What hopes remained that Europe was recovering from the economic catastrophe delivered by the pandemic have all but disappeared as the lethal virus has resumed spreading rapidly.
France, Europe’s second-largest economy, this week amplified the concern as the government downgraded its forecast pace of expansion for the last three months of the year from an already minimal 1 percent to zero. Overall, the statistics agency predicts the economy will contract by 9 percent this year.
The diminished expectations are a direct outgrowth of alarm over the revival of the virus. France reported nearly 19,000 new cases on Wednesday — a one-day record, and nearly double the number seen the day before. The surge prompted President Emmanuel Macron to announce new restrictions, including a two-month shutdown of cafes and bars in Paris and surrounding areas.
In Spain, the central bank governor this week warned that the accelerating spread of the virus could force the government to impose restrictions that would produce an economic contraction of as much as 12.6 percent this year.
The European Central Bank’s chief economist on Tuesday cautioned that the 19 countries that share the euro currency may not recover from the disaster until 2022, with those that are dependent on tourism especially vulnerable.
Summer increasingly feels like a distant memory.
In August, with infection rates down, lockdowns lifted, and many Europeans indulging in the sacred ritual of the summer holiday, signs of revival were abundant. Many European economies expanded dramatically as people returned to shops, restaurants and vacation destinations.
Hopes had also been buoyed by a landmark agreement forged by the European Union to raise a $750 billion ($883 billion) euro relief