LONDON — European Commission President Ursula von der Leyen said it herself: “The start was tough.”
The European Union has had a bumpy Covid-19 vaccine rollout. The campaign has prompted complaints that regulators were too slow to approve the shots and led to a simmering tussle with AstraZeneca as the pharmaceutical giant repeatedly slashed its delivery commitments.
The World Health Organization expressed concern earlier this week that the region’s ongoing coronavirus crisis now appears “more worrying” than it has for several months. The warning comes as many countries introduce new measures in an attempt to curb a third wave of infections.
The health agency also described Europe’s vaccination campaign as “unacceptably slow” and said it was crucial to speed up the rollout because new infections are currently increasing in every age group apart from those aged 80 years or older.
It’s a messy picture, further complicated by the unique nature of European politics.
“There have been various problems with the system, and it is a complex system, so I think it’s key not to point the finger to one pointed failure but recognize that it’s very complex,” Linda Bauld, professor of public health at the University of Edinburgh, told CNBC.
The European Commission, the executive arm of the EU, has been in charge of negotiating contracts with the pharmaceutical firms on behalf of the 27 member states. The institution is also responsible for overseeing the exports of the shots produced in the bloc.
However, health policy matters are a competence of the member states, which means the 27 capitals organize the inoculations in their own countries and can ultimately decide to buy Covid shots outside the deals struck by the commission, for example.
This juxtaposition between national and EU institutions has often hindered the reputation of the bloc in the wider vaccination efforts.
“There is issues to do with both (national and EU institutions). There clearly are politics in it and we have all heard about that in the media, but there are also issues to do with the decision-making structures, the commissions’ views and the priorities of member states,” Bauld told CNBC.
AstraZeneca shot suspension
This was highlighted recently when 13 EU countries decided to halt the use of the Oxford-AstraZeneca shot while possible side effects were investigated.
At the time, the European Medicines Agency – the drugs regulator for the entire 27-member region — recommended that countries continue to use the vaccine even while it was reviewing data of blood clots in some vaccinated people. But some member states preferred to be cautious and used their sovereign power to stop the use of this vaccine while the EMA completed its review. The drug regulator’s safety committee concluded in a preliminary review that the benefits of the vaccine continue to outweigh the risk of side effects.
It has also been the case that heads of state have used the institutions in Brussels to complain about the hiccups in the process. Earlier in March, Austrian Chancellor Sebastian Kurz said there was “secrecy” in the decision to distribute the vaccines at the commission’s steering board.
The group, which is chaired by the commission, has representatives from all the member states, including Austria.
“Why do they come up with this now knowing that Austria is a member of the steering board, like the 26 other member states, and has been informed of the previous allocations like the others?” an EU official from another member state, who did not want to be named due to the sensitivity of the issue, asked during a CNBC interview in March.
The distribution of the vaccines is carried out on a pro-rata basis, depending on the size of the countries’ population. But some EU nations were particularly keen to have more of the AstraZeneca shot, since it is cheaper and easier to store than the Pfizer-BioNTech vaccine.
“If a member state decides not to take up its pro rata allocation, the doses are redistributed among the other interested member states,” the commission said in a statement in March.
The distribution of vaccines became an issue as a result of AstraZeneca’s repeated cuts to supply deliveries.
While the EU was expecting to receive 90 million doses of the shot by the end of the first quarter, the pharmaceutical giant said it could only deliver 40 million doses in that timeframe. This was later revised down to 30 million doses.
AstraZeneca has blamed low yields in European plants for the lower deliveries. Additionally, the drugmaker has said it could only aim to deliver 70 million doses between April and June, when the EU was expecting 180 million in the same period.
“We also know that AstraZeneca has unfortunately under-produced and under-delivered. And this painfully, of course, reduced the speed of the vaccination campaign,” von der Leyen said at a press conference in March.
Tougher export rules
To solve this issue, the commission proposed stricter rules on exports of shots produced in the bloc.
Since the end of January, the 27 countries can stop shipments of Covid vaccines when a company is not complying with delivery targets with the EU. This is how the Italian government stopped a shipment of AstraZeneca shots from going to Australia in March. Between the end of January and late March, the commission received 315 requests for vaccine exports, but only this one was refused.
But because EU officials are concerned about further delivery delays, the commission decided to toughen up the export regulations from late March onward.
The commission will not only be checking whether the pharma companies are delivering on schedule, but also whether the recipient country has any bans or restrictions of Covid vaccines produced there and whether this nation also has a better epidemiological situation than the EU.
