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19 January 2022
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Europe COVID-19 tracker Economics - Europe
Going different ways
With Omicron cases having peaked or nearing their peak Fabio Balboni
across Europe… Senior Economist
HSBC Bank plc
…the UK has announced an end to 'Plan B' from next week...
...but other countries continue down the route of selective
restrictions for the unvaccinated
Infections peaking, countries taking different directions on restrictions
In Europe, there are increasing signs that Omicron cases might have peaked (in the
UK) or might be nearing their peak (across the continent), with the largest number of
cases seen in young people. Death rates have come down in Germany and remain
contained elsewhere, while pressures on the health system appear manageable.
With that in mind, the UK Prime Minister has announced an end to 'Plan B' from
26 January (another 'Freedom day'), with people no longer asked to work from home
and mask wearing no longer mandatory. Some restrictions will remain, however, on
self-isolation requirements for people testing positive, although the government
hopes to remove that requirement from 24 March.
On the continent, governments are following a different approach. At the other end of
the spectrum, the Italian government continues to tighten further the limitations for
unvaccinated people, with proof of vaccination or recovery from the virus now
required also for hairdressers and beauty salons (from 20 January) and for all retail
shops (including tobacco shops, which might be a strong incentive for some to get
vaccinated) and all public offices, postal services and banks from 1 February.
In the coming weeks, it will be interesting to see the possible implications of these
diverging approaches on the fine balance between immediate disruption to activity to
the economy and restoring people's confidence to go back to their normal lives.
Temporary disruption to activity; inflation keeps surprising to the upside
On the data front, the Business Insights and Conditions Survey in the UK showed that
in December around 3% of the workforce was estimated to have been on sick leave or
not working because of COVID-19 symptoms, self-isolation or quarantine. Just over
one-fifth of businesses reported increased cancellations from customers (and nearly
half of those in the accommodation and food service sector). Short-time working is
also likely to have increased in December across the continent, confirming some of
the disruptions to activity from the combination of higher COVID-19 cases and tighter
restrictions. However, the ZEW survey for January showed expectations improving in
January for key manufacturing sectors, most importantly autos, which increased by
almost 21pts, while the retail sector also saw a significant improvement. This bodes
well for a relatively swift recovery. Inflation, meanwhile, surprised again to the upside
in the UK in December (5.4% y-o-y), with the recent further rise in oil and gas prices
due to geopolitical tensions adding pressure to inflation at the start of 2022.
This is an abridged version of a report by the same title published on 19-Jan-22. Please
contact your HSBC representative or email AskResearch@hsbc.com for more information.
Disclosures & Disclaimer Issuer of report: HSBC Bank plc
This report must be read with the disclosures and the analyst certifications in
View HSBC Global Research at:
the Disclosure appendix, and with the Disclaimer, which forms part of it. https://www.research.hsbc.comFree to View ● Economics - Europe
19 January 2022
Case numbers still elevated but may be peaking
1. The Omicron wave remains strong but might be starting to peak in Europe…
000s COVID-19 cases* in the eurozone 'big 4' and UK 000s
900 900
Thousands
Thousands
750 750
600 600
450 450
300 300
150 150
0 0
Mar-20 May-20 Jul-20 Sep-20 Nov-20 Jan-21 Mar-21 May-21 Jul-21 Sep-21 Nov-21 Jan-22
Germany France Italy Spain UK
Source: Refinitiv Datastream, HSBC. Note: *7-day moving average
2. …as case numbers have started to recede in some countries, especially in the UK
7dma Daily COVID-19 cases per 100k of population 7dma
500 500
400 400
300 300
200 200
100 100
0 0
Spain
Italy
Sweden
Netherlands
Greece
Portugal
Ireland
Norway
UK
France
Belgium
Switzerland
Austria
7-days to 11 Jan 7-days to 18 Jan
Source: Refinitiv Datastream, HSBC. Note: Weekend numbers are reported as 0 so ‘7-days to’ does not include Saturday and Sunday.
