France, Germany plan billions in pandemic recovery spending

April 27, 2021

FRANKFURT, Germany (AP) — France and Germany together laid out plans for billions in spending from the European Union's pandemic recovery fund aimed at fighting climate change and boosting the use of digital technology across the economy.

The finance ministers of the EU's two biggest economies on Tuesday underlined their joint determination to use the spending to transform Europe's economy and get the continent growing again as it lags behind the U.S. and China in rebounding from the pandemic recession.

Under the fund's formula, France should get around 40 billion euros ($48 billion) while German Finance Minister Olaf Scholz said his country planned about 28 billion euros ($36 billion) in spending. Scholz said that half the money would go to environmentally friendly projects and a quarter to spreading the use of digital technology. He said the fund would build on domestic relief and stimulus measures already passed by the German government.

He called the fund “a groundbreaking step for Europe.” French Finance Minister Bruno Le Maire urged the European Commission, the EU’s executive branch, to quickly evaluate the plans so that money can start flowing to members states from the 750 billion euro ($906 billion) fund as early as July, noting that the U.S. and China have recovered faster. He said that since the fund was approved “we have lost too much time” and that “Europe must remain in the race.” Last year, France’s economy shrank by 8.3% amid the virus crisis, the worst slump since World War II, according to national statistics institute INSEE.

They said the new spending, funded by shared debt, would avoid mistakes made in the wake of the 2008-2009 global financial crisis and recession, when countries focused excessively on cutting spending and closing deficits. Le Maire said “today the priority is clearly to invest massively, not to consolidate public finances. We have drawn lessons from the past.”

Spain’s Cabinet also approved its proposal for how it wants to invest the recovery funds. Spain, which has suffered heavily from the pandemic, is set to receive 140 billion euros ($166 billion) — half in direct payments and the other half in loans — from the EU's recovery plan, second only to Italy. In line with EU priorities, Spain’s left-wing government has placed a heavy emphasis on creating a greener economy while boosting productivity for an economy that shrunk by 11% last year.

The money from the fund, which was agreed in July 2020, comes with pressure from Brussels to address problems identified by the European Commission's review of members states' economic policies. Spain, for instance, is being asked to overhaul labor laws, tax practices and pensions. Countries with low tax regimes such as Ireland or Cyprus are under pressure to discourage aggressive tax planning by multinational companies.

Italy's 221.1 billion euro ($267.3 billion) recovery plan includes steps to reduce its backlog of court cases, considered a drag on businesses that can't get commercial disputes resolved quickly.

Sylvie Corbet reported from Paris.

EU launches legal action against vaccine-maker AstraZeneca

April 26, 2021

BRUSSELS (AP) — The European Union's executive branch said Monday that it has launched legal action against coronavirus vaccine-maker AstraZeneca for failing to respect the terms of its contract with the 27-nation bloc.

The AstraZeneca vaccine has been central to Europe’s immunization campaign, and a linchpin in the global strategy to get vaccines to poorer countries. But the slow pace of deliveries has frustrated the Europeans and they have held the company responsible for partly delaying their vaccine rollout.

European Commission spokesman Stefan De Keersmaecker said that Brussels launched the legal action against AstraZeneca last Friday “on the basis of breaches of the advance purchase agreement.” He said the reason for the legal action was that “some terms of the contract have not been respected” and that “the company has not been in a position to come up with a reliable strategy to ensure a timely delivery of doses.”

AstraZeneca’s contract with the EU, which was signed by the Commission on behalf of the member countries last August, foresaw an initial 300 million doses for distribution among member countries, with an option for a further 100 million.

The British-Swedish drugmaker had hoped to deliver 80 million doses of that in the first quarter of 2021, but only 30 million were sent. According to the Commission, the company is now set to provide 70 million doses in the second quarter, rather than the 180 million it had promised.

AstraZeneca said in a statement that it “regrets” the Commission’s decision to take legal action and that it will “strongly defend” itself in court. “We believe any litigation is without merit and we welcome this opportunity to resolve this dispute as soon as possible,” AstraZeneca said. It said deliveries are improving “following an unprecedented year of scientific discovery, very complex negotiations, and manufacturing challenges.”

“We are making progress addressing the technical challenges and our output is improving, but the production cycle of a vaccine is very long which means these improvements take time to result in increased finished vaccine doses,” it said.

The company said it wants to continue “working constructively with the EU Commission to vaccinate as many people as possible. Many thousands of our employees working around the clock have been driven by a passion to help the world at no profit.”

