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Vaccines fail to check COVID wave overwhelming Eastern Europe

Drivers queue for COVID-19 swab tests at a drive-thru coronavirus testing center in Warsaw, Poland, on Feb 25, 2021.

LUKASZ SOKOL/BLOOMBERG

By WOJCIECH MOSKWA AND PETER LACA | Bloomberg | Published: March 11, 2021

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Eastern Europe is struggling to contain a growing wave of coronavirus infections, even as an accelerating global vaccine rollout is raising optimism about the end of the pandemic.

The Czech Republic is suffering the most, with infections rising more than 10 times faster than in Germany, according to data from the European Centre for Disease Prevention and Control. Slovakia, Hungary and Poland are also experiencing the most severe outbreaks in months. The Czechs lead the world in deaths per population, followed by the U.K. and Hungary, which recently overtook Italy, according to Johns Hopkins University data.

Just a year ago, countries in eastern Europe reacted quick to the outbreak and their strict measures helped ward off the severe hit that their western neighbors suffered in the spring of 2020. But now hospitals are overwhelmed and leaders are warning about the most difficult periods being still ahead. The worsening epidemic is threatening a nascent economic recovery as governments respond with ever-harsher lockdowns.

"Our hospitals will feel the strongest pressure this week," Czech Health Minister Jan Blatny said. "The less we respect the measures, the longer they will remain in place."

The Czechs and Slovaks have asked their European Union partners for emergency supplies of vaccines and to take some patients if they run out of beds in intensive care units. Last week, the government in Prague imposed the strictest curbs on movement to date, including a nationwide ban on travel between counties.

After taming the initial wave of the virus, the region's advantage slipped away as governments removed unpopular restrictions and were generally slow in reinstating them when the number of cases spiked in the last months of 2020.

Critics say east European governments generally responded too late to an outbreak of the virus last fall. Many reopened shops and even pubs for several weeks before Christmas, following a brief respite in infections, helping fuel the virus in early 2021, according to epidemiologists.

By contrast, western Europe has been more cautious in easing. Germany just last week unveiled a plan to gradually relax restrictions from the end of this month.

Still, weaker currencies across eastern Europe mean that plenty of the bad news has been priced in as investors weigh the economic impact. ING Bank said Czech cases should start slowing from late March due to the curbs. Importantly, the latest set of restrictions is primarily focused on mobility, while industrial production is largely unaffected.

"The case for a swift economic recovery from the second quarter onwards remains intact," especially as the pace of vaccinations is expected to rise sharply, according to ING strategist Petr Krpata and economist Jakub Seidler.

But there's still a tough road ahead until then.

Goldman Sachs economists said in a note to clients that COVID-related fatalities in the Czech Republic, Hungary and Poland were higher than in the U.S. The positive test hit rate, a leading indicator of future case growth, has "seen a significant surge since mid-February, with the highest increases in Hungary and Poland."

Poland registered 21,045 COVID infections over the past 24 hours, the most since November, with the weekly average of new cases doubling from a month ago. The government is activating temporary hospitals at stadiums and exhibition halls and has urged doctors to postpone non-COVID procedures.

Hungary, despite some success in rolling out vaccinations thanks to its purchases of Russian and Chinese shots, tightened curbs this week. The government reported a record 8,312 new COVID-19 infections on Thursday, a 47% jump from the previous day. The"R rate" — which measures how many people each infected person passes the virus to — rose to 1.3 from 0.8 at the end of January, the news website Index reported on Wednesday.

Estonia reported a record 1,957 cases on Thursday as the Baltic country implemented tougher lockdown measures. Across the Balkans, but the countries are bracing for the arrival of another wave of the pandemic, including the virus's more dangerous variants.

"The worst-case scenario is materializing," Polish Health Minister Adam Niedzielski said on Thursday. "Not only are we battling a dynamic rise in infections, the trend appears to be long-lasting."