PROFESSIONAL ENGLISH ABOUT US FUNDS INSIGHTS ESG POLICY FORUM BLOG HOME / POLICY FORUM / BLOG / EUROPE’S COVID RESURGENCE: WHY BOOSTERS ARE KEY EUROPE’S COVID RESURGENCE: WHY BOOSTERS ARE KEY As winter draws closer, Europe is again facing the threat of a new Covid wave with daily cases hitting record levels in some countries. While still low vaccination rates could help explain surging cases in most Eastern European countries, it is puzzling to see some Western European countries with decent vaccination rates also struggling. There are also significant disparities between infection rates of countries with similar vaccination rates. Why are cases rising again and what might be causing such disparities? Vaccination Rates Do Matter The latest Covid wave first started across Eastern European countries like Bulgaria, Romania, Croatia, and Czechia. Since mid-October, cases also began surging rapidly in countries like Germany, Austria and the Netherlands. A quick look at the latest seven-day average of daily new cases per million people across Europe suggests that it has a negative relationship with the full vaccination rate of each country. The relationship becomes clearer when excluding Bulgaria and Romania where the latest infection waves have already peaked. In other words, lower full vaccination rates at least partially explain why some countries are witnessing a more aggressive surge in cases compared to others. More importantly, there is an even stronger negative correlation between full vaccination rates and daily Covid deaths per million people. There almost seems to be a cap on Covid death rate once a country manages to fully vaccinate over 65% of its population, as shown below. Geographic Proximity and Cross-Border Passenger Flows May Have Played a Part While acknowledging different vaccination rates as an explanatory factor, it is still unclear why countries like the Netherlands which has achieved high full vaccination rate of over 70% are still witnessing a strong case resurgence, i.e. why some countries are above the best fitted line in the scatter chart above. Some potential reasons could be geographic proximity and stronger traffic flow links to countries with higher infection rates, including the less vaccinated Eastern European countries. https://www.ecdc.europa.eu/en/covid-19/situation-updates/weekly-maps-coordinated-restriction-free-movement We conducted a simple network analysis of cross-border air traffic passenger flows between European countries, using an average of 2019-2020 numbers for data completeness and assuming no major change in travel patterns in 2021. Based on how many passengers travel between country pairs it is possible to identify more closely linked travel clusters using the Louvain method of community detection. As shown below, six clusters were identified within Europe, which are indicated by different colours in the network graph and the map. Comparing the travel cluster map with the ECDC’s Covid risk map above, it could be seen that there seem to be some correlations. Declining Vaccine Efficacy and Importance of Boosters Countries like France, Spain, Italy and Portugal so far have only seen modest rises in daily cases, likely thanks to their relatively higher full vaccination rates and weaker travel links to high-risk countries in Eastern Europe. However, given Europe’s interconnectedness how resilient these countries will be are likely dependent on how much effective vaccine protection there is. The latter in turn depends on the interplay between declining efficacy from the first round of vaccinations and the rollout of boosters. We show below some simple projections of vaccine coverage for major countries into the year-end, assuming vaccine efficacy drops by 60% after six months – midpoint of estimated ranges from latest medical studies (see Science and The Lancet). We also assume that booster rollouts would continue at the latest speed. From the comparison we can see that Germany seems to already have a lower effective vaccine coverage compared to Italy, France or Spain, and is projected to fare worse by the end of the year at the current pace. The Netherlands has only started sending out invitations for boosters since 18 November and has not published data on booster rollout. Lower effective vaccine coverage might have also contributed to faster case growth in Germany and the Netherlands. To sum up, vaccination rates do influence Covid infection rates and death rates across countries. However waning vaccine efficacy means a lot of countries are less protected than their headline full vaccination rates suggest. This highlights the importance and urgency of speeding up booster rollouts, which may be the only viable solution to reduce chances of future resurgence. Tao Pan – Head of AI and Big Data The Algebris Policy & Research Forum (the "Forum") is a not-for-profit advisory forum, independent of the commercial activities of Algebris (UK) Limited. The Forum is designed to contribute to the promotion of a strong and a balanced European economy, underpinned by a sound financial system and supported by a transparent regulatory and fiscal environment, for the benefit of societies as a whole. 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