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E.U. Moves to Shore Up Economies Reeling From Virus E.U. Moves to Shore Up Economies Reeling From Virus
(32 minutes later)
BRUSSELS — When European finance ministers agreed on a half-trillion euros’ worth of joint measures to shore up their economies in the face of the coronavirus, it felt like an accomplishment. But two weeks later, when European Union leaders met to approve that package, the deal already looked like too little, too late.BRUSSELS — When European finance ministers agreed on a half-trillion euros’ worth of joint measures to shore up their economies in the face of the coronavirus, it felt like an accomplishment. But two weeks later, when European Union leaders met to approve that package, the deal already looked like too little, too late.
While the leaders of the 27 member nations did approve the aid package in a teleconference on Thursday night, they also shifted their attention to what more still needs to be done, asking the bloc’s executive arm to come up with a proposal for a recovery fund from what is set to be an economic calamity unseen on the continent outside wartime.While the leaders of the 27 member nations did approve the aid package in a teleconference on Thursday night, they also shifted their attention to what more still needs to be done, asking the bloc’s executive arm to come up with a proposal for a recovery fund from what is set to be an economic calamity unseen on the continent outside wartime.
But what that fund will do, how big it will be, when it will be introduced — and virtually every other detail pertaining to its function — is still to be determined, and those gaping blanks lay bare just how far away the bloc’s leaders are from agreeing on a bolder joint effort.But what that fund will do, how big it will be, when it will be introduced — and virtually every other detail pertaining to its function — is still to be determined, and those gaping blanks lay bare just how far away the bloc’s leaders are from agreeing on a bolder joint effort.
A recovery experienced evenly across the 27 member nations — population 440 million, wealth $20 trillion, forecast recession this year 10 percent — is crucial for the European Union to continue functioning as a single market for goods and services, its main purpose. It is also crucial to the stability of one of the world’s most important currencies, the euro, which is shared by 19 European Union countries.A recovery experienced evenly across the 27 member nations — population 440 million, wealth $20 trillion, forecast recession this year 10 percent — is crucial for the European Union to continue functioning as a single market for goods and services, its main purpose. It is also crucial to the stability of one of the world’s most important currencies, the euro, which is shared by 19 European Union countries.
“The single market is a bloc,” President Emmanuel Macron of France said after the meeting. “If we abandon these regions, if we give up on a part of Europe, it is all of Europe that will fall.”“The single market is a bloc,” President Emmanuel Macron of France said after the meeting. “If we abandon these regions, if we give up on a part of Europe, it is all of Europe that will fall.”
At the Thursday meeting, the leaders gave their blessing to a set of measures put together by their finance ministers earlier this month and said they should be deployed June 1.At the Thursday meeting, the leaders gave their blessing to a set of measures put together by their finance ministers earlier this month and said they should be deployed June 1.
[Analysis: ‘Life has to go on’: How Sweden has faced the virus without a lockdown.][Analysis: ‘Life has to go on’: How Sweden has faced the virus without a lockdown.]
The measures include a European Commission program that could loan up to 100 billion euros, or about $108 billion, for unemployment benefits in member states; about €200 billion in investments in small and medium-size enterprises through the European Investment Bank; and €240 billion in loans from the European Stability Mechanism for countries to fund their health care systems.The measures include a European Commission program that could loan up to 100 billion euros, or about $108 billion, for unemployment benefits in member states; about €200 billion in investments in small and medium-size enterprises through the European Investment Bank; and €240 billion in loans from the European Stability Mechanism for countries to fund their health care systems.
Beyond that, the leaders also asked the European Commission, the European Union’s executive branch, to prepare a proposal on how to partly repurpose the bloc’s regular seven-year budget to create a recovery fund.Beyond that, the leaders also asked the European Commission, the European Union’s executive branch, to prepare a proposal on how to partly repurpose the bloc’s regular seven-year budget to create a recovery fund.
The commission’s suggestions are to come later this month, or in early May, and will form the basis for the next round of debate.The commission’s suggestions are to come later this month, or in early May, and will form the basis for the next round of debate.
“You are in a world of bad options, but the path of least resistance is probably using the budget framework,” said Mujtaba Rahman, the head of the Europe practice at the Eurasia Group consultancy.“You are in a world of bad options, but the path of least resistance is probably using the budget framework,” said Mujtaba Rahman, the head of the Europe practice at the Eurasia Group consultancy.
