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The Feito Río bar in Madrid was still recovering from this spring’s lockdown when city authorities, reacting to a resurgence of Covid-19 infections, this week imposed a 10 p.m. curfew on bars and restaurants—right around the hour when many Spaniards like to head out for tapas.

“People who go out for dinner won’t have it at five o’clock, but at nine or even later. If this place has to be closed and empty at 10, you tell me how to do it,” said Javier Huerta, the Feito Río’s manager. He expects the bar to lose more than half...

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