Europe's coronavirus deaths slow as German Chancellor Angela Merkel vows more cash for recovery

BERLIN (BLOOMBERG) - Coronavirus deaths slowed in Spain and Germany, offering an encouraging sign to leaders in Europe as they plan to relax lockdown measures that have crushed the region's economies.

Spain recorded fewer than 400 fatalities for the second day in row, a sign that the outbreak may be stabilising in the country as it grapples with Europe's worst outbreak. In Germany, deaths dropped to the lowest in five days. The number of patients in intensive care declined in Belgium, which has has the world's highest per-capita death rate.

With Europe's economies battered by lockdowns imposed to bring the epidemic under control, Chancellor Angela Merkel said on Saturday (April 25) that Germany will pour more money into European Union coffers than previously expected as the bloc tries to manage the fallout of the outbreak.

Some countries in the EU are preparing to ease the restrictions. An initial reopening of businesses is planned for May 4 in hard-hit Italy, and France is working on plans to gradually open the economy starting May 11.

The EU needs an economic stimulus programme, because "the economic damage will be great", Dr Merkel said in her weekly podcast. The bloc's common budget will play a key role in financing reconstruction efforts, and "Germany, too, will have to commit itself to much more" than previously planned, the chancellor said.

Europe's economic woes are mounting, with Germany expecting output to shrink by 6.3 per cent this year, the worst contraction since at least 1950, Handelsblatt reported, citing draft government projections. The largest economy in Europe has been crippled by a lockdown that has shuttered factories, halted travel and closed schools. Almost every third company in Germany has requested state wage support.

Dr Merkel's pledge to back a huge stimulus package for the EU wasn't enough to force through a deal as leaders inched ahead with their reconstruction plans during a videoconference on April 23. Her commitment to expanding the EU budget came after European Central Bank (ECB) President Christine Lagarde told heads of government that the euro-area economy could shrink by as much as 15 per cent this year as a result of the pandemic and they risk doing too little, too late, according to three people familiar with the remarks.

The ECB takes centre stage once again on April 30, when its Governing Council holds a scheduled policy meeting. The central bank will increase emergency bond-buying in the coming months to ramp up support for the economy, according to a Bloomberg survey of economists.

Fatalities in Spain increased by 378, for a total of 22,902, according to Health Ministry data published on Saturday. The government has partially relaxed one of the world's strictest lockdowns, with the confinement measures currently due to end on May 9.

Deaths in Germany rose by 148 to 5,723 in the 24 hours through Saturday morning, a smaller increase than Friday's daily rise of 260, according to data from Johns Hopkins University.

In the UK, where the death toll is nearing 20,000, Prime Minister Boris Johnson is easing back to work after battling Covid-19, but there's no time set for his full-time return. The Treasury is preparing plans that would allow non-essential businesses to reopen while ensuring they're free from the coronavirus, The Times reported, citing a Treasury blueprint.

The number of fatalities in Belgium increased to 6,917. Despite having only 11 million people, Belgium has reported more deaths from the disease than China.

According to officials, the reason for the grisly figures isn't overwhelmed hospitals - 43 per cent of intensive-care beds were vacant even at the peak of the crisis - but the country's bureaucratic rigour. Unlike many other countries, the home of the EU's top institutions counts deaths at nursing homes even if there wasn't a confirmed infection.