Europe’s economic and public health challenge is to prevent a third wave of the pandemic and a third lockdown

Europe is now in the midst of its second wave of the pandemic and second lockdown. The latest information suggests that mass vaccination will be possible in the spring or summer of 2021. Given the human and economic cost of a COVID wave and the ensuing lockdown, in particular the negative effects on long-term growth and potential growth, the public health and economic policy goal is now to prevent a third wave and a third lockdown in the spring of 2021, before a vaccine becomes available. A third lockdown would result in a catastrophic loss of potential growth of around 1 percentage point per year. Public health restrictions in the first half of 2021 must therefore do what it takes to try to avoid it.