Record economic slumps hit Europe in face of resurgent virus

PARIS: Devastating economic figures poured in Friday as nations counted the cost of their efforts to contain the coronavirus pandemic, even as fresh spikes forced many countries including Britain to put the brakes on a return to normality.

Six months after the World Health Organization (WHO) declared a global emergency, the novel coronavirus has infected more than 17 million people, with global daily cases now approaching the 300,000 mark. The impact is being felt in every sphere of life, with elections postponed in Hong Kong - the latest blow to its democracy activists - and the annual Muslim Hajj pilgrimage in Saudi Arabia performed with reduced numbers. The sacred Hajj pilgrimage in Saudi Arabia has been held with some 10,000 Muslim faithful allowed, instead of the roughly 2.5 million that attended last year.

In a sign of the terrible trade-offs being forced on governments, Britain imposed new lockdowns in several northern counties on Friday, just as Western Europe announced historic economic slumps that would have been unthinkable at the start of the year.

France's economy contracted by 13.8 percent in the April-June quarter, mirroring similar devastation in Spain (18.5 percent), Portugal (14.1 percent) and Italy (12.4 percent). Europe as a whole saw GDP fall by 12.1 percent in the eurozone and 11.9 percent across the Union bloc.

"It is a shocking drop, but completely understandable as the economy was shut for a considerable period," said Bert Colijn, senior economist at ING Bank.

One sector that is not struggling is pharmaceuticals, as the world pins its hopes on the race for a vaccine. Pharma giants Sanofi and GSK announced they will receive up to $2.1 billion from the US government for the development of a Covid-19 vaccine. And the US-German pharma team-up of Pfizer and BioNTech signed a deal with Japan to provide 120 million doses of their potential vaccine. They kept the size of the deal under wraps, but the US government recently put the cost of 100 million doses from those firms at almost $2 billion.

But many businesses are in freefall, with airline conglomerate IAG, the owner of British Airways, posting a first-half net loss of 3.8 billion euros ($4.5 billion) and UK bank NatWest sliding into the red, while Dutch airline KLM and truck makers Scania said they were each shedding 5,000 jobs.

It comes a day after the United States - the world's hardest-hit nation and its biggest economy - posted a second-quarter fall of 9.5 percent compared with the same period a year ago, the worst it had ever recorded.

While strict European lockdowns were effective in bringing cases and deaths under control, an uptick in cases means the restrictions are far from over, even if they have become more localised and specific.

Britain was the latest to impose new measures on Friday, banning different households from meeting indoors across Greater Manchester, and parts of Lancashire and Yorkshire.

Britain also delayed plans to reopen casinos, bowling alleys and skating rinks, due to begin on Saturday, while also putting off plans to resume indoor performances and larger stadium crowds.

Germany added three northern Spanish regions to its list of high-risk destinations, including the tourist hotspots of Barcelona and the beaches of the Costa Brava, meaning anyone arriving from those areas will have to produce a negative coronavirus test or go into quarantine for 14 days.

Denmark reversed its stance on face masks, recommending them on public transport just days after saying they did not "make sense in the current situation."

The UN health agency's emergency committee was to meet for a fourth time Friday to assess the raging pandemic and its status as a public health emergency of international concern (PHEIC) - WHO's highest level of alarm.

Meanwhile, Vietnam recorded its first coronavirus death on Friday as the pandemic rebounds in a country that had previously been praised for stubbing out the contagion. And Hong Kong said it would delay local elections planned for September because of a virus surge - the latest in a string of bad news for democracy activists.