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Europe has become the epicentre of the pandemic again, prompting some governments to consider re-imposing unpopular lockdowns in the run-up to Christmas and stirring debate over whether vaccines alone are enough to tame COVID-19. Europe accounts for more than half of the average 7-day infections globally and about half of the latest deaths, according to a Reuters tally, the highest levels since April last year when the virus was at its initial peak in Italy. Governments and companies are worried the prolonged pandemic will derail a fragile economic recovery.

Countries including the Netherlands, Germany, Austria and the Czech Republic are taking or planning measures to curb the spread. Caretaker Dutch Prime Minister Mark Rutte announced a three-week partial lockdown from Saturday, Western Europe’s first since the summer. “The virus is everywhere and needs to be combated everywhere,” Rutte said in an address on Friday evening. The fresh concerns over what British Prime Minister Boris Johnson described on Friday as “storm clouds” over Europe come as successful inoculation campaigns have plateaued ahead of the winter months and flu season. About 65% of the population of the European Economic Area (EEA) – which includes the European Union, Iceland, Liechtenstein and Norway – have received two doses, according to EU data, but the pace has slowed in recent months. Take-up in southern European countries is around 80%, but hesitancy has hampered rollout in central and eastern Europe and Russia, leading to outbreaks that could overwhelm healthcare. Germany, France and the Netherlands are also experiencing a surge in infections, showing the challenge even for governments with high acceptance rates. To be sure, hospitalisations and deaths are much lower than a year ago and big variations by country in the use of vaccines and boosters as well as measures like social distancing make it hard to draw conclusions for the whole region.

This is a truly global crisis as no country is spared. Countries reliant on tourism, travel, hospitality, and entertainment for their growth are experiencing particularly large disruptions. Emerging market and developing economies face additional challenges with unprecedented reversals in capital flows as global risk appetite wanes, and currency pressures, while coping with weaker health systems, and more limited fiscal space to provide support. Moreover, several economies entered this crisis in a vulnerable state with sluggish growth and high debt levels.