Job losses in Germany, IMF predicts Asia contraction; Fauci warns of possible US spike

CORONAVIRUS ALERT 07/01/2020

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In top stories today:

  • Unemployment surged in Germany, while International Monetary Fund (IMF) predictions say Asia’s economy will shrink “for the first time in living memory.” Infectious diseases expert Dr. Anthony Fauci warned that daily coronavirus infections could spike in the United States.
  • QUOTE: “It is time to return to first principles,” wrote the editorial board of The Washington Post. “We need a colossal effort, a Manhattan Project, to fight the virus, and we don’t have it.”
  • US cities and states are re-imposing restrictions on bars, pools, and large public gatherings before July 4 celebrations after infectious diseases expert Dr. Anthony Fauci said the coronavirus outbreak is out of control in some places, The Washington Post reported. New cases surged by 47,000 on June 30, the biggest daily increase since the start of the pandemic, Reuters reported, citing its own tally.
  • QUOTE: “We’re now having 40-plus thousand new cases a day. I would not be surprised if we go up to 100,000 a day if this does not turn around,” Fauci told a Senate hearing on June 30, the Financial Times reported. “I am very concerned because it could get very bad.”
  • Further local lockdowns such as the one in the English town of Leicester could be just days away to control outbreaks of coronavirus, Sky News reported. Meanwhile, in Australia, about 300,000 people in more than thirty suburbs of Melbourne will go back into lockdown for a month from the evening of July 1, news website the Independent reported.
  • “No one wants to go back to lockdown,” reads a headline on news service Stat. “Is there a middle ground for containing Covid-19?” State leaders hope measures such as bar closures in parts of California and the month-long closure of gyms, bars, and movie theaters in Arizona can contain the spread of the virus as another round of lockdowns is “beyond unpalatable,” the article said.
  • Revelers in Prague held a “symbolic farewell” to coronavirus party, with thousands of people sitting at a table five hundred meters long on the Charles Bridge and not observing social distancing while they shared food and drink brought from home, the BBC reported. The World Health Organization has said this week that the pandemic is not even close to being over, the BBC added.
  • READ MORE:  As the world marks Pride Month, three prominent out LGBTI European leaders discussed their countries’ fight against coronavirus, ongoing disagreements between Europe and the United States, and the continuing fight for LGBTI equality. Read more here about the virtual event hosted by the Atlantic Council on June 30.

ECONOMIC SHRINKAGE AND RECOVERY

  • Unemployment surged last month in Germany, taking the total count close to three million, but further job losses were prevented by a generous program of state support, Bloomberg reported. The Ifo institute, among the country’s leading economic research institutes, lowered its forecast of growth next year to 6.4 percent, down from 10 percent five weeks ago, the newswire added.
  • Airbus plans to cut 15,000 jobs in its commercial aircraft business, or about 11 percent of the company’s total workforce, citing the impact for years to come of coronavirus on the aviation industry, The Wall Street Journal reported. Most of the cuts will be in France and Germany, the newspaper added.
  • Asia’s economy will shrink “for the first time in living memory,” said the IMF, which now expects a 1.6 percent drop this year for the region, compared with its April forecast of no growth, CNBC reported. It could take several years for the region to recover from the economic impact of coronavirus, CNBC said, citing an IMF blog post.
  • Activity at factories in Europe and Asia continued to grow in June as lockdown restrictions eased, The Wall Street Journal reported. Growth was recorded in countries including France, the United Kingdom, Ireland, Malaysia, Vietnam, and Australia, the Journal said, citing surveys of purchasing managers. Elsewhere the pace of decline in activity eased considerably, showing that the global economy is rebounding, the newspaper said.  
  • There are signs of a so-called V-shaped economic recovery in the United Kingdom—growth returns quickly from a steep decline—but a surge in unemployment could soon put the country off course, said Andy Haldane, the Bank of England’s chief economist, The Guardian reported on June 30. But rating agency S&P Global cut its UK forecast again on July 1, expecting a contraction of 8.1 percent this year, and warned of a “perfect storm” next year if the United Kingdom doesn’t reach a deal on Brexit, Reuters reported.
  • UK home prices fell last month for the first time in eight years, denting hopes of a consistent recovery as the property market reopens following the easing of lockdowns, the Financial Times reported, citing Nationwide’s house price index.