3. Omicron is now the dominant COVID-19 4. The Omicron trajectory in the UK
variant in most countries mirrors the precedent set by South Africa
% Omicron as % of submitted genomes % 000s New COVID-19 cases (7dma) 000s
in the past 4 w eeks (18 Jan 2022) 35 350
100 100 30 300
80 80 25 250
60 60 20 200
40 40 15 150
20 20 10 100
0 0 5 50
Spain
South Africa
Canada
Sweden
Portugal
Italy
United Kingdom
Brazil
USA
Denmark
Norway
Belgium
France
Israel
0 0
0 5 10 15 20 25 30 35 40
Day s since the start of the Omicron wave
South Africa (LHS) UK (RHS)
Source: GISAID, HSBC. Source: Refinitiv Datastream, HSBC. Note: Start date at 23 November for South
Africa and 10 December for the UK..
We acknowledge the assistance of Yash Dewan, HSBC Bank plc, in the preparation of this report.
2Free to View ● Economics - Europe
19 January 2022
Encouraging data from hospitalisations
5. The number of deaths has started to 6. Excess mortality has been declining
decline in Germany and remains relatively across the board more recently
contained elsewhere
No. COVID-19 related deaths (7 dma) No. p-score Ex ess mortality p-score
1400 1400 30 30
1200 1200
20 20
1000 1000
800 800 10 10
600 600 0 0
400 400
-10 -10
200 200
0 0 -20 -20
Feb-20 Jul-20 Dec-20 May-21 Oct-21 Mar-21 Jun-21 Sep-21 Dec-21
Germany France Italy Germany France Italy
Spain UK Spain UK
Source: Our World in Data, HSBC. Source: Our World in Data, HSBC.
7. New cases in Germany are 8. ...and in Paris cases have started to
predominantly among the young... decline even if they are still on the rise
nationally
000s Germany : New COVID cases by age (7 dma) 000s 7d-total France: COVID-19 new cases per 100k 7d-total
30 30 5000 5000
Thousands
25 25 4000 4000
20 20
3000 3000
15 15
2000 2000
10 10
5 5 1000 1000
0 0 0 0
Mar-20 Jul-20 Nov-20 Mar-21 Jul-21 Nov-21 May-20 Sep-20 Jan-21 May-21 Sep-21 Jan-22
0-4 5-14 15-34
35-59 60-79 80+ National Paris
Source: Macrobond, HSBC Source: French Government, HSBC.
9. Hospital admissions seem to have 10. In Spain the pressure on the health
started to stabilise in London system is not much higher than at the end
of August, but is worrying in some regions
No. of beds London hospitalisations No. of beds % Share of intensive cart units occupied by %
due to COVID-19 COVID-19 patients in selected Spanish regions
10000 1500 50 50
8000 1200
40 40
6000 900
30 30
4000 600
20 20
2000 300
0 0 10 10
Feb-21
Jun-21
0 0
Dec-20
Dec-21
Aug-20
Aug-21
Oct-20
Apr-21
Oct-21
Basque C.
Madrid
Catalonia
Spain
Total beds - occupied by confirmed COVID-19
patients (LHS)
Mechanical Ventilation beds - occupied by confirmed
As of 9-Feb As of 10-Aug As of 24-Aug As of 19-Jan
COVID-19 patients (RHS)
Source: NHS England, HSBC. Source: El Diario, HSBC.
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19 January 2022
Booster campaigns are continuing at speed
11. The UK is still leading the booster 12. …but other countries are closing in due
campaign in Europe… to increased vaccinations and strong
incentives thanks to COVID health-passes...
No. COVID-19 booster shots per 100 (16 Jan 2022) No. No. Total booster shots per hundred No.
60 60 60 60
50 50 50 50
40 40 40 40
30 30 30 30
20 20 20 20
10 10 10 10
0 0 0 0
Germany
Spain
Hungary
Italy
Czechia
EU
Feb-21 May-21 Aug-21 Nov-21 Feb-22
World
Belgium
UK
Austria
France
Poland
Israel
US Germany France
Italy Spain UK
Source: Macrobond, HSBC Source: Our World in Data, HSBC.
