COVID-19 In Europe: New Lockdowns Could Impede Economic Recovery In Germany, France

Germany and France will implement new lockdown policies to prevent the spread of COVID-19, impeding economic growth in these two countries.

In Germany, the restaurants, bars, clubs and recreation centers will be closed for a month-long “lockdown light” beginning on Nov. 3. Shops will remain open, albeit at a limited capacity.

According to the German Institute For Economic Research, the country’s economy likely grew by around 6% in the third quarter of the year. Joerg Kraemer, chief economist at Commerzbank, said the country’s economic growth over the past months would be undone by another shutdown.

"The economy cannot be switched on and off like a light bulb without damage being done," he told German news agency DPA.

In France, a stricter month-long lockdown will begin Friday, with citizens only allowed to leave home for specific reasons, such as physical exercise, essential shopping trips or going to the doctor.

France saw its GDP drop by a record 14% in the second quarter of this year, with third-quarter projections to be released in the coming days.

“The shock is terrible especially for small and medium-sized firms, which are getting closed in the most important time of the year, before (the) holidays,” Tomasz Michalski, economics professor at HEC Paris business school, told CNBC about the new lockdown policies. “In many of these (businesses), most yearly sales take place in the last quarter of the year. Their business will be taken away again by supermarkets and huge online retailers.”

Cases have been skyrocketing in both nations recently. Germany registered a record of over 16,000 new cases Thursday, while France witnessed a record 52,010 new infections on Sunday.

Italy is also implementing new measures, closing down bars and restaurants early and shutting down some recreational events. Italy registered a record 26,829 new cases Thursday.

"We are deep in the second wave," European Commission President Ursula von der Leyen said about the uptick in cases around Europe. "I think that this year's Christmas will be a different Christmas."