extension of the confinement.

But public support remains essential.

Within the European Central Bank, it is already estimated that the stimulus fund will not be sufficient.

IN SHORT

► The United States is preparing a round of sanctions against the two conglomerates controlled by the Burmese junta.

Information from Reuters.

The MEC and the MEHL are targeted.

Two groups led by high-ranking officers and present in the majority of industries in the country.

Their assets could be frozen.

The decision should be announced today.

► The Suez Canal authorities promise a return to normal in the coming hours.

According to the Reuters agency, the stalled Ever given, a 200,000-ton container ship, is still blocking traffic in both directions.

If this obstacle persists, the shipowners plan to change the sea route, which would lengthen the route of the boats by a week.

12% of freight traffic passes through this channel.

The oil market took in the information, the barrel fell by 1% after having jumped yesterday by 5%.

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  • Coronavirus

  • Vaccines

  • Economy

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