EU leaders agree on mammoth stimulus plan; WHO welcomes Oxford vaccine data

CORONAVIRUS ALERT 07/21/2020

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.

Dear Coronavirus Alert readers,

Four months ago, we launched the Coronavirus Alert to gather vital news about the coronavirus and its impact on the world. Now, as we confront a world transformed by the pandemic, we want to hear from you. What do you like best about the alert and how could it be improved? What do you want—and need—to know about where the post-COVID world is headed? How can we be most helpful in getting you the COVID-related news, analysis, insights, and foresight you can’t find elsewhere?

Send us your feedback by emailing editor@atlanticcouncil.org.

In top stories today:

  • European leaders haggled their way to an unprecedented budget and stimulus plan after four days and nights of often heated debate. The World Health Organization (WHO) welcomed data on vaccine development by Oxford University and AstraZeneca but said more research is still needed.
  • Worn out after four days and nights of haggling, twenty-seven European Union (EU) leaders reached a deal on an unprecedented 1.8 trillion euro budget and coronavirus recovery fund, The Associated Press reported. The so-called frugal four—Austria, Denmark, the Netherlands, and Sweden—finally agreed on the 390 billion euros of grants to the countries hardest hit by the pandemic, compared with 500 billion euros proposed by France and Germany in May, the Financial Times said.
  • BBC Monitoring gives an overview of media reaction to the deal around Europe: “The EU is still alive” (Germany’s Der Spiegel); “a milestone” (Spain’s El Pais); “The undeniable victory that this is for Paris and Berlin… will also have a bitter aftertaste” (France’s Les Echos).
  • EVENT: Through a webinar co-hosted by the Atlantic Council in Turkey and the Turkish Heritage Organization, distinguished panelists discuss the future of multilateralism, international cooperation, and Turkey’s perspectives around discussions about the changing global order. The webinar begins at 10:00 a.m. EDT on Tuesday, July 21. Details are here.
  • EVENT: Is NATO still a relevant force to manage the challenges to the international order of the twenty-first century and the great powers testing its limits? Join us for this online debate on Tuesday, July 21 at 2:00 p.m. EDT. Details are here.
  • US President Donald J. Trump said on July 20 that he will resume daily White House coronavirus briefings, The Washington Post reported.  Trump tweeted a photo of himself wearing a mask on July 20, calling it an act of patriotism to do so, ITV News reported. That came after months of resistance to being seen in public with a face covering, the broadcaster added.
  • Twenty-eight US states have statewide mask orders in place after one by Arkansas took effect on July 20, CNBC reported, citing its own tally. The wearing, or not, of masks has become politicized, CNBC added.
  • The statistics say… US deaths from the disease rose for the second week in a row, increasing by 5 percent to 5,200 fatalities in the week ending July 19, Reuters reported. California posted a record increase of new cases, up by 11,800 on July 20, the newswire said separately, citing county data.
  • The WHO said data published on July 20 by the University of Oxford and AstraZeneca on a possible coronavirus vaccine was good news, but more evidence of the shot’s effectiveness is still needed, CNBC reported, citing Dr. Mike Ryan, executive director of the WHO’s emergencies program. It’s possible that the vaccine could be rolled out by the end of the year but that’s not a certainty, Sarah Gilbert, the lead developer of the vaccine, told BBC radio, Reuters reported.
  • The Asian financial hub of Hong Kong is “woefully unprepared” to face an unexpected spike in coronavirus infections, with the median age of those affected fifty-five compared with forty in previous waves, prompting concern that more cases could turn critical, Bloomberg reported. Local infections have risen by more than six hundred in two weeks, almost half of which are untraceable, the newswire added.

