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Macro
Focus Euro Area
Delta variant: downside risks to growth? 13 August 2021
The Delta variant of the coronavirus spread rather rapidly in the United Kingdom at the
beginning of May and has quickly become dominant in continental Europe as well.
On 23 July, the World Health Organisation’s Regional Office for Europe issued a press
release confirming that SARS-CoV-2 Delta VOC is now present in almost all EU countries
and is dominant in 19 out of the 28 States that provided the WHO with sufficient Research Department
analytical data.
However, thanks to vaccinations, in the major European countries the strong uptrend
of infection cases has not placed healthcare systems under pressure, nor has it
prompted the introduction of significant restrictive measures. Overall, the reopening Macroeconomic Research
of the economies has continued as planned.
The economic impact is hard to quantify, but seems relatively limited. We have not
revised down our growth projections. Future risks persist tied to the limited diffusion of
vaccines in the in the emerging countries. Lorenzo Biagioli
Economist - Euro Area
Unlike the previous strains of COVID-19, the Delta variant 1 is warranting for heightened attention
on the part of national governments and health authorities, due to its higher morbidity rate (+40-
60% compared to the original strain) and to the higher potential risk of hospitalisation (not yet
confirmed at the present stage of research). The other risk factor, that calls for an acceleration
of the vaccination campaign, lies in the fact that individuals that have received only the first
dose of a vaccination cycle would seem to be less protected against the Delta variant
compared to other variants, regardless of the type of vaccine. Full vaccination, vice versa, as
indicated by Dr. Hans Henri P. Kluge (WHO Regional Director for Europe), seems to allow a
significant reduction of the risk of contracting the more severe forms of the virus.
Based on the latest risk assessments of the European Centre for Disease Prevention and Control
(ECDC) published between June and July, considering that SARS-CoV-2 Delta is the dominant
variant throughout the EU (see Table 1), we may conclude that:
The overall risk of SARS-Cov-2 infection tied to the forecast increased diffusion of the Delta
variant, for the overall population, is considered low for the fully vaccinated population
subgroups, and high for the partially vaccinated or unvaccinated population sub-groups
The overall risk of contracting SARS-Cov-2 for vulnerable individuals, tied to the forecast
increased diffusion of the Delta variant, is considered to be low to moderate for the fully
vaccinated population sub-groups, and very high for the partially vaccinated or
unvaccinated sub-groups
Contagion risk is significantly higher when NPI 2 measures are not used and full vaccination is
not rapidly achieved.
1 COVID-19 variants are named by the WHO after the letters of the Greek alphabet to avoid
stigmatisation of the nations in which they are detected and reported. The new system applies to the
four variants of concern – the most worrying currently circulating – and to second level concern variants
that are being monitored. The labels “will not replace existing scientific names, but are aimed to help
in public discussion", said Maria Van Kerkhove, the WHO’s COVID-19 technical lead. Under the new
system, the hitherto called B.1.1.7 UK variant becomes Alpha; the B.1.351 South African strain becomes
Beta, and the P.1 Brazilian variant is now called Gamma. The so-called Indian B.1.617 is split into sub-
lineages, of which the B.1.617.2 variant of concern becomes “Delta”.
2 Non-pharmaceutical intervention (NPI). With specific reference to COVID-19, NPI includes measures
such as lockdowns, social distancing, compulsory facemask use, and respect of hand hygiene rules.
Based on information available up to 13 August 2021
Please read carefully the important disclosures at the end of this publication.Focus Euro Area 13 August 2021
The President of the EU Commission, Ursula, von der Leyen, recently confirmed that the goal of EU target achieved: 70% of
vaccinating 70% of the adult population in Europe with at least one dose by the end of July has adult European citizens fully
been achieved. In the meantime, after having submitted to the US FDA and the European EMA vaccinated by the end of
agencies their request to authorise the administration of a third dose of the vaccine, Pfizer and July
BioNTech provided the two agencies with an update on the clinical data available, based on
which a “third shot” increases the immune response to the Delta variant by five times in people
aged between 18 and 55.
