EU's 'vaccine protectionism and selfishness' could cost world economy £6.7trillion

The European Union has a target of vaccinating fully at least 70 percent of the population in each member state by the end of the summer, but this objective is at risk. So far, the bloc has only managed to administer about 8.9 million doses in total, about two for every 100 citizens. On the other hand, the US and the UK are running at seven and 10.5 respectively, while Israel is at 43.

Many believe the consequences of this failure could be disastrous if they are not addressed quickly.

This is why the news that AstraZeneca, an Anglo-Swedish vaccine-maker, may supply less than 40 percent of the doses the EU expected in the first quarter has sparked fury among the bloc’s leaders.

Amid the recriminations, politicians are arguing that, if AstraZeneca refuses to make up some of the shortfall with supplies from its plants in Britain, then the EU should retaliate by stopping exports to Britain from plants in continental Europe.

However, not everyone seems to be on the same page as Brussels.

Head of International at Barron’s Group Francesco Guerrera has accused the EU of wasting time in a “useless” public relations war with the head of AstraZeneca.

Mr Guerrero claimed the bloc has gone beyond pure vaccine nationalism by trying to take a step towards vaccine protectionism.

He also cited a study by the International Chamber of Commerce, which claims that such selfishness could cost the world economy $9.2trillion (£6.7trillion).

He wrote: “We already knew that ‘vaccine nationalism’, in which several countries try to amass as many stocks as possible, would slow down the fight against this powerful and lethal enemy.

“But yesterday Brussels went much further, coining a new ‘vaccine protectionism’ with (unrealistic) threats to block exports made in Europe.

“It is an unedifying spectacle that obscures the true miracle of this tragic period in our history: the international effort supported by governments, companies and universities to find in record time an antidote to a pestilence that has turned everyone’s lives upside down.

“Just yesterday, a study by the International Chamber of Commerce predicted that the selfishness of countries hoarding antivirus medicines could cost the world economy $9.2 trillion (£6.7tn).”

Mr Guerrero added in his piece for Italian newspaper La Repubblica: “Like economic protectionism, vaccine protectionism needs an enemy that can be attacked by politicians desperate for popular support.

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“In this case, but not surprisingly, AstraZeneca.

“Blaming an Anglo-Swedish company is easier for European politicians because it does not bother Brussels: the UK is already out of the club while Sweden is not in the living room occupied by France, Germany, Italy and Spain.”

Instead of looking for scapegoats in the private sector, the journalist noted, European politicians should look around to see if the fault lies with the haste or incompetence of their lawyers or the finding that, when receiving life-saving medicines at bargain prices, the negotiating margins are tight.

The head of Oxford-based think-tank Euro Intelligence Wolfgang Munchau echoed Mr Guerrero’s claims, writing in a recent report: “We see the EU’s response as typical for someone who made a mistake and then resorts to a blame game.

“What Europe needs to do right now is to get working on plugging the vaccine gap.

“We also agree with [French economist] Jean Pisani-Ferry, who made a similar point on a global level. The outbreak of a new Covid-19 variant, 501Y.V3, which has wreaked unbelievable havoc in Manaus, Brazil, warrants a global response.

“The advanced nations should fund a comprehensive vaccine programme for the poorer nations.”

He added: “The alternative is to close your borders, which is economically insane. His diagnosis is similar to our criticism of an endemic collection action problem: he says countries are trying to free-ride.

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“Everybody wants the others to pay for a common good.

“Donald Trump’s withdrawal from the WHO was an obvious example.

“We would add to this that the EU is now trying to do exactly the same.”

The study, commissioned by the International Chamber of Commerce and mentioned by Mr Guerrero, claims to clearly demonstrate the economic case to invest in “the Access to Covid-19 Tools (ACT) Accelerator” – the global collaboration to accelerate the development, production, and equitable access to coronavirus tests, treatments, and vaccines.

Dr Tedros Adhanom Ghebreyesus, Director-General of the World Health Organization (WHO), said: “I believe the world faces a catastrophic moral failure in equal access to the tools to combat the pandemic. This research shows a potentially catastrophic economic failure. The progress made by the ACT Accelerator shows solidarity in beating this virus.

“The longer we wait to provide vaccines, tests, and treatments to all countries, the faster the virus will take hold, the potential for more variants will emerge, the greater the chance today’s vaccines could become ineffective, and the harder it will be for all countries to recover.

“Truly, no-one is safe until everyone is safe.”

One of the study authors, Ṣebnem Kalemli-Özcan – Neil Moskowitz Endowed Professor of Economics and Finance at the University of Maryland, College Park – added: “No economy can fully recover until we have global equitable access to vaccines, therapeutics and diagnostics.

“The path we are on leads to less growth, more deaths, and a longer economic recovery.”