Dark déjà vu for European economy as virus cases spike

LONDON (AP) — Europe’s economy was just catching its breath from what had been the sharpest recession in modern history. A resurgence in coronavirus cases this month is a bitter blow that will likely turn what was meant to be a period of healing for the economy into a lean winter of job losses and bankruptcies.

Bars, restaurants, airlines and myriad other businesses are getting hit with new restrictions as politicians desperately try to contain an increase in infection cases that is rapidly filling up hospitals.

The height of the pandemic last spring had caused the economy of the 19 countries that use the euro to plunge by a massive 11.8% in the April-June quarter from the previous three-month period. About 1.5 million more people registered as unemployed during the pandemic. The damage was contained only by governments’ quick decision to spend hundreds of billions of euros (dollars) to keep another 45 million on payrolls and companies running.

While the new restrictions are so far not as drastic as the near-total shutdown of public life imposed in the spring, they are kicking an economy that's down. For many Europeans, there is a foreboding sense of déjà vu.

“It is a disaster,” says Thomas Metzmacher, who owns a restaurant in Germany’s financial hub, Frankfurt, of the government’s decision to impose an 11 p.m. curfew.

He noted that even before the new restrictions many people in his industry could only just about survive. The curfew means people who come in for a meal don’t linger for a few extra beers or schnapps, which is where restaurants make most of their profits. “Now it is: go for a meal, finish your drink, pay, go home,” he says.

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