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Focus Euro Area

Delta variant: downside risks to growth?                                                                    13 August 2021
The Delta variant of the coronavirus spread rather rapidly in the United Kingdom at the
beginning of May and has quickly become dominant in continental Europe as well.
On 23 July, the World Health Organisation’s Regional Office for Europe issued a press
release confirming that SARS-CoV-2 Delta VOC is now present in almost all EU countries
and is dominant in 19 out of the 28 States that provided the WHO with sufficient                            Research Department
analytical data.
However, thanks to vaccinations, in the major European countries the strong uptrend
of infection cases has not placed healthcare systems under pressure, nor has it
prompted the introduction of significant restrictive measures. Overall, the reopening                       Macroeconomic Research
of the economies has continued as planned.
The economic impact is hard to quantify, but seems relatively limited. We have not
revised down our growth projections. Future risks persist tied to the limited diffusion of
vaccines in the in the emerging countries.                                                                  Lorenzo Biagioli
                                                                                                            Economist - Euro Area
Unlike the previous strains of COVID-19, the Delta variant 1 is warranting for heightened attention
on the part of national governments and health authorities, due to its higher morbidity rate (+40-
60% compared to the original strain) and to the higher potential risk of hospitalisation (not yet
confirmed at the present stage of research). The other risk factor, that calls for an acceleration
of the vaccination campaign, lies in the fact that individuals that have received only the first
dose of a vaccination cycle would seem to be less protected against the Delta variant
compared to other variants, regardless of the type of vaccine. Full vaccination, vice versa, as
indicated by Dr. Hans Henri P. Kluge (WHO Regional Director for Europe), seems to allow a
significant reduction of the risk of contracting the more severe forms of the virus.

Based on the latest risk assessments of the European Centre for Disease Prevention and Control
(ECDC) published between June and July, considering that SARS-CoV-2 Delta is the dominant
variant throughout the EU (see Table 1), we may conclude that:
   The overall risk of SARS-Cov-2 infection tied to the forecast increased diffusion of the Delta
    variant, for the overall population, is considered low for the fully vaccinated population
    subgroups, and high for the partially vaccinated or unvaccinated population sub-groups
   The overall risk of contracting SARS-Cov-2 for vulnerable individuals, tied to the forecast
    increased diffusion of the Delta variant, is considered to be low to moderate for the fully
    vaccinated population sub-groups, and very high for the partially vaccinated or
    unvaccinated sub-groups
   Contagion risk is significantly higher when NPI 2 measures are not used and full vaccination is
    not rapidly achieved.

1 COVID-19 variants are named by the WHO after the letters of the Greek alphabet to avoid

stigmatisation of the nations in which they are detected and reported. The new system applies to the
four variants of concern – the most worrying currently circulating – and to second level concern variants
that are being monitored. The labels “will not replace existing scientific names, but are aimed to help
in public discussion", said Maria Van Kerkhove, the WHO’s COVID-19 technical lead. Under the new
system, the hitherto called B.1.1.7 UK variant becomes Alpha; the B.1.351 South African strain becomes
Beta, and the P.1 Brazilian variant is now called Gamma. The so-called Indian B.1.617 is split into sub-
lineages, of which the B.1.617.2 variant of concern becomes “Delta”.
2 Non-pharmaceutical intervention (NPI). With specific reference to COVID-19, NPI includes measures

such as lockdowns, social distancing, compulsory facemask use, and respect of hand hygiene rules.

Based on information available up to 13 August 2021
Please read carefully the important disclosures at the end of this publication.
Focus Euro Area                                                                                                                  13 August 2021

The President of the EU Commission, Ursula, von der Leyen, recently confirmed that the goal of                         EU target achieved: 70% of
vaccinating 70% of the adult population in Europe with at least one dose by the end of July has                        adult European citizens fully
been achieved. In the meantime, after having submitted to the US FDA and the European EMA                              vaccinated by the end of
agencies their request to authorise the administration of a third dose of the vaccine, Pfizer and                      July
BioNTech provided the two agencies with an update on the clinical data available, based on
which a “third shot” increases the immune response to the Delta variant by five times in people
aged between 18 and 55.
Table 1 – Delta VOC already dominant in most of Europe
                            Increase of new cases (15-day % chg.)           % Delta VOC on total cases recorded
UK                                                               -35.9                                          99.8
Italy                                                             82.3                                          91.2
France                                                            81.4                                         89.2*
Germany                                                           80.4                                          99.1
Spain                                                            -10.3                                          97.8
Switzerland                                                       46.3                                          100
Sweden                                                            81.7                                         92.5*
Norway                                                            91.0                                          90.4
Netherlands                                                      -61.4                                          90.0
Belgium                                                           17.7                                          98.0
Note: * Data available as at 26 July. Source: Intesa Sanpaolo elaborations on data provided by Our World in Data (as
at 7 August 2021)