Table 1 – Delta VOC already dominant in most of Europe
Increase of new cases (15-day % chg.) % Delta VOC on total cases recorded
UK -35.9 99.8
Italy 82.3 91.2
France 81.4 89.2*
Germany 80.4 99.1
Spain -10.3 97.8
Switzerland 46.3 100
Sweden 81.7 92.5*
Norway 91.0 90.4
Netherlands -61.4 90.0
Belgium 17.7 98.0
Note: * Data available as at 26 July. Source: Intesa Sanpaolo elaborations on data provided by Our World in Data (as
at 7 August 2021)
The updated situation in Europe
After having experienced an exponential surge of new infections starting respectively in May and Vaccination rate slowing.
June, the United Kingdom and Spain are recording a significant decline in the number of Delta Hospital facilities distant from
variant cases, despite a slowdown of the pace of vaccinations throughput Europe in the present past levels of stress
phase (see Fig. 4). Available data seem to indicate that the new doses administered in the
summer months are mostly second shots. In essence, those who considered getting vaccinated
as a priority have already done so, and those against should largely confirm their intention in the
future as well 3. The residual portion of the population reportedly intends to receive a first dose of
the vaccine at the end of summer, also due to the fact that the limitations imposed by not having
a COVID Green Certificate (in countries where it has been introduced) will become more readily
evident in the autumn (see below for a more detailed picture of the measures put in place by
individual countries). With specific reference to the United Kingdom, where on 19 July (“Freedom
Day”) all virus containment measures were removed, the favourable trend of infection numbers
is probably explained by the more cautious approach taken by citizens. However, the contagion
curve is rising back up as we write.
3 Based on ECDC data as at 8 August, the share of the European population not yet vaccinated
amounts to 48.4% in the 18-24 year cohort, and 36.2% in the 25-49 age group. For the more vulnerable
portion of the population (over-70s), the percentage is 13%.
Intesa Sanpaolo – Research Department 2Focus Euro Area 13 August 2021
Fig. 1 – New cases: most worrying surge in France Fig. 2 – Population vaccinated with at least one dose (%)
x 1,000 x 1,000
50 200 80 80
40 150 60 60
30
100 40 40
20
10 50 20 20
0 0 0 0
Mar Apr May Jun Jul Aug Dec Jan Feb Mar Apr May Jun Jul
2021 2020 2021
France Spain European Union Germany
Italy Germany France Italy
UK EU (RH Scale) Spain United Kingdom
Source: Refinitiv Datastream Source: Refinitiv Datastream
Source: Intesa Sanpaolo elaborations on Refinitiv-Datastream data Source: Intesa Sanpaolo elaborations on Refinitiv-Datastream data
Fig. 3 – Fully vaccinated population (%) Fig. 4 – Vaccination rate expected to rise back up after the
summer holiday period
x 1,000 x 1,000
80 80 15 15
New doses administered/mln pers. (MA 7 days)
60 60
10 10
40 40
5 5
20 20
0 0 0 0
J F M A M J J A D J F M A M J J A
2021 2021
EU UK France FR IT DE
Spain Italy Germany ES UK EU
Source: Refinitiv Datastream Source: Refinitiv Datastream
Source: Intesa Sanpaolo elaborations on Refinitiv-Datastream data Source: Intesa Sanpaolo elaborations on Refinitiv-Datastream data
Fig. 5 – Hospitalisations: data confirm the effectiveness of the Fig. 6 – Mortality rate stable, but may not yet fully reflect the
vaccines against the Delta variant as well evolution of the new variant
70 70 35 35
New weekly entrances/100K pers. 14-day cumulated deaths
60 60 30 per 100k people 30
50 50 25 25
40 40 20 20
30 30 15 15
20 20 10 10
10 10 5 5
0 0 0 0
2020 2021 2020 2021
IT FR DE BEL DEU ESP
ES NLD FRA ITA NLD
Source: Refinitiv Datastream Source: Refinitiv Datastream
Source: Intesa Sanpaolo elaborations on Refinitiv-Datastream data Source: Intesa Sanpaolo elaborations on Refinitiv-Datastream data and
WHO
Among the major economies, Italy and Germany are the countries in which the rise of new
infections in absolute terms is still limited, whereas in Spain the measures put in place to date
seem to have produced more than satisfactory results. On the other hand, the current trend of
the contagion curve is most worrying in France, despite the introduction of relatively stricter
measures to contain the diffusion of the Delta variant. The latest ECDC update on the pandemic
Intesa Sanpaolo – Research Department 3Focus Euro Area 13 August 2021
situation in Europe (released on 6 August) outlines a rise of the new infection rate to 214 per 100
thousand population (fifth consecutive increase), a higher mortality rate from 3.6 to 4.7 per million
population, and roughly stable hospitalisations. The forecasting model projects broadly stable
infection rates for the next two weeks, and an increase of the mortality rate to 6.9 per million
population, concentrated in France, Spain and Greece. The expected dynamic does not imply
significant changes to health restrictions significative.