Finding that path of least resistance at times of crisis has been the European Union playbook. But the approach under the current circumstances is generating concern that any economic recovery, just like in the aftermath of the global financial crisis a decade ago, will deepen the dysfunction built into the bloc’s architecture, where decisions need to have the backing of 27 countries with deeply divergent economies, politics and local priorities.Finding that path of least resistance at times of crisis has been the European Union playbook. But the approach under the current circumstances is generating concern that any economic recovery, just like in the aftermath of the global financial crisis a decade ago, will deepen the dysfunction built into the bloc’s architecture, where decisions need to have the backing of 27 countries with deeply divergent economies, politics and local priorities.
The battle lines are familiar: north versus south, richer nations versus poorer ones. What is also becoming clearer over the course of negotiations is that the fight is not just about the size and details of the bloc’s response to the virus, but also about the timing.The battle lines are familiar: north versus south, richer nations versus poorer ones. What is also becoming clearer over the course of negotiations is that the fight is not just about the size and details of the bloc’s response to the virus, but also about the timing.
Leaders from Northern Europe are thinking about the economic fallout from the pandemic in two distinct phases — crisis and recovery — while in Southern Europe, which has been hit harder, the two phases bleed into each other.Leaders from Northern Europe are thinking about the economic fallout from the pandemic in two distinct phases — crisis and recovery — while in Southern Europe, which has been hit harder, the two phases bleed into each other.
“The Germans, Dutch and Finns are of the view that enough has been done for the crisis phase,” Mr. Rahman said. “The recovery phase will be about how to reboot economies over the medium term, and, for that reason, they see Thursday’s discussion in a slightly less urgent light.”“The Germans, Dutch and Finns are of the view that enough has been done for the crisis phase,” Mr. Rahman said. “The recovery phase will be about how to reboot economies over the medium term, and, for that reason, they see Thursday’s discussion in a slightly less urgent light.”
The difference in perspective isn’t just the result of culture, or of historical approaches to spending and debt. It is also the outcome of the simple fact that, while the coronavirus hit all European countries, some in the European Union are suffering a lot more than others.The difference in perspective isn’t just the result of culture, or of historical approaches to spending and debt. It is also the outcome of the simple fact that, while the coronavirus hit all European countries, some in the European Union are suffering a lot more than others.
“You see a strong north-south divide in that, and, as reality is different on what you see every day, your perception is different on how urgent things are,” said Guntram B. Wolff, director at Bruegel, a Brussels-based economics think tank.“You see a strong north-south divide in that, and, as reality is different on what you see every day, your perception is different on how urgent things are,” said Guntram B. Wolff, director at Bruegel, a Brussels-based economics think tank.
For now, it seems that Northern Europe is setting both the pace and the rules.For now, it seems that Northern Europe is setting both the pace and the rules.
Having nipped in the bud the most ambitious proposal to fund the bloc’s recovery efforts — issuing joint debt in the form of so-called corona bonds — leaders from Northern Europe are now trimming back Southern Europe’s hopes for grants rather than loans.Having nipped in the bud the most ambitious proposal to fund the bloc’s recovery efforts — issuing joint debt in the form of so-called corona bonds — leaders from Northern Europe are now trimming back Southern Europe’s hopes for grants rather than loans.
Updated June 12, 2020Updated June 12, 2020
States are reopening bit by bit. This means that more public spaces are available for use and more and more businesses are being allowed to open again. The federal government is largely leaving the decision up to states, and some state leaders are leaving the decision up to local authorities. Even if you aren’t being told to stay at home, it’s still a good idea to limit trips outside and your interaction with other people. Touching contaminated objects and then infecting ourselves with the germs is not typically how the virus spreads. But it can happen. A number of studies of flu, rhinovirus, coronavirus and other microbes have shown that respiratory illnesses, including the new coronavirus, can spread by touching contaminated surfaces, particularly in places like day care centers, offices and hospitals. But a long chain of events has to happen for the disease to spread that way. The best way to protect yourself from coronavirus — whether it’s surface transmission or close human contact — is still social distancing, washing your hands, not touching your face and wearing masks.
So far, the evidence seems to show it does. A widely cited paper published in April suggests that people are most infectious about two days before the onset of coronavirus symptoms and estimated that 44 percent of new infections were a result of transmission from people who were not yet showing symptoms. Recently, a top expert at the World Health Organization stated that transmission of the coronavirus by people who did not have symptoms was “very rare,” but she later walked back that statement.So far, the evidence seems to show it does. A widely cited paper published in April suggests that people are most infectious about two days before the onset of coronavirus symptoms and estimated that 44 percent of new infections were a result of transmission from people who were not yet showing symptoms. Recently, a top expert at the World Health Organization stated that transmission of the coronavirus by people who did not have symptoms was “very rare,” but she later walked back that statement.
