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Europe’s recovery summer is more fragile than you think.



ALBUFEIRA, Portugal — Until last week, Raissa Moura and her colleagues at the Pine Cliffs Resort reception were optimistic that life had returned to normal along Portugal’s Mediterranean coast.

last year As the pandemic halted the journey They have to worry about the desolation of luxury hotels with 1,300 beds and villas. They were laid off and had to work for weeks within an eerily quiet lobby decommissioning. Outside, foxes roam the abandoned grounds.

But this summer is shaping up nicely in the Algarve, Portugal’s top tourist destination. Covid-1

9 cases have dropped so dramatically that the UK has designated Portugal as a so-called green country. by allowing its citizens to visit without quarantine upon their return. The sun loungers lined under the pine trees were filled with people raising cocktails. The resort’s eight pools echo the sound of children splashing.

“Feeling hopeful,” Ms. Moura, 28, said this afternoon. “Resort comes alive again”

but the next day London rocks Portugal by revoking green country status. claiming that the cases As the problem escalated, Ms. Moura and her colleagues prepared for another cancellation. along the coast From seaside palapas to cliff-top restaurants. to the rental car area The people who suddenly depended on tourists for a living began to prepare for another lost summer.

“People were like, ‘Let’s do it again,'” Ms. Mura told me the day after the news spread.

I traveled here from London in early June to report on what was supposed to be the story of the country’s return to Earth. It’s a welcome example of Europe finally recovering from the economic catastrophe that accompanied the worst epidemic in a century. Portugal faced Europe’s worst exponential recession in the first months of this year. after establishing strict controls on economic life to contain the virus Now you’re ready to reap the rewards and recover faster.

But Portugal’s story of the summer epidemic turns out to be a story of the stubborn tolerance of the epidemic and the volatile nature of expectations. As the virus is undermining plans to start a new life. Despite the signs of progress But no one knows what will happen next — in Portugal, across Europe and across the global economy. Ambiguity has forced businesses and families to be cautious, slowing down investments, delaying travel plans. and delayed decision-making while waiting for elusive certainty. This is a state of mind that can make the recession last longer.

since the epidemic Policymakers in wealthy countries have envisioned the lockdown as an attempt to stop the spread of the coronavirus, with governments helping affected workers while waiting for the public health threat to finally recede. thought and proceeded They can safely turn around the economy.

Portugal’s season of doubt underscores that the economy doesn’t come with a built-in power button. Resorts are struggling to hire seasonal workers as employees are reluctant to risk traveling to the region as long as future closures are possible. Local workers are wary of their money. The resort is postponing the upgrade. causing the construction workers to lose their jobs. Potential guests will need to explore the complexity of government policy changes regarding quarantine and testing requirements.

Thomas Schoen, general manager of Pine Cliffs Resort, said: “It’s not easy to turn the switch on and off. “It stops and goes all the way.”

The big picture in Europe is more positive. After the initial vaccination campaign failed. Europe gains momentum This allowed the government to ease restrictions. Shops were reopened in 27 EU countries. while cafes and restaurants can be served outdoors. Increased economic activity in the service sector

Economists expect 19 euro-denominated countries to see strong economic growth this year — a 4.2% rate. According to the latest forecast from Oxford Economics

Central to optimism is the fact that Europeans are increasingly moving. This represents a potentially profitable summer travel season.

within the eurozone Public transport use increased in May, reaching 72 percent of pre-epidemic levels. Based on tracking data collected by Jefferies, a financial services company. Flight activity rises to 28% of pre-COVID-19 levels And visits to accommodation booking sites rose to 110% of pre-COVID-19 levels, up from 40% in December.

Countries heavily dependent on tourism Some seem to benefit, such as Greece, Italy and Spain. Government data shows no one is better than Portugal. which before the outbreak Tourism accounts for nearly one-fifth of overall economic activity.

during the first three months of the year while the government announced the lockdown measures Portugal’s economy contracted an alarming 3.3 percent compared to the last quarter of 2020, significantly worse than the 0.6% drop in the eurozone.

The pain seemed to increase greatly: from January to May. Portugal’s new coronavirus cases drop to less than 200 daily from more than 15,000

“We’re starting to see the public health picture better and so things are starting to improve in the economy,” said Ricardo Amaro, senior economist at Oxford Economics.

The British decision to designate Portugal as a green country is of particular importance. It is customary for the British to flock to Portugal to take a break from the harsh weather. Just as New Yorkers use Florida to get away from the winter.

Portugal received more than 2 million tourists from the UK in 2019, according to the National Tourism Board. Only neighboring Spain sent more.