The “four waves” of COVID-19 compared
If we split the evolution of the COVID-19 pandemic – from its onset in Europe until today – into The start of the vaccination
four separate waves, with no interruption between them 4, the following picture emerges: campaign marked the main
watershed, but diversity by
The introduction of vaccines resulted in a plunge in new infection cases between the third
geographical region is a still
and fourth wave, when the first-dose administration rate grew progressively in all the Eurozone
unresolved issue
countries, also extending individuals younger than 60 (in the EU, for instance, in the three
months between November 2020 and January 2021 new cases increased by +124%; in the
June-August 2021 three-,month period, with the Delta variant as the dominant strain, growth
was limited to +7%).
The effectiveness of the vaccines is confirmed by the trend of the contagion curve and by
the plunge in the number of serious cases, certified by the low hospitalisation rate following
administration of the first and second dose. Among the major EU countries, Italy is still the one
in which recourse to hospitalisation is strongest; in any case, overall data referred to EU
countries are no reason for particular concern.
The levels of stress borne by hospital facilities are consistent in reflecting the advancement
of the vaccination campaigns, that allowed a reduction in the percentage of serious cases.
If the effectiveness of full vaccination in preventing the more serious cases, or deaths related
to the Delta variant, is confirmed – as seems to be the case based on the scientific data
provided by pharmaceutical companies – the increase of COVID-19 cases tied to the Delta
variant should not result in significant changes in terms of mortality and hospitalisations, in this
fourth wave of the pandemic, keeping the level of stress for healthcare facilities at
acceptable levels.
Fig. 7 – New cases recorded Fig. 8 – Mortality (%)
5,000,000 0.16
4,500,000
0.14
4,000,000
0.12
3,500,000
3,000,000 0.10
2,500,000 0.08
2,000,000
0.06
1,500,000
0.04
1,000,000
500,000 0.02
- -
First wave Second wave Third wave Fourth wave First wave Second wave Third wave Fourth wave
Italy Germany France Spain UK Italy Germany France Spain UK
Source: Intesa Sanpaolo elaborations on Refinitiv-Datastream data Note: rates in relation to overall population, by single country.