DEALS DROP

  • Deal-making fell to its lowest level in more than ten years in the second quarter, with the United States hardest hit, as the coronavirus pandemic put an end to one of the longest runs in mergers and acquisitions history, the Financial Times reported. Deals of $485 billion in the period were at a 50 percent decline on year-earlier levels as lockdowns roiled financial markets and liquidity dried up, the newspaper said, citing data from Refinitiv.
  • Department-store chain Macy’s took a $3.1 billion charge in the first quarter as the coronavirus pandemic hit its long-term projects and market value, Bloomberg reported. There’s been a gradual recovery in sales in the two months since the quarter ended, the newswire added.
  • European stocks posted their best quarterly performance in five years, with some analysts shifting their focus on equities from the United States to Europe as lockdown restrictions ease, CNBC reported. The Euro Stoxx climbed 12.59 percent in the three months ending June 30, CNBC said.
  • Retails sales in Germany rose at a record 13.9 percent in May from the previous month, led by online sales, groceries, and household appliances, suggesting pent-up demand as coronavirus lockdowns were lifted, the Financial Times reported. Some economists plan to review their forecasts for Germany’s economy as a result of the July 1 data from the Federal Statistics Agency, the newspaper added.
  • Budget carrier Ryanair said bookings by air travelers in Europe are “very strong” in the first half of July, and it expects at least ten million passengers in July and August combined, The Washington Post said, citing Reuters. Most border restrictions have now been lifted in the European Union, the Post added.
  • The Swedish government has set up a commission to probe its controversial approach to coronavirus, in which it shunned lockdowns and kept much of society open while urging social distancing and self-quarantine, Bloomberg reported. Sweden’s death toll has much been much higher than in neighboring countries, the newswire said. Direct international flights to Greece restart on July 1, but the country will not allow travelers from the United Kingdom or Sweden until July 15, Bloomberg reported on June 29.

THAILAND, TIMBUKTU

  • Thailand is allowing in some foreigners on a controlled basis, including those with family or work ties, students, technical experts, and investors, The Associated Press reported. The country has also started to reopen schools as well as entertainment venues that have been shut since mid-March, the news service said. Meanwhile, Egypt reopened airports, the Egyptian museum, and the famous Giza Pyramids in Cairo for the first time in three months, The Associated Press said in a separate report.
  • QUOTE: “It seems a tragedy that the pandemic has so quickly become an adjunct of an even more dangerous environmental catastrophe,” Jo Ellison wrote in the Financial Times. “Or that we who parroted on for weeks about how we would do better in future have fallen back on disgusting habits in the space of a few hot days.”
  • Coronavirus has reached Timbuktu in Mali, whose far-flung location in the Sahara Desert has made the West African town synonymous with the ends of the earth, The Associated Press reported. The five hundred cases and nine deaths make it Mali’s biggest outbreak outside the capital, the news service added.
  • In Mexico, which tests only the sickest of patients for coronavirus and says wide-scale testing is wasteful, 50 percent of tests come back as positive, the highest in the world along with Bolivia, Bloomberg reported.
  • QUOTE: “You don’t want it to be that easy to find cases,” Bloomberg cited Amesh A. Adalja, an infectious disease specialist at Johns Hopkins Center for Health Security, as saying. “They’re not trying hard enough.”
  • Foreigners are barred from entry to Brazil for thirty days because of the coronavirus pandemic, Reuters reported. Exceptions apply to foreigners with the right to live or work there, those with Brazilian spouses or children, and passengers in transit as long as they stay in the airport, the newswire said.
  • EVENT: In times of crisis, what is the importance of soft power and nuance in international cooperation? How does protocol impact the ability of decision-makers to move into consensus? Join us for an online master class on soft power with Capricia Marshall, former Chief of Protocol of the United States at 12:00 pm ET on Wednesday, July 1. Details are here. 

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