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Analysis: Europe must play catch-up as U.S. economy readies for take-off – The Guardian

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By Jan Strupczewski

BRUSSELS (Reuters) – Struggling to get its vaccine campaign and economic recovery plan in gear, Europe can only watch with envy the stratospheric growth path projected for the stimulus-fueled U.S. economy.

But officials and economists caution against direct comparisons between the two, noting that much of the divergence masks in-built support that European workers and businesses get from the region’s more extensive welfare states, supplemented in many cases by generous furlough schemes.

The bigger question, they say, is whether Europe’s web of greater social protections will in the longer term stifle the remodelling of its economy which leaders hope will be one of the few positive takeaways from the health crisis.

“The European social contract leads to a slower rebound,” Daniel Gross, head of the Centre for European Policy think tank in Brussels, said of the implicit trade-off between securing existing jobs and businesses and allowing new ones to emerge.

“It might also impair medium term growth as structural changes are too slow,” he warned.

The same factors were at play when Europe emerged much more slowly than the United States from the 2008-09 global financial crisis. This time, the added concern is that delays with vaccine rollouts across the 27-nation EU make it vulnerable to further crippling lockdowns even as the U.S. economy returns to life.

Washington’s new $1.9 trillion stimulus package has shone a yet harsher light on the EU’s woes: the Federal Reserve this week projected a 6.5% growth rate for the United States in 2021 compared to a mere 3.7% forecast for the European economy.

The International Monetary Fund sees the United States returning to its pre-crisis output levels by year-end, six months ahead of the EU – and even that assumes Europe can master the pandemic and return to a degree of normality.

SAFETY NET

Critics have asked why Europe has not yet mustered anything of the sheer scale of the Biden package. But EU officials say that is like comparing apples with oranges.

“The EU is not a federal state, so support measures at both national and European level must be counted,” European Economics Commissioner Paolo Gentiloni told Reuters.

“And through our social systems, a much higher level of support kicks in automatically during a downturn than in the U.S.,” he added.

Gentiloni said that when existing welfare support and other state measures were combined with one-off emergency aid, total support in individual EU countries came to 8% of the economy, with governments providing a further 19% of GDP in liquidity support for 3.5 trillion euros ($4.17 trillion) in total.

By comparison, the United States in 2020 provided 11% of its GDP in automatic and discretionary measures and 5% in liquidity support, or some $3.35 trillion, EU officials estimate.

The United States has now pulled clearly ahead with its $1.9 trillion plan.

Gentiloni said, however, that the rest of the world would also benefit from its positive spillovers, including Europe, where all governments pledged to keep spending this year and next.

It is true that the EU suffered economically more in 2020 than the United States because the pandemic hit Europe before it went across the Atlantic, forcing lockdowns a month earlier.

But while the EU economy contracted more, European labour support has kept unemployment barely changed during the bloc’s biggest ever recession, with the jobless rate edging up from 6.5% to a peak of 7.8% and then easing again to 7.3% in January.

U.S. unemployment, by contrast, surged to 14.8% of the workforce in April 2020 from 4.4% in March to then gradually slid back to 6.3% in January this year.

“The European social protection nets are deeply rooted in the social and political history of our countries,” the chairman of euro zone finance ministers Paschal Donohoe told Reuters.

“That’s why the EU has chosen to focus its response on protecting employment through the deployment of large job retention schemes, rather than relying on direct transfer payments,” he said.

LIVES SAVED

No small matter is also the fact that, while stringent EU lockdowns hit the economy more than they did in the United States, they likely saved lives: in the EU there have been 5,365 COVID-19 cases and 127 deaths per 100,000 citizens, against 8,910 infections and 162 deaths per 100,000 Americans.

The most immediate challenge for Europe now is to get its vaccine campaign back on track after France, Germany and other nations resumed usage of AstraZeneca’s vaccine following safety reassurances from regulators.