Source: Intesa Sanpaolo elaborations on Refinitiv-Datastream data
4 First wave (cumulated data as at 03 June 2020) – Second wave (cumulated data from 4 June 2020 to
3 October 2020) – Third wave (cumulated data from 4 October to 3 May 2021) – Fourth wave
(cumulated data from 4 May 2021 to 3 August 2021)
Intesa Sanpaolo – Research Department 4Focus Euro Area 13 August 2021
Fig. 9 – Hospitalisation rate (%)
25.0
20.0
15.0
10.0
5.0
-
First wave Second wave Third wave Fourth wave
Italy Germany France Spain
Note: values in relation to the number of cases recorded in the same period. Source: Intesa Sanpaolo elaborations on
Refinitiv-Datastream data
Tab. 2 – Frist wave (cumulated data as at 3 Jun. 2020) – Second wave (cumulated data from 4 Jun. 2020 to 3 Oct. 2020)
Wave 1 Wave 2
Cases (tot) Mortality (%) Hospital admissions (%) Cases (tot) Mortality (%) Hospital admissions (%)
Italy 233,836 14.37 22.70 86,072 2.72 7.36
Germany 182,642 4.70 3.16 113,492 0.79 1.50
France 188,674 15.38 13.64 420,093 0.75 1.59
Spain 240,326 11.29 7.95 567,460 0.87 2.44
EU 1,164,635 10.94 - 1,843,835 1.15 -
UK 258,973 14.69 - 243,273 1.74 -
Source: Intesa Sanpaolo elaborations on Refinitiv-Datastream data
Tab. 3 - Third wave (cumulated data from 4 Oct. 2020 to 3 May 2021) – Fourth wave (cumulated data from 4 May 2021 to 3 Aug. 2021)
Wave Wave 4
Cases (tot) Mortality (%) Hospital admissions (%) Cases (tot) Mortality (%) Hospital admissions (%)
Italy 3,730,800 2.29 4.36 312,666 2.14 3.00
Germany 3,132,573 0.03 1.20 346,069 2.41 0.43
France 4,712,115 1.55 1.57 857,750 0.80 0.47
Spain 2,732,644 1.69 1.42 982,880 0.35 0.47
EU 27,541,005 1.97 - 3,919,397 1.32 -
UK 3,905,136 2.18 - 1,516,438 0.15 -
Source: Intesa Sanpaolo elaborations on Refinitiv-Datastream data
Delta variant: same problem, different responses
The country that firs experienced a surge in cases tied to Delta variant (beginning of May) was On 19 July, the use of PPE is
the United Kingdom, where the incidence of the VOC on total new cases recorded is currently of no longer compulsory in the
around 99%. Nonetheless, Prime Minister Boris Johnson decided to remove, starting on 19 July (so- United Kingdom
called “Freedom Day”) most of the restrictive measures previously put in place, allowing – for
instance – the reopening of sports facilities at 100% capacity, and removing the obligation to use
face masks and keep social distancing, despite strong criticism from the opposition in Parliament.
Johnson acknowledged that the overcoming of the pandemic is still a distant prospect, and that
the country will have to accept the idea of seeing an increase in the number of deaths related
to COVID-19. Also according to the British PM, “vaccines have shifted the balance in the trade-
off between the risk of new infections and the cost borne by the economy due to the
containment measures being kept in place”. The government explained its decision by
indicating that the hospitalisation rate among newly infected individuals had only grown
moderately in relation to overall cases.
Intesa Sanpaolo – Research Department 5Focus Euro Area 13 August 2021
Tab. 4 – Measures put in place by the major European countries to control the Delta variant
Country Measures Enforcement date
United Removal of the obligation to use face masks, although private companies retain the power to impose its use 19 July
Kingdom* to their workers (the government in any case recommends using PPE in supermarkets). In pubs, obligation lifted
to display QR code upon entry, and orders can again be placed indoors. One-metre social distancing no
longer compulsory and distancing between tables no longer required in restaurants. The "Work from home"
(WFH) message will be abandoned, although workers will be left the choice between smart working and work
at the office. The 5 people limit on home visits is abolished. The COVID Pass is no longer compulsory, but optional
for each individual.
Removal of the “rule of six” in social relations. No attendance limits, including on weddings and funerals. No
limitations on sports facility capacity, restored to 100%.
France** Strengthening of border controls 18 July
COVID Pass to access recreation and culture venues 21 July
COVID Pass compulsory to access cafes, restaurants, shopping malls, hospitals, rest homes, social-medical August
facilities, and for long-distance travel.
Molecular swab tests: at a charge unless prescribed by doctor, in order to encourage vaccinations rather than Autumn
multiple tests.
