Currently there is no stopping of COVID-19 and it is escalating in Europe. There are a lot of people who take the measures seriously and do live according to the ‘social rules’ that governments have come up with. But large numbers of people do not. This is a concern and not helping getting out of the crisis. That is the disadvantage of all having stubborn own opinions. Like we all know better how our favorite football team should play, we all are our own virologists. The virus started in December 2019 in China and for a long time it was mainly a ‘Chinese’ virus. China has the virus under control. In Europe numbers do increase rapidly and the situation in hospitals, especially in Italy, is getting very worrying.
Governments are trying to limit the economic damage and do come up with large stimulus packages to compensate company losses and to avoid massive layoffs. Lockdowns can be effective to stop the virus from spreading, but they cannot take forever. The economy can take it for a couple of weeks, maybe 1 or 2 months? But at some point the economic damage is getting too large. Public health comes first. A complete economical disaster will also hurt public health. People are losing jobs, get stressed out, suicide numbers go up, welfare goes down drastically for large groups, et cetera.
Whats next?
The problem for the financial markets is that no one exactly knows what scenarios are likely in the upcoming months. If the virus does not get under control, do countries keep extending lockdowns? Or do they just at some point get out of lockdowns and come up with more creative solutions, in which restaurants and shops can be opened again? And does anybody have a good idea how far we are away from infection peaks? There are no clear answers and the market does not know how to price itself.
60+ lockdown
At some point we might have to accept that we do not have full control over the virus. But the economy needs to keep running somehow. People need to have money to buy bread. The government can only help the people for so long. One thing we know for sure: people above 60 years old are most at risk. Quite a large part of 60+ individuals does not work anymore and not having them in the workforce is not a severe problem. An idea could be to force a 60+ lockdown (and maybe also other people in risk categories). These people cannot leave their homes. Food needs to be delivered to the door, no one should enter their homes. And if necessary for assistance, nurses should be checked on temperature before they come in contact with the 60+ individuals.
Back to normal
With a 60+ lockdow, life can go a bit further back to normal again. People should still work from home if possible. But shops, restaurants, cinemas, et cetera can go open again under certain (strict) rules. Quite some young (healthy) people will get infected but only a small part needs to get to the hospital. Slowly the country builds up group immunity, with not too many mortalities. This is a situation that is acceptable to be in for longer time, like a year. Probably till there is a vaccine. And maybe the virus does go away in summer and everything can go fully back to normal. Countries need to go to more creative solutions instead of going for drastic lockdowns which are panic reactions. Panic reactions are fine for a short time, but not a permanent solution.