“It is quite concerning at the political level the whole discussion about exports restrictions, controls or even bans,” Dimitri Eynikel, coordinator at Medecins sans Frontieres, told CNBC. He added that this could lead to further obstructions, divisions and delays in vaccine distributions.
Ultimately the supply chain is international and if one nation were to stop sending raw materials to the EU, for example, then that could undermine the production of the shots within the bloc.
The EU’s move to have stricter oversight on where vaccines go sparked criticisms of vaccine nationalism.
“I think the EU is definitely prioritizing its population first but no different from other high-income countries or regions. The United States is doing the same, the U.K. is doing the same so in that sense (the EU) is no different,” Eynikel said.
Data shared by the International Monetary Fund has shown that China, India and the EU are among the biggest exporters of Covid shots, while the U.S. and the U.K. have exported none so far.
Hopes for the second quarter
Despite several issues so far, the EU is confident that the next three months will prove to be a turning point in the vaccine program.
In total, the commission is expecting 360 million doses of Covid shots between April and June, meaning it is well placed to achieve its target of vaccinating 70% of the adult population before the end of summer.
“Despite the fact that things could have gone faster, granted, but we have had a great success. The alternative of not having procured vaccines together would be that we would be competing between European member states and possibly some of us would have not have the vaccine even at this stage,” Chris Fearne, Malta’s health minister, told CNBC’s “Squawk Box Europe” on Tuesday.
Biden offers tax credits for COVID-19 vaccination and paid time off
By Trevor Hunnicutt
WASHINGTON (Reuters) –President Joe Biden on Wednesday announced tax credits for certain businesses that pay employees who take time off to get COVID-19 shots, a new effort to involve corporate America in his vaccination campaign.
“I’m calling on every employer, large and small, in every state to give employees the time off they need with pay to get vaccinated,” the Democratic president said.
The tax credits will apply to businesses with fewer than 500 employees, he said.
In a speech, Biden also said he expects the United States to reach his 100-day goal of getting 200 million coronavirus vaccine shots in arms by the end of the day, even as the nation faces an increase in infections.
“Today we hit 200 million shots,” Biden said. “It’s an incredible achievement for the nation.”
Biden said the vaccine effort is entering a new phase with everyone over age 16 becoming eligible to be vaccinated. Biden said 80% of all seniors have received at least one shot, leading to a dramatic decline in the deaths of elderly Americans.
“If you’ve been waiting for your turn, wait no longer,” Biden said.
Biden administration officials said the government plans to reimburse businesses for the cost of giving workers as many as 80 hours in paid time off to get their shots or recover from any side effects.
The tax credit is for up to $511 per day for each worker, through September. Businesses with fewer than 500 employees employ roughly half of U.S. private-sector workers. The tax credits were authorized under Democratic-backed COVID-19 pandemic relief legislation passed by Congress and signed by Biden over Republican opposition.
The administration’s chief problem in its response to the pandemic is now shifting from securing enough vaccine supply to persuading enough Americans to seek out the available shots.
More than half of American adults have had at least one vaccine dose, according to the U.S. Centers for Disease Control and Prevention (CDC). A third of U.S. adults are fully vaccinated, as well as 26% of the population overall.
The U.S. COVID-19 death toll of more than 568,000 leads the world. The coronavirus is still killing hundreds of Americans daily and many Americans have shown a reluctance to get vaccinated.
Countries around the world with less successful vaccination campaigns than the United States are dealing with a spike in infections.
Biden, who has loaned some unused vaccines to Canada and Mexico and donated funds to a multilateral vaccination effort for poor countries, said the White House is still looking at its options for eventually sending vaccines to Canada, Central America and elsewhere. Biden told reporters after his speech that he spoke with Canadian Prime Minister Justin Trudeau earlier on Wednesday.
“We don’t have enough to be confident to send it abroad now, but I expect we’re going to be able to do that,” Biden said.
“We’re looking at what is going to be done with some of the vaccines that we are not using. We’ve got to make sure they are safe to be sent.”
(Reporting by Trevor Hunnicutt and Steve Holland; Editing by Will Dunham and Jonathan Oatis)
The Liberal Government rolls out post-pandemic spending plan ahead of likely election
By Julie Gordon
OTTAWA (Reuters) -Canadian Prime Minister Justin Trudeau’s government on Monday lined up billions in new spending to provide emergency support during a virulent third wave of COVID-19 and to help launch an economic recovery ahead of an election expected later this year.