13. A slowdown in UK’s booster campaign 14 Vaccinations are proving effective in
also helped others to catch up the UK in reducing the critical cases
000s England: New COVID Vaccinations by age - 000s % UK*: Critical care admissions by %
boosters (7 dma) v accination status (2021)
350 350 80 80
Thousands
Thousands
300 300
250 250 60 60
200 200
40 40
150 150
100 100
20 20
50 50
0 0 0 0
Sep-21 Oct-21 Nov-21 Dec-21 Jan-22 May Jun Jul Aug Sep Oct Nov Dec
12-17 18-29 30-39
40-59 60-79 80< Unvaccinated One dose Two doses Booster
Source: UK Government, HSBC. Source: ICNARC, The Spectator, HSBC. Note: *Excluding Scotland.
15. Vaccination coverage is still relatively low for several countries in Eastern Europe
% Share of population v accinated (17 Jan 2021) %
100 100
90 90
80 80
70 70
60 60
50 50
40 40
30 30
Italy
Greece
Ireland
United States
Romania
Switzerland
Belgium
Norway
Estonia
Slovakia
France
Poland
United Kingdom
Austria
Germany
Spain
Latvia
Malta
Hungary
Czechia
Slovenia
Portugal
Lithuania
Source: Our World in Data, HSBC.
4Free to View ● Economics - Europe
19 January 2022
Mobility data have struggled to recover from the holiday season
16. Mobility has dropped in the UK due to 17. In the eurozone, mobility hasn't
holidays and 'Plan B' recovered yet from the holiday effect
Index UK: Stringency of restrictions Dev iation Index Eurozone: Stringency of restrictions Dev iation
and retail mobility from baseline and retail mobility from baseline
0 20 0 20
20 0 20 0
40 -20 40 -20
60 -40 60 -40
80 -60
80 -60
100 -80
100 -80 Mar-20 Jul-20 Nov-20 Mar-21 Jul-21 Nov-21
Mar-20 Jul-20 Nov-20 Mar-21 Jul-21 Nov-21
Stringency score (LHS, inverted) Mobility (RHS)*
Stringency score (LHS, inverted) Mobility (RHS)*
Source: Google mobility, Oxford COVID-19 Government response Tracker, HSBC Source: Google mobility, Oxford COVID-19 Government response Tracker, HSBC
Note: *7-day moving average. Note: *7-day moving average
18. Retail mobility data have not shown signs of marked rebound at the start to 2022...
% from baseline Europe and US: Mobility data - retail and recreation* % from baseline
20 20
0 0
-20 -20
-40 -40
-60 -60
-80 -80
-100 -100
Mar-20 May-20 Jul-20 Sep-20 Nov-20 Jan-21 Mar-21 May-21 Jul-21 Sep-21 Nov-21 Jan-22
Germany France Italy Spain
UK Sweden Norway US
Source: Google, HSBC. Note: *7-day moving average.
19. ...while the recovery in workplace mobility has been more pronounced after the
holidays
% from baseline Europe and US: Mobility data - w orkplaces* % from baseline
20 20
0 0
-20 -20
-40 -40
-60 -60
-80 -80
-100 -100
Mar-20 May-20 Jul-20 Sep-20 Nov-20 Jan-21 Mar-21 May-21 Jul-21 Sep-21 Nov-21 Jan-22
Germany France Italy Spain
UK Sweden Norway US
Source: Google, HSBC. Note: *7-day moving average
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19 January 2022
New restrictions focused on unvaccinated people, UK to re-open
20. Latest on the restrictions from the major European countries
Country Latest lockdown measures
Germany Germany further tightened some COVID-19 restrictions after a summit on 7 January and extended all previous restrictions
announced in December. Apart from the general limit of just 10 people (not accounting for children) for private and public
meetings irrespective of the COVID-19 situation and the vaccination status, a general banning of spectators from visiting “non-
regional” (sporting) events indoors and outdoors and a closure of all dance clubs and potentially bars (though the latter
depends on the federal states’ local legislation), the so-called 2G+ rule will now be applied to the whole gastronomy sector.
