Despite the resurgence of COVID-19 infection rates in July across Europe, lower mortality and weekly new hospital admission rates compared to previous waves point for the moment to limited risk of closures in the region. At the same time, inoculation rates kept progressing at a good pace, with more than 50 percent of total population in all major European economies now fully vaccinated. Strong signs of recovery for the tourism sector in sun-kissed countries like Italy pave the way for further output gains for the Euro Area in 2021.