Germany Upon entry into the country, all individuals aged 12 and over will be held to produce a negative swab test (no 1 August
older than 72 hours if PCR, no older than 48 hours if rapid antigenic test) proof of having recovered from COVID-
19, or vaccination documentation. When returning to Germany from countries with a high incidence of the
Delta variant, a COVID Pass or proof of having recovered from COVID-19 will no longer be sufficient, and a
negative swab test is in any case required.
Introduction of the Green Pass Being discussed
Spain In addition to a set of containment measures adopted by individual regions (mostly curfews), border control July
measures have been put in place to enter Spain based on a classification of countries by risk level, updated
on a weekly basis by the Spanish government in light of the COVID-19 contagion indices.
Italy Introduction of compulsory Green Pass to access indoor bars and restaurants, shows, sports events and August
competitions, spas, theme parks and entertainment venues, PA open competitions. Compulsory Green Pass
also for health workers and teaching staff.
The contagion index will no longer represent the main criterion in assigning regions risk level colour codes (white, 1 August
yellow, orange, red). As of 1st August, the two main criteria are the hospital bed occupancy rate and intensive
care unit admissions.
Extension of compulsory Green Pass to long-distance travel, flights, ships and ferries on interregional services, 1/9 – 31/12
on passenger trains of the Intercity, night Intercity and High-Speed type, on buses for ongoing and periodical
passenger transport on services connecting more than two regions
Note: (*) Scotland, Wales, and Northern Ireland have not fully embraced the easing of measures implemented in England; (**) The French Constitutional Court
has approved the measured introduced by the French government that makes the use of a health pass compulsory, ruling that it is constitutional.
Source: Intesa Sanpaolo, based on National data sources.
France, on the other hand, also in light of the negative experience of last April, called a Health In some regions of Europe
Defence Council meeting on 12 July, that introduced new preventive measures, such as curfews have been
compulsory vaccination for health workers, COVID Pass to access restaurants, bars, trains, reintroduced, and
aircraft, hospitals and rest homes. Furthermore, starting on 21 July, vaccination certification is vaccinations are compulsory
required to access all events with an attendance of more than 50 people. The government’s for the vulnerable population
spokesperson, Gabriel Attal, has made it known that the government has and is considering all groups
the potential scenarios, as does not rule out the possibility of reintroducing curfews on a national
scale, as has already been the case in some peripheral regions (South-Western France).
In Spain as well, in regions with a high Delta variant contagion rate, curfews and early closing
hours have been reintroduced, also due to the fact that the diffusion of the VOC in the country
is mostly tied to the less cautious behaviour of the younger population.
In Italy, as of 6 August, the obligation was introduced to produce a Green Certificate COVID pass
to gain indoor access to bars and restaurants, shows, sports events and competitions, spas,
theme parks, recreational venues, public administration open competitions. Starting in
September, the limitations (in the absence of a COVID pass) will also be extended to means to
long-distance travel.
A photograph of the restrictive measures adopted or already scheduled to be introduced in the
future in the four major European countries is summarised in Table 2 on page 6. The limited
pressure on hospital facilities, and the low mortality rate compared to the previous waves of the
virus rule out a significant tightening of restrictions in the near term.
