U.S. Markets closed

European Leaders Accept Reopening Risks and Hope for Vaccine

John Follain, Charlie Devereux and David Goodman

(Bloomberg) --

Europe is embarking on a period of uneasy coexistence with the coronavirus, with countries gently opening shuttered economies and looking to contain the outbreak via monitoring until a vaccine can be found.

Italy’s shops, bars, restaurants and barbers will be allowed to reopen on a regional basis, and people will able to move within their own region starting Monday. In Spain, which had Europe’s strictest lockdown, about 70% of the country will have entered a first phase of opening that permits groups of up to 10 people to meet, with bars and restaurants permitted to open outside serving spaces. Beaches across southern Europe are opening as well.

The relaxations follow similar steps in Germany, Europe’s largest economy, and come amid signs that the severity of the pandemic appears to be easing. Pressure to reopen has been building as the economic fallout from the pandemic spreads. The euro-region economy is projected to contract almost 8% this year, with the summer tourism season -- key to economies across the continent -- under threat from travel restrictions and fears of contagion.

Portugal, Italy and Spain are all moving to open beaches, while calling for social distancing to remain in place. Whether foreign tourists will be able or willing to hit the beaches this summer remains to be seen. Italy, Spain and Greece face economic contractions of more than 9% this year, with the pandemic likely to deal an unprecedented blow to their tourism-reliant economies.

Prime Minister Pedro Sanchez said Spain, the world’s second-most visited country last year, would proceed with caution. The government is in talks with other European countries on the possibility of establishing “sanitary corridors” for tourism between areas that are deemed to be low risk.

“Spain needs tourism but tourism needs security,” Sanchez said Saturday. “We need to overcome the health emergency as soon as possible,” if we “make a false step we could put at risk our international credibility that’s taken years to accumulate.”

On Sunday, Germany reported the third-lowest increase in new coronavirus cases since late March, while Spain recorded the smallest number of new fatalities in two months.

France reported 483 new deaths, the most in three weeks, bringing its toll to 28,108. However, hospitalizations and the number of intensive-care patients continued to decline.

Russia had among its fewest new cases of the past two weeks. The number held below 10,000 for a second day, after a surge in infections this month left Russia with the second-highest number of virus sufferers after the U.S.

Russia, like many other governments, is looking to ease the restrictions that have choked economies across the continent. Leaders are signaling that they are increasingly willing to accept the risk that easing lockdowns could lead to new waves of infections, while hoping for an eventual vaccine.

Italy’s Health Ministry reported 145 additional coronavirus-linked deaths on Sunday, the fewest since March 9.

“We are taking a calculated risk, aware that the contagion curve could rise again,” Prime Minister Giuseppe Conte said late Saturday. “We cannot wait for a vaccine.”

In the U.K., Prime Minister Boris Johnson warned there will be no quick fix. The government this week began a tepid easing, allowing people to spend more time outside and preparing for the reopening of certain businesses and possibly schools in June. The government has been struggling to convince people that it’s safe to return to work or send children to school in the country with the second-highest death toll from the virus after the U.S.

A poll published in the Observer newspaper Sunday showed support for the government’s handling of the pandemic is waning, with the economy at risk of the worst recession in more than three centuries.

“We have to acknowledge we may need to live with this virus for some time to come,” Johnson wrote in an opinion piece for the Mail on Sunday.

The Johnson government has also been looking to spur research into a vaccine. A U.K. vaccine production facility is expected to open in the summer of 2021, a year earlier than previously planned, after receiving a total of 131 million pounds ($159 million) in government funding to accelerate development, The center near Oxford says it will be capable of manufacturing 70 million vaccine doses within four to six months of opening.

Vaccine Race

Although developers globally are working on as many as 100 experimental vaccines for Covid-19, the process is likely to take time. Finding a vaccine and distributing it globally will be a “massive moonshot” and the world needs to learn to live with a virus that “may never go away,” Dr. Michael Ryan, executive of director of the World Health Organization’s Emergency Program said last week.

Moreover, who gets to be immunized once a drug has been developed is proving highly contentious.

AstraZeneca Plc Chief Executive Officer Pascal Soriot said the U.K. will take priority for the University of Oxford’s fast-moving effort, while French officials said the idea of the U.S. being first to get French drugmaker Sanofi’s possible treatment was “unacceptable.” The French push back came after Sanofi Chief Executive Officer Paul Hudson suggested that the U.S. would be granted first access to any vaccine because the country was the first to fund the French company’s research.

There were also examples of countries working together on treatments. Norway will supply Sweden with virus medications, including propofol that’s used to treat patients on respirators. In Sweden, whose handling of the crisis has become a topic of international debate after it opted for a much laxer lockdown, Propofol supplies have been squeezed as the number of intensive-care patients rose.

(Updates with France, Italy in eighth and 11th paragraphs.)

For more articles like this, please visit us at bloomberg.com

Subscribe now to stay ahead with the most trusted business news source.

©2020 Bloomberg L.P.