COVID-19 European Bulletin 2

Happened

Thursday, March 26, 2020

British PM Boris Johnson tests positive for Covid-19

Thursday, April 2

UK opposition party, Labour, call for Conservative government to publish the findings of its 2016 pandemic drill, Exercise Cygnus, the findings of which were buried by the Department of Health and are understood to have recommended measures that would have mitigated the impact of the pandemic. 

Saturday, April 4

Sir Keir Starmer elected Leader of the Labour party, vowing to "call out" government mistakes over COVID-19. See Tactics Institute's analysis here.

Monday, April 6

Epidemic

  • Authorities in northern Italy begin testing health workers for antibodies that may help identify individuals with immunity to the coronavirus.
  • Italy reports the lowest daily rise of confirmed COVID-19 cases since March 17; Italy has 25% of worldwide fatalities
  • US death toll tops 10,000, that is, the third-highest number of victims in the world after Italy and Spain
  • US President Donald Trump threatened India with retaliation if it does not release stocks of hydroxychloroquine ordered by America.

Economic Impact

  • Airbus announced additional production pauses in Germany and the United States, in response to an industry-wide slowdown
  • Italy announced an economic package of €950bn in loan guarantees to ensure liquidity for businesses currently closed.

Happening

Tuesday, April 7, 2020

Epidemic

  • 55-year old British PM Johnson admitted to intensive care after receiving oxygen support for serious COVID-19 complications.
  • Coronavirus deaths in Spain tick up for the first time in five days to 743 people (a total of 13,798)
  • French Health Minister Olivier Veran warns that France has not reached the peak of the epidemic
  • Iranian FM Zarif Tweets that Iran needs no charity from the US, rather the end of economic sanctions

Economic Impact

  • The dollar lost ground on Tuesday as riskier currencies rebounded on tentative hopes that lockdowns may be slowing the spread of the coronavirus.
  • Oil also rose on Tuesday amid hope that oil producers will agree to cut output in the face of crushed demand due to the pandemic.

 

Crisis Bulletin

PM Johnson's worsening personal case comes as the pandemic has killed 5,373 people in Britain. Johnson, 55, was admitted after suffering persistent coronavirus symptoms, including a high temperature and a cough, for more than 10 days. Officially, he is not in need of a ventilator at this point in time. While Britain has no formal succession plan should a prime minister become incapacitated, Johnson had asked Foreign Secretary Dominic Raab to deputise for him.

400,000 people have signed a petition urging French officials to let more doctors prescribe the anti-malaria drug chloroquine for coronavirus patients, as experts continue to disagree over its efficacy. The French petition on the Change.org website was launched on Friday, April 3 by a group of doctors including Philippe Douste-Blazy, a cardiologist and former French health minister.

On Monday, April 6, President Trump threatened retaliation if India did not release stocks of hydroxychloroquine ordered by America. India, one of the world’s largest exporters of the drug has approved its use for individuals at high risk of being infected by coronavirus, including healthcare workers.

Economic Impact Bulletin

Europe’s leading planemaker Airbus announced on Monday that it would pause production and assembly at its German sites in Bremen and Stade, as well as its A220/A320 manufacturing facility in Mobile, Alabama. These measures come in addition to production pauses in France, Spain and the UK.

France says it will not accept a European response to the coronavirus crisis that does not include long-term recovery measures like a joint EU solidarity fund, finance minister Bruno Le Mair said on Monday, ahead of a meeting between Eurozone finance ministers on Tuesday.

Le Maire has proposed an additional fund worth “several hundred billion euros” financed by joint borrowing that would be used to fund public spending for economic recovery after the current downturn. Net contributors in the EU budget, including Austria, Denmark, Finland and the Netherlands, refuse to back an agreement that would allow joint borrowing. Le Maire makes the case for a limited time-scope fund (5-10 years) focused on recovery.

The President of the German Parliament, Wolfgang Schaeuble, and his French counterpart Richard Ferrand called for "more solidarity and fiscal integration" in Europe.

European Commission President Ursula von der Leyen has called for EU member states to use the Multiannual Financial Framework — expected to run from 2021 to 2027 — "in such a way that it is a crucial part of our recovery plan."

On Monday, Italy’s government approved a €400bn of guaranteed bank loans to companies hit by the coronavirus crisis. Banks will be able to extend credit totalling €750bn. The Treasury will shield banks from losses on 90% of loans. The guarantee can be extended to 100% of possible losses for loans not exceeding 25,000 euros. Italy’s state lender Cassa Depositi e Prestiti (CDP) and its export agency Sace will provide further guarantees until the end of this year for an additional 200 billion euros, according to the decree.

Business lobby Confindustria projects a 6% decline in GDP for 2020. On Tuesday, the Italian National Statistical Service projected a 9.9% plunge in consumer spending by June.

Germany has proposed repurposing the European Stability Mechanism (ESM) to free up billions of euros for Italy, Spain and others that require financial assistance during the post-pandemic recovery.

The European Commission has put forward the Support mitigating Unemployment Risks in Emergency (SURE) instrument, which would free up to €100 billion in loans for EU member states to protect jobs.

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