Elevated uncertainty will persist over the next months. First, it is still unclear whether and how the deconfinement steps will affect the spread of the virus. There is a non-negligible risk of a second wave of infections once measures are partially lifted. Regional spikes of COVID-19 infections after easing of confinement have been observed in China, South Korea and Germany. If these occur on a larger scale, a partial or full reversal of the easing measures may be necessary, at additional economic costs. Close monitoring may facilitate a faster adapation of measures and the management of local outbreaks, but it will also will require some flexibility for businesses to adapt to changing local conditions. Second, while the number of new cases has been on the decline in the European Union for a few weeks, other parts of the world have not seen yet a flattening of the curve. The number of new cases is still close to its peak in the United States; in some emerging economies – such as Brazil, Russia and Middle Eastern countries - the number of new cases is still increasing. The spread of the virus in other parts of the world will continue to impact on EU economies even while European countries are gradually lifting confinement measures, for example through reduced trade.
Deconfinement andstrategies to boost economic recovery remain essential. Despite the progressive deconfinement, uncertainty remains high. Hence, measures to support businesses, employment and consumer confidence are going to remain key to facilitate the recovery. Exit strategies and the speed of lifting lockdown measures must reflect the local developments of the pandemic. At the same time, coordinated action at European level, including exchange of information on spare healthcare capacities, support for testing , research to fight the virus and a coordinated approach for restoring Schengen, can facilitate a gradual but predictable deconfinement and contribute to reviving the single market, which has a key role in supporting the economic recovery. Discussions on the EU recovery fund, which should support a forceful economic rebound, are ongoing.
3. Price, seasonal and calendar adjusted. Destatis.
4. For example, while confinement strategies of Luxembourg and Germany were similar on many aspects activity stopped for some weeks in Luxembourg but continued in Germany at reduced pace.
5. The share of companies reporting reduction of employment is 22% in Baden-Wuerttemberg and 20% in Bavaria compared to 18% on average. Ifo Business Survey for April 2020.
6. Sweden has not formally imposed a lockdown but relied on voluntary social distancing.
7. Joint Roadmap on lifting containment measures, press release 8 May.
8. In practice, residents in regions in EU countries with comparable (and relatively good) epidemiological situations would be allowed to move first, and only in a second phase would freedom of movement be restored throughout the whole Schengen area and beyond.