The budget, the Liberal government’s first in two years because of the pandemic, is aimed squarely at boosting near-term growth and includes a long-promised national daycare plan.
It also follows through on stimulus promised late last year, outlining a C$101.4 billion ($81 billion) “growth plan” over three years, with nearly half of that spending coming in the first year.
“We have to finish the fight against COVID – and that costs a lot of money,” Finance Minister Chrystia Freeland told reporters, adding that hundreds of thousands of Canadians remain out of work because of the pandemic.
Liberal insiders expect Trudeau to seek an election later this year to try to secure a majority in parliament. The Liberals currently need the support of at least one other party to pass legislation, including the budget.
Opposition lawmakers were unimpressed with the budget. But the leader of the left-leaning New Democratic Party said he was not prepared to bring down the government over it.
“It is clearly irresponsible to have an election or in any way to trigger an election while we are in the midst of this third wave,” Jagmeet Singh told reporters. “The impact on people would be devastating and we are not going to do that.”
Erin O’Toole, who heads the official opposition Conservatives, said: “This is an election budget and a poor one at that.” His party trailed the Liberals by 37% to 29% in an Abacus Data poll published last week.
Business groups were pleased with the added certainty of finally having a full budget, but remained unsold on the need for a massive stimulus plan with the economy already set to surge later this year as pent-up demand is unleashed.
“There’s a lot of spending in a lot of programs. But the effects of all of those combined together for me is just a bit unsure,” said Robert Asselin, senior vice president of policy at the Business Council of Canada.
The deficit for the fiscal year that started on April 1 will be the second largest in recent decades, with the closely watched debt-to-GDP ratio hitting 51.2%, although Freeland promised a return to restraint as the economy gets back to normal.
“I think the key here is the debt-to-GDP (ratio) is expected to peak this year … and it’s expected to come down in the years ahead,” said Doug Porter, chief economist at BMO Capital Markets. “I think that’s a credible plan if they can stick to it.”
THIRD COVID WAVE
Trudeau’s Liberal government has been buoyed in opinion polls by its response to the COVID-19 pandemic. But a third wave of infections is pounding the country’s largest city, Toronto, and its suburbs – a key Ontario region for securing an electoral majority – and the coronavirus vaccine rollout has trailed other wealthy countries like the United States and Britain.
Of the nearly C$50 billion in new spending this year, C$27 billion is set aside to extend pandemic recovery measures like wage and rent subsidies for businesses and for a new program to help transition companies back to hiring.
The budget also aims to create a national childcare program and to make a more aggressive effort to reduce carbon emissions, both measures that polls show are important to Liberal voters.
While Freeland said historically low interest rates allowed significant investment, she also pledged to unwind deficits and reduce the debt-to-GDP ratio over the medium term. A senior government official said, however, that a fiscal anchor should not be seen as a “straitjacket.”
The official also said that the government had run stress tests on the accumulating debt and was confident of its abilities to service that debt even as interest rates rise in the future.
“It’s hard for us to draw a conclusion that we’re out over our skis. We don’t believe we are. We think we’re in very solid terrain,” the official told reporters.
Surging growth should also increase revenues, with 5.8% growth forecast for this year, after a 5.4% contraction in 2020.
The deficit in the current year is projected to hit C$154.7 billion, less than half that of the previous fiscal year, with total national debt soaring to C$1.23 trillion this year, up from C$1.08 trillion in the previous year.
The Canadian dollar steadied at about 1.2530 to the greenback, or 79.81 U.S. cents, after the budget was released. Canada‘s 30-year yield extended its rise, up 7.5 basis points at 2.060%.
($1 = 1.2526 Canadian dollars)
(Reporting by Julie Gordon; Additional reporting by David Ljunggren, Steve Scherer, Fergal Smith and Moira Warburton; Editing by Peter Cooney)
Beijing huddles with friends, seeks to fracture U.S.-led ‘clique’
By Gabriel Crossley and Yew Lun Tian
BEIJING (Reuters) – China is shoring up ties with autocratic partners like Russia and Iran, as well as economically dependent regional countries, while using sanctions and threats to try to fracture the alliances the United States is building against it.
Worryingly for Beijing, diplomats and analysts say, the Biden administration has got other democracies to toughen up to a rising, more globally assertive China on human rights and regional security issues like the disputed South China Sea.
“China has always resolutely opposed the U.S. side engaging in bloc politics along ideological lines, and ganging up to form anti-China cliques,” the Chinese foreign ministry said in a statement to Reuters.
