Spanish-Led Outbreaks Fuel Concerns of Further Economic Pain

(Bloomberg) --

An uptick in coronavirus infections across Europe is fueling concerns of a fresh hit to the economy as governments reinstate travel and social restrictions.

Spain is at the center of those concerns. The country recorded 1,525 new cases on Friday, the most since April 29, and several governments have issued recommendations against traveling to parts of the country. The U.K. has gone as far as ordering a quarantine for all travelers from the nation.

While Spain’s numbers stand out, the British government itself made a surprise announcement Thursday night to reimpose lockdowns in northern England as Covid-19 cases spiked. Italy, the original European epicenter of the pandemic, has also seen an increase in virus numbers, along with France, Germany and Belgium.

The latest Spanish figures, in which new infections climbed by almost 300, show that outbreaks are no longer focused on Catalonia. The number of cases in the Madrid region rose by 372 on Friday, up from 225 a day earlier, while those in Catalonia dropped by almost half.

The Thursday night order by Boris Johnson’s government means that at least 4.3 million people in the Greater Manchester area, as well as two other regions, will no longer be able to meet indoors with members of other households. The order comes on the heels of the Johnson administration’s unexpected decision last week to impose a two-week quarantine on all travelers from Spain.

Strong Reaction

The U.K.’s move triggered a strong reaction from the Spanish government, which argues that the outbreaks are under control as it grapples to salvage the summer holiday season for the local tourism industry. Spain’s economy contracted by 18.5% in the second quarter, the biggest drop in Europe, led by plunges in consumer spending and investment.

Although the Spanish infections are concerning, the health ministry highlighted Thursday that more than 60% of those who have tested positive aren’t suffering symptoms, a sign that the detection process is catching the infection in its initial stages. Ministry data also shows that just 10 people have died in the past week, a far cry from the hundreds dying each day during the worst of the pandemic.

All the same, other European nations, including France, have also advised against travel to certain regions such as Catalonia.

France itself on Thursday reported that the virus infection rate has almost doubled over the past three weeks, requiring “quick and sizable efforts” to contain the surge, according to the national public health agency. The number of new cases is increasing by more than 1,000 a day and the spread accelerated this week.

Italy also saw an uptick in cases on Thursday, with 386 new infections. The increase is the highest since June 5 and is largely connected to outbreaks in welcome centers for migrants in Veneto and Sicily.

Germany recorded the highest number of new coronavirus cases in six weeks on Friday. A spate of smaller outbreaks has kept the infection rate above a key threshold for seven straight days, fueled concerns that the disease may spread more rapidly.

In both Spain and France, health authorities have signaled to family gatherings as one particular type of spreading event. For its part, Belgium has restricted social contacts to a maximum of five per household for four weeks after a surge of new cases since mid-July. Antwerp, the hardest-hit province, has enforced an 11:30 p.m. curfew.

©2020 Bloomberg L.P.