Europe in battle to overcome economic lag vs US, Asia

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    By Dhara Ranasinghe

    LONDON- Europe’s slow vaccine roll-out means its economic recovery could lag behind upturns in the United States and Asia unless it can get the program back on track in the weeks ahead.

    The International Monetary Fund last month hailed the strong China rebound and forecast that the US and Japanese economies would return to pre-pandemic levels by the end of the year, but the euro zone won’t catch up until next year.

    While President Joe Biden’s administration aims to provide even more stimulus in a $1.9 trillion US package, EU capitals are still negotiating which projects will get funding from a 750 billion-euro joint recovery fund.

    Delays to the European Union’s vaccine roll-out and concern about new coronavirus variants, meanwhile, make it harder for European governments to ease current pandemic restrictions.

    “It remains a race between mutations of the virus and the vaccination, and euro zone countries are lagging on the vaccination process, that’s for sure,” said Sylvain Broyer, chief economist EMEA at S&P Global Ratings.

    Data this week showed the euro zone’s downturn deepened in January as renewed restrictions hit the region’s dominant service industry hard. Existing lockdowns in many countries are set to last into March and beyond.

    A German survey on Thursday showed that companies in the zone’s biggest economy expect restrictions of some kind to be in place until mid-September.

    Much of the concern lies with the EU vaccination program, launched with much fanfare on Dec. 27 but since struggling with slow rollouts and shortages of vaccine.

    According to calculations by trade insurance group Euler Hermes, average daily vaccination rates across major EU economies stand at just 0.12 percent of the population – four times lower than in Britain and the United States.

    EU countries have so far given first doses to about 3 percent of their populations, compared with 9 percent for the United States and 14 percent for Britain, according to Our World in Data.