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Europe Widens Virus Lockdown, Moves to Limit Economic Damage

Nikos Chrysoloras, Viktoria Dendrinou and Alberto Brambilla
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Europe Widens Virus Lockdown, Moves to Limit Economic Damage

(Bloomberg) --

Europeans faced increasingly draconian restrictions on public life, as governments tightened border controls to check the spread of the coronavirus and moved to limit damage to the continent’s fragile economies.

With Europe now the epicenter of the outbreak, countries in the Schengen free-travel zone were considering restricting access to foreigners and asking residents to refrain from leaving, effectively sealing external frontiers, three officials familiar with the matter said. France may intensify its national lockdown, Finance Minister Bruno Le Maire said in a television interview.

Italy was weighing new measures for Europe’s hardest-hit nation, including increased spending for its stricken health-care sector, aid to airlines and postponing some tax deadlines. France is considering additional spending of as much as 40 billion euros ($44 billion) to counter the economic impact, Les Echos reported.

Germany will partially close its borders with France, Switzerland, Austria, Luxemburg and Denmark on Monday, though goods and commuter traffic will still be allowed to flow, Interior Minister Horst Seehofer told reporters.

While one focus is checking the spread of the disease and limiting the strain placed on medical facilities, another is addressing the impact on economies. The European Central Bank unveiled a series of monetary measures Thursday that failed to pacify investors concerned that the euro area is heading for recession.

Markets recovered Friday as Germany pledged to spend whatever it takes to protect its economy and the European Commission said it’s ready to green light widespread fiscal stimulus.

Still, HSBC Holdings Plc economists are among those declaring that a euro-area recession looks unavoidable. Italy and France were already contracting before the health emergency, while Germany had stalled.

For the broader European Union, the European Commission last week said there could be a 1% contraction this year, which would be more severe than the downturn experienced during the sovereign debt crisis a decade ago.

Earlier on Sunday, Austria banned gatherings of more than five people and said it will close restaurants from Tuesday. France announced cuts in domestic air, rail and bus links, a day after closing restaurants, cafes and non-essential stores.

That’s after Italy and Spain went into lockdown. Many other governments have followed suit or are poised to.

“The next weeks will be challenging, difficult and painful,” Austrian Chancellor Sebastian Kurz told an emergency session of parliament. “We’re hoping that we, our society and our economy will be resurrected after Easter, and our life can go on as we love and cherish it.”

Irish Bars

Ireland’s government asked pubs to close for at least two weeks after footage of bars filled with drinkers in defiance of guidelines appeared on social media. Industry groups say it proved impossible to police social distancing guidelines. The government also pleaded with citizens not to replace pub visits with house parties.

The Dutch government, falling in line with restrictions in much of the rest of Europe, ordered schools, gyms, restaurants and bars closed for three weeks. At Amsterdam’s “coffee shops,” known more for selling joints than java, lines stretched around the block when it was announced they’d have to close.

In other developments:

- Deaths in Italy from the new coronavirus rose to 1,809, an increase of 368 from Saturday, officials said in Rome. Authorities are attempting to halt an exodus of people from lockdown in the north to second residences or toward their families in the south, La Repubblica reported.

- A 75-year-old man became Hungary’s first fatality from the virus.

- Spain’s confirmed cases jumped by 2,000 to 7,753 on Sunday and the death toll more than doubled to 288 from 136.

- Lithuanian Prime Minister Saulius Skvernelis pledged to announce a financial aid package of “no less” than 1 billion euros ($1.1 billion) on Monday.

- Estonia will bar everyone except for residents and their family members from entering the country from Tuesday.

- Latvia will close borders, airports and ports to non-residents on Tuesday and ban all official events, with unofficial events capped at 50 people.

- The Swiss government may provide additional economic support on top of its $10 billion Covid-19 aid package if the crisis worsens.

- Slovenia suspended public transport from Sunday and the government is expected to close all bars and restaurants.

- Poland has implemented full border controls and international flights are suspended. Cafes, bars, restaurants and shopping malls are closed.

- The Czech government may place the entire nation into quarantine, Prime Minister Andrej Babis said.

- Bulgaria will use its state-owned development bank to provide liquidity to businesses, Finance Minister Vladislav Goranov said in Sofia.

- Greece closed its land borders with Albania and North Macedonia and stopped flights and sea arrivals from the two nations.

- Cyprus announced measures worth 700 million euros, or 3% of its gross domestic product, to support companies and workers.

(Updates with measures by Germany, France, Ireland and the Netherlands. A previous version corrected day of Estonia border closing.)

--With assistance from Zoe Schneeweiss, Boris Groendahl, Simon Kennedy, Milda Seputyte, Joao Lima, Jan Bratanic, Marek Strzelecki, Peter Laca, Jerrold Colten, Macarena Munoz, Stephan Kahl, Aaron Eglitis, Zoltan Simon, Ott Ummelas, Slav Okov, Georgios Georgiou, Bryce Baschuk, Sotiris Nikas, Dara Doyle, David Rocks, Joost Akkermans, Geraldine Amiel and Hailey Waller.

To contact the reporters on this story: Nikos Chrysoloras in Brussels at nchrysoloras@bloomberg.net;Viktoria Dendrinou in Brussels at vdendrinou@bloomberg.net;Alberto Brambilla in Milan at abrambilla5@bloomberg.net

To contact the editors responsible for this story: Chad Thomas at cthomas16@bloomberg.net, Iain Rogers, Andrew Davis

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