BAD LOANS, DIVIDENDS

  • Groups of young people gathering in bars and restaurants, especially in New York City, pose a “threat” to the reopening of New York State, Governor Andrew Cuomo warned, CNBC reported. Cuomo said he could force businesses to shut down again if local authorities don’t step up enforcement measures and if people keep congregating, CNBC added.
  • Economists say Congress needs to approve at least one trillion dollars in stimulus measures to avert an economic disaster in the United States as key aspects of the two-trillion-dollar Cares Act are about to expire this month, Bloomberg Businessweek reported. That coincides with a resurgence in infections in states that were quick to reopen their economies, the news outlet said.
  • “Is the rebound in America’s economy already over?” the Financial Times asks in a long-form article.
  • QUOTE: “Now we have to run and use these funds for investments and structural reforms,” said Italian Prime Minister Giuseppe Conte of the 209 billion euros in EU grants and loans available to Italy, the BBC reported. “We have a real chance to make Italy greener, more digital, more innovative, more sustainable, inclusive. We have the chance to invest in schools, universities, research and infrastructure.”
  • Europe’s banks face as much as 800 billion euros in bad loans, as well as a thirty billion euro hit to their revenue in the next three years because of the coronavirus pandemic, the Financial Times reported, citing the worst-case scenario—that includes a severe second wave of infections—given in a report by Oliver Wyman, a consultancy.
  • Trade and industry indicators that improved in May and June are levelling off, in a sign that damage to the European economy from coronavirus may be longer-lasting than some economists hoped, the newspaper said in a separate article. The travel and tourism industry, key to the economies of southern Europe, is picking up albeit from very low levels, the Financial Times added.
  • Almost 50,000 UK workers at banking group RBS will remain working from home until 2021, The Guardian reported. The company had previously said that home working extended until the end of September, the newspaper added. Meanwhile, delivery company Hermes said it will create 10,500 jobs in the United Kingdom as more consumers shift to online shopping, The Times said. 
  • Companies in the Asia Pacific are cutting dividends at the quickest pace in more than ten years as the pandemic roils business plans and clouds the outlook for profits, Bloomberg reported. About 23 percent of MSCI Asia Pacific members have reduced or canceled pay-outs to investors so far this year, it said.
  • Australia plans to spend 16.8 billion Australian dollars to extend a wage-subsidy program for businesses hit by the pandemic, amid a surge in new infections in the south-east of the country, Reuters reported. Meanwhile, the Financial Times said Australia has been protected from an even worse downturn by record demand for natural resources from China, despite worsening diplomatic relations between the two nations.
  • UK households have experienced the steepest decline in income since the 1970s oil shock, even as the government prepares to end a large-scale furlough program, Bloomberg reported, citing the Resolution Foundation think-tank. Forecasters warn of mass job cuts unless help is extended beyond October when support to twelve million furloughed workers is scheduled to end, the newswire said.
  • The statistics say… Real wages have fallen by 4.5 percent since the pandemic began, the most since 1975, when the Arab oil embargo sent inflation sky-high, Bloomberg reported.
  • Japan has paid eighty-seven companies to bring production back home or relocate it into Southeast Asia after the pandemic exposed an over-reliance on manufacturing in China and disrupted global supply chains, The Washington Post reported. Automaker Nissan, for instance, had to halt production at a Japanese plant temporarily in February after a shortage of parts from China, the newspaper added.

SOUTH AFRICA

  • Researchers are making progress in answering the question: How deadly is COVID-19? The Wall Street Journal reported. The disease kills between 0.3 percent and 1.5 percent of those infected, according to researchers’ analyses, first from outbreaks on cruise ships and more recently from surveys of thousands of people in virus hot spots, the Journal said. Variables include age and access to health care, it added.
  • QUOTE: “The effects of COVID-19 have been and will continue to be devastating,” Jeremy Farrar, director of the Wellcome Trust, a research charity, wrote in the Financial Times. “But infectious diseases and pandemics are not the only global challenges that we face. We urgently need to address other issues, including climate change, access to clean water, antimicrobial resistance, and mental health.”
  • Thembelani Nxesi, the minister for employment and labor, and Gwede Mantashe, the minister for mineral resources, both members of the South African cabinet, were admitted to hospital with COVID-19 on July 20, Reuters reported. Both men had been self-isolating after testing positive about a week ago. South Africa has among the highest rates of infections worldwide, with more than 370,000 cases and almost 5,200 deaths, the newswire said.
  • Catalonia, the region in the northeast of Spain that includes the city of Barcelona, seems to be ill prepared to trace new infections in what was meant to be an early-detection system, The Associated Press reported. Barcelona and a rural area in Catalonia have become the two places hardest hit by a resurgence in infections, the news service said.  
  • Researchers at Imperial College London are exploring how artificial intelligence can help to personalize ventilator settings for severe COVID-19 patients and avoid damaging their lungs, Bloomberg reported. Patients can develop a life-threatening condition known as Acute Respiratory Distress Syndrome, which stops the lungs from getting enough oxygen to the body, the newswire said.

UAE TESTING

  • The United Arab Emirates, a federation of ten million residents, has carried out more than 4.5 million coronavirus tests, with an aim to reach six million within two months, The Wall Street Journal reported. That’s more than three times the current rate of testing in the United States, the Journal said. Bahrain and Qatar have adopted a similar approach to UAE’s mass screening, the newspaper added.
  • US air travel fell by 4 percent in the week ended July 19 compared with the week earlier, the first decline since April, CNBC reported. Airlines including Delta and United have scaled back expansion plans for August as a spike in coronavirus cases dents passenger demand, CNBC said.
  • Greta Thunberg, the climate activist, said she will donate one hundred thousand euros to help tackle the spread of coronavirus in the Amazon, giving the money to SOS Amazonia, a campaign led by climate protest group Fridays For Future Brazil, the BBC reported. It’s her first donation from the $1.1 million Thunberg received as part of the Gulbenkian Prize for Humanity, the broadcaster added.
  • Uruguay, wedged between Brazil and Argentina, has avoided the worst of the continent’s coronavirus outbreak thanks to factors including stable and united leadership and a voluntary but widespread lockdown, The Washington Post reported, citing analysts and officials. It’s the only country in Latin America from which the European Union accepts visitors, the newspaper added.

RESOURCES:

READ MORE ON CORONAVIRUS

Coronavirus