Pandemic Grips Europe as Spanish Deaths Rise and Economy Slumps

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The coronavirus pandemic tightened its grip on Europe as Spain reported its highest death toll for a single day and further evidence emerged of the crippling impact on the continent’s economy.

Spanish authorities recorded 514 deaths on Tuesday, with the country struggling to contain the outbreak despite strict rules that are keeping people from leaving their homes. Prime Minister Pedro Sanchez has warned that the worst is yet to come, while Italy tightened restrictions on movement and Britain spent its first day in lockdown.

There’s no sign yet of the pandemic peaking, and different countries are at varying stages of trying to cope with the sheer influx of patients to hospitals and the effects on economies of keeping everyone indoors. The French and German governments are looking at further measures to keep companies afloat and pump money into the system once the virus risk eases, on top of aid already committed.

Italy passed China last week to become the deadliest center of the disease, yet the focus Tuesday was on Spain, where fatalities increased to 2,696 from 2,182 the day before, according to health ministry data. The number of confirmed cases rose to just shy of 40,000.

Spain is already in the second week of a lockdown set to continue until April 11, with severe restrictions on mobility, police patrolling the streets and the army helping to move patients. In Madrid, the regional and city governments have set up makeshift hospitals in hotels and at the main convention center to alleviate the stress on a public health service operating at full capacity.

Tighter Grip

Italy’s government now may impose fines of up to 3,000 euros ($3,260) for violations of the lockdown. A cabinet meeting chaired by Prime Minister Giuseppe Conte later Tuesday was expected to approve the fines, and police powers to seize vehicles of anyone caught violating the restrictions, according to people familiar with the matter.

Economically, the country is in turmoil, with almost all industrial production now shuttered. The cabinet is also planning to approve a measure allowing for the extension of different levels of lockdown up to July 31, if circumstances should warrant it, according to a document seen by Bloomberg.

The U.K. could tighten its lockdown measures if more action is deemed necessary after Prime Minister Boris Johnson ordered people to stay at home. The government approved a ban on all unnecessary movement of people for at least three weeks. Police will break up gatherings and will have the power to fine individuals who defy the tough new laws.

On Tuesday, Cabinet Office Minister Michael Gove said further action will be considered and stricter rules could be imposed if necessary. The U.K. had previously been criticized for moving too slowly on social distancing, with schools, pubs and restaurants closing only on Friday.

Hit Hard

Indeed, across Europe, companies are taking a financial battering not seen in decades as the curbs on businesses and households bite.

The first major data outlining the damage showed companies seeing demand plunge at a record pace, activity shrinking and confidence dropping. Governments and central banks have promised massive stimulus to cushion the blow and protect jobs, yet politicians and policy makers are unlikely to be able to stave off a deep recession this year.

In Germany, Chancellor Angela Merkel’s government is evaluating an additional stimulus program to help revive the economy after the coronavirus crisis recedes, according to a person close to the discussions. The package to get the economy growing again, should it be needed, would come on top of the more than 750 billion euros in emergency aid announced Monday, this person said.

The action would be targeted for immediate impact, though a broad distribution of funds isn’t on the table, the person said. The finance ministry declined to comment. The economy ministry wasn’t immediately available to comment.

Meanwhile in France, the government has compiled a list of companies that need state support to survive, with the aeronautics and auto industries among the priorities.

— With assistance by John Follain, Birgit Jennen, Tim Ross, and Ania Nussbaum

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