Merkel said Germany was facing an “acute national health emergency”.
“We have to act, and now,” Merkel said. “If infections continue at this rate, we will be at the limits of the capacities of our health system.”
The Robert Koch Institute (RKI) for disease control said 14,964 new coronavirus infections had been confirmed during a 24-hour period, marking Germany’s highest daily increase since the pandemic began.
Under the restrictions, members of no more than two households will be allowed to meet in public venues, with a maximum of 10 persons, while gatherings in private homes should be avoided.
The measures, agreed with the premiers of the 16 states, take effect on Monday and will remain in place through November in the hope that families will be able to celebrate Christmas.
“The decisions will apply across the country,” Merkel said and would be imposed by general regulations.
The restrictions include shutting down cultural and recreational facilities and closing restaurants.
Amateur sports events will not take place but shops are to remain open, although they will not be allowed to let in more than one customer per 10 square metres.
Hotels will not be permitted to offer accommodation to tourists and workers should, wherever possible, work from home.
It comes as France goes back into lockdown from tomorrow – after night-time curfews were imposed earlier this month – with President Emmanuel Macron saying the virus was “circulating at a speed that not even the most pessimistic forecasts had anticipated”.
Like all our neighbours, we are submerged by the sudden acceleration of the virus.
“We are all in the same position: overrun by a second wave which we know will be harder, more deadly than the first.”
France on Tuesday reported 523 new deaths from coronavirus over the previous 24 hours, the highest daily toll since April, when the virus was at its most severe.
Doctors have warned that intensive care units risk becoming overwhelmed. France’s death toll of more than 35,000 is the seventh highest in the world.
France first imposed an eight-week lockdown during the northern spring when hospitalisations and deaths caused by the COVID-19 epidemic reached a peak.
The lockdown was effective at containing the epidemic but the virus spread again after restrictions were relaxed on May 11 and people started congregating again in classrooms, universities, bars and restaurants.
Under the new measures, people will have to stay in their homes except to buy essential goods, seek medical attention or use their daily one-hour allocation of exercise.
They will still be allowed to go to work if their employer deems it impossible for them to do the job from home, and – in a departure from the previous lockdown in March – most schools will remain open.
Sweden, whose light-touch pandemic strategy has gained global attention, has registered 1980 new coronavirus cases on October 27, the highest since the start of the pandemic, Health Agency statistics say.
The increase released on Wednesday compares with a high of 1870 daily cases recorded on October 23.
The Health Agency has said the peak during the northern spring probably ran far higher but went unrecorded due to a lack of testing at the time.
Sweden registered nine new deaths, taking the total to 5927 deaths.
Sweden’s death rate per capita is several times higher than Nordic neighbours but lower than some larger European countries such as Spain and the UK.
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