This means that even fully vaccinated (or recently COVID-19 recovered) people now require a negative test result that is not
older than 24 hours to enter a restaurant. However, people who have had a booster shot are exempt from the test mandate.
This new regulation thus extends the general nationwide 2G-rule for almost all other activities, including retail shopping or
private and public services irrespective of the local COVID-19 situation, and federal states are allowed to selectively apply a
2G+ rule to these sectors as well if the infection situation requires it. Moreover, unvaccinated people are even restricted from
meeting with a maximum of two people from different households and need to provide a negative COVID-19 test to use public
transport. Since the beginning of the pandemic, indoor mask wearing has been mandatory, including on public transport. More
restrictive measures in general could still be applied on a local or federal state level depending on the respective infection
situation. All these measures will be in place until at least the next scheduled COVID-19 summit on 24 January.
France Current restrictions are mainly targeted on unvaccinated people (aged above 12) via the imposition of a health pass
(i.e. a proof of full vaccination, recovery or a negative test) to access some activities (museums, cinemas, bars,
restaurants, large shopping malls, hospitals and some long-distance transport such as aeroplanes and trains). In
addition, vaccination is mandatory for some key occupations (healthcare, firefighters). Since 15 January, a booster is
required 7 months after the last dose to maintain the pass. In addition, by the end of January, it will no longer be possible to
present a negative test for people aged above 16 years.
Among other restrictions, nightclubs have been closed since 10 December and will not reopen before the end of January at
the earliest. Large events in closed places are now limited to a ceiling of 2000 people. Wherever possible, remote working is
now mandatory for at least 3 days (and preferably 4 days) per week. Non-compliant firms are subject to fines. Mask wearing is
mandatory outdoors in several departments. Regarding travel, all non-EU travellers coming to France have to present a
negative test, even if they are vaccinated.
Conversely, self-isolation rules were loosened on 3 January, due to the sharp rise in COVID-19 cases led by the
Omicron variant. For infected people, the length of the isolation period has been cut to 7 days for vaccinated people,
against 10 days for unvaccinated people. Besides, vaccinated people in contact with infected people don’t have to
quarantine if they have a negative test, contrary to unvaccinated people that have to isolate for 7 days.
Spain Since May, Spain hasn’t been in a state of emergency and the nationwide curfew has ended. As the number of COVID-19
cases has started to increase again, though, some restrictions have been reintroduced in some areas. Most regions have now
introduced a ‘green pass’ requirement for entering restaurants, bars and all cultural and sports events. Some regions have
also imposed additional limits on: the opening hours of bars, restaurants and clubs (2am or 4am if all the staff are vaccinated
or had a negative COVID-19 test); the size of gatherings (8 or 12 people, depending on the region) and the capacity of
buildings for events. Catalonia is the region which has imposed the toughest restrictions, imposing a 1am curfew in the cities
with higher infection rates and limiting gatherings to 10 people. Asturias has closed bars and restaurants indoors. Other
regions have imposed other restrictions to the opening hours of restaurants bars and clubs. Masks are not necessary in
outdoor settings where social distancing is observed
Italy Since mid-September, a ‘green pass’ (full vaccination or negative COVID-19 test) has been required to go into restaurants and
bars (indoors), theatres, cinemas public transport, as well as some outdoors venues, and attend concerts and sporting events.
Since 15 October, it has also been a requirement for all public and private sector workers, with high penalties for the non-
compliant. This was tightened on 15 December with the introduction of a ‘super green pass’, restricting access to social events
(cinemas, restaurants, theatres, etc.) to people who are vaccinated or have had the virus in the past six months – so it’s no
longer enough to have tested negative. A negative test is still sufficient to go to work though. Restrictions have been tightened
further since 10 January with the super-green pass requirement extended to several professions (health, education, military,
public facing jobs) while the vaccination has been made mandatory for people of more than 50 years of age. From 20 January,
the super green pass will also be required for hairdressers, beauty salons and all retail shops, and from 1 February for all
public offices, postal services and banks.