After that, the question is whether Europe can make good its longer-term goal of transforming its economy to make it neutral in terms of carbon emissions by 2050, ready for the digitalised world and better prepared for future health emergencies.

To achieve that, the EU will jointly borrow, spend and repay 750 billion euros, most of which will be distributed to EU governments in loans and grants for investment and reforms. That is due to add two percentage points to EU growth by 2026.

While the first money from that package is to be paid out in the second half of this year, most of it will only come in 2022 and 2023. The United States is also considering another stimulus package focused on infrastructure later this year.

“There is a time lag between the two, let’s face it,” European Central Bank President Christine Lagarde told reporters last week, highlighting the speedy U.S. stimulus in her latest plea for quick disbursements from the EU recovery fund.

“…Our own fiscal measures are not kicking in yet. And we need that,” she added.

($1 = 0.8395 euros)

(Editing by Mark John and Toby Chopra)

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Construction wraps on indoor supervised site for people who inhale drugs in Vancouver

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VANCOUVER – Supervised injection sites are saving the lives of drug users everyday, but the same support is not being offered to people who inhale illicit drugs, the head of the BC Centre for Excellence in HIV/AIDS says.

Dr. Julio Montaner said the construction of Vancouver’s first indoor supervised site for people who inhale drugs comes as the percentage of people who die from smoking drugs continues to climb.

The location in the Downtown Eastside at the Hope to Health Research and Innovation Centre was unveiled Wednesday after construction was complete, and Montaner said people could start using the specialized rooms in a matter of weeks after final approvals from the city and federal government.

“If we don’t create mechanisms for these individuals to be able to use safely and engage with the medical system, and generate points of entry into the medical system, we will never be able to solve the problem,” he said.

“Now, I’m not here to tell you that we will fix it tomorrow, but denying it or ignoring it, or throw it under the bus, or under the carpet is no way to fix it, so we need to take proactive action.”

Nearly two-thirds of overdose deaths in British Columbia in 2023 came after smoking illicit drugs, yet only 40 per cent of supervised consumption sites in the province offer a safe place to smoke, often outdoors, in a tent.

The centre has been running a supervised injection site for years which sees more than a thousand people monthly and last month resuscitated five people who were overdosing.

The new facilities offer indoor, individual, negative-pressure rooms that allow fresh air to circulate and can clear out smoke in 30 to 60 seconds while users are monitored by trained nurses.

Advocates calling for more supervised inhalation sites have previously said the rules for setting up sites are overly complicated at a time when the province is facing an overdose crisis.

More than 15,000 people have died of overdoses since the public health emergency was declared in B.C. in April 2016.

Kate Salters, a senior researcher at the centre, said they worked with mechanical and chemical engineers to make sure the site is up to code and abidies by the highest standard of occupational health and safety.

“This is just another tool in our tool box to make sure that we’re offering life-saving services to those who are using drugs,” she said.

Montaner acknowledged the process to get the site up and running took “an inordinate amount of time,” but said the centre worked hard to follow all regulations.

“We feel that doing this right, with appropriate scientific background, in a medically supervised environment, etc, etc, allows us to derive the data that ultimately will be sufficiently convincing for not just our leaders, but also the leaders across the country and across the world, to embrace the strategies that we are trying to develop.” he said.

Montaner said building the facility was possible thanks to a single $4-million donation from a longtime supporter.

Construction finished with less than a week before the launch of the next provincial election campaign and within a year of the next federal election.

Montaner said he is concerned about “some of the things that have been said publicly by some of the political leaders in the province and in the country.”

“We want to bring awareness to the people that this is a serious undertaking. This is a very massive investment, and we need to protect it for the benefit of people who are unfortunately drug dependent.” he said.

This report by The Canadian Press was first published Sept. 18, 2024.

The Canadian Press. All rights reserved.

