EU CAUTIOUSLY BACKS VACCINE CURBS THAT INVITE RETALIATION

 Bloomberg 26 March 2021 - by  Ian Wishart, Viktoria Dendrinou and Chiara Albanese

© Thomson Reuters European Commission President Ursula von der Leyen delivers a joint press conference with the European Council President at the end of the first day of a European Union (EU) summit over video conference at the European Council Building in Brussels, Belgium, March 25, 2021. Aris OIkonomou/Pool via REUTERS

(Bloomberg) -- European Union leaders gave their guarded support to a plan to restrict vaccine exports after it emerged the bloc sent more shots to the rest of the world than it has given to its own people.

As the region’s bumbling vaccine program continues to turn up the pressure on governments, European Commission President Ursula von der Leyen made the case for a new, tougher mechanism to secure vaccine supplies pointing to the 77 million shots that companies have shipped out of the bloc, compared with the 62 million that have been administered to EU citizens.

The strong-arm tactics, however, risk retaliatory measures that could jeopardize the supply of ingredients and equipment for vaccine plants in Europe - not to mention set back the global effort to contain the coronavirus.

“There was a broad sense of agreement that if it needs to be used, and of course we hope it will not be used, broader consequences should be taken into account,” Dutch Prime Minister Mark Rutte told reporters following an online summit. “Global supply and production chains need to remain intact.”

With Europe in the grip of a third wave of infections, the EU and its 27 governments show little sign of being able to boost confidence in their vaccine strategy. The bloc already lags behind the U.S and the U.K in its inoculation rollout, and governments across the continent have announced extensions or tightening of lockdowns as the health situation deteriorates.

The global fight for vaccine supplies extended to India. The world’s biggest vaccine exporter has slowed shipments of coronavirus shots to other countries as it expands domestic inoculations. Like in Europe, Indian infections have jumped rapidly over the last month.

The worsening outbreak in the EU will likely prompt Germany to classify neighboring France as a high-incidence virus area, which would trigger a negative Covid-19 test requirement for anyone entering from the country. Chancellor Angela Merkel suggested late Thursday that the move is imminent, but said “that doesn’t mean, for example, that there will be border controls.”

© ASSOCIATED PRESS German Chancellor Angela Merkel addresses the German parliament Bundestag ahead of an European Union summit at the Reichstag building in Berlin, Germany, Thursday, March 25, 2021. (AP Photo/Markus Schreiber)

In the EU’s hard-line on vaccine exports, Von der Leyen sought to shift blame back to manufacturers, singling out AstraZeneca Plc for failing to deliver tens of millions of doses it promised for the first quarter. The commission chief said the company needs to meet its commitments to the EU before it will be allowed to export doses elsewhere.

“We could have been much faster if all pharmaceutical companies had fulfilled their contracts,” she told reporters after the meeting. “AstraZeneca has committed to a lower number of doses than was contracted.”

Europe has again become a global epicenter of the crisis. More than 25 million people have been infected with Covid-19 and nearly 600,000 people have died from the disease, according to the European Centre for Disease Prevention and Control.

The export-ban plan had met with a cool response from some governments before the talks and while leaders made no attempt to reverse it during the teleconference summit, Merkel was among those suggesting their reluctance to actually wield the new tool.

“We’ve agreed with the commission that if companies don’t fulfill their contracts, export restrictions will of course be more likely than when companies do fulfill their contracts with the EU,” the German leader said.

© Bloomberg Widespread Outbreak

The U.K. has been the biggest beneficiary of EU-based vaccine production, purchasing 21 million doses, an EU official said. That accounts for about two-thirds of all the shots administered in the U.K. and makes the British program most exposed to a tougher stance in Brussels.

The two sides have been bickering for weeks over supplies and engaged in talks earlier in the week. On Wednesday, they issued a joint statement, saying they were working on ways “to create a win-win situation.”

“Europe isn’t a selfish continent,” contrary to what “I read in the press across the Channel,” French President Emmanuel Macron said in a dig at the British media.

The EU’s underwhelming roll-out has also sparked tensions between the 27 leaders, who spent much of Thursday’s call arguing over how to redistribute a batch of Pfizer Inc. shots that was delivered earlier than originally scheduled.

© Bloomberg Supply Surge

A group of countries led by Austria that had opted out of some Pfizer purchases and based their strategy on Astra’s vaccines are now demanding a bigger chunk from the accelerated batch to make up for the shortfall.

“We hope that the blocking of vaccine exports won’t be needed,” Belgian Prime Minister Alexander De Croo told reporters. “But it’s good to have the mechanism in place as a safety measure, just in case.”

(Updates with German, Indian details, virus map)

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