Applied philosophy - The Visegrád Group on life support

Another spring in lockdown approaches, a year after Covid-19 first reached Europe. In the first wave the Visegrád Group of countries were held up as examples of how to efficiently suppress the spread of the virus. However, they were slow to reintroduce restrictions during the second wave and are now struggling to contain the spread. Luckily, the new EU recovery fund will help kick start their recoveries when vaccination programmes permit the reopening of their economies. However, we worry that they have become too dependent on EU support.

It has been over a year since the virus reached Europe with the first confirmed case in Italy. Despite their generally good quality universal healthcare systems, countries on the continent have had a tough time containing the pandemic, as suggested by relatively high levels of confirmed deaths in population-adjusted terms. After a brief respite in the summer of 2020, the second (and in some countries the third) wave of the virus forced authorities to introduce and maintain tight restrictions on mobility and socialisation.

Vaccinations may give hope that an end is in sight but, after a sputtering start (the UK excepted), the return to normality may have been pushed back to the end of 2021 or early-2022. Nevertheless, when the recovery gathers speed, we expect European and Emerging Market assets to outperform the rest of the world. In fact, in our 2021 Outlook we expressed a preference for these regions, especially within risk assets. In the intersection of those two regions we find the so-called Visegrád Group (Czechia, Hungary, Poland and Slovakia), which went from success stories to cautionary tales in their management of the pandemic. What went wrong and what are their prospects?