The updated situation in Europe
After having experienced an exponential surge of new infections starting respectively in May and                       Vaccination rate slowing.
June, the United Kingdom and Spain are recording a significant decline in the number of Delta                          Hospital facilities distant from
variant cases, despite a slowdown of the pace of vaccinations throughput Europe in the present                         past levels of stress
phase (see Fig. 4). Available data seem to indicate that the new doses administered in the
summer months are mostly second shots. In essence, those who considered getting vaccinated
as a priority have already done so, and those against should largely confirm their intention in the
future as well 3. The residual portion of the population reportedly intends to receive a first dose of
the vaccine at the end of summer, also due to the fact that the limitations imposed by not having
a COVID Green Certificate (in countries where it has been introduced) will become more readily
evident in the autumn (see below for a more detailed picture of the measures put in place by
individual countries). With specific reference to the United Kingdom, where on 19 July (“Freedom
Day”) all virus containment measures were removed, the favourable trend of infection numbers
is probably explained by the more cautious approach taken by citizens. However, the contagion
curve is rising back up as we write.

3 Based on ECDC data as at 8 August, the share of the European population not yet vaccinated

amounts to 48.4% in the 18-24 year cohort, and 36.2% in the 25-49 age group. For the more vulnerable
portion of the population (over-70s), the percentage is 13%.

Intesa Sanpaolo – Research Department                                                                                                               2
Focus Euro Area                                                                                                                                                      13 August 2021

Fig. 1 – New cases: most worrying surge in France                                                           Fig. 2 – Population vaccinated with at least one dose (%)
x 1,000                                                                x 1,000
    50                                                                   200                                80                                                                                    80
      40                                                                150                                 60                                                                                    60
      30
                                                                        100                                 40                                                                                    40
      20
      10                                                                50                                  20                                                                                    20

       0                                                                0                                     0                                                                                   0
                 Mar     Apr   May   Jun           Jul       Aug                                                  Dec      Jan      Feb    Mar        Apr   May Jun      Jul
                                2021                                                                              2020                                2021
                    France                   Spain                                                                       European Union                    Germany
                    Italy                    Germany                                                                     France                            Italy
                    UK                       EU (RH Scale)                                                               Spain                             United Kingdom
                                                                             Source: Refinitiv Datastream                                                                                  Source: Refinitiv Datastream

Source: Intesa Sanpaolo elaborations on Refinitiv-Datastream data                                           Source: Intesa Sanpaolo elaborations on Refinitiv-Datastream data

Fig. 3 – Fully vaccinated population (%)                                                                    Fig. 4 – Vaccination rate expected to rise back up after the
                                                                                                            summer holiday period
                                                                                                            x 1,000                                                                  x 1,000
80                                                                                  80                           15                                                                    15
                                                                                                                  New doses administered/mln pers. (MA 7 days)

60                                                                                  60
                                                                                                                  10                                                                  10
40                                                                                  40
                                                                                                                   5                                                                  5
20                                                                                  20

  0                                                                                 0                              0                                                                  0
           J        F    M     A         M     J         J         A                                                   D       J     F     M      A    M         J    J      A
                                     2021                                                                                                           2021
               EU                  UK                    France                                                                FR                 IT                  DE
               Spain               Italy                 Germany                                                               ES                 UK                  EU
                                                                             Source: Refinitiv Datastream                                                                                  Source: Refinitiv Datastream

Source: Intesa Sanpaolo elaborations on Refinitiv-Datastream data                                           Source: Intesa Sanpaolo elaborations on Refinitiv-Datastream data

Fig. 5 – Hospitalisations: data confirm the effectiveness of the                                            Fig. 6 – Mortality rate stable, but may not yet fully reflect the
vaccines against the Delta variant as well                                                                  evolution of the new variant

