The reimposition of coronavirus restrictions has caused the recovery to stall – if not go into reverse in many countries – with France and Spain most affected. There are tentative signs that the number of new cases is beginning to slow again in Spain, but it will be a long time before governments risk lifting their restrictions. The second wave has already prompted people to scale back travel to recreational and retail centres and is likely be a drag on the economy until well into next year. As a result, fiscal support for the economy will need to be sustained and the ECB will have little choice but to extend its emergency asset purchases (the PEPP) beyond the middle of next year.
Become a client to read more
This is premium content that requires an active Capital Economics subscription to view.
Already have an account?
You may already have access to this premium content as part of a paid subscription.
Sign in to read the content in full or get details of how you can access it
Register for free
Sign up for a free account to gain:
- Unlock additional content
- Register for Capital Economics events
- Receive email updates and economist-curated newsletters
- Request a free trial of our services