Currently, only six regions are left in the ‘white’ category while the remaining 14 are now back in the ‘yellow’ category with
obligatory mask wearing outdoors and further restrictions to mobility. Press reports suggest some regions could move into the
'orange' category (with a further extension of the super green pass to restaurants, shopping malls, and mobility across different
municipalities limited to essential reasons). Some municipalities in Northern Italy are now back in the ‘red zone’ with curfews
from 8pm to 5am. As for international travel, arrivals from the EU no longer have to quarantine, but they are required to show a
negative COVID-19 test undertaken within 48 hours before departure (from 16 December even if fully vaccinated).
UK Mask wearing is mandatory in public spaces, but England, Scotland and Wales have announced the end to the Omicron-
specific measures introduced in December. In England, this means the working from home guidance will be lifted and no more
vaccine passport arrangements will apply from 26 January (and masks are no longer mandatory in schools as of 20 January).
In Scotland, it means nightclubs can reopen and the three household limit on social interactions has been lifted. In Wales,
restrictions on outdoor and indoor activity will be lifted on 21 and 28 January, respectively.
As of 7 January 2022, pre-departure tests are no longer required for arrivals into the UK, and passengers will need to take a
lateral flow test, not a PCR, by day two after arrival. UK PM Boris Johnson has said that he is hoping to let all COVID-19 rules
lapse – including self-isolation for those testing positive – when the legislation expires in March.
Source: Country data, HSBC
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19 January 2022
Limited hit to activity from restrictions
21. The ZEW has shown a rebound in 22. Restaurant sales are still down
expectations in some key sectors such as following some of the recent restrictions
manufacturing (driven by autos) and retail
% Yr Restaurant sales vs 2019 (7 dma) % Yr
Index Germany : ZEW sector breakdown Index 100 100
80 80 75 75
60 60
50 50
40 40
25 25
20 20
0 0 0 0
-20 -20 -25 -25
-40 -40 -50 -50
-60 -60 -75 -75
-80 -80 -100 -100
2010 2012 2014 2016 2018 2020 2022 Oct-20 Jan-21 Apr-21 Jul-21 Oct-21 Jan-22
Retail Auto Steel
Global United Kingdom Germany
Mech. Eng. Construction
Source: Macrobond, HSBC. Source: OpenTable, HSBC.
23. Disruption to the number of flights has 24. Car registrations were a bit of a mixed
been relatively contained, however bag in December, but Germany is showing
encouraging signs
% Daily departure/arrival of flights compared vs 2019 % Index Eurozone: Vehicle registrations Index
0 0 (2019 = 100) (2019 = 100)
-20 -20 120 120
-40 -40 100 100
-60 -60 80 80
-80 -80 60 60
-100 -100 40 40
Spain
Germany
Netherlands
Italy
20 20
UK
Switzerland
Norway
Poland
Turkey
France
0 0
Jan-20 Jun-20 Nov-20 Apr-21 Sep-21
14-Apr-21 26-Aug-21 13-Jan-22 Germany France Italy Spain
Source: Eurocontrol. Source: Refinitiv Datastream, HSBC.
25. Household savings expectations 26. ...and unemployment fears have edged
remain higher than before the pandemic... up again, which might deter consumption
Index Sav ings expectations over the next 12 months Index Index Unemployment ex pectations over Index
80 80 the nex t 12 months
3 3
60 60
2 2
40 40
1 1
20 20
0 0
0 0 -1 -1
-20 -20 -2 -2
2018 2019 2020 2021 2022 2017 2018 2019 2020 2021 2022
Eurozone Germany France Eurozone Germany France
Italy Spain UK Italy Spain
Source: Refinitiv Datastream. Source: Refinitiv Datastream.
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19 January 2022
More upside surprises on inflation
27. UK inflation surprised again to the 28. Further rises in oil and gas prices could
upside in December put further pressure on inflation
% Yr UK: Headline CPI, Core CPI and RPI Inflation % Yr EUR/MWh Netherlands gas and Brent crude EUR/bbl
8 8 prices
7 7 200 80
6 6 175 70
5 5 150 60
4 4 125
50
3 3 100
40
2 2 75
50 30
1 1
25 20
0 0
0 10
-1 -1
2015 2016 2017 2018 2019 2020 2021 2022
2011 2013 2015 2017 2019 2021
RPI CPI Core CPI Gas prices (LHS) Oil prices (RHS)
Source: ONS, Refinitiv Datastream. Source: Refinitiv Datastream, Bloomberg, HSBC.
