Only a few weeks ago, many European countries were hoping their more affluent citizens would by now have started spending nest eggs built up during the pandemic to trigger a consumer-led recovery in the region’s economy.
But with the spread of COVID-19 prompting new lockdowns across the continent and vaccine campaigns behind schedule, it is still unclear when – or indeed if – record levels of private savings will finally convert into a much-needed spending boom.
Daniel Krupka, managing director of a technology think tank based in Berlin, is a case in point. After Germany on Monday extended its lockdown, he cancelled a one-week family holiday on the Baltic Sea island of Hiddensee booked for April.
“We probably would have spent up to 2,000 euros, but this won’t happen now,” Krupka said.
“Maybe we can spend a week on Hiddensee later in the year, but I’m also thinking about using the money now for bringing down our mortgage with an extra repayment to the bank.”
While the pandemic has either threatened or destroyed the livelihoods of millions, those lucky enough to have kept working have in many cases bolstered their savings accounts as national restrictions deprive them of opportunities to spend their cash.
-Reuters