The AstraZeneca vaccine is cheaper and easier to use than rival shots from Pfizer and Moderna and has been endorsed for use in over 50 countries, including by the 27-nation EU and the World Health Organization. U.S. authorities are still evaluating the vaccine.

The Commission has publicly criticized the company on several occasions, and last month it launched a dispute resolution mechanism aimed at amicably addressing their differences. Brussels said that its focus is to ensure timely deliveries of vaccines.

It since said that its option for extra AstraZeneca doses will not be taken up. Last week, Commission President Ursula von der Leyen announced that a new vaccine contract is set to be concluded with BioNTech-Pfizer for 1.8 billion doses for the 2021-23 period. She said the deal will ensure doses for booster shots, vaccines adapted to new variants, and, potentially, vaccines for children and teenagers.

Von der Leyen said that the EU, home to around 450 million people, has “already passed 123 million vaccinations" and is on track to have vaccinated 70% of all adults by July. Previously the target had been September.

Pan Pylas in London contributed to this report.

Brazil regulator rejects Sputnik vaccine; Russia cries foul

April 27, 2021

RIO DE JANEIRO (AP) — Brazil's health regulator cited safety concerns while rejecting several states' requests to import almost 30 million doses of Russia's Sputnik V vaccine, prompting criticism from the Russian government.

The five-person board of the Brazilian Health Regulatory Agency unanimously decided late Monday that consistent and trustworthy data required was lacking for approval of the requests from 10 states, according to a statement. Another four states and two cities have also sought authorization to import the vaccine.

The agency, known as Anvisa, said there were faults in all clinical studies of the vaccine’s development, as well as absent or insufficient data. The agency statement said that analysis indicated that the adenovirus on which the vaccine is based has the capacity to replicate, which could cause sickness or death, particularly among those with low immunity or respiratory problems. The Russian fund overseeing the vaccine's marketing globally denied the claim.

“We will never permit, without the existence of due proof required, millions of Brazilians to be exposed to products without the due proof of their quality, safety and efficacy or, at minimum, in the face of the grave situation that we’re living through, a favorable cost-benefit relationship,” Anvisa’s president Antônio Barra Torres said in the statement.

Anvisa’s decision doesn’t affect a separate request from Brazilian company Uniao Quimica for emergency use authorization of Sputnik V produced locally, according to an emailed statement from Anvisa’s press office.

Still, it came as a blow to Russia’s efforts to promote worldwide adoption of the vaccine, whose exports have helped it regain diplomatic footholds in countries where relationships had languished. “We need additional information on what this lack (of data) means, because there’s already more than enough data," Kremlin’s spokesperson Dmitry Peskov told reporters in a daily briefing.

“The contacts (with Brazil) will continue. If some data is lacking, it will be provided,” he added. The Russian Direct Investment Fund said in a three-page statement that “no replication-competent adenoviruses were ever found in any of the Sputnik V vaccine batches produced.”

It was also more pointed in its criticism, saying that dozens of national health regulators have approved Sputnik V and Anvisa's decision was “of a political nature and has nothing to do with the regulator’s access to information or science.”

The fund pointed to the U.S. Department of Health and Human Services’ 2020 annual report, which said in a section titled “Combatting malign influences in the Americas” that it had convinced Brazil to not to buy the Russian shot. The U.S. Embassy in Brazil has denied exerting any pressure regarding vaccines approved by Brazil’s health regulator, and Brazil's foreign ministry has denied being contacted.

Daniel Dourado, a Brazilian doctor and lawyer who is a researcher at the University of Sao Paulo, said on Twitter that he doubted politics played any role in Anvisa's decision, as that would have required its directors to lie in their analysis. He added that, while the state governors’ hurry is understandable, Anvisa is correctly fulfilling its duty.

Brazil hasn't lived up to its proud tradition of mass vaccination programs in this pandemic, with the Health Ministry ignoring early opportunities to purchase shots and facing shortages locally of vaccines it did acquire. The country has the world's second-highest death toll, and will surpass the milestone of 400,000 deaths this week. The majority of that staggering tally came in just the last four months.

One of Anvisa’s directors, Cristiane Rose Jourdan Gomes, acknowledged the sensitivity of its decision since making available an array of vaccines is a priority in fighting COVID-19. She said she hopes Sputnik V can bring its information in line with requirements.

Denise Garrett, vice president of the Sabin Vaccine Institute that advocates for expanding global vaccine access, and who is Brazilian herself, also voiced support of Anvisa on Twitter. “There is no way to approve Sputnik V with the information available at the moment,” she said.

