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Why Subsidies Beat Lockdowns

As the second wave of the COVID-19 pandemic threatens Europe, governments should induce restaurant, bar, and shop owners to take a paid vacation, rather than ordering them to close. Such a policy promises much lower fiscal and social costs and would be politically far easier to sustain in the tough winter months ahead.

BERLIN – Many European governments are trying to combat the second wave of the COVID-19 pandemic by imposing a β€œlockdown light,” usually including limitations on the operations of restaurants, bars, and some non-essential shops. The assumption behind these partial closures is that the risk of infection is high when people mingle in closed spaces. A recent paper published in Nature provides further evidence that places like restaurants, gyms, and cafes can play a major role in spreading the coronavirus.

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