Summer time journey restrictions will ‘dent’ Mediterranean economies’ restoration

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Robust journey restrictions throughout Europe may considerably injury the economies of Greece, Spain and Portugal, as holidaymakers may go for one other summer time of home journeys.

Jack Allen-Reynolds, Europe economist at financial analysis agency Capital Economics, stated the emergence of latest Covid-19 variants and eurozone authorities’ sluggish progress with vaccinations “imply that there’s a rising danger of one other summer time vacationer season being misplaced”.

He stated: “That will put an enormous dent within the Greek economic system and considerably delay the recoveries in Spain and Portugal.”

He warned that the slower tempo of vaccinations in Europe, in comparison with different superior economies, implies that strict measures stay longer within the eurozone than elsewhere.

“Even when home lockdowns are eased, worldwide journey restrictions may put Europe’s summer time tourism season in danger,” he stated.

Portugal, Greece and Mediterranean islands akin to Malta and Cyprus stand to lose essentially the most due to their higher dependence on tourism.

Among the many 4 largest economies, Spain is most in danger. Spain’s journey companies exports in Q3 are usually equal to round 2% of annual GDP however fell to simply zero.5% final yr, stated Allen-Reynolds.

The seasonal sample is much less excessive in France and Italy, and virtually non-existent in Germany.

A number of the misplaced income may be made up by further spending from home residents however Allen-Reynolds stated that the southern economies stand out as susceptible.

“Against this, Belgium and Germany may even profit, as a result of the potential lack of overseas vacationer spending may very well be outweighed by further spending by residents who would usually go to different nations,” he concluded.

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