A study by European scientists is the first to document a strong statistical link between genetic variations and Covid-19, the illness caused by the coronavirus. Having Type A blood was linked to a 50 percent increase in the likelihood that a patient would need to get oxygen or to go on a ventilator, according to the new study.A study by European scientists is the first to document a strong statistical link between genetic variations and Covid-19, the illness caused by the coronavirus. Having Type A blood was linked to a 50 percent increase in the likelihood that a patient would need to get oxygen or to go on a ventilator, according to the new study.
The unemployment rate fell to 13.3 percent in May, the Labor Department said on June 5, an unexpected improvement in the nation’s job market as hiring rebounded faster than economists expected. Economists had forecast the unemployment rate to increase to as much as 20 percent, after it hit 14.7 percent in April, which was the highest since the government began keeping official statistics after World War II. But the unemployment rate dipped instead, with employers adding 2.5 million jobs, after more than 20 million jobs were lost in April.The unemployment rate fell to 13.3 percent in May, the Labor Department said on June 5, an unexpected improvement in the nation’s job market as hiring rebounded faster than economists expected. Economists had forecast the unemployment rate to increase to as much as 20 percent, after it hit 14.7 percent in April, which was the highest since the government began keeping official statistics after World War II. But the unemployment rate dipped instead, with employers adding 2.5 million jobs, after more than 20 million jobs were lost in April.
Mass protests against police brutality that have brought thousands of people onto the streets in cities across America are raising the specter of new coronavirus outbreaks, prompting political leaders, physicians and public health experts to warn that the crowds could cause a surge in cases. While many political leaders affirmed the right of protesters to express themselves, they urged the demonstrators to wear face masks and maintain social distancing, both to protect themselves and to prevent further community spread of the virus. Some infectious disease experts were reassured by the fact that the protests were held outdoors, saying the open air settings could mitigate the risk of transmission.Mass protests against police brutality that have brought thousands of people onto the streets in cities across America are raising the specter of new coronavirus outbreaks, prompting political leaders, physicians and public health experts to warn that the crowds could cause a surge in cases. While many political leaders affirmed the right of protesters to express themselves, they urged the demonstrators to wear face masks and maintain social distancing, both to protect themselves and to prevent further community spread of the virus. Some infectious disease experts were reassured by the fact that the protests were held outdoors, saying the open air settings could mitigate the risk of transmission.
Exercise researchers and physicians have some blunt advice for those of us aiming to return to regular exercise now: Start slowly and then rev up your workouts, also slowly. American adults tended to be about 12 percent less active after the stay-at-home mandates began in March than they were in January. But there are steps you can take to ease your way back into regular exercise safely. First, “start at no more than 50 percent of the exercise you were doing before Covid,” says Dr. Monica Rho, the chief of musculoskeletal medicine at the Shirley Ryan AbilityLab in Chicago. Thread in some preparatory squats, too, she advises. “When you haven’t been exercising, you lose muscle mass.” Expect some muscle twinges after these preliminary, post-lockdown sessions, especially a day or two later. But sudden or increasing pain during exercise is a clarion call to stop and return home.Exercise researchers and physicians have some blunt advice for those of us aiming to return to regular exercise now: Start slowly and then rev up your workouts, also slowly. American adults tended to be about 12 percent less active after the stay-at-home mandates began in March than they were in January. But there are steps you can take to ease your way back into regular exercise safely. First, “start at no more than 50 percent of the exercise you were doing before Covid,” says Dr. Monica Rho, the chief of musculoskeletal medicine at the Shirley Ryan AbilityLab in Chicago. Thread in some preparatory squats, too, she advises. “When you haven’t been exercising, you lose muscle mass.” Expect some muscle twinges after these preliminary, post-lockdown sessions, especially a day or two later. But sudden or increasing pain during exercise is a clarion call to stop and return home.
States are reopening bit by bit. This means that more public spaces are available for use and more and more businesses are being allowed to open again. The federal government is largely leaving the decision up to states, and some state leaders are leaving the decision up to local authorities. Even if you aren’t being told to stay at home, it’s still a good idea to limit trips outside and your interaction with other people.States are reopening bit by bit. This means that more public spaces are available for use and more and more businesses are being allowed to open again. The federal government is largely leaving the decision up to states, and some state leaders are leaving the decision up to local authorities. Even if you aren’t being told to stay at home, it’s still a good idea to limit trips outside and your interaction with other people.
