World Views | Europe starts to feel the vaccine effect at last

Lionel Laurent, Bloomberg

The European Union’s Covid-19 vaccination rollout had looked like a crossbetween a bad joke and a bad dream. Almost everything that could go wrong did: Logistical failures, supply delays, the odd diplomatic incident and an ugly bust-up with AstraZeneca Plc. The euro-area economy, battered by successive virus waves, fell into a double-dip recession earlier this year.
Yet the bloc has really turned a corner in recent days. A concerted effort to get needles into people’s arms, helped by an expanded supply of doses and the pressure to escape society-crushing lockdowns, is paying off. The EU daily average rate of jabs is currently around 7 doses per 1,000 people, fully closing the gap with the U.S. and U.K. this week. Germany recently broke records with 1.1 million jabs in one day, while France is about halfway there. There are already signs suggesting a newfound optimism is feeding through to the economy.
The early tics of the EU’s characteristic bureaucratic caution have been replaced with a more can-do attitude: French football stadiums and Italian museums now serve as vaccination centers, while family doctors and pharmacists have been roped in to jab patients. Despite some clumsy safety U-turns on AstraZeneca’s shot, which slowed take-up, vaccine hesitancy is ebbing as newly regained freedoms in Israel and Britain are viewed with envy. Vaccine manufacturing is ramping up, with the EU eyeing an annual production capacity of 3 billion doses by the end of 2021.
More than 70 million Europeans have now received at least one dose, equivalent to about one-fifth of the EU’s population. Even if the bloc is several months away from its target coverage of 70% of adults, that’s having a direct impact on the virus. New cases and deaths are on a downward trajectory in France, Germany, Spain and Italy, after a third wave that saw hospitals overloaded and businesses shuttered. Lockdowns are once again tentatively being lifted, hopefully for good this time.
A lot is riding on getting the next phase right. The coming summer is Europe’s best chance at something close to normality for a region that’s been starved of tourism, consumer spending and nightlife for months. Leaders are projecting confidence: Mario Draghi has told the world to book vacations to Italy, France’s Emmanuel Macron is broadening jab eligibility to all adults ahead of schedule and Spain’s Pedro Sanchez told his country that it had reached the “beginning of the end” of the pandemic.
What’s needed is to ensure both vaccine logistics and basic pandemic management stay on track. Caution is still warranted: France is lifting restrictions with daily case levels at around 300 per million people, twice the U.S.’s current level and ten times the U.K.’s. And judging by other countries’ experiences, the pace of vaccinations may slow as younger, less vulnerable people become eligible as they may be more reluctant to get the jab. It remains to be seen whether the nudges being tried, such as Germany’s offer of relaxing restrictions specifically for the vaccinated, will change that dynamic.
If the summer does bring brighter days, consumers will need confident signals to ensure the reopening leads to the spending rebound economists and investors expect. That means checking any temptation to withdraw government support too quickly amid a rise in prices and weakness in the job market.
It also means delivering on the promise of the EU’s 750 billion-euro ($905 billion) stimulus plan, due to pay out its first round of grants this summer. Barclays Plc economists reckon the euro region’s real gross domestic product won’t return to pre-crisis levels until around the middle of next year, and the pandemic’s scars will run deep.
No country or region is an island in this crisis, and this is no time to feel overly triumphant when India is going through a devastating wave of infections. But it’s still heartening to see the EU learning from past mistakes and giving itself a chance to make up for lost time. It won’t get many more.