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Denmark Attempts Return From Virus Lockdown After Early Response

Denmark Attempts Return From Virus Lockdown After Early Response

(Bloomberg) -- One of the first countries in Europe to shutter its economy in response to Covid-19 may soon be ready to start the slow road back to normal life.

“We’ve managed to avoid the misfortune that has befallen a number of other countries,” Denmark’s Prime Minister Mette Frederiksen said at a press conference in Copenhagen on Monday. “The only reason for that” is that “we acted early.”

Denmark Attempts Return From Virus Lockdown After Early Response

After Easter, Denmark will open kindergartens and primary schools for the first time in a month. And the government will start talks with business leaders on gradually moving employees back into offices, Frederiksen said.

It’s a clear sign that nations willing to take drastic steps early on now find themselves on a different trajectory to those that were slow to react. In neighboring Sweden, Prime Minister Stefan Lofven recently admitted he’ll need to review his laissez-faire response to the virus, after new forecasts showed that thousands of his countrymen will lose their lives to Covid-19.

The pandemic has been quick to expose weaknesses in national health-care systems and political bureaucracy. In the U.S., President Donald Trump was initially reluctant to acknowledge the seriousness of the threat. Now, the world’s richest economy is the new global epicenter of the virus. In the U.K., where policies have veered from no restrictions to a sudden lockdown, Prime Minister Boris Johnson is himself in hospital with Covid-19.

In Denmark, Frederiksen said any signs of an uptick in the number of cases would be followed by an immediate resumption of restrictions. What’s more, Denmark will keep its borders closed, travel restrictions will remain in place and gatherings bigger than 10 people are still banned, she said. Restaurants, bars and cafes will remain closed.

Tipping Point

But across continental Europe, there appeared to be signs the region may be approaching a tipping point. In some of the worst-hit countries, the death toll is starting to recede. On Sunday, Italy reported its lowest single-day fatality rate in 2 1/2 weeks, providing further evidence that its strict confinement measures are starting to bear fruit. And Austria said on Monday it will be taking its first steps to restart the economy after Easter.

Danes were told on March 11 that their lives would need to change drastically in order to prevent the spread of the virus. On that day, the nation tuned in to a press conference after dinner, in which Frederiksen said that schools would be shut, and everybody besides emergency personnel was to stay home.

In a rare televised moment a few days later, Denmark’s Queen Margrethe II -- a hugely popular figure in the country -- addressed the nation to underline the need to comply with the new social distancing requirements. She even went as far as to say it would be unconscionable to invite guests, and promptly canceled her own 80th birthday celebrations.

Denmark, which thanks to its welfare model already boasts one of the world’s best functioning health-care systems, has more than seven times as many beds with ventilators as it has patients hospitalized with critical Covid-19 symptoms. And because of its universal health-care model, all treatment, including testing, is free to those in need of it.

On Monday, Frederiksen said more resources are being plowed into the nation’s health-care system to step up the rate of Covid-19 testing, which she said was a key part of the strategy to gradually re-open the economy.

Denmark Attempts Return From Virus Lockdown After Early Response

Like most other places, the number of cases has picked up in Denmark. But its mortality rate is much lower, at 3.9%, or 3.09 deaths per 100,000 people, according to data compiled by John Hopkins University. That compares with 12.3% in Italy (26.29 deaths per 100,000), 10.2% in the U.K. and 8.6% in France.

In recent weeks, Denmark passed so-called coronavirus laws, empowering police to issue hefty fines if people are caught in groups of more than 10. Immigrants caught stealing equipment such as hand sanitizer can be expelled, while Danes face prison sentences for similar offenses.

The strict measures triggered considerable debate in Denmark, with some critics lambasting the blanket approach and its destructive effect on the economy. Through it all, however, Frederiksen’s popularity has soared, with almost 80% of Danes backing her approach.

Now, Denmark’s potential return to normal sooner than others has drawn forecasts for a quicker rebound in the economy. On Monday, Denmark’s Economic Council predicted a GDP contraction of only 3.5%, if output returns to normal quickly. That compares with the recent worst-case scenario painted by the central bank, for GDP to shrink as much as 10%.

The government’s decision to open parts of the economy “makes very good sense,” Sydbank said in a client note. “It’s obviously not kindergartens and primary schools that drive the bulk of economic growth, but this creates the foundations that allow us to resume activity in businesses.”

©2020 Bloomberg L.P.