“We hope relevant countries see clearly their own interests…and are not reduced to being anti-China tools of the U.S.”
After last month’s stormy talks between top U.S. and Chinese diplomats in Anchorage, Beijing also appeared to engage more urgently with countries like Russia, Iran and North Korea, which are also on the wrong end of U.S.-led sanctions.
“China is very worried about U.S. alliance diplomacy,” said Li Mingjiang, associate professor at the S. Rajaratnam School of International Studies in Singapore, pointing to what he calls attempts to “huddle for warmth” with governments shunned by the West.
Days after the Alaska meeting, the Chinese government’s top diplomat, State Councillor Wang Yi, received Russia’s foreign minister Sergei Lavrov, who called for Moscow and Beijing to push back against what he called the West’s ideological agenda.
A week later, Wang flew to Iran and signed a 25-year economic pact, which Renmin University professor Shi Yinhong said “effectively exposes every Chinese company participating to direct or indirect U.S. sanctions.”
President Xi Jinping, meanwhile, exchanged messages with North Korean leader Kim Jong Un, calling for a deeper partnership with another country whose ambitions for nuclear arms has drawn sanctions.
China is also wooing its economically dependent neighbours. Wang hosted foreign ministers from Indonesia, Malaysia, the Philippines, Singapore and South Korea in China’s southeastern Fujian province in recent weeks.
Li said Beijing will be holding out promises to help these countries revive their economies after the COVID-19 pandemic, making them think twice about siding with the United States.
After Philippines diplomats and generals accused China of sending militia-manned vessels into their waters, President Rodrigo Duterte said he was not going to let territorial disputes in the South China Sea get in the way of working with China on vaccines and economic recovery.
Biden has continued to pressure Beijing on many of the same issues the Trump administration did, but with a more alliance-focused strategy.
At a meeting between Biden and Japanese Prime Minister Yoshihide Suga on Friday, the two countries presented a united front against China’s assertiveness, on issues ranging from the disputed East China Sea islands known as Senkaku in Japan and Diaoyu in China, to rights issues in China’s Hong Kong and Xinjiang region.
Last month, the United States, the European Union, Britain and Canada imposed coordinated sanctions over reports of forced labour in China’s western Xinjiang region, while over a dozen countries jointly accused China of withholding information from an investigation into the origin of the COVID-19 pandemic.
Germany, Britain, the Netherlands, Canada and France all recently joined the United States in sending warships through the disputed South China Sea, or announced plans to do so.
Washington also said it wants a “coordinated approach” with allies on whether to participate in the 2022 Winter Olympics in Beijing, amid concerns over human rights violations, particularly related to the treatment of Uighurs and other Muslim minorities in Xinjiang.
BREAKING THE ‘CLIQUE’
China has responded angrily to shows of unity by Washington’s allies, with its diplomats dubbing Japan a “vassal” and Canada‘s Prime Minister Justin Trudeau a “running dog” of the United States.
China’s strategy to weaken this unity revolves around encouraging U.S. allies to engage independently with Beijing, and put the economic benefits first, while punishing them if they engage in joint-action against China.
Beijing responded to the EU’s sanctions of Chinese officials over Xinjiang with disproportionately harsh counter-sanctions, analysts said, potentially torpedoing a long-awaited investment agreement.
Janka Oertel, director of the Asia Programme at the European Council on Foreign Relations, believes Beijing is prepared to sacrifice economic benefits for core interests if they are threatened by the U.S.-EU alliance.
Xi drove home the message in a recent phone call with German Chancellor Angela Merkel, telling her that he hoped “the EU will make a correct judgment on its independence”.
But China still needs European technology and investment, said Joerg Wuttke, president of the European Chamber of Commerce in China.
“They still talk to us, despite the sanctions, business keeps going, and that’s very reassuring.”
Beijing has not given up persuading Washington that cooperation is better than competition, as demonstrated last week when it assured U.S. climate envoy John Kerry of support for Biden’s virtual climate summit this week.
“China hopes Washington can appreciate that it is in U.S. interests to have China as a friend rather than as a foe,” said Wang Wen, a professor at the Chongyang Institute of the Renmin University of China.
(Reporting by Gabriel Crossley and Yew Lun Tian; Editing by Tony Munroe & Simon Cameron-Moore)
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Europe kicks off vaccination programs | All media content | DW | 27.12.2020 – Deutsche Welle
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