70                                                                                  70                      35                                                                                    35
                                New weekly entrances/100K pers.                                                                                          14-day cumulated deaths
60                                                                                  60                      30                                                     per 100k people                30
50                                                                                  50                      25                                                                                    25
40                                                                                  40                      20                                                                                    20
30                                                                                  30                       15                                                                                   15
20                                                                                  20                       10                                                                                   10
 10                                                                                 10                        5                                                                                   5
  0                                                                                 0                         0                                                                                   0
                        2020                             2021                                                                       2020                             2021
               IT                  FR                    DE                                                              BEL                    DEU                    ESP
               ES                  NLD                                                                                   FRA                    ITA                    NLD
                                                                             Source: Refinitiv Datastream                                                                                  Source: Refinitiv Datastream

Source: Intesa Sanpaolo elaborations on Refinitiv-Datastream data                                           Source: Intesa Sanpaolo elaborations on Refinitiv-Datastream data and
                                                                                                            WHO

Among the major economies, Italy and Germany are the countries in which the rise of new
infections in absolute terms is still limited, whereas in Spain the measures put in place to date
seem to have produced more than satisfactory results. On the other hand, the current trend of
the contagion curve is most worrying in France, despite the introduction of relatively stricter
measures to contain the diffusion of the Delta variant. The latest ECDC update on the pandemic

Intesa Sanpaolo – Research Department                                                                                                                                                                       3
Focus Euro Area                                                                                                                       13 August 2021

situation in Europe (released on 6 August) outlines a rise of the new infection rate to 214 per 100
thousand population (fifth consecutive increase), a higher mortality rate from 3.6 to 4.7 per million
population, and roughly stable hospitalisations. The forecasting model projects broadly stable
infection rates for the next two weeks, and an increase of the mortality rate to 6.9 per million
population, concentrated in France, Spain and Greece. The expected dynamic does not imply
significant changes to health restrictions significative.

The “four waves” of COVID-19 compared
If we split the evolution of the COVID-19 pandemic – from its onset in Europe until today – into                       The start of the vaccination
four separate waves, with no interruption between them 4, the following picture emerges:                               campaign marked the main
                                                                                                                       watershed, but diversity by
    The introduction of vaccines resulted in a plunge in new infection cases between the third
                                                                                                                       geographical region is a still
     and fourth wave, when the first-dose administration rate grew progressively in all the Eurozone
                                                                                                                       unresolved issue
     countries, also extending individuals younger than 60 (in the EU, for instance, in the three
     months between November 2020 and January 2021 new cases increased by +124%; in the
     June-August 2021 three-,month period, with the Delta variant as the dominant strain, growth
     was limited to +7%).

    The effectiveness of the vaccines is confirmed by the trend of the contagion curve and by
     the plunge in the number of serious cases, certified by the low hospitalisation rate following
     administration of the first and second dose. Among the major EU countries, Italy is still the one
     in which recourse to hospitalisation is strongest; in any case, overall data referred to EU
     countries are no reason for particular concern.

    The levels of stress borne by hospital facilities are consistent in reflecting the advancement
     of the vaccination campaigns, that allowed a reduction in the percentage of serious cases.

    If the effectiveness of full vaccination in preventing the more serious cases, or deaths related
     to the Delta variant, is confirmed – as seems to be the case based on the scientific data
     provided by pharmaceutical companies – the increase of COVID-19 cases tied to the Delta
     variant should not result in significant changes in terms of mortality and hospitalisations, in this
     fourth wave of the pandemic, keeping the level of stress for healthcare facilities at
     acceptable levels.
Fig. 7 – New cases recorded                                             Fig. 8 – Mortality (%)
 5,000,000                                                                0.16
 4,500,000
                                                                          0.14
 4,000,000
                                                                          0.12
 3,500,000
 3,000,000                                                                0.10

 2,500,000                                                                0.08
 2,000,000
                                                                          0.06
 1,500,000
                                                                          0.04
 1,000,000
    500,000                                                               0.02

         -                                                                  -
              First wave      Second wave   Third wave   Fourth wave                First wave           Second wave        Third wave        Fourth wave

                      Italy     Germany     France   Spain   UK                                  Italy   Germany   France     Spain      UK

Source: Intesa Sanpaolo elaborations on Refinitiv-Datastream data       Note: rates in relation to overall population, by single country.
                                                                        Source: Intesa Sanpaolo elaborations on Refinitiv-Datastream data