Intesa Sanpaolo – Research Department 6Focus Euro Area 13 August 2021
Fig. 10 - Mobility indices: ITALY Fig. 11 - Mobility indices: FRANCE
50 50 50 50
0 0 0 0
-50 -50 -50 -50
-100 -100 -100 -100
2020 2021 2020 2021
Workplaces Workplaces
Retail and Recreation Retail and Recreation
Grocery and Pharmacy Grocery and Pharmacy
Transit Station Transit Station
Source: Refinitiv Datastream Source: Refinitiv Datastream
Source: Intesa Sanpaolo elaborations on Our World in Data data Source: Intesa Sanpaolo elaborations on Our World in Data data
Fig. 12 - Mobility indices: GERMANY Fig. 13 - Mobility indices: SPAIN
20 20 50 50
0 0
0 0
-20 -20
-40 -40 -50 -50
-60 -60
-80 -80 -100 -100
2020 2021 2020 2021
Workplaces Workplaces
Retail and Recreation Retail and Recreation
Grocery and Pharmacy Grocery and Pharmacy
Transit Station Transit Station
Source: Refinitiv Datastream Source: Refinitiv Datastream
Source: Intesa Sanpaolo elaborations on Our World in Data data Source: Intesa Sanpaolo elaborations on Our World in Data data
Effectiveness of COVID-19 vaccines against the B.1.617.2 variant (Delta)
An intensely debated aspect in the present phase is the effectiveness of the vaccines currently Independent research
available against the Delta variant. As mentioned above, the pharmaceutical companies are confirms the effectiveness of
sending the competent supervisory authorities updates on their trials, anticipating satisfactory the vaccination against the
results in terms of protection from the B.1.617.2 variant (Delta). For what concerns independent Delta variant as well
research, on 21 July 2021 the New England Journal of Medicine published a paper 5 (focused on
the Pfizer-BioNTech and Astra Zeneca vaccines) that shows the effectiveness of the vaccines
against the two Alpha and Delta variants to differ very modestly, but only after the administration
of the second dose. Vice versa, individuals that have received only one dose of the vaccine
show a significantly lower immune response against the Delta variant, compared to their
response to the Alpha variant. More in detail the paper confirms that a single dose of vaccine is
less effective against the Delta variant by between 12% and 19% compared to its effectiveness
against the Alpha variant. The difference between the individual results yielded by the Pfizer-
BioNTech and Astra Zeneca vaccines was also rather contained. Therefore, these data seem not
only to confirm the indications provided by the pharmaceutical companies – at least with respect
to the need to complete the two-dose cycle – but to also support the WHO’s latest invitation to
5 Effectiveness of COVID-19 Vaccines against the B.1.617.2 (Delta) Variant, https://www.nejm.org/doi/full/10.1056/NEJMoa2108891
Intesa Sanpaolo – Research Department 7Focus Euro Area 13 August 2021
postpone the planning of a third dose until sufficient distribution of second doses will have been
achieved in the economically less evolved geographical regions as well.
Conclusions
Some European countries seem to be responding at a delay to the spreading of the Delta
variant, especially when considering the growth rate of the VOC on total new cases. The
containment measure removal phase, as certified by mobility indices, that came at a time
when the Delta variant was at its most morbid, had a multiplier effect on new cases, especially
in the more permissive countries, such as Spain and the UK.
Unvaccinated individuals to date, that are – largely – not expected to change their attitude
in the future, are concentrated in the younger cohorts of the population. Based on ECDC
data as at 8 August, non-vaccinated European citizens are 48.4% accounted for by
individuals of between 18 and 24 anni years of age, with those in the 25-49 year bracket
accounting for 36.2%. By no coincidence, in the countries where action was taken in a more
targeted manner on the behaviours of youths (Spain), the contagion curve rapidly reversed.
The effectiveness of full vaccination, against the Delta variant as well, means that new
infection cases are in any case putting much less pressure on hospital facilities, therefore the
latest wave of the pandemic is being managed without the need to impose restrictions of
major impact. The measures of mobility for recreational ends and retail outlets have further
improved.
The advancement of the vaccination campaign is still very mixed at the geographical level:
in countries such as Japan, Australia, New Zealand, and South Korea, fewer than one-third of
citizens – on average – have received the first does of the vaccine. This increases the risk of
new variants spreading that could prove to be more resistant to the defensive action of the
vaccines.
For this reason as well, the administration of a third dose of the vaccine to populations that
are already fully vaccinated will have to be balanced with the option of accelerating the
vaccination of emerging country populations. Germany and France (and, outside the EU,
Israel in particular), are heading fast towards administering a third dose, despite the WHO’s
recent call to wait until the distribution of vaccines will have become more even at the global
level.