29. Market inflation expectations for the 30. As the ECB has scaled back monthly
eurozone have ticked back up but remain asset purchases, some pressure on bond
contained spreads is re-emerging
% Eurozone: 5Yr 5Yr inflation sw aps % bps ECB PEPP net purchases and Italy 10Y EURbn
2.5 2.5 spreads against German bund
300 30
2.0 2.0 250 25
200 20
1.5 1.5
150 15
100 10
1.0 1.0
50 5
May-20 Oct-20 Mar-21 Aug-21 Jan-22
0.5 0.5
2016 2017 2018 2019 2020 2021 2022 Italy 10Y bond spread (LHS)
Net purchases (RHS)
Source: Bloomberg. Source: Refinitiv Datastream, ECB, HSBC.
31. In Italy, firms are now expecting above- 32. ...and plan to continue to pass on the
target inflation in the coming years... higher costs to the consumers
% y -o-y Italy : Ex pected inflation % y -o-y % y -o-y Italy : Change in firms' own selling prices % y -o-y
4 4 3 3
3 3 2 2
2 2 1 1
1 1 0 0
0 0 -1 -1
2014 2015 2016 2017 2018 2019 2020 2021 2013 2015 2017 2019 2021
in 1 yr in 2 yrs in 3 - 5 yrs Over past 12 months Over next 12 months
Source: ISTAT, HSBC. Source: ISTAT, HSBC.
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19 January 2022
Labour market
33. Regular pay rose 3.8% 3m/yr in the UK 34. The last couple of jobs PMIs point to a
in November, but in real terms it is flat slightly less frenetic recruitment market in
given high inflation the UK
UK: AWE Index Demand and av ailability Index
%3m/y r % 3m/y r
of permanent staff
8 8 100 100
7 7 90 90
6 6 80 80
5 5
70 70
4 4
3 3 60 60
2 2 50 50
1 1 40 40
0 0 30 30
-1 -1 20 20
-2 -2 10 10
-3 -3
0 0
2016 2017 2018 2019 2020 2021 2022
1998 2002 2006 2010 2014 2018 2022
Regular pay (real) Regular pay (nominal)
Demand Availability
Source: ONS, Refinitiv Datastream. Source: ONS, Refinitiv Datastream.
35. Eurozone short-time workers dropped 36. The unemployment rate (7.2% last
to around 2.5m last November but should November) has dropped below the pre-
have ticked up in December based on data pandemic level in the eurozone, but it is
from Germany and Spain still near 8% including short-time workers
Mln Eurozone: Short-time workers Mln % Eurozone: Unemployment %
35 35 17 17
30 30 15 15
25 25 13 13
20 20
11 11
15 15
9 9
10 10
7 7
5 5 Q4 Q1 Q2 Q3 Q4 Q1 Q2 Q3 Q4
0 0 19 20 20 20 20 21 21 21 21
Mar-20 Jul-20 Nov-20 Mar-21 Jul-21 Nov-21 Headline unemployment rate
Germany France Italy Spain Other 'Shadow' unemployment rate
Source: HSBC calculations based on Ministries of Labour, national security institutes Source: Refinitiv Datastream, Eurostat, HSBC calculations.
and IFO.
37. There is mixed evidence on wage growth 38. Even in Germany contractual pay growth
in the eurozone but so far there is nothing remains modest, and in the other Big 4
that should make the ECB too worried countries it is even softer
% Yr Eurozone: Labour data % Yr % Yr Contractual pay growth % Yr
4.0 8.0 5 5
3.5 6.0
4 4
3.0 4.0
2.5 2.0 3 3
2.0 0.0
1.5 -2.0 2 2
1.0 -4.0
1 1
0.5 -6.0
2000 2004 2008 2012 2016 2020
0 0
Negotiated wages (LHS) 2007 2009 2011 2013 2015 2017 2019 2021
Comp. per employee (RHS)
Unit labour costs (RHS) Germany France Italy Spain
Source: Eurostat, Refinitiv Datastream. Source: Macrobond, Refinitiv Datastream, HSBC.
