That the lockdowns are crippling the global economy is beyond dispute. According to the latest estimates from JP Morgan, output will contract by 2.6 per cent year on year in 2020, the worst year for the global economy since World War II. Indeed, even before the leading advanced economies imposed stricter curbs on commerce and travel in mid-March, business activity had already collapsed, preliminary survey data from IHS Markit showed.

In financial markets, the fallout from the Covid-19 crisis has been just as severe, and has amplified the effects of the economic shock despite massive monetary and fiscal support from the world’s major central banks and governments.

Global stocks have just suffered their worst quarter since the 2008 financial crash, with the benchmark S&P 500 index plummeting 26.7 per cent in the space of just 16 days, its fastest decent into a bear market on record. Oil prices, meanwhile, have fallen to their lowest levels in 18 years, pushing the bonds of junk-rated energy companies into distressed territory, while the surge in the US dollar has crushed emerging-market currencies.

The severity of the virus-induced shock has given rise to tensions between the exigencies of tackling an international public health emergency and the pressure on governments to ensure that the lockdowns do not turn what is expected to be a brutal yet relatively short-lived global recession into a protracted downturn.

To be sure, the trade-off – which, to put it crudely, is between saving lives and crushing the economy – is far from clear-cut.

If governments reopen their economies too quickly, allowing the virus to proliferate and prompting renewed lockdowns, the damage, both in economic and financial terms, would be colossal. Uncertainty about the trajectory of Covid-19 (particularly in the US, which has supplanted Europe as the epicentre of the pandemic) is the biggest source of concern for businesses and investors. A botched lifting, or easing, of restrictions would deepen the crisis further.

However, the problem is that fear of economic inactivity is just as potent as fear of the virus itself.

It is not unreasonable to ask how much longer economies can remain shut without causing irreparable harm and exacerbating financial stresses. In a note published on Wednesday, ADM Investor Services International, a UK brokerage, warned that “markets will find no solace or comfort until such time as the peak of the Covid-19 spread is clearly in place and lockdown measures are eased decisively”.

This is indeed the case. What is not clear, however, is whether the persistent volatility in stock markets is mostly attributable to difficulties in containing the virus or increasing anxiety over the costs and duration of the lockdowns.

Right now, investors are in no mood to deploy capital as the epidemic continues to spread. While there is enormous concern over the scale and severity of the economic shock – in particular the rapid deterioration in the US and British labour markets – most market participants believe strict lockdowns are a necessary step to beat the virus.

Yet, so are other measures in the absence of a vaccine, such as mass testing and adequately resourced health services – a huge problem in Britain, where there are acute shortages of protective equipment for staff.

Given how vulnerable markets are right now, and the uncertainty about the efficacy of the shutdowns, “lockdown fatigue” is likely to become the main source of selling pressure in the absence of clear signs that the pandemic is being brought under control.

If Italy is able to stop new infections and “flatten the curve”, this could inspire confidence in the effectiveness of lockdowns in other Western economies. If not, it will not just be Italians that will be up in arms; markets will also lose faith in the battle against Covid-19.

Nicholas Spiro is a partner at Lauressa Advisory