Touching contaminated objects and then infecting ourselves with the germs is not typically how the virus spreads. But it can happen. A number of studies of flu, rhinovirus, coronavirus and other microbes have shown that respiratory illnesses, including the new coronavirus, can spread by touching contaminated surfaces, particularly in places like day care centers, offices and hospitals. But a long chain of events has to happen for the disease to spread that way. The best way to protect yourself from coronavirus — whether it’s surface transmission or close human contact — is still social distancing, washing your hands, not touching your face and wearing masks.
Common symptoms include fever, a dry cough, fatigue and difficulty breathing or shortness of breath. Some of these symptoms overlap with those of the flu, making detection difficult, but runny noses and stuffy sinuses are less common. The C.D.C. has also added chills, muscle pain, sore throat, headache and a new loss of the sense of taste or smell as symptoms to look out for. Most people fall ill five to seven days after exposure, but symptoms may appear in as few as two days or as many as 14 days.Common symptoms include fever, a dry cough, fatigue and difficulty breathing or shortness of breath. Some of these symptoms overlap with those of the flu, making detection difficult, but runny noses and stuffy sinuses are less common. The C.D.C. has also added chills, muscle pain, sore throat, headache and a new loss of the sense of taste or smell as symptoms to look out for. Most people fall ill five to seven days after exposure, but symptoms may appear in as few as two days or as many as 14 days.
If air travel is unavoidable, there are some steps you can take to protect yourself. Most important: Wash your hands often, and stop touching your face. If possible, choose a window seat. A study from Emory University found that during flu season, the safest place to sit on a plane is by a window, as people sitting in window seats had less contact with potentially sick people. Disinfect hard surfaces. When you get to your seat and your hands are clean, use disinfecting wipes to clean the hard surfaces at your seat like the head and arm rest, the seatbelt buckle, the remote, screen, seat back pocket and the tray table. If the seat is hard and nonporous or leather or pleather, you can wipe that down, too. (Using wipes on upholstered seats could lead to a wet seat and spreading of germs rather than killing them.)If air travel is unavoidable, there are some steps you can take to protect yourself. Most important: Wash your hands often, and stop touching your face. If possible, choose a window seat. A study from Emory University found that during flu season, the safest place to sit on a plane is by a window, as people sitting in window seats had less contact with potentially sick people. Disinfect hard surfaces. When you get to your seat and your hands are clean, use disinfecting wipes to clean the hard surfaces at your seat like the head and arm rest, the seatbelt buckle, the remote, screen, seat back pocket and the tray table. If the seat is hard and nonporous or leather or pleather, you can wipe that down, too. (Using wipes on upholstered seats could lead to a wet seat and spreading of germs rather than killing them.)
Taking one’s temperature to look for signs of fever is not as easy as it sounds, as “normal” temperature numbers can vary, but generally, keep an eye out for a temperature of 100.5 degrees Fahrenheit or higher. If you don’t have a thermometer (they can be pricey these days), there are other ways to figure out if you have a fever, or are at risk of Covid-19 complications.Taking one’s temperature to look for signs of fever is not as easy as it sounds, as “normal” temperature numbers can vary, but generally, keep an eye out for a temperature of 100.5 degrees Fahrenheit or higher. If you don’t have a thermometer (they can be pricey these days), there are other ways to figure out if you have a fever, or are at risk of Covid-19 complications.
The C.D.C. has recommended that all Americans wear cloth masks if they go out in public. This is a shift in federal guidance reflecting new concerns that the coronavirus is being spread by infected people who have no symptoms. Until now, the C.D.C., like the W.H.O., has advised that ordinary people don’t need to wear masks unless they are sick and coughing. Part of the reason was to preserve medical-grade masks for health care workers who desperately need them at a time when they are in continuously short supply. Masks don’t replace hand washing and social distancing.The C.D.C. has recommended that all Americans wear cloth masks if they go out in public. This is a shift in federal guidance reflecting new concerns that the coronavirus is being spread by infected people who have no symptoms. Until now, the C.D.C., like the W.H.O., has advised that ordinary people don’t need to wear masks unless they are sick and coughing. Part of the reason was to preserve medical-grade masks for health care workers who desperately need them at a time when they are in continuously short supply. Masks don’t replace hand washing and social distancing.