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N.B. election: Parties’ answers on treaty rights, taxes, Indigenous participation

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FREDERICTON – The six chiefs of the Wolastoqey Nation in New Brunswick distributed a survey on Indigenous issues to political parties ahead of the provincial election, which is scheduled to kick off Thursday. Here are some of the answers from the Progressive Conservative, Liberal and Green parties.

Q: How does your party plan to demonstrate a renewed commitment to recognizing our joint treaty responsibilities and acknowledging that the lands and waters of this territory remain unceded?

Progressive Conservative: The party respectfully disagrees with the assertion that land title has been unceded. This is a legal question that has not been determined by the courts.

Liberal: When we form government, the first conversations the premier-designate will have is with First Nations leaders. We will publicly and explicitly acknowledge your treaty rights, and our joint responsibility as treaty people.

Green: The Green Party acknowledges that New Brunswick is situated on the unceded and unsurrendered territories of the Wolastoqiyik, Mi’kmaq and Peskotomuhkati peoples, covered by the Treaties of Peace and Friendship. Our party is committed to establishing true nation-to-nation relationships with First Nations, grounded in mutual respect and co-operation as the treaties intended.

Q: How does your party propose to approach the issue of provincial tax agreements with First Nations?

Progressive Conservative: The government of New Brunswick operates in a balanced and fair manner with all organizations, institutions and local governments that represent the citizens of this province, including First Nations. Therefore, we cannot offer tax agreements that do not demonstrate a benefit to all citizens.

Liberal: Recent discussions with First Nations chiefs shed light on the gaps that existed in the previous provincial tax agreements with First Nations. Our party is committed to negotiating and establishing new tax agreements with First Nations that address the local needs and priorities and ensure all parties have a fair deal.

Green: The Green Party is committed to fostering a respectful relationship with First Nations in New Brunswick and strongly opposes Premier Blaine Higgs’s decision to end tax-sharing agreements. We believe reinstating these agreements is crucial for supporting the economic development and job creation in First Nation communities.

Q: How will your party ensure more meaningful participation of Indigenous communities in provincial land use and resource management decision-making?

Progressive Conservative: The government of New Brunswick has invested significant resources in developing a robust duty to consult and engagement process. We are interested in fully involving First Nations in the development of natural resources, including natural gas development. We believe that the development of natural gas is better for the environment — because it allows for the shutdown of coal-fired power plants all over the globe — and it allows for a meaningful step along the path to reconciliation.

Liberal: Our party is focused on building strong relations with First Nations and their representatives based on mutual respect and a nation-to-nation relationship, with a shared understanding of treaty obligations and a recognition of your rights. This includes having First Nations at the table and engaged on all files, including land-use and resource management.

Green: We will develop a new Crown lands management framework with First Nations, focusing on shared management that respects the Peace and Friendship Treaties. We will enhance consultation by developing parameters for meaningful consultation with First Nations that will include a dispute resolution mechanism, so the courts become the last resort, not the default in the face of disagreements.

This report by The Canadian Press was first published Sept. 18, 2024.

The Canadian Press. All rights reserved.

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Canadian Coast Guard crew member lost at sea off Newfoundland

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ST. JOHN’S, N.L. – A crew member of a Canadian Coast Guard ship has been lost at sea off southern Newfoundland.

The agency said in a release Wednesday that an extensive search and rescue effort for the man was ended Tuesday evening.

He was reported missing on Monday morning when the CCGS Vincent Massey arrived in St. John’s, N.L.

The coast guard says there was an “immediate” search on the vessel for the crew member and when he wasn’t located the sea and air search began.

Wednesday’s announcement said the agency was “devastated to confirm” the crew member had been lost at sea, adding that decisions to end searches are “never taken lightly.”

The coast guard says the employee was last seen on board Sunday evening as the vessel sailed along the northeast coast of Newfoundland.

Spokeswoman Kariane Charron says no other details are being provided at this time and that the RCMP will be investigating the matter as a missing person case.

This report by The Canadian Press was first published Sept. 18, 2024.

The Canadian Press. All rights reserved.

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