AP reporter Daria Litvinova contributed from Moscow.

Virus wave, lack of parts hold back German business optimism

April 26, 2021

FRANKFURT, Germany (AP) — A closely watched indicator of German business outlooks barely rose in April as the third wave of coronavirus infections held back optimism about the pace of post-pandemic recovery.

The Ifo index published Monday crept up to 96.8 points from 96.6 points for March as companies viewed current conditions as better but expressed less optimism about the coming six months. Germany, along with the rest of Europe, is going through a renewed battle with higher levels of infections as a variant that spreads more easily has become the dominant strain. More than 5,000 people are in intensive care with COVID-19, the disease caused by the virus.

The Munich-based Ifo institute noted as a compounding factor that some 45% of industrial companies also reported bottlenecks among suppliers, the most since 1991. Auto companies have seen a lack of semi-conductors force them to hold back production. Economists expect a significant rebound toward more normal levels of activity toward the end of the year after vaccination campaigns pick up speed.

“The April Ifo index points to a pause in the German rebound as lockdowns continue,” said Carsten Brzeski, global head of macro at ING bank. “The prospects for a strong rebound in the second half of the year, however, remain valid.”

Italy's Draghi presenting 'epochal' virus recovery plan

April 26, 2021

ROME (AP) — Italian Premier Mario Draghi is presenting a 222.1 billion euro ($268.6 billion) coronavirus recovery plan to Parliament on Monday, aiming to not only bounce back from the pandemic but enact “epochal” reforms to address structural problems that long predated COVID-19.

Italy has the biggest share of the EU’s 750 billion euro ($907 billion) recovery pot, with 191.5 billion euros ($231.6 billion) of its six-year plan financed by EU funds. Draghi, the former European Central Bank chief, was put in the premier’s office specifically to make sure the money isn’t wasted since Italy has long had one of the worst records in the EU of making use of available funds.

The plan is heavy on investments to modernize and digitize Italy’s economy and bureaucracy and encourage environmentally sustainable development. Both are directed particularly at the all-important tourism industry — think Venice, the Colosseum and Amalfi coast resorts — which accounts for 13% of Italy’s gross domestic product and was devastated by pandemic-related closures.

Employment options for women and young people are prioritized, given youth unemployment tops 30% and Italy has long ranked at the bottom of the EU in terms of the percentage of women in the workforce. Women accounted for more than half the 456,000 jobs lost in Italy last year.

Here’s a look at Italy’s plans, which were announced on the same day that most of the country began emerging from its latest coronavirus lockdown, with museums reopening and restaurants and bars open for outdoor service.

DIGITAL TRANSFORMATION and EMPLOYMENT

About 27% of the plan is directed at digital transformation of the Italian economy and public administration, broadening access to high-speed internet service, especially in schools, and providing incentives to the private sector to digitize.

Around 22.4 billion euros ($27 billion) are aimed at “social inclusion” investments and programs to boost training and employment opportunities for women and help cities improve access and opportunities for disabled people. The aim of both, coupled with increased day care spots, is to remove obstacles that have traditionally kept Italian women at home caring for the young, old, sick and disabled.

The plan envisages the Italian economy, which shrank 8.8% last year, will grow 3.6 percentage points beyond base forecasts in 2026 and that its employment rate will grow 3.2 percentage points.

SUSTAINABLE DEVELOPMENT

The EU required that at least 37% of its funds be directed toward climate-related investments, part of the bloc’s aim for a cut of 55% of greenhouse gases by 2030 and carbon neutrality by 2050. Italy’s plan is directing 40% overall, or 68.6 billion euros ($82.9 billion), to green-related investments and initiatives: boosting recycling, overhauling public transport systems to favor low-emission vehicles, and reducing water waste through improvements to waterways.

The plan calls for some 31.4 billion euros ($37.9 billion) in transportation infrastructure improvements and extending high-speed rail lines across the peninsula, especially in the underserved south.

EDUCATION AND RESEARCH

Among other things, the plan aims to create 152,000 more day care spots for babies and 76,000 for preschoolers, addressing a structural shortage that has long dissuaded parents from having children and women from working.

Other destinations for the 31.9 billion euro ($38.5 billion) investment in education and research is to spiff up dilapidated school buildings and get them better wired, and revamp the higher-education curriculum to encourage more students to pursue higher degrees.

Italy has long been beset by brain drain, with its brightest students pursuing advanced degrees and jobs abroad, and not coming back.

