Merkel’s statements about new measures are a mixed picture in the European markets

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European stocks closed higher on Monday amid concerns that the German government would take tougher measures to stem the pandemic following the country’s latest outbreak.

In particular, the pan-European STOXX 600 index closed with small losses of 0.1% at 485.46 points.

The German DAX fell 0.3% to 16,115.69 points, the French CAC 40 recorded small losses of 0.1% to 7,105.00 points, while the British FTSE 100 strengthened by 0.4% to 7,255.46 points.

In the region, the Italian FTSE MIB strengthened 0.2%, while the Spanish IBEX 35 rose 0.8%.

The mood in the markets today was aggravated by Angela Merkel’s warnings about the possibility of stricter restrictions in Europe’s largest economy in order to control the latest wave of the pandemic.

The German chancellor has warned CDU officials that the restrictive measures in place in Germany are “not sufficient” in the face of the “dramatic situation” caused by the resurgence of coronavirus cases in the country, according to party sources, adding that if it does not stop the fourth wave of the pandemic hospitals face a very serious problem.

With today’s developments and the daily record of cases, the health situation “will be worse than we have known” until today, Merkel warned.

The German chancellor’s comment intensified the concerns of investors, who are already closely following the developments on the pandemic front, after Austria announced on Friday that a total, national lockdown is being implemented from today to stop the pandemic again in the country, being the first country in the European Union to take such strict measures once again after last year’s lockdown. Going a step further, the Austrian government has announced that vaccination of the population will also become mandatory from 1 February.

This is because these latest developments evoke unpleasant memories of the domino lockdowns that took place last year, when Europe was at the center of the pandemic, and which led to economic downturns, with investors fearing that a new round of restrictive measures would could undermine the recovery of economies again.

In business developments, Telecom Italia (TIM) securities jumped 30.3% after the takeover bid of 10.8 billion euros received by the company from the US investment fund KKR.

In another telecommunications deal, Norwegian Telenor climbed 1.5% in the aftermath of a deal with its Charoen Pokphand Group to merge its overseas units, with the deal valued at $ 8.6 billion.

On the other hand, Ericsson’s title plunged 5.6%, announcing a deal to buy cloud communications company Vonage for $ 6.2 billion.

The climate is also exacerbated by the Bundesbank’s estimate that inflation in Germany could soar to 6%, a development that raises concerns about an earlier-than-expected tightening of monetary policy, which could also hurt economic growth.

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