(Bloomberg Opinion) — Europe is increasingly determined to pull out all stops to fight the coronavirus crisis.
French President Emmanuel Macron declared “war” on Covid-19 Monday evening with a raft of measures to keep citizens in lock-down mode, including a ban on non-essential travel, just a few days after ordering business closures and shutting schools. Germany’s Angela Merkel rolled out similar “drastic” moves to shut down bars, cinemas, gyms and more. There has been nothing like it in living memory during peace time. Europe’s visa-free Schengen travel area, a symbol of the region’s post-Cold War freedoms, is raising barriers both internally and externally.The goal of getting ahead of an infection curve that has Europe at its epicenter is admirable and necessary, as it aims to protect health services from overcrowding and also points to a more united regional approach. Italy has had strict self-isolation measures for some time now, as a result of its high case count, and its economy has suffered disproportionately relative to its neighbors. With the euro area as a whole now facing a likely recession, finance ministers have taken the welcome step of pledging emergency fiscal support worth 1% of GDP. “We are all Italians,” European Commission President Ursula von der Leyen said recently. This now rings true.Cutting off access to our loved ones hurts, but when it comes to public health, the upside to social distancing is clear. Reducing human contact means fewer ways for the virus to spread — currently, each carrier of this novel coronavirus is estimated to infect on average two or more people. Given France’s case tally has increased fivefold to over 5,000 in just over a week, slowing the spread is vital for a country that currently has about the same number of intensive-care units nationwide. It’s the Asian experience that gives the most comfort, with the Covid-19 infection curve having stabilized in Singapore and Hong Kong after similar tough measures. Forecasts estimate it might peak in Europe by April or May.But draconian measures will leave deep economic scars, especially if they stay in place longer than expected. Leaders are projecting an aura of calm and control, promising to preserve the free flow of manufactured goods and to protect services workers affected by the shutdown. But the reality is far messier. Factories are closing their doors: Automaker PSA Group PSA has shut its European plants, as has tiremaker Michelin. Unless the promises of fiscal stimulus get properly ramped up, the current size of what’s on offer isn’t going to cover all of the damage, which Bank of America Corp. economists estimate at north of 3% of GDP. Layoffs look inevitable at this point.The political and public willingness to mothball the economy and curtail freedom for an indeterminate length of time to fight infection says a lot about 21st-century society. The mood in 2020 is different to 1918, when the Spanish flu struck a war-weary population from whom a lot of information was kept hidden. Today, we track the spread of Covid-19 using data dashboards with up-to-the-minute knowledge; seeing the global tally of deaths cross the 7,000 mark feels like a preventable tragedy. As Yuval Noah Harari put it in Homo Deus, we view deadly epidemics not as an inevitable natural calamity but as an inexcusable human failure. That may be a reason why tough social-distancing measures, which were often distrusted and ignored in the 1900s, are getting wider support.Yet this is precisely what makes the current situation so unprecedented. Nobody really knows how long European countries will remain encased in the proverbial bell jar — that all depends on when Covid-19’s infection curve peaks or starts to flatten. Until then, stimulus promises are unlikely to cheer jittery markets, which have sent blue-chip euro-zone stocks down 36% in one month. The economic crisis is inseparable from the epidemiological one. Macron and Merkel have taken new bold steps in the pandemic “war,” but nobody knows how soon the tough medicine will have its desired effect.
To contact the author of this story: Lionel Laurent at [email protected]
To contact the editor responsible for this story: Melissa Pozsgay at [email protected]
This column does not necessarily reflect the opinion of Bloomberg LP and its owners.
Lionel Laurent is a Bloomberg Opinion columnist covering Brussels. He previously worked at Reuters and Forbes.
For more articles like this, please visit us at bloomberg.com/opinion
Subscribe now to stay ahead with the most trusted business news source.
©2020 Bloomberg L.P.