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19 January 2022
COVID-19 in Western Europe
39. COVID-19 cases seem to be past the 40. ...while in France the trend is still upwards
peak in Germany...
000s. Germany : COVID-19 cases 000s. 000s. France: COVID-19 cases 000s.
9000 120 16000 400
Thousands
Thousands
7500 100
12000 300
6000 80
4500 60 8000 200
3000 40
4000 100
1500 20
0 0 0 0
Feb-20 Jul-20 Dec-20 May-21 Oct-21 Feb-20 Jul-20 Dec-20 May-21 Oct-21
New cases (RHS) Cumulative (LHS) New cases (RHS) Cumulative (LHS)
Source: Refinitiv Datastream, HSBC. Source: Refinitiv Datastream, HSBC.
41. Cases are still on the rise in Italy... 42. …and also in Spain
000s. Italy : COVID-19 cases 000s. 000s. Spain: COVID-19 cases 000s.
10000 250 10000 350
Thousands
Thousands
8000 200 8000 280
6000 150 6000 210
4000 100 4000 140
2000 50 2000 70
0 0 0 0
Feb-20 Jul-20 Dec-20 May-21 Oct-21 Feb-20 Jul-20 Dec-20 May-21 Oct-21
New cases (RHS) Cumulative (LHS) New cases (RHS) Cumulative (LHS)
Source: Refinitiv Datastream, HSBC. Source: Refinitiv Datastream, HSBC.
43. The Omicron wave seems to have clearly 44. …and also possibly in Switzerland,
peaked in the UK despite a still elevated number of cases
000s. UK: COVID-19 cases 000s. 000s. Sw itzerland: COVID-19 cases 000s.
21000 350 2100 35
Thousands
Thousands
18000 300 1800 30
15000 250 1500 25
12000 200 1200 20
9000 150 900 15
6000 100 600 10
3000 50 300 5
0 0 0 0
Feb-20 Jul-20 Dec-20 May-21 Oct-21 Feb-20 Jul-20 Dec-20 May-21 Oct-21
New cases (RHS) Cumulative (LHS) New cases (RHS) Cumulative (LHS)
Source: Refinitiv Datastream, HSBC. Source: Refinitiv Datastream, HSBC.
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19 January 2022
45. Benelux cases are back on the rise 46. In Norway, the number of cases remains
after a relatively quieter period elevated
000s. Netherlands/Belgium : COVID-19 cases 000s. 000s. Norw ay: COVID-19 cases 000s.
4000 60 500 15
Thousands
Thousands
3000 45 400 12
300 9
2000 30
200 6
1000 15
100 3
0 0
Feb-20 Jul-20 Dec-20 May-21 Oct-21 0 0
NL - New cases (RHS) BE - New cases (RHS) Feb-20 Jul-20 Dec-20 May-21 Oct-21
NL - Cumulative (LHS) BE - Cumulative (LHS) New cases (RHS) Cumulative (LHS)
Source: Refinitiv Datastream, HSBC. Source: Refinitiv Datastream, HSBC.
47. Sweden has finally been caught by 48. The impact of Omicron has been
Omicron especially marked in Ireland but the tide
might be turning
000s. Sw eden: COVID-19 cases 000s. 000s. Ireland: COVID-19 cases 000s.
1800 30
Thousands
1200 24
Thousands
1500 25 1000 20
1200 20 800 16
900 15 600 12
600 10 400 8
300 5 200 4
0 0 0 0
Feb-20 Jul-20 Dec-20 May-21 Oct-21 Feb-20 Jul-20 Dec-20 May-21 Oct-21
New cases (RHS) Cumulative (LHS) New cases (RHS) Cumulative (LHS)
Source: Refinitiv Datastream, HSBC. Source: Refinitiv Datastream, HSBC.