In the Algarve, the seaside kingdom of villas, resorts and golf courses, the region’s unemployment rate is stubbornly 10 percent, compared to 7.1 percent for Portugal overall. Revitalizing tourism should address that problem.

At a fish market in Quarteira, the opening of a new restaurant brings fresh demand for harvested sea bass, squid, squid and fragrant shrimp.

“This year is much better than last year,” Asunsau Gomes said as she looked after the stalls at the market she took care of with her mother.

But for most local merchants The recovery was more inspiring than it was evident.

Carlos Martins, a 41-year-old father of two, raised his family by working on a fishing boat. A trawl full of sardines last summer Sardine prices have skyrocketed to 7 euros per kilogram (about $8.50) as wholesalers come from Spain to catch the fish. while foreign buyers were absent last year. Prices plummeted by 85 percent, dropping his wages almost equally.

“We are all waiting for the price to recover,” Martins said. “When the fish are close to being free The fishermen are not paid.”

For more than two decades, Vera Galvão worked as a waitress at her father’s seafood restaurant when the epidemic hit. As a result, the business had to be shut down.

Most workers are still paying their salaries under the leave program, which is effective in most of Europe But when Ms. Galvo went to submit documents to receive welfare benefits. She was shocked to learn that she had no right. Because her father failed to pay the required taxes, she said.

Between May and July of last year, Galvão, 41, a single mother of two boys, Rely on loans from friends to buy groceries. She now works for a non-profit that collects food from local supermarkets. and sent to households in need.

“Many people who have lost their jobs are still unable to find new jobs,” she said.

Continued concerns about job security limit sales for local businesses. Discourage them from hiring — the lean wealth response cycle.

At the beachfront café in Quarteira, a glass shelf showcases fresh pastries. Regional dishes such as fig and almond cakes and national dishes such as Portuguese egg tarts But sales are weak. Owner Manuel Picareto, 71, complains that most of his clients are locals working in tourism.

“Instead of buying two pastries People buy one,” Picareto said.

Because the villa owner canceled the trip last year. They canceled the maintenance of the swimming pool and landscaping. destroy the book of AlgarvePool.com which is the company of Ukrainian couple Iryana and Sergii Liashenko.

“Our income has dropped 75 percent,” said 37-year-old Liashenko.

The Liashenkos have been feeling hopeful when their phones rang in recent weeks. The villa owner is coming back. Their ponds and gardens were filled with weeds and algae. Irrigation systems need to be repaired.

“We think we will have more money coming in,” Liashenko said.

a few hours later British government withdraws name of Portugal’s coveted green country The news resounded like a thunderstorm on the wedding day.

“Everyone is crying,” said Claudio Lópes Mereles, a Brazilian who owns gelateria in Albufeira. It is said using unprintable words to describe what Britain has just done to local fortunes. “We live by British tourists”

because it is expected to have less sales He therefore restricted purchases of imported equipment such as pistachios from Sicily. cocoa from Belgium to export tightness to the rest of the continent

At a nearby liquor dealer called Empro, a manager points out 800 cider boxes stacked almost to the rafters in a cavernous warehouse. and wondering if they can find a taker before the content expires.

Empro relies on British visitors for more than two-thirds of its sales. Cider is one of many products stocked to satisfy a unique British taste. Tourism benefits from the EU’s newly developed COVID certificates. This allows travel for people who are fully vaccinated or have recently been tested, but Empro marketing manager Susana Cavaco waves to suggestions that visitors from elsewhere might compensate for the loss of the Briton. Because of their legendary propensity to consume large quantities of alcoholic beverages. beer on the beach Followed by cocktails and wine during dinner time.

“Nobody drinks like the British,” said Ms. Cavaco.

The London government will not assess the list of greenest countries for another three weeks.

At Pine Cliffs Resort, a group of whitewashed buildings with terracotta tiles on perches above the sea. Management has difficulty recruiting enough seasonal employees. As a result, the accommodation is understaffed by about 25 percent, said Chen, General Manager.

due to the need for social distancing Therefore, breakfast buffet cannot be arranged. But lacking enough staff for efficient sit-down service. Let the guests sit and wait at the table to order their food.

Mr. Chen has accumulated some cash reserves to deal with future problems. He has canceled his investment in a new children’s club. and slow down the planned restaurant renovations

“I believe in good things to come. But we also have to be true,” Chen said. “I don’t believe that we have overcome every obstacle on our way. We will keep it until there is a good level of certainty.”

The next day, Britain downgraded Portugal from an approved tourist destination as a potentially dangerous breeding ground for the coronavirus strain.


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