• 04 A long (European) economic winter is coming
• 06 Desperately seeking an adequate policy response. What does this mean for corporates? What does this mean for markets?
• 08 Country focus: The costs of ‘lockdown light’ in Germany, France, Italy, Spain and the UK

Lockdown 2.0 or ‘lockdown light’ in Europe embodies the stop-and-go strategy, which should follow epidemic cycles until a post-vaccine return to normal in 2022. Yet these new restrictions are not a replay of Spring 2020 as their economic hit to Q4 2020 GDP should prove 30-60% less severe. The Eurozone recovery could thus be delayed but not derailed.

Q4 2020 GDP looks set to contract by around –4% q/q, bringing the full-year 2020 forecast to –7.6%. How-ever, expect a timid recovery in 2021 (+4.1% vs +4.8% expected at end September) as strict rules on social interactions remain in place. Only in the second half of 2021 will the anticipated availability of an effective vaccine, to be rolled out before year-end, provide some much needed tailwind to the economic recovery by reducing eco-nomic uncertainty. Nevertheless, the risk of long-term scarring to the economy has risen in the face of more insolvencies, higher unem-ployment and increased pressure on the banking sector.

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