If you’ve been exposed to the coronavirus or think you have, and have a fever or symptoms like a cough or difficulty breathing, call a doctor. They should give you advice on whether you should be tested, how to get tested, and how to seek medical treatment without potentially infecting or exposing others.If you’ve been exposed to the coronavirus or think you have, and have a fever or symptoms like a cough or difficulty breathing, call a doctor. They should give you advice on whether you should be tested, how to get tested, and how to seek medical treatment without potentially infecting or exposing others.
If you’re sick and you think you’ve been exposed to the new coronavirus, the C.D.C. recommends that you call your healthcare provider and explain your symptoms and fears. They will decide if you need to be tested. Keep in mind that there’s a chance — because of a lack of testing kits or because you’re asymptomatic, for instance — you won’t be able to get tested.If you’re sick and you think you’ve been exposed to the new coronavirus, the C.D.C. recommends that you call your healthcare provider and explain your symptoms and fears. They will decide if you need to be tested. Keep in mind that there’s a chance — because of a lack of testing kits or because you’re asymptomatic, for instance — you won’t be able to get tested.
“There is a variety of opinions on grants and loans,” said Ursula von der Leyen, the president of the European Commission, whose staff will need to draft the proposal, after the meeting. “There will certainly be a sound balance; it’s a matter of negotiations with the member states so we find a good mixture.”“There is a variety of opinions on grants and loans,” said Ursula von der Leyen, the president of the European Commission, whose staff will need to draft the proposal, after the meeting. “There will certainly be a sound balance; it’s a matter of negotiations with the member states so we find a good mixture.”
A proposal floated by hard-hit Spain, and backed by Italy and other weaker economies, calls for the recovery fund to have an endowment of €1.5 trillion, or $1.62 trillion, to spend over two to three years, beginning in January 2021.A proposal floated by hard-hit Spain, and backed by Italy and other weaker economies, calls for the recovery fund to have an endowment of €1.5 trillion, or $1.62 trillion, to spend over two to three years, beginning in January 2021.
They want the cash in the form of grants, not loans that need to be repaid. While Spain supports the idea of raising this money through the European Union budget mechanism, it believes that the only way to get the necessary capital is by allowing the European Commission to issue perpetual bonds — financial instruments associated with wartime efforts that have a never-ending repayment horizon and thus ultralow installments.They want the cash in the form of grants, not loans that need to be repaid. While Spain supports the idea of raising this money through the European Union budget mechanism, it believes that the only way to get the necessary capital is by allowing the European Commission to issue perpetual bonds — financial instruments associated with wartime efforts that have a never-ending repayment horizon and thus ultralow installments.
Ms. von der Leyen said this, too, was a matter for future debate.Ms. von der Leyen said this, too, was a matter for future debate.
“Arguments were exchanged tonight, but in a very constructive manner: the same goes for the maturity of potential loans — it all has to be now negotiated in detail.”“Arguments were exchanged tonight, but in a very constructive manner: the same goes for the maturity of potential loans — it all has to be now negotiated in detail.”
The process of proposal, debate, fine-turning and agreement could drag on for months, officials warned, and some national Parliaments may need to approve the final compromise.The process of proposal, debate, fine-turning and agreement could drag on for months, officials warned, and some national Parliaments may need to approve the final compromise.
Restrictions on travel and meetings could also delay the fund’s launch, as several leaders have said they won’t sign off on something this significant over a teleconference, and it was as yet unclear when they would be able to hold an in-person meeting again.Restrictions on travel and meetings could also delay the fund’s launch, as several leaders have said they won’t sign off on something this significant over a teleconference, and it was as yet unclear when they would be able to hold an in-person meeting again.
Still, the reality of rapid economic decline could force European Union leaders to speed things up.Still, the reality of rapid economic decline could force European Union leaders to speed things up.
“I think it will take several European leaders’ meetings to come to a fully-functioning recovery fund, but, as the economic situation deteriorates, a sense of urgency will pick up in all parts of the European Union,” Mr. Wolff from Bruegel said.“I think it will take several European leaders’ meetings to come to a fully-functioning recovery fund, but, as the economic situation deteriorates, a sense of urgency will pick up in all parts of the European Union,” Mr. Wolff from Bruegel said.
Aurelien Breeden contributed reporting from Paris and Monika Pronczuk from BrusselsAurelien Breeden contributed reporting from Paris and Monika Pronczuk from Brussels