In the present phase, it is not yet possible to quantify the impact of the Delta variant on GDP
growth, which nonetheless seems limited. For the time being, the measures put in place are
not preventing the rebound sparked by reopenings. However, the proliferation of clusters in
the emerging countries could curb forecast GDP growth in the second half of the year, by
impacting international production chains. Furthermore, the emergence of new variants,
more resistant to the vaccines, could call for a reintroduction of containment measures, or
induce the population to adopt cautious behaviours, to the point of slowing the normalisation
of the economy.
Intesa Sanpaolo – Research Department 8Focus Euro Area 13 August 2021 Appendix Analyst Certification and Other Important Disclosures The analysts drafting this report state that the opinions, forecasts, and estimates contained herein are the result of independent and subjective evaluation of the data and information obtained and no part of their compensation has been, is, or will be directly or indirectly linked to the views expressed. This research has been prepared by Intesa Sanpaolo S.p.A. and distributed by Intesa Sanpaolo SpA-London Branch (a member of the London Stock Exchange) and Intesa Sanpaolo IMI Securities Corp (a member of the NYSE and FINRA). Intesa Sanpaolo S.p.A. accepts full responsibility for the contents of this report. Please also note that Intesa Sanpaolo S.p.A. reserves the right to issue this document to its own clients. Intesa Sanpaolo S.p.A. is authorised by the Banca d'Italia and is regulated by the Financial Conduct Authority in the conduct of designated investment business in the UK and by the SEC for the conduct of US business. Opinions and estimates in this research are as at the date of this material and are subject to change without notice to the recipient. Information and opinions have been obtained from sources believed to be reliable, but no representation or warranty is made as to their accuracy or correctness. This report has been prepared solely for information purposes and is not intended as an offer or solicitation with respect to the purchase or sale of any financial products. It should not be regarded as a substitute for the exercise of the recipient’s own judgement. No Intesa Sanpaolo S.p.A. entity accepts any liability whatsoever for any direct, consequential or indirect loss arising from any use of material contained in this report. This document may only be reproduced or published with the name of Intesa Sanpaolo S.p.A.. This document has been prepared and issued for, and thereof is intended for use by, Companies which have suitable knowledge of financial markets, which are exposed to the volatility of interest rates, exchange rates and commodity prices and which are capable of evaluating risks independently. Therefore, such materials may not be suitable for all investors and recipients are urged to seek the advice of their relationship manager/independent financial advisor for any necessary explanation of the contents thereof. Person and residents in the UK: this document is not for distribution in the United Kingdom to persons who would be defined as private customers under rules of the FCA. US persons: this document is intended for distribution in the United States only to Major US Institutional Investors as defined in SEC Rule 15a-6. US Customers wishing to effect a transaction should do so only by contacting a representative at Intesa Sanpaolo IMI Securities Corp. in the US (see contact details below). Intesa Sanpaolo S.p.A. issues and circulates research to Major Institutional Investors in the USA only through Intesa Sanpaolo IMI Securities Corp., 1 William Street, New York, NY 10004, USA, Tel: (1) 212 326 1199. Inducements in relation to research Pursuant to the provisions of Delegated Directive (EU) 2017/593, this document can be qualified as an acceptable minor non- monetary benefit as it is: - macro-economic analysis or Fixed Income, Currencies and Commodities material made openly available to the general public on the Bank’s website - Q&A on Investor Protection topics - ESMA 35-43-349, Question 8 & 9. Method of distribution This document is for the exclusive use of the recipient with whom it is shared by Intesa Sanpaolo and may not be reproduced, redistributed, directly or indirectly, to third parties or published, in whole or in part, for any reason, without prior consent expressed by Intesa Sanpaolo. The copyright and all other intellectual property rights on the data, information, opinions and assessments referred to in this information document are the exclusive domain of the Intesa Sanpaolo banking group, unless otherwise indicated. Such data, information, opinions and assessments cannot be the subject of further distribution or reproduction in any form and using any technique, even partially, except with express written consent by Intesa Sanpaolo. Persons who receive this document are obliged to comply with the above indications. Valuation Methodology Comments on macroeconomic data are prepared based on macroeconomic and market news and data available via information providers such as Bloomberg and Refinitiv-Datastream. Macroeconomic, exchange rates and interest rate forecasts are prepared by the Intesa Sanpaolo Research Department, using dedicated econometric models. Forecasts are obtained using Intesa Sanpaolo – Research Department 9