HEALTH CARE

The structural weakness of Italy’s national health system was on full display during the pandemic, when hospitals in northern Lombardy were overwhelmed and general practitioners were largely left on their own to care for sick patients as Italy became the epicenter of Europe's outbreak.

The 18.5 billion euro ($22.3 billion) investment in health care aims to reinforce in particular the general medicine and preventive care provided at the local level, with a strengthening of home care and telemedicine. Digital infrastructure improvements aim to improve data analysis.

REFORMS

Italy’s lethargic justice system and cumbersome bureaucracy have long been accused of discouraging foreign investment, since lawsuits and criminal trials can last for years and securing permissions to do just about anything can take a similarly long time.

The justice system reform aims to reduce the backlog of court files with temporary hires, while revising norms and procedures to encourage more recourse to mediation. Other reforms are focused on modernizing Italy’s old and outdated public administration, aiming to increase turnover to get more young people hired, digitize systems, simplify procedures for permits and boost competition particularly in public services and utilities.

German lawmakers approve 'emergency brake' virus rules

April 21, 2021

BERLIN (AP) — German lawmakers on Wednesday approved a proposal by Chancellor Angela Merkel’s government to mandate uniform restrictions in areas where the coronavirus is spreading too quickly, among them closures and a nighttime curfew.

As parliament's lower house debated the plan, thousands of protesters gathered on a nearby street. Police ended the demonstration after participants ignored coronavirus restrictions. The legislation to apply an “emergency brake” consistently in areas with high infection rates is intended to end the patchwork of measures that has often characterized the pandemic response across highly decentralized Germany’s 16 states.

Lawmakers in the lower house voted 342-250 for the plan, with 64 abstentions. The upper house, where state governments are represented, is due to consider the legislation Thursday. It would apply until the end of June.

“As hard as it is, as sick of it as we are, reducing contacts helps,” Health Minister Jens Spahn told lawmakers. “We are again seeing 5,000 COVID-19 intensive care patients and rising, with the age of the patients sinking,” Spahn said. “We want to avoid an overburdening of our health system, an overburdening that many of our neighboring countries have experienced painfully.”

Not far from the parliament’s Reichstag building, an estimated 8,000 protesters assembled, few of them wearing masks. Police ended the gathering after organizers failed to get participants to comply with coronavirus restrictions.

A group of demonstrators was prevented from climbing over barriers. Officers used pepper spray after bottles were thrown at them, police said. The police department said on Twitter that seven people were arrested.

“There are some people out there today on the streets of this city who say it isn’t serious and there’s almost nothing going on,” Vice Chancellor Olaf Scholz said in parliament. “Yes, something is going on: 80,000 people in this country have died, and you can’t talk past or overlook that.”

“Because that’s the case, and because the situation is still serious, something must be done beyond what we have done so far,” Scholz said. “And what we need now is clarity and consistency for what happens when the…infection rates rise too much.”

The proposal features plans to impose a 10 p.m.-5 a.m. curfew, limit personal contacts, close leisure and sports facilities and shut or restrict access to many stores. The measures would kick in for areas where there are more than 100 weekly new cases per 100,000 residents. Schools would have to switch to distance learning at a higher rate of 165.

Germany’s nationwide rate stood at 160 new cases per 100,000 residents on Wednesday, though there were wide regional variations. Opposition lawmakers advanced a variety of arguments against the bill. Alexander Gauland of the far-right Alternative for Germany, which opposes lockdown measures in general, called it an “attack on rights of freedom, federalism and common sense.”

The Greens had different objections. “This emergency brake remains too half-hearted, too ineffective, too inconsistent and too disproportionate,” lawmaker Maria Klein-Schmeink said.

Learning to breathe: German clinic helps COVID long haulers

April 20, 2021

HEILIGENDAMM, Germany (AP) — Simone Ravera rolls up her trousers, slips off her shoes and socks, then gingerly steps into the chilly waters of the Baltic Sea. The 50-year-old rheumatology nurse is slowly finding her feet again after being struck down with COVID-19 last fall, seemingly recovering and then relapsing with severe fatigue and “brain fog" four months later.

“The symptoms were almost as bad as at the beginning,” Ravera said. Close to despair, she found a clinic that specializes in treating people with what have been called post-COVID-19, or long-term COVID-19, symptoms.

Located in Heiligendamm, a north German seaside spa popular since the late 18th century, the clinic specializes in helping people with lung diseases such as asthma, chronic bronchitis and cancer. Over the past year it has become a major rehabilitation center for COVID-19 patients, treating 600 people from across Germany, according to its medical director, Dr. Joerdis Frommhold.