49. Omicron has also spread rapidly 50. … and Greece, even though more
across Portugal… recently we are starting to see a decline
000s. Portugal: COVID-19 cases 000s. 000s. Greece: COVID-19 cases 000s.
2000 50 2000 50
Thousands
Thousands
1600 40 1600 40
1200 30 1200 30
800 20 800 20
400 10 400 10
0 0 0 0
Feb-20 Jul-20 Dec-20 May-21 Oct-21 Feb-20 Jul-20 Dec-20 May-21 Oct-21
New cases (RHS) Cumulative (LHS) New cases (RHS) Cumulative (LHS)
Source: Refinitiv Datastream, HSBC. Source: Refinitiv Datastream, HSBC.
11Free to View ● Economics - Europe
19 January 2022
Fiscal measures (in the Big 4 eurozone countries and the UK)
51. Fiscal policy was highly supportive of growth last year even if a significant chunk of
support did not make it into the economy due to restrictions and was actually saved
% GDP Decomposition of deficit changes in 2020 % GDP
14 14
12 12
10 10
8 8
6 6
4 4
2 2
0 0
-2 -2
Eurozone Germany France Italy Spain* UK*
Discretionary One-offs Economic cycle Fiscal impulse Deficit change
Source: HSBC calculations based on national statistical institutes, Eurostat and European Commission, 2020 budgets and amendments.
Notes: *Discounting the impact (0.9% of GDP) of the incorporation of ‘Sareb’ under the public sector. The ‘Economic Cycle’ component for eurozone countries and the Big 4
includes the ‘normal’ short-time work compensation schemes but not the extensions and more generous terms agreed in response to the COVID-19 crisis.
52. Stronger-than-anticipated growth has helped contain the fiscal deficits this year
despite a strongly expansionary fiscal policy, particularly in the eurozone
% GDP Decomposition of deficit changes in 2021 % GDP
4 4
3 3
2 2
1 1
0 0
-1 -1
-2 -2
-3 -3
-4 -4
-5 -5
-6 -6
-7 -7
Eurozone Germany France Italy Spain UK*
Discretionary Economic cycle NGEU 'grants' 2020 One-offs expiring Fiscal impulse Deficit change
Source: HSBC calculations based on 2022 Draft Budget Plans, Eurostat and European Commission, 2020 budgets and amendments.
Notes: The ‘Economic Cycle’ component for eurozone countries and the Big 4 includes the ‘normal’ short-time work compensation schemes but not the extensions and more
generous terms agreed in response to the COVID-19 crisis.
53. In 2022, the domestic fiscal policy stance should remain mildly expansionary in the
eurozone, thanks also to the support provided by the Next Generation EU (NGEU) fund
% GDP Fiscal impulse: Decomposition of deficit changes in 2022 % GDP
3 3
2 2
1 1
0 0
-1 -1
-2 -2
-3 -3
-4 -4
-5 -5
Eurozone Germany France Italy Spain UK*
Discretionary Economic cycle NGEU 'grants' 2020 One-offs expiring Fiscal impulse Deficit change
Source: HSBC calculations based on 2022 Draft Budget Plans, Eurostat and European Commission, 2020 budgets and amendments.
Notes: * The adjusted series takes into account that due to ongoing restrictions at least part of the stimulus implemented last year and this year did not actually feed through
into the economy but will only do so once restrictions are lifted.
12Free to View ● Economics - Europe
19 January 2022
Disclosure appendix
Analyst Certification
The following analyst(s), economist(s), or strategist(s) who is(are) primarily responsible for this report, including any analyst(s)
whose name(s) appear(s) as author of an individual section or sections of the report and any analyst(s) named as the covering
analyst(s) of a subsidiary company in a sum-of-the-parts valuation certifies(y) that the opinion(s) on the subject security(ies) or
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views or forecasts expressed herein, including any views expressed on the back page of the research report, accurately reflect
their personal view(s) and that no part of their compensation was, is or will be directly or indirectly related to the specific
recommendation(s) or views contained in this research report: Fabio Balboni.
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