4 First wave (cumulated data as at 03 June 2020) – Second wave (cumulated data from 4 June 2020 to

3 October 2020) – Third wave (cumulated data from 4 October to 3 May 2021) – Fourth wave
(cumulated data from 4 May 2021 to 3 August 2021)

Intesa Sanpaolo – Research Department                                                                                                                       4
Focus Euro Area                                                                                                                     13 August 2021

Fig. 9 – Hospitalisation rate (%)
  25.0

  20.0

  15.0

  10.0

    5.0

     -
                  First wave             Second wave                Third wave              Fourth wave

                                    Italy     Germany         France       Spain

Note: values in relation to the number of cases recorded in the same period. Source: Intesa Sanpaolo elaborations on
Refinitiv-Datastream data

Tab. 2 – Frist wave (cumulated data as at 3 Jun. 2020) – Second wave (cumulated data from 4 Jun. 2020 to 3 Oct. 2020)
                                               Wave 1                                                                  Wave 2
                          Cases (tot)       Mortality (%)    Hospital admissions (%)            Cases (tot)        Mortality (%)   Hospital admissions (%)
Italy                         233,836               14.37                       22.70                86,072                 2.72                      7.36
Germany                       182,642                4.70                        3.16               113,492                 0.79                      1.50
France                        188,674               15.38                       13.64               420,093                 0.75                      1.59
Spain                         240,326               11.29                        7.95               567,460                 0.87                      2.44
EU                          1,164,635               10.94                           -             1,843,835                 1.15                         -
UK                            258,973               14.69                           -               243,273                 1.74                         -
Source: Intesa Sanpaolo elaborations on Refinitiv-Datastream data

Tab. 3 - Third wave (cumulated data from 4 Oct. 2020 to 3 May 2021) – Fourth wave (cumulated data from 4 May 2021 to 3 Aug. 2021)
                                                Wave                                                                   Wave 4
                         Cases (tot)        Mortality (%)    Hospital admissions (%)           Cases (tot)         Mortality (%)   Hospital admissions (%)
Italy                     3,730,800                  2.29                        4.36              312,666                  2.14                      3.00
Germany                   3,132,573                  0.03                        1.20              346,069                  2.41                      0.43
France                    4,712,115                  1.55                        1.57              857,750                  0.80                      0.47
Spain                     2,732,644                  1.69                        1.42              982,880                  0.35                      0.47
EU                       27,541,005                  1.97                           -            3,919,397                  1.32                         -
UK                        3,905,136                  2.18                           -            1,516,438                  0.15                         -
Source: Intesa Sanpaolo elaborations on Refinitiv-Datastream data

Delta variant: same problem, different responses
The country that firs experienced a surge in cases tied to Delta variant (beginning of May) was                          On 19 July, the use of PPE is
the United Kingdom, where the incidence of the VOC on total new cases recorded is currently of                           no longer compulsory in the
around 99%. Nonetheless, Prime Minister Boris Johnson decided to remove, starting on 19 July (so-                        United Kingdom
called “Freedom Day”) most of the restrictive measures previously put in place, allowing – for
instance – the reopening of sports facilities at 100% capacity, and removing the obligation to use
face masks and keep social distancing, despite strong criticism from the opposition in Parliament.
Johnson acknowledged that the overcoming of the pandemic is still a distant prospect, and that
the country will have to accept the idea of seeing an increase in the number of deaths related
to COVID-19. Also according to the British PM, “vaccines have shifted the balance in the trade-
off between the risk of new infections and the cost borne by the economy due to the
containment measures being kept in place”. The government explained its decision by
indicating that the hospitalisation rate among newly infected individuals had only grown
moderately in relation to overall cases.

