economy europe Markets

The Virus Strikes Back (Too Complacent)

Foreboding headlines around COVID-related travel restrictions put a dent in risk appetite Friday, as the UK said arrivals from France, the Netherlands, and Malta would be required to quarantine for two weeks. They join Spain, the Bahamas, and Belgium on the UK’s quarantine list.

“The biggest priority has to be to protect our hard-won gains in getting the virus under control and not re-importing it as people return home”, UK Transport Secretary Grant Shapps remarked. Apparently, there are more than 150,000 British citizens on holiday in France, which means this has the potential to be a logistical nightmare.

“British holidaymakers are racing back from France today to avoid the two-week quarantine that comes into effect at 4am on Saturday”, The Telegraph writes, adding the following,

They face paying hundreds of pounds to make a quick exit from the country with the cheapest ticket on a Eurostar train from Paris to London going for £210 this morning.

The cost of taking a car through the Channel Tunnel on Eurotunnel Le Shuttle services on Friday morning was £260, with the operator warning those without valid bookings not to travel to the terminal. All trains after midday are fully booked. Telegraph Travel has learned of one-way flights from the south of France to the UK as high as £800

Among nearly half a million Britons holidaying in France was Kate Bussmann. “We decided to move our Eurotunnel booking forward to Thursday evening. It was a not-cheap gamble – it cost £99 to change – but we have no regrets at abandoning our holiday early,” she says.

The UK’s decision comes just hours after Boris Johnson said the UK will relax restrictions on more businesses, even as fines for violations of containment protocols will be steeper going forward.

Earlier this week, the UK said the economy contracted more than 20% in the second quarter. It was the worst performance among large, developed nations and stood out even in Europe, where the likes of Spain and Italy suffered grievous contractions.

The UK’s cautious approach to travel comes amid signs the virus is making a comeback across Europe.

“One can only be worried as hundreds of new people are hospitalized”, French Health Agency chief Jerome Salomon said. “No one wants to go through again”, he added, referencing the worst days of the country’s outbreak. Salomon cautioned that some people are not complying with social distancing rules.

Germany, meanwhile, reported the most new cases since May.

Travel stocks in Europe slid Friday as the grim news proliferated.

In Spain, a business lobby expressed grave concerns about the deleterious effect of a prospective new lockdown. The country is also grappling with an increase in caseloads.

New Zealand’s outbreak worsened as well. There were a dozen new local cases Friday, some of which were outside of Auckland, which was locked down this week after the discovery of four infections snapped the country’s 102-day streak without a local case.

Europe also got a stark reminder of how devastating the virus was to the economy. In the course of confirming the euro-area’s massive 12.1% contraction, Eurostat said 4.9 million jobs were lost during the first half of 2020. That negates more than 40% of the labor market gains since the last recession.

Perhaps — just perhaps — market participants have become too complacent as the dog days of summer drag on.


 

3 comments on “The Virus Strikes Back (Too Complacent)

  1. Prestwick AK says:

    Will be interesting to see how US back-to-school impacts the new case counts, in those locales where in-person classes are occurring.

  2. I think you can bet the farm on new higher spikes where the case loads are high and testing is still erratic.

  3. At least the Europeans are dealing with Covid-19 more effectively than we are…Based on WHO statistics as of 08/15/20, European region experienced 27.72 deaths per 100,000 population. In the US the Covid-19 death rate is 51.52 deaths/100K population.
    This means that, had we followed European procedures for dealing with the virus, we would have had 89,304 deaths, instead of the 165,995 deaths we currently have. The difference (76,691) is blood on the hands of President Trump (deaths we needn’t have experienced).

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