Europe faces a five-week delay on the vaccination front that, if left uncorrected, could cost close to EUR90bn to the European economy in 2021, acoording to the lastest calculations of Euler Hermes, global leader in trade credit insurance.

Reaching EU Commission’s goal of vaccinating 70% of the adult population by summer 2021 would call for a vaccination pace that is roughly six times higher than currently observed.

Euler Hermes calculations show that EU countries are already five weeks behind schedule. As every week of prolonged sanitary restrictions reduces quarterly nominal EU GDP growth by -0.4pp, the current delay represents the equivalent of -2.0pp or close to EUR90bn.

For Belgium we expect a cost of EUR600 million per additional week of sanitary restrictions.

For Belgium we expect a cost of EUR600 million per additional week of sanitary restrictions.

The vaccine is the ultimate multiplier for investment and private consumption. The economic cost of the delay compares to the cost of the vaccines by a ratio of four to one. Getting the vaccination campaign on track is key as it would allow for a return to pre-crisis levels by mid-2022.

Euler Hermes:

Economic spillover effects could fuel centrifugal political forces, Eurler Hermes fears. Should the EU face a delayed return to normalcy, confidence in the European project stands to suffer a substantial blow. In particular, we are concerned about the risk of a notable increase in political uncertainty and polarization – at the national as well as the European level.

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