Grim EU Leaders’ Call Offers Reality Check for Buoyant Markets

(Bloomberg) -- European Union leaders warned in a private video call on Thursday that life won’t be getting back to normal any time soon and that tougher restrictions would be needed to limit the spread of the coronavirus pandemic.

With governments across the EU grappling again with rising infection rates and deaths, the leaders called for drug companies to ramp up production and delivery of vaccines while weighing a new curb on non-essential travel both within the bloc’s borders and outside, according to people familiar with the discussion.

Despite optimism surrounding the start of the vaccine rollout, concerns about mutations of the virus are dashing hopes of a quick recovery, just as the European Central Bank warned that the euro area was headed for a double-dip recession. Governments want to stem the tide of a Covid-19 variation first identified in the U.K. and are worried about similar strains cropping up elsewhere.

With the virus killing more than 400,000 people in the EU since the spring of 2020 and hobbling the European economy, the bloc is counting on shots developed by various western drugmakers. It’s lagging the U.K. and U.S. in vaccinating people and struggling to move in synchronized ways toward stepped-up testing and inoculations.

New Strains

European Commission President Ursula von der Leyen told the 27 leaders that mutations risked undermining global efforts to conquer the disease unless the whole world is vaccinated, according to the people, who asked not to be identified because the meeting was private. The commission is trying to coordinate the bloc’s vaccine response as well as to work up plans for common travel restrictions.

Von der Leyen’s remarks were given added resonance by Irish Prime Minister Micheal Martin whose country has been hit hard by the variant from the U.K. In a warning to his fellow leaders of what they may face in the coming days, he told the summit that after his government allowed the reopening of non-essential stores and restaurants it experienced a “perfect storm” as people brought in the disease from Britain, with hospitalizations hitting a new high.

Von der Leyen also told the leaders that AstraZeneca’s vaccine is expected to get conditional market authorization at the end of next week, with deliveries possibly starting in mid-February, the people said. She added that Johnson & Johnson is expected to apply for market authorization for its vaccine in mid-February. And if it receives the green light in early March, then deliveries can start at the end of March or early April.

German Chancellor Angela Merkel warned her 26 counterparts that the bloc risks facing a dramatic rise in infections if the mutated strains of the illness emanating from the U.K. and South Africa aren’t contained.

Travel Risks

But French President Emmanuel Macron sounded a note of concern, telling leaders they shouldn’t assume the vaccines will prove effective in the long run, according to the people. France reported more than 20,000 new Covid-19 cases for the third straight day on Thursday.

In a report published shortly before the video-call started, the European Centre for Disease Prevention and Control recommended that non-essential travel should be avoided.

EU member states “should prepare the health care system for high demand due to the increased transmissibility of the new variants of concern,” ECDC said. The move to curb non-essential travel was endorsed by leaders during their discussions, dealing another blow to the continent’s battered aviation industry.

It all points to a bleak spring for the pandemic-battered continent. Earlier on Thursday British Prime Minister Boris Johnson, no longer a leader in the EU, didn’t rule out his country’s lockdown remaining until the summer, warning that the new coronavirus strain is “much more contagious.”