(Bloomberg) — France is ready to institute a new national lockdown as a last resort as Europe grapples with how to contain the resurgent coronavirus.

Plans to restrict movement are ready, but the country will do everything possible to avoid measures that clobbered the economy in the second quarter, France’s Prime Minister Jean Castex said on Thursday.

“The epidemic is gaining ground, and we need to intervene now,” Castex said, rejecting the need for broad restrictions. “This doesn’t mean the situation is as serious as it was” earlier this year.

Europe’s leaders are struggling with how to respond to the latest developments in the pandemic, wary of sweeping measures that could hobble recovering economies. There’s little appetite for harsh lockdowns, as current data indicate the outbreak is becoming less deadly — at least for now.

“Another lockdown would create incalculable risks for companies and snap the chains of value creation,” Dieter Kempf, president of Germany’s BDI industry lobby, said on Twitter.

Tensions over how to counter the latest rise in cases rose to the surface in Germany. Ahead of a video conference between Chancellor Angela Merkel and state leaders to discuss the pandemic, Bavaria Premier Markus Soeder called out Health Minister Jens Spahn.

Spahn announced this week that arrivals from risk areas will have to enter a 14-day quarantine, which can be ended after five days if a negative test result is provided. Due to a lack of capacity, a requirement for people to be tested on arrival will be scrapped.

Soeder called the decision “at the very least hasty” and questioned whether quarantine works in practice.

Germany is struggling to define a national strategy as some state leaders point to low infection rates locally. That’s created tensions over how to handle the latest upsurge.

At the meeting, Merkel wants state governments to refrain from further loosening steps and impose a fine of at least 50 euros on people who don’t abide by face-mask rules, news agency DPA reported, citing a draft of the proposal.

The country also aims to extend a ban on large events such as festivals and concerts until at least the end of 2020, according to DPA. But there is resistance on the measure as some German states want to continue to hold Christmas markets.

“The health challenges are far from overcome, and neither are the economic and social issues,” Finance Minister Olaf Scholz said in an interview with the in-house publication for his Social Democratic party. “We are fighting for jobs and companies,” he said, adding that it will likely take until next fall to overcome the crisis.

French Rules

France’s new restrictions are to be targeted at specific locations where contagion rates are more severe, such as Paris, where people will be required to wear masks outside. Marseille, France’s second largest city, has made masks mandatory everywhere and bars and restaurants have to close by 11 p.m.

Local authorities were better placed to propose measures to contain the spread and react to specific outbreaks, Castex said.

The approach is similar in Spain. Prime Minister Pedro Sanchez said Tuesday that another lockdown is not on the table, putting the response in the hands of regional authorities.

Spain, the epicenter of the pandemic in Europe, recorded 3,594 infections, close to a four-month high. Italy registered 1,367 new coronavirus cases Wednesday, the most since May 12. France reported 5,429 new cases over the past 24 hours, a four-month high.

Summer Travel

In Germany, there were 1,431 new cases in the 24 hours through Thursday morning, still well below the peak of nearly 7,000 at the end of March and in early April.

Across Europe, outbreaks since mid-July have been fueled by summer-time social gatherings and lax social distancing among young adults. Many of the new cases in Italy involve younger vacationers returning either from within the country or from abroad.

While the number of hospitalized and deaths has remained well below the levels seen during the pandemic peak in spring, the concern is that the disease hits more elderly and other vulnerable people in the coming weeks.

Italy, which is also ruling out a new national lockdown, stepped up testing in ports and airports for arrivals from at-risk countries, with a record 93,529 tests carried out Wednesday. It has already closed nightclubs and tightened rules on mask wearing.

After avoiding severe spikes, “I hear people say that Italy is a model, but I am very cautious,” Health Minister Roberto Speranza said in an interview on Wednesday. “We still have much to do. God forbid people should think that the battle has been won.”

(Updates with German comments)

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