Focus Euro Area 13 August 2021 analyses of historical statistical data series made available by the leading data providers and also on the basis of consensus data, taking account of appropriate connections between them. Disclosure of potential conflicts of interest Intesa Sanpaolo S.p.A. and the other companies belonging to the Intesa Sanpaolo Banking Group (jointly also the “Intesa Sanpaolo Banking Group”) have adopted written guidelines “Organisational, management and control model” pursuant to Legislative Decree 8 June, 2001 no. 231 (available at the Intesa Sanpaolo website, webpage https://group.intesasanpaolo.com/en/governance/leg-decree-231-2001) setting forth practices and procedures, in accordance with applicable regulations by the competent Italian authorities and best international practice, including those known as Information Barriers, to restrict the flow of information, namely inside and/or confidential information, to prevent the misuse of such information and to prevent any conflicts of interest arising from the many activities of the Intesa Sanpaolo Banking Group which may adversely affect the interests of the customer in accordance with current regulations. In particular, the description of the measures taken to manage interest and conflicts of interest – related to Articles 5 and 6 of the Commission Delegated Regulation (EU) 2016/958 of 9 March 2016 supplementing Regulation (EU) No. 596/2014 of the European Parliament and of the Council with regard to regulatory technical standards for the technical arrangements for objective presentation of investment recommendations or other information recommending or suggesting an investment strategy and for disclosure of particular interests or indications of conflicts of interest as subsequently amended and supplemented, the FINRA Rule 2241, as well as the FCA Conduct of Business Sourcebook rules COBS 12.4 - between the Intesa Sanpaolo Banking Group and issuers of financial instruments, and their group companies, and referred to in research products produced by analysts at Intesa Sanpaolo S.p.A. is available in the "Rules for Research " and in the extract of the "Corporate model on the management of inside information and conflicts of interest" published on the website of Intesa Sanpaolo S.p.A., webpage https://group.intesasanpaolo.com/en/research/RegulatoryDisclosures. This documentation is available to the recipient of this research upon making a written request to the Compliance Department, Intesa San Paolo S.p.A., Via Hoepli, 10 – 20121 Milan – Italy. Furthermore, in accordance with the aforesaid regulations, the disclosures of the Intesa Sanpaolo Banking Group’s interests and conflicts of interest are available through webpage https://group.intesasanpaolo.com/en/research/RegulatoryDisclosures/archive-of-intesa-sanpaolo-group-s-conflicts-of-interest. The conflicts of interest published on the internet site are updated to at least the day before the publishing date of this report. We highlight that disclosures are also available to the recipient of this report upon making a written request to Intesa Sanpaolo S.p.A. – Macroeconomic Analysis, Via Romagnosi, 5 - 20121 Milan - Italy. Intesa Sanpaolo acts as market maker in the wholesale markets for the government securities of the main European countries and also acts as Government Bond Specialist, or in comparable roles, for the government securities issued by the Republic of Italy, by the Federal Republic of Germany, by the Hellenic Republic, by the European Stability Mechanism and by the European Financial Stability Facility. Intesa Sanpaolo Research Department – Head of Research Gregorio De Felice Tel. 02 879+(6) Macroeconomic Analysis Luca Mezzomo 62170 luca.mezzomo@intesasanpaolo.com Alessio Tiberi 62985 alessio.tiberi@intesasanpaolo.com Macroeconomic Research Paolo Mameli 62128 paolo.mameli@intesasanpaolo.com Lorenzo Biagioli lorenzo.biagioli@intesasanpaolo.com Aniello Dell’Anno 63071 aniello.dellanno@intesasanpaolo.com Giovanna Mossetti 62110 giovanna.mossetti@intesasanpaolo.com Andrea Volpi 62339 andrea.volpi@intesasanpaolo.com Intesa Sanpaolo – Research Department 10
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