Measuring international travel restrictions. Oxford Covid-19 government response stringency index for international travel with selected European countries

Europe tries to save its summer

Your level-headed briefing on how the coronavirus pandemic is affecting the markets, global business, our workplaces and daily lives, with expert input from our reporters and specialists across the globe.

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Latest news

  • The world’s tourism industry is on course to lose at least $1.2tn, or 1.5 per cent of global economic output, from the four-month standstill in travel

  • US manufacturing activity rebounded in June as lockdowns eased and businesses resumed operations

  • Wigan Athletic has fallen into administration, becoming the first English football club to succumb to the effects of the coronavirus lockdown

Europe tries to save its summer

Europe’s businesses are desperately hoping they can save something of the summer holidays as coronavirus infections drop and lockdown measures are loosened across much of the continent.

Companies from airlines and tour operators to hotels and restaurants are anxious to generate seasonal summer income that contributes so much of their annual revenues.

For some countries, led by Croatia, Greece and Portugal, the trade-offs with public health are particularly tense: tourism contributes more than 15 per cent of GDP. Spain, close behind, has scrapped restrictions for the Schengen free travel zone and the UK.

On Tuesday, the EU agreed a list of 15 countries that it recommends exempting from its coronavirus entry ban. Visitors from other countries, including the US, where infections are rising again, remain excluded. Chinese visitors will be allowed in only when there is reciprocal access for Europeans.

As José Luis Yzuel, who represents an association of Spanish hotels and restaurants, says: “If the tourism industry can recover 50 per cent of last year’s sales that will be a triumph — but then if you compare something with complete annihilation, anything looks good.”

Markets

US stocks were lifted on the first day of third-quarter trading by encouraging jobs numbers and vaccine hopes. The second quarter was the best in more than two decades as investors took heart from central bank support and optimism over a post-pandemic recovery.

John Plender offers an alternative reason for market optimism: investors now believe central banks will do whatever it takes to counter a crisis. Our senior editorial writer warns that the potential trend of decoupling equity prices from struggling economies will ultimately prove toxic.

Mark Lewis of BNP Paribas explains why the EU carbon trading emissions scheme has performed so well during the pandemic and at a time of shrinking economies: investors are taking the long view that there is no alternative to carbon-pricing mechanisms if policymakers are to achieve net-zero emissions by 2050.

Business

Airbus is slashing 15,000 jobs — or 17 per cent of its commercial aerospace workforce — in the biggest single reduction in its passenger jet business since the creation of Europe’s flagship aircraft maker 20 years ago. Guillaume Faury, chief executive, warned that he did not expect air traffic to recover to 2019 levels before 2023 and potentially as late as 2025.

Bank executives say they have seen minimal interest in a $600bn US programme designed to help mid-sized companies through the Covid-19 pandemic. The poor uptake, blamed on complexity, raises questions about whether the federal response to the crisis is helping key parts of the American economy.

German consumers released from lockdown in May pushed retail sales up by a record 13.9 per cent from the previous month in a sign the economy is rebounding even while social-distancing rules remain. Online and mail-order sales surged 28.7 per cent year on year. “German consumers opened their wallets like never before in May,” said Holger Schmieding, economist at Berenberg.

Global economy

Martin Wolf says leaders should focus on creating the strongest feasible recovery after the “global sudden stop” from Covid-19. Our chief economics commentator argues for continued aggressive fiscal and monetary policy with an accelerated shift to a more sustainable economy. “The demand for sensible government run by competent people is back.”

Chart showing that the world economy may be past the worst

Africa will need more financial help to avoid “long-lasting, terrible consequences” from the pandemic, warned Kristalina Georgieva, managing director of the IMF, with the fund predicting a region-wide GDP contraction of 3.2 per cent this year. The economic impact has been severe because of falling commodity prices and a collapse in tourism and investment.

Coronavirus and its economic consequences threaten to wipe out progress on gender equality at work as women are at greater risk of losing their jobs, more likely to be exposed to infection and take on more of the burden of unpaid care, the International Labour Organization has warned. Global working hours were 14 per cent lower in the second quarter of 2020 than in the last quarter of 2019 — equivalent to a loss of 400m full-time jobs.

Get in touch

How is your workplace dealing with the pandemic? And what do you think business and markets — and our daily lives — will look like after lockdown? Please tell us by emailing [email protected] We may publish your contribution in an upcoming newsletter. Thanks

The essentials

If you are willing and able to return to the workplace, you may find yourself in strange company. Technologies being tested to keep the office of the future safe include robots irradiating the premises with ultraviolet light, self-cleaning surfaces, virus-detecting monitors and greater ventilation.

The FT’s sports correspondent Murad Ahmed is one of the privileged few allowed to attend one of the UK premier league’s first football fixtures after a 100-day pandemic hiatus. The experience involved temperature checks and no handshakes. Match days used to have other drawbacks, says Murad. The queue to get through the turnstiles. The queue for the bar. The queue for the toilets. Worst of all, the queue jumpers. Yet sitting inside a hollow stadium, it is abundantly clear why the sport needs its passionate following.

Employers should share jobs around and reduce the working week so staff can continue to work at least part-time rather than incur the far heavier mental health burden of losing their jobs, a study in the UK by Cambridge university academics argues. But no prospect of an improved work-life balance for traders after European exchanges rejected calls for a shorter trading day.

Final thought

So much for “building back better”. Despite the calls for an improved post-coronavirus world, FT fashion editor Jo Ellison argues that in the UK’s eased lockdown the only things we’ve been discarding are tonnes of rubbish, with urban skies “no longer filled with lusty birdsong, but with the roar of police helicopters and sound systems that have accompanied the outbreak of illegal street raves”. Forget the big ideas, and start with the basics, she says: “Take your rubbish home with you.”