Intesa Sanpaolo – Research Department                                                                                                                  5
Focus Euro Area                                                                                                                    13 August 2021

Tab. 4 – Measures put in place by the major European countries to control the Delta variant
Country          Measures                                                                                                               Enforcement date
United           Removal of the obligation to use face masks, although private companies retain the power to impose its use                         19 July
Kingdom*         to their workers (the government in any case recommends using PPE in supermarkets). In pubs, obligation lifted
                 to display QR code upon entry, and orders can again be placed indoors. One-metre social distancing no
                 longer compulsory and distancing between tables no longer required in restaurants. The "Work from home"
                 (WFH) message will be abandoned, although workers will be left the choice between smart working and work
                 at the office. The 5 people limit on home visits is abolished. The COVID Pass is no longer compulsory, but optional
                 for each individual.
                 Removal of the “rule of six” in social relations. No attendance limits, including on weddings and funerals. No
                 limitations on sports facility capacity, restored to 100%.
France**         Strengthening of border controls                                                                                                   18 July
                 COVID Pass to access recreation and culture venues                                                                                 21 July
                 COVID Pass compulsory to access cafes, restaurants, shopping malls, hospitals, rest homes, social-medical                          August
                 facilities, and for long-distance travel.
                 Molecular swab tests: at a charge unless prescribed by doctor, in order to encourage vaccinations rather than                     Autumn
                 multiple tests.
Germany          Upon entry into the country, all individuals aged 12 and over will be held to produce a negative swab test (no                   1 August
                 older than 72 hours if PCR, no older than 48 hours if rapid antigenic test) proof of having recovered from COVID-
                 19, or vaccination documentation. When returning to Germany from countries with a high incidence of the
                 Delta variant, a COVID Pass or proof of having recovered from COVID-19 will no longer be sufficient, and a
                 negative swab test is in any case required.
                 Introduction of the Green Pass                                                                                           Being discussed
Spain            In addition to a set of containment measures adopted by individual regions (mostly curfews), border control                          July
                 measures have been put in place to enter Spain based on a classification of countries by risk level, updated
                 on a weekly basis by the Spanish government in light of the COVID-19 contagion indices.
Italy            Introduction of compulsory Green Pass to access indoor bars and restaurants, shows, sports events and                              August
                 competitions, spas, theme parks and entertainment venues, PA open competitions. Compulsory Green Pass
                 also for health workers and teaching staff.
                 The contagion index will no longer represent the main criterion in assigning regions risk level colour codes (white,             1 August
                 yellow, orange, red). As of 1st August, the two main criteria are the hospital bed occupancy rate and intensive
                 care unit admissions.
                 Extension of compulsory Green Pass to long-distance travel, flights, ships and ferries on interregional services,              1/9 – 31/12
                 on passenger trains of the Intercity, night Intercity and High-Speed type, on buses for ongoing and periodical
                 passenger transport on services connecting more than two regions
Note: (*) Scotland, Wales, and Northern Ireland have not fully embraced the easing of measures implemented in England; (**) The French Constitutional Court
has approved the measured introduced by the French government that makes the use of a health pass compulsory, ruling that it is constitutional.
Source: Intesa Sanpaolo, based on National data sources.

France, on the other hand, also in light of the negative experience of last April, called a Health                      In some regions of Europe
Defence Council meeting on 12 July, that introduced new preventive measures, such as                                    curfews have been
compulsory vaccination for health workers, COVID Pass to access restaurants, bars, trains,                              reintroduced, and
aircraft, hospitals and rest homes. Furthermore, starting on 21 July, vaccination certification is                      vaccinations are compulsory
required to access all events with an attendance of more than 50 people. The government’s                               for the vulnerable population
spokesperson, Gabriel Attal, has made it known that the government has and is considering all                           groups
the potential scenarios, as does not rule out the possibility of reintroducing curfews on a national
scale, as has already been the case in some peripheral regions (South-Western France).

In Spain as well, in regions with a high Delta variant contagion rate, curfews and early closing
hours have been reintroduced, also due to the fact that the diffusion of the VOC in the country
is mostly tied to the less cautious behaviour of the younger population.

In Italy, as of 6 August, the obligation was introduced to produce a Green Certificate COVID pass
to gain indoor access to bars and restaurants, shows, sports events and competitions, spas,
theme parks, recreational venues, public administration open competitions. Starting in
September, the limitations (in the absence of a COVID pass) will also be extended to means to
long-distance travel.

A photograph of the restrictive measures adopted or already scheduled to be introduced in the
future in the four major European countries is summarised in Table 2 on page 6. The limited
pressure on hospital facilities, and the low mortality rate compared to the previous waves of the
virus rule out a significant tightening of restrictions in the near term.

