By Powerscourt on 01/02/2021
Vaccine jingoism, which was very much evident across the UK media over the weekend, has spilled into today’s papers.
A number of newspapers declared victory over Europe in the rollout of vaccines. Stories ranged from how the EU was about to unravel because of the vaccine crisis to how the UK would bail out the bloc.
The slightly manic reaction is understandable after the misery of Brexit negotiations and the suffering of the country during the COVID-19 pandemic, when it has been among the highest in deaths per million people.
There is no doubt that the EU has lagged far behind the US and the UK in the acquisition and supply of vaccines. That can be partly blamed on the overly bureaucratic approach of the commission to contract negotiations, as well as the length of time it has taken for the European Medicines Agency to authorise vaccines.
The attempt by the Commission on Friday to control the exports of vaccines from the bloc, and in doing so putting article 16 of the Northern Ireland Protocol on the table, was a spectacular own goal that created