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Europe Risks a New Economic Downturn as Lockdowns Return

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“We are completely reliant on the development of the virus,” said Sylvain Broyer, chief economist at S&P Global Ratings in Europe.

The volatile growth pattern repeated itself at the national level. Germany recorded an 8.2 percent increase in G.D.P. in the third quarter compared with the previous quarter, but business surveys indicate that the pace is likely to slow markedly in months to come.

France grew more than 18 percent in the quarter, according to official data published Friday. But Bruno Le Maire, the French finance minister, said a tough fourth quarter would cause the economy to shrink by 11 percent for the full year.

The economic cost is particularly high in industries that depend on person-to-person contact. The longer the pandemic lasts, the greater the risk of mass bankruptcies among service businesses like hotels, fitness studios and nail salons. In Paris, the hotel occupancy rate plunged to 26 percent in September, when a new curfew was put into effect, according to MKG Group, a French consulting firm. That figure is likely to worsen.

“There is unfortunately still no evidence that you can simply turn on and off an economy like a light switch without causing more structural damage, maybe even a short circuit,” Carsten Brzeski, global head of macroeconomics at ING Bank, said in a note to clients.

Only a few months ago, Europe appeared to be coming back to life. Trade fairs resumed and theaters reopened, albeit with restrictions on attendance. La Monnaie, the Brussels opera house, was brave enough to try to stage a production of “Die Tote Stadt,” by Erich Wolfgang Korngold. To avoid the need for an intermission, the performance was slashed to less than two hours, and the size of the orchestra was trimmed so that the musicians would not be crowded too tightly together.

To little avail. As Belgium recorded one of the worst infection rates in the world, the authorities forced the opera to close this month after just two performances.


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