Europeans have nowhere to spend money saved in the pandemic

But increasing cases with COVID-19 and procrastinating in the vaccine supply have made it unclear whether, or when, a very necessary wave of expenses can occur from private savings.

One such example is: Daniel Krupka. He is the manager of a Berlin-based technological think tank. After Germany extended the isolation measures Monday, he cancelled a weekly family vacation on an island on the Baltic Sea, reserved for the month of April.

“Muse we would have spent up to 2,000 euros, but this will not now happen”, Krupka told Reuters agency.

Maybe later this year we can get there. But, I'm also thinking of using the money to lower the credit level to bank”, he said.

Pandemia has threatened or destroyed millions of lives. Those who have been more fortunate and have worked have in many cases increased the value of their savings, as the measures of restrictions imposed by states have been unable to spend money.

In Germany, savings rose to a record 16.2% last year compared to 10.9% in 2019. In France, the rate was 22.2% in the fourth quarter of last year. Even in Italy and Spain, savings levels have increased markedly.

Experts and policymakers had hoped that this reserve of imposed savings would begin to circulate in the eurozone economy to enable a local economic recovery, which is likely to remain well behind that of the United States.

Lost consumption

These expectations have waned after the two largest Eurozone economies -- France and Germany -- again imposed restrictions against the spread of the coronary.

France's Ministry of Finance believes the new month-long restrictions affecting retail non-hellies in Paris and parts of the north will have minimal impact on the economy.

But private sector economists are less optimistic.

This will depend on the return of the trust of French families, the success of the vaccine campaign, and the expansion of state support (economic)”, said Selin Ozhurt of Euler Hermes, a credit insurance company.

This company has said that economic growth in France for 2021 is 5.4%, a figure of 0.5% lower than forecasts.

In Germany, Bundesbanka in December predicted the economy would grow 3% this year, given the assumption that the measures of control would be released in the spring.

“Pandemia and isolation measures will burden more in the German economy perhaps a little longer than we expected”, chief economist in Bundesbanka, Jens Ulbrich, told Reuters.

Ulbrich says consumption will again return to the economy once restrictions measures are released. But other experts say there are reasons people's spending will not start as soon as expected.

Some particular product purchases cannot happen again. Anyone who has bought a big new television for a movie theater at home during the first isolation, or a high-tech kitchen to cook nice food at home, will not do so again just after just six months”, said Rolf Buerk of the GfK Institute, an organisation that deals with monthly consumer research.

The same is true of certain services.

You certainly won't go to the hairmaker more often in order to compensate for all the cuts you haven't made during your isolation. So some consumer spending is simply lost in the long-term” plan, he said.

The investment bank “Barclays Economics Research” has also been reserved in projections.

She said that excessive savings are maintained by high-income persons, and it is still a question of how the pandemic will transform consumer behavior into the long-term plan.

“We don't think that by the end of 2022 private consumption will return to the pre-division crisis”, Barclays Economics Research said.

The main question now is how long the restrictions imposed by states will last. The time of these restrictions depends on the possibility of European authorities controlling the spread of the virus by means of vaccine and other measures.

The head of economists at the European Central Bank, Philip Lane, has said that the forecast for an extension of isolation measures even in the second quarter of 2021 has been taken into account in estimates of 4% economic growth in the euro area this year.

He told the medium CNBC that the European Union aims to start putting the virus under control through the vaccine and thus enable a progressive opening of the eurozone economy.

We're going through the second quarter now. It will be a quarter long”, he said.