Intesa Sanpaolo – Research Department                                                                                                                   6
Focus Euro Area                                                                                                                                   13 August 2021

Fig. 10 - Mobility indices: ITALY                                                               Fig. 11 - Mobility indices: FRANCE

     50                                                          50                                50                                                            50

         0                                                       0                                  0                                                            0

    -50                                                          -50                              -50                                                            -50

-100                                                             -100                           -100                                                             -100
                     2020                        2021                                                               2020                          2021
                Workplaces                                                                                    Workplaces
                Retail and Recreation                                                                         Retail and Recreation
                Grocery and Pharmacy                                                                          Grocery and Pharmacy
                Transit Station                                                                               Transit Station
                                                                 Source: Refinitiv Datastream                                                                    Source: Refinitiv Datastream

Source: Intesa Sanpaolo elaborations on Our World in Data data                                  Source: Intesa Sanpaolo elaborations on Our World in Data data

Fig. 12 - Mobility indices: GERMANY                                                             Fig. 13 - Mobility indices: SPAIN

    20                                                               20                            50                                                            50

     0                                                               0
                                                                                                    0                                                            0
-20                                                                  -20
-40                                                                  -40                          -50                                                            -50
-60                                                                  -60
-80                                                                  -80                        -100                                                             -100
                    2020                          2021                                                              2020                          2021
              Workplaces                                                                                      Workplaces
              Retail and Recreation                                                                           Retail and Recreation
              Grocery and Pharmacy                                                                            Grocery and Pharmacy
              Transit Station                                                                                 Transit Station
                                                                 Source: Refinitiv Datastream                                                                    Source: Refinitiv Datastream

Source: Intesa Sanpaolo elaborations on Our World in Data data                                  Source: Intesa Sanpaolo elaborations on Our World in Data data

Effectiveness of COVID-19 vaccines against the B.1.617.2 variant (Delta)
An intensely debated aspect in the present phase is the effectiveness of the vaccines currently                                        Independent research
available against the Delta variant. As mentioned above, the pharmaceutical companies are                                              confirms the effectiveness of
sending the competent supervisory authorities updates on their trials, anticipating satisfactory                                       the vaccination against the
results in terms of protection from the B.1.617.2 variant (Delta). For what concerns independent                                       Delta variant as well
research, on 21 July 2021 the New England Journal of Medicine published a paper 5 (focused on
the Pfizer-BioNTech and Astra Zeneca vaccines) that shows the effectiveness of the vaccines
against the two Alpha and Delta variants to differ very modestly, but only after the administration
of the second dose. Vice versa, individuals that have received only one dose of the vaccine
show a significantly lower immune response against the Delta variant, compared to their
response to the Alpha variant. More in detail the paper confirms that a single dose of vaccine is
less effective against the Delta variant by between 12% and 19% compared to its effectiveness
against the Alpha variant. The difference between the individual results yielded by the Pfizer-
BioNTech and Astra Zeneca vaccines was also rather contained. Therefore, these data seem not
only to confirm the indications provided by the pharmaceutical companies – at least with respect
to the need to complete the two-dose cycle – but to also support the WHO’s latest invitation to

5   Effectiveness of COVID-19 Vaccines against the B.1.617.2 (Delta) Variant, https://www.nejm.org/doi/full/10.1056/NEJMoa2108891

Intesa Sanpaolo – Research Department                                                                                                                                             7
Focus Euro Area                                                                                        13 August 2021

postpone the planning of a third dose until sufficient distribution of second doses will have been
achieved in the economically less evolved geographical regions as well.

Conclusions
   Some European countries seem to be responding at a delay to the spreading of the Delta
    variant, especially when considering the growth rate of the VOC on total new cases. The
    containment measure removal phase, as certified by mobility indices, that came at a time
    when the Delta variant was at its most morbid, had a multiplier effect on new cases, especially
    in the more permissive countries, such as Spain and the UK.

   Unvaccinated individuals to date, that are – largely – not expected to change their attitude
    in the future, are concentrated in the younger cohorts of the population. Based on ECDC
    data as at 8 August, non-vaccinated European citizens are 48.4% accounted for by
    individuals of between 18 and 24 anni years of age, with those in the 25-49 year bracket
    accounting for 36.2%. By no coincidence, in the countries where action was taken in a more
    targeted manner on the behaviours of youths (Spain), the contagion curve rapidly reversed.

