Continued resilience and support are needed
A second round of lockdowns has descended upon Europe. Governments, businesses, and people need to show further resolve to make it through the months ahead.
As Europeans resumed their normal holiday routines in the late summer, they could be forgiven for thinking the worst of the Covid-19 pandemic was behind them. Now, as countries all across the continent are re-entering lockdowns of varying severities and lengths, the coronavirus is proving to be as relentless as it is unsparing. Eight months on from its introduction to Europe, economic activity on the continent is once again being frozen in a bid to save lives and prevent health systems from being overwhelmed.
People and businesses everywhere are rightly concerned about further economic harm that will be inflicted. The lockdowns in the spring caused precipitous drops in GDP and led to layoffs in all corners of society. But following that initial shock and with the virus largely under control, people anticipated a resumption of somewhat normal daily activity where they could get to work repairing the damage. There was hope of a V-shaped rebound in economic activity that would start over the summer and extend into next year. That is exactly what happened, for a time. With the virus circulating at very low levels across the continent, people went out, production lines returned, and the recovery began. Unfortunately, the resumption of normal life proved to be fleeting.
Now, instead of the broad V-shaped rebound so many hoped for, K is the new letter bestowed upon our economic recovery. Top companies that are digital and technology-based are excelling. People are still at home and looking at their screens more than ever. That won’t change any time soon. One only needs to check the quarterly reports released by the biggest tech companies last week to see how well they are performing. So too are home improvement stores as people are turning to do-it-yourself projects at home to pass the time.
Predictably, companies and industries that rely on free circulation of people are struggling mightily. Airlines, hotels, and cruise ship companies are hurting. Mass gatherings of people are largely still banned, meaning the arts, sports, and conferences remain sidelined. Restaurants who were barely getting by on outdoor dining are now forced to rely on significant government support once again. Consumer-facing fintechs, reliant on interchange fee revenue from travelers, are facing funding problems and experiencing reliability issues. These are trying times for businesses everywhere.
Banks and insurers impressively met the remote working challenge virtually overnight in the spring. This new round of restrictions is not arriving as suddenly as it did the first time around. Companies have tools and processes in place to ensure continuity. The challenge for businesses, managers, and employees is to overcome coronavirus fatigue. People are understandably weary from a long and trying year. Unfortunately, the virus is set to be a fixture of our lives for many months to come. Can businesses find ways to keep their employees motivated, productive, and striving throughout the long winter months? How to continue innovating and delivering digital solutions for customers? These questions are no doubt occupying the minds of managers all over the world.
In the early days of the pandemic, I wrote about the extraordinary measures governments and banks were taking to prop up their economies, people, and businesses. The swiftness of action then was commendable and spared many from falling through the cracks. But now, continued succor will be needed. Governmental support to SMEs will be required. Lost wages will need to be paid. And loan forgiveness on the part of banks may also be warranted. Thankfully, it appears policymakers on the continent understand these necessities.
"New normal" was the oft-used phrase to describe the massive changes foisted upon the world in the spring. Now, it's November and our "normal" is no longer new. Daily life now entails some combination of limited in-person interactions, movement restrictions, and virtual meetings or classes. As the memories of a summer with freedom of movement drift further away, people and businesses are facing the prospect of an arduous few months ahead. The holiday season will lack its typical conviviality and charm. For Europeans, resilience and persistence are the name of the game. The light at the end of the tunnel may be some way off. But it is indeed there. A day will come when there is a mass-produced vaccine and masks won't be required everywhere. Until then, this exceptional year drags on and our "normal" is unfortunately here to stay.