Coronavirus poses risk to EU stability; experts urge vaccine patience, Europeans mull vacation plans

CORONAVIRUS ALERT 5/6/2020

The Atlantic Council’s Coronavirus Alert is a regular summary of policy, economic, and business events around the emergency. To stay updated, sign up to the Coronavirus Alert here.

In top stories today…

  • The coronavirus crisis poses a risk to stability in the eurozone, the European Commission said. The White House set out plans to disband its coronavirus task force, while tensions with China continue. Experts urged patience on a vaccine, as signs emerged of people making vacation plans for the summer. 
  • QUOTE: “The danger of a deeper and more protracted recession is very real,” the European Commission said, the Financial Times reported.  
  • The coronavirus pandemic poses a risk to stability in the euro zone, the European Commission warned as it predicted a deeper collapse in economic output this year than during the financial crisis, the Financial Times said. The crisis raises the risk of economic and social divisions within the European Union, said the commission, which renewed calls for a pan-European “recovery plan,” the Financial Times reported.  
  • QUOTE: “Will some people be affected? Yes. Will some people be affected badly? Yes,” US President Donald J. Trump said, Bloomberg reported. “But we have to get our country open and we have to get it open soon.” 
  • The White House will disband the coronavirus task force in the coming weeks in spite of evidence that the outbreak is not yet under control, The New York Times reported, citing Trump as he visited a Honeywell factory in Arizona that produces masks. “We will have something in a different form,” Trump told reporters, the newspaper added.  
  • The United States is mulling economic action against Beijing to match its anti-China rhetoric over the coronavirus outbreak, the Financial Times reported. The measures being considered, to curb investment flows and supply chains, threaten a commercial truce reached between the nations four months ago, ending nearly two years of tariff threats, the newspaper said.  
  • READ MORE: “How to make a bad situation much worse: Run from Afghanistan because of the virus,” reads the headline to a New Atlanticist article. “[I]t would be strategic blunder undercutting the US position and investment in Afghanistan and the entire South Asia region, as well as sending a terrible signal to our partners, allies, and adversaries,” write the Atlantic Council’s James B Cunningham and Earl Anthony Wayne, and Hugo Llorens, Ronald E. Neumann and Richard Olson.
  • Former UK Prime Minister Theresa May criticized government leaders worldwide for going their own way on coronavirus and failing to come up with a coherent global response to the crisis, the BBC reported. May was writing in the Times newspaper, the BBC added. 
  • READ MORE: “History shows that while democracies often mess up initial responses to crises, they also possess resilience that astonishes both themselves and their adversaries,” write the Atlantic Council’s Ana Palacio and Daniel Fried. “The United States needs to lead in devising both immediate and systemic responses to the coronavirus challenge, but not alone.” 

VACCINE PATIENCE

  • Experts urge caution on promises that a vaccine against coronavirus may be ready for emergency use by the fall because that fuels unrealistic expectations, news service Stat reported. Even if the usual timeframe for vaccine discovery and production could be massively sped up it would be several more months or longer before shots were ready for Americans, with a much longer wait for other countries, adding to the risk that the outbreak poses for several years ahead, Stat reported.  
  • QUOTE: “[E]ven if we had a vaccine that showed some evidence of protection by September, we are so far from having a vaccine in people’s arms,” said Michael Osterholm, director of the University of Minnesota’s Center for Infectious Diseases Research and Policy, news service Stat reported.  
  • A more contagious, mutant strain of coronavirus has been affecting Europe and the United States and could re-infect those who already have antibodies against the disease, Sky News reported, citing a study by researchers at Los Alamos National Laboratory. The paper was released before being peer-reviewed because of the urgency of the issue, though this has prompted some criticism, Sky added.  
  • Undiagnosed and untreated cases of tuberculosis (TB) will cause the infection of up to 6.3 million people and the death of 1.4 million more between now and 2025 because of coronavirus lockdowns, The Guardian reported, citing research commissioned by the Stop TB Partnership in partnership with Imperial College London, Avenir Health, and Johns Hopkins University. That sets back global efforts to end TB by between five and eight years, the newspaper added.  

GERMANY, BALTIC 

  • Several of Germany’s sixteen federal regions have broken ranks by lifting coronavirus restrictions ahead of a conference call on May 6 that’s meant to coordinate strategy, the Financial Times reported. Chancellor Angela Merkel wants to reach an agreement with regions on a gradual reopening of Europe’s biggest economy, but she says local restrictions will have to be put back in place if infections pick up again, Bloomberg reported.  
  • The Baltic states of Latvia, Lithuania, and Estonia will open their borders to each other starting on May 15 to create a “travel bubble” inside the European Union as coronavirus restrictions ease, Reuters reported, citing the countries’ prime ministers.  

OIL GLUT, DEBT 

  • Nigeria, Africa’s most populous nation, may face years without oil revenue as a production glut depresses the prices it’s paid for crude, Bloomberg reported. While Brent-crude futures topped thirty dollars a barrel on May 5, Nigeria is getting about ten dollars less than that, the newswire added. So-called petrostates from Venezuela to Iraq and Iran are contending with the same stark future, Bloomberg added.  
  • QUOTE: “It’s now dawned on everyone across the country how severe this threat is,” said Andrew Nevin, chief economist for Nigeria at PricewaterhouseCoopers, Bloomberg reported. “There is a possibility that at least for three to five years, there’s going to be no revenue flowing to the government from oil.”
  • “Debt relief: which countries are most vulnerable?” asked the Financial Times. Pressure is growing on investors to postpone payments and enter negotiations as countries face a cash crunch prompted by the health and economic crisis because of coronavirus, the newspaper said. Argentina, Venezuela, Lebanon, and Jordan feature in the article, along with Iran, Zambia, Zimbabwe, and South Africa. 
  • South Korea started to relax quarantine rules as coronavirus infections decline, but the government urged people to maintain social distancing in their daily lives, Yonhap News Agency reported. Quartz featured the story in its daily email to readers.  

VACATIONS? CASH BURN 

  • Accommodation booking service Airbnb has seen a surge in domestic bookings in Denmark and the Netherlands, a sign that people are starting to plan vacations as governments begin to ease lockdowns, the Financial Times reported, citing an interview with Brian Chesky, the company’s chief executive. Airbnb plans to cut 25 percent of its workforce, or 1,900 people, as soon as next week, the newspaper also reported.  
  • Germans may be able to go abroad on vacation if the coronavirus outbreak remains under control, Federal tourism commissioner Thomas Bareiss told Der Tagesspiegel newspaper, the BBC reported. Italy’s Prime Minister Giuseppe Conte told newspaper Il Fatto Quotidiano that Italians could go on vacation this summer, although France’s Emmanuel Macron said on May 5 that it was too soon to decide and that it will become clearer by the beginning of June, the BBC added. 
  • The biggest US airlines are spending about ten billion dollars a month as they await the return of customers amid the coronavirus outbreak, while they carry seventeen passengers on average on domestic flights and twenty-nine on international services, The New York Times reported. The newspaper cited a copy of testimony by industry group Airlines for America to a Senate hearing about aviation on May 6.  
  • Virgin Atlantic plans to cut more than 3,000 jobs, almost a third of its UK workforce, and end operations at Gatwick airport south of London, as the coronavirus outbreak looks set to affect the travel industry for months ahead, ITV News reported. 
  • Shanghai Disneyland reopens on May 11 after being closed for three months, making it the first Disney park to do so, The New York Times reported. Visitors will need to register online to prove that their infection risk ranks as green on China’s health-tracking app, their temperature will be taken and they must wear masks, while crowd sizes will be controlled at the park, the newspaper added.  

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