Some of her patients came close to death and now have to relearn how to breathe properly, rebuild their stamina and overcome a host of neurological problems associated with severe illness. But Frommhold also treats a second group of patients who experienced mild to medium COVID-19 symptoms, and only spent a short time in the hospital, if at all.

“These patients get rebound symptoms after about one to four months,” Frommhold said. Most are aged between 18 to 50 and have no pre-existing conditions, she said. "They're the ones that are usually never ill.”

After recovering from a bout of COVID-19, these patients suddenly find themselves short of breath, depressed and struggling to concentrate, said Frommhold. Some suffer symptoms resembling those of dementia.

One former dialysis nurse found her kitchen flooded because she’d forgotten to turn off the tap. "Others are unable to do homework with their kids because they don’t understand the questions themselves,” Frommhold said.

Their symptoms aren’t always taken seriously by doctors. Despite suffering hair loss, joint and muscle pain, irregular blood pressure and dizziness, routine test results for such patients usually come back normal.

“They appear young, dynamic, high performing, but then they can’t do any of the things they used to," Frommhold said. Therapists at the clinic initially focus on stabilizing patients' breathing. Then they work to restore stamina and motor coordination with the help of occupational therapy and posture training. Cognitive therapy and psychological support are also part of the program.

Similar clinics for “long haulers" have sprung up around the world over the past year, including in the United States. In Germany, such treatment is increasingly being offered by the country's network of more than 1,000 medical rehabilitation centers, 50 of which specialize in pulmonary diseases.

"That doesn’t exist in many other countries yet,” Frommhold said. It is unclear how many people suffer from long-term COVID-19, partly because the condition isn't clearly defined yet. Scientists are still trying to understand what is behind the wide range of symptoms patients report.

“No two patients have the same experience and it varies within patients,” said Elizabeth Murray, a professor of e-health and primary care at University College London. “The symptoms they are experiencing this week are not necessarily a guide to the symptoms they would be experiencing next week,” said Murray, a former general practitioner. “It makes it difficult for everybody; it makes it very, very difficult for the patients.”

Britain’s Office for National Statistics said a survey of 9,063 respondents who tested positive for COVID-19 found that more than 20% reported persistence of some symptoms after five weeks. For about 10% of respondents that included fatigue, while similar numbers reported headaches or loss of taste and smell.

More than 140 million coronavirus infections have been confirmed worldwide to date, according to a tally by Johns Hopkins University, meaning even a small percentage of long-term COVID-19 sufferers would suggest millions could be affected.

"That’s a lot of extra people to treat and no health care system has got a lot of spare capacity," said Murray. She added that the economic impact of so many people dropping out of the labor force could be devastating, particularly as many sufferers are women who also shoulder a disproportionate burden at home.

Murray is developing a digital program, funded by Britain's National Institute for Health Research, to treat long-term COVID-19 symptoms and reach more patients faster than through traditional rehab facilities, ensuring they don't feel abandoned by the medical system.

Frommhold said a similar program might help Germany cope with the expected surge in long-term COVID-19 sufferers, but suggested that greater acceptance of the condition will also be necessary for those who don't fully recover.

“In my eyes we first need a campaign like the one there was for HIV awareness, that explains how there are different pathways even after recovery from COVID,” she said. Getting patients, their families and employers to understand that they now have a chronic condition could prevent long haulers from falling into a spiral of depression and anxiety, Frommhold said.

Heike Risch, a 51-year-old kindergarten teacher from the eastern city of Cottbus was hardly able to walk unaided upon leaving the hospital after recovering from COVID-19. “I felt like I’d aged 30 years in a short period of time,” she said.

At the clinic, Risch couldn't balance a table tennis ball on a racket and walk backward. She still can't read a clock properly. “You don’t trust your own body anymore. You don’t trust your own head anymore,” Risch said.

Still, she hopes to return to work someday. "I like working with children but I need to be able to concentrate. I need to be able to do two things at once occasionally,” she said. Ravera, the nurse, says she has come a long way thanks to the therapy in Heiligendamm and feels lucky to have support from friends and family.

But Ravera doubts she'll go back to doing three-shift weekends at the hospital she worked at in Bavaria. “You don’t know when you’ll be well again. The illness comes in waves," she said. Instead, Ravera is considering using what she learned in rehab to help others who are struggling to breathe properly again after COVID-19.

“It's a bit of a journey into the unknown,” she said.