Against the clock
Written by Javier Maquieira, senior associate
Edited by Katie Stanton, associate partner
25 January 2021
Good morning,
The first European Council video conference of 2021 took place last Thursday and, what began as a catch-up on the European Union’s coordinated response to the Covid-19 pandemic, quickly unravelled into an emergency meeting complicated by frustrating developments.
For when it comes to vaccine roll-out, the bloc is not only far from leading the race, but also facing further delays to its goal to vaccinate 70% of adults by the end of September.
According to research by POLITICO, if inoculations continue at their current pace, the EU as a whole won’t hit that target until March 2024. Bulgaria presents the most concerning case: it won’t get there until 2040 unless it picks up vaccinations by a factor of 29. Malta is the only country that might just meet the European Commission’s target in time, provided it doubles its number of daily doses.
The same estimates show that the UK, where the Conservative Party hopes the vaccination drive may restore faith in Boris Johnson’s government, will have vaccinated 83% of its adults by the end of the summer, provided the current number of doses per day remains unchanged.
One reason for Europe’s lag is slower regulatory approvals in the EU, where only the Pfizer/BioNTech and Moderna jabs are currently being administered. The Oxford/AstraZeneca vaccine is yet to be signed off by the European Medicines Agency, although it may well do so as early as today.
On top of this, both Pfizer and AstraZeneca announced delivery delays last week which will further hamper vaccination efforts in the EU and beyond. While Pfizer said it was slowing supplies to Europe as it seeks to increase capacity at its Belgian processing plant, AstraZeneca offered few details as to why “initial volumes will be lower than originally anticipated”.
The news of reduced supply has caused deep dissatisfaction among EU leaders, with Italy’s prime minister, Giuseppe Conte, accusing both companies of serious contract violations and vowing to use “all available legal tools” against them.
If we discount the potential impact of emerging coronavirus strains, things could still speed up depending on new vaccine developments and better policy coordination at both EU and national levels.
But while the EU might be working against the clock, it is worth remembering that most developing countries have been widely left behind in terms of access to Covid-19 vaccines. That is no doubt the most sobering fact of all.
Cabinet secretaries and scientists are urging Boris Johnson to impose blanket border control measures requiring all new arrivals, including UK citizens, to quarantine at their own expense in government-supervised hotels. Although the prime minister’s preferred option is a targeted approach aimed at high-risk countries, experts have warned this may not protect Britain from importing more coronavirus strains.
The Kremlin has accused western countries of encouraging the protests that took place over the weekend in support of opposition leader Alexei Navalny. Although tens of thousands joined the rallies and more than 3,500 were detained, a spokesman for the Russian president, Vladimir Putin, said only “a few” people had turned out. In the meantime, EU foreign ministers are meeting today to discuss their response, amidst calls for increased sanctions.
Matt Hancock has told Sky News that it is still a “long, long, long way” before Covid-19 cases are low enough for lockdown to be lifted, with the government unsure as to whether schools in England will reopen fully by Easter. The health secretary said that although “early evidence” shows the number of new infections has started to decrease, the NHS remains under “enormous” pressure.
Business and economy
According to United Nations figures released on Sunday, foreign direct investment into Chinese companies grew by four per cent in 2020, leading the US to lose its number one status. China had $163bn (£119bn) in inflows last year, compared to $134bn attracted by the US, where foreign investment peaked in 2016.
Boohoo confirmed this morning that it will buy the intellectual property assets of department store Debenhams for £55m. The online fashion retailer said it intended to “rebuild and relaunch the Debenhams platform” to create the “UK’s largest marketplace across fashion, beauty, sport and homeware”. The transaction does not include any of the chain’s department stores, which will be wound down and incur substantial job losses. (£)
Another online fashion retailer, ASOS, has emerged as frontrunner to buy TopShop from administrators for more than £250m. If successful, the transaction may renew fears for the future of most of TopShop’s workforce, given ASOS’s status as a digital-only retailer.
Columns of note
Writing in the Financial Times, Kevin Martin observes that there’s a rising demand for greater non-financial data transparency, including information related to the “four Ps”: people, profit, planet and purpose. As the emphasis on a company’s intangible assets such as brand and reputation continues to increase, firms need to examine their language and audit their practices to identify and remove bias, inequity, or inconsistency. Businesses risk regulatory or legal consequences, as well as potential shareholder devaluation if they disclose too little or do so inconsistently. (£)
As the Domestic Abuse Bill returns to committee stage in the House of Lords today, Nicole Jacobs argues in The Times that the legislation needs some key amendments to ensure all victims get protection, including support for migrant women, a wider statutory duty for councils to fund community-based survivors, and protection for survivors facing ongoing abuse after they have left a relationship. Post-separation abuse needs tackling sooner rather than later, writes Jacobs, to ensure that victims can be protected from abusive behaviours and the heightened risk of homicide in this period. (£)
The week ahead
The Davos World Economic Forum will be held online this week due to the coronavirus pandemic and focus on “more resilient, more inclusive and more sustainable” economic growth.
The virtual gathering will be attended by financial speakers such as European Central Bank president Christine Lagarde, Bank of England governor Andrew Bailey, and IMF managing director Kristalina Georgieva. The in-person gathering is scheduled to take place in Singapore in May.
The Federal Reserve holds its first meeting of 2021 on Wednesday and the US releases its first reading of fourth-quarter gross domestic product on Thursday. UK and German unemployment numbers are also out, along with key GDP figures from Europe and Asia.
Tech giants Apple, Facebook and Microsoft report this week, with all of them expected to reveal a surge in earnings. Meanwhile, in the UK, easyJet’s outlook is projected to be “extremely cautious” with holidays cancelled until the end of March and its planes grounded across Europe.
What’s happening today?
Finals
Crest Nicholson
Sthree
Interims
Newmark Security
Int. economic announcements
(09:00) IFO Expectations (GER)
(09:00) IFO Current Assessment (GER)
(09:00) IFO Business Climate (GER)
According to the Centre for Retail Research, four per cent of the world’s cheese ends up stolen, making it the world’s most stolen food. (@8fact)
Parliamentary highlights
House of Commons
Oral questions
Work and Pensions (including Topical Questions)
Opposition Day Debate
Government’s proposed increase in council tax – Keir Starmer, Steve Reed, Angela Rayner, Anneliese Dodds, Kate Hollern, Mr Nicholas Brown
Government’s plans for employment rights – Keir Starmer, Andy McDonald, Edward Miliband, Angela Rayner, Lucy Powell, Mr Nicholas Brown
Adjournment
Support for limited company directors during the covid-19 outbreak – Owen Thompson
House of Lords
Oral questions
SolarWinds cyberattack – Lord Clement-Jones
How many of the new ship orders highlighted by the PM in his announcement about defence spending have been ordered – Lord West of Spithead
Government guidance to inform their plans to plant 30,000 hectares of trees per year – Lord Carrington
Rebuilding social capital – Lord Haskel
Private Notice Question
The role of the EU Ambassador to the UK – Baroness Ludford
Statement
Vaccine roll-out – Lord Bethell
Legislation
Domestic Abuse Bill – committee stage (day 1) – Baroness Williams of Trafford
Scottish Parliament
Environment, Climate Change and Land Reform Committee
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