   The effectiveness of full vaccination, against the Delta variant as well, means that new
    infection cases are in any case putting much less pressure on hospital facilities, therefore the
    latest wave of the pandemic is being managed without the need to impose restrictions of
    major impact. The measures of mobility for recreational ends and retail outlets have further
    improved.

   The advancement of the vaccination campaign is still very mixed at the geographical level:
    in countries such as Japan, Australia, New Zealand, and South Korea, fewer than one-third of
    citizens – on average – have received the first does of the vaccine. This increases the risk of
    new variants spreading that could prove to be more resistant to the defensive action of the
    vaccines.

   For this reason as well, the administration of a third dose of the vaccine to populations that
    are already fully vaccinated will have to be balanced with the option of accelerating the
    vaccination of emerging country populations. Germany and France (and, outside the EU,
    Israel in particular), are heading fast towards administering a third dose, despite the WHO’s
    recent call to wait until the distribution of vaccines will have become more even at the global
    level.

   In the present phase, it is not yet possible to quantify the impact of the Delta variant on GDP
    growth, which nonetheless seems limited. For the time being, the measures put in place are
    not preventing the rebound sparked by reopenings. However, the proliferation of clusters in
    the emerging countries could curb forecast GDP growth in the second half of the year, by
    impacting international production chains. Furthermore, the emergence of new variants,
    more resistant to the vaccines, could call for a reintroduction of containment measures, or
    induce the population to adopt cautious behaviours, to the point of slowing the normalisation
    of the economy.

Intesa Sanpaolo – Research Department                                                                              8
Focus Euro Area                                                                                                      13 August 2021

Appendix

Analyst Certification and Other Important Disclosures
The analysts drafting this report state that the opinions, forecasts, and estimates contained herein are the result of independent
and subjective evaluation of the data and information obtained and no part of their compensation has been, is, or will be directly
or indirectly linked to the views expressed.
This research has been prepared by Intesa Sanpaolo S.p.A. and distributed by Intesa Sanpaolo SpA-London Branch (a member
of the London Stock Exchange) and Intesa Sanpaolo IMI Securities Corp (a member of the NYSE and FINRA). Intesa Sanpaolo
S.p.A. accepts full responsibility for the contents of this report. Please also note that Intesa Sanpaolo S.p.A. reserves the right to
issue this document to its own clients. Intesa Sanpaolo S.p.A. is authorised by the Banca d'Italia and is regulated by the Financial
Conduct Authority in the conduct of designated investment business in the UK and by the SEC for the conduct of US business.
Opinions and estimates in this research are as at the date of this material and are subject to change without notice to the
recipient. Information and opinions have been obtained from sources believed to be reliable, but no representation or warranty
is made as to their accuracy or correctness.
This report has been prepared solely for information purposes and is not intended as an offer or solicitation with respect to the
purchase or sale of any financial products. It should not be regarded as a substitute for the exercise of the recipient’s own
judgement.
No Intesa Sanpaolo S.p.A. entity accepts any liability whatsoever for any direct, consequential or indirect loss arising from any use
of material contained in this report.
This document may only be reproduced or published with the name of Intesa Sanpaolo S.p.A..
This document has been prepared and issued for, and thereof is intended for use by, Companies which have suitable knowledge
of financial markets, which are exposed to the volatility of interest rates, exchange rates and commodity prices and which are
capable of evaluating risks independently.
Therefore, such materials may not be suitable for all investors and recipients are urged to seek the advice of their relationship
manager/independent financial advisor for any necessary explanation of the contents thereof.
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Intesa Sanpaolo – Research Department                                                                                                   9
Focus Euro Area                                                                                                    13 August 2021

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Macroeconomic Analysis
Luca Mezzomo                                                                       62170             luca.mezzomo@intesasanpaolo.com
Alessio Tiberi                                                                     62985                alessio.tiberi@intesasanpaolo.com
Macroeconomic Research
Paolo Mameli                                                                       62128              paolo.mameli@intesasanpaolo.com
Lorenzo Biagioli                                                                                     lorenzo.biagioli@intesasanpaolo.com
Aniello Dell’Anno                                                                  63071            aniello.dellanno@intesasanpaolo.com
Giovanna Mossetti                                                                  62110          giovanna.mossetti@intesasanpaolo.com
Andrea Volpi                                                                       62339                andrea.volpi@intesasanpaolo.com

Intesa Sanpaolo – Research Department                                                                                               10
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