German Chancellor Angela Merkel called on shops in the country to shut until mid-January after a sharp rise in coronavirus deaths.
Germany imposed far less stringent shutdown rules than other major European nations after coming through the first wave of the pandemic relatively unscathed.
The call came after deaths soared by 590 on Wednesday, the highest total since the start of the coronavirus outbreak.
Ms Merkel blamed lax social distancing for the worrying rise and demanded the introduction of strict new measures.
“When mulled wine stands are being built, when waffle stands are being built, that's not compatible with what we had agreed to with only takeaways for food and drinks," she said, in an emotional speech to Germany's Parliament.
"I am really sorry, but if we're paying the price of death tolls at 590 people daily then that's, in my view, not acceptable."
Ms Merkel said it was right to close shops and limit social gatherings. She said a scientific study by Leopoldina Academy backed up the call.
The researchers had called for all shops other than those selling essential items to close between Christmas Eve and January 10 at the earliest.
Employees should also work from home when possible while schools are also kept shut.
Ms Merkel said people had a responsibility to significantly reduce social contact over the festive period.
"If we have too many contacts before Christmas and it ends up being the last Christmas with the grandparents, then we'd really have failed," she said.
Meanwhile, other European politicians sounded the alarm about worrying rises in case numbers.
London Mayor Sadiq Khan said the city could be forced into Tier 3 measures, the highest level of restrictions, if the rate of infection did not improve in the next few days.
Under Tier 3, all pubs, restaurants, indoor entertainment and tourist venues would close, dealing a significant blow to the city’s hospitality industry leading to Christmas.
British Prime Minister Boris Johnson expressed his concern about the rising toll in the capital.
“If you look at what’s happening in London, for instance, we are seeing the disease starting to climb again in spite of all the efforts we’ve made,” Mr Johnson said on Tuesday.
On Wednesday, the UK's Department of Health reported 533 deaths and an additional 16,578 new infections.
Meanwhile, Sweden has proposed temporary legislation that would allow shops and other businesses to be closed where there is a greater risk of transmission.
The country was praised for its light lockdown measures earlier in the pandemic but has been forced to re-examine its strategy in recent weeks.
Swedish health authorities reported 133 new deaths on Tuesday, bringing the total to 7,200, and reported 297,732 cases in total.
Elsewhere, Switzerland resisted calls to close its mountain slopes to skiers. France, Germany and Italy have closed their resorts.
Swiss authorities said on Wednesday that at least 70 people had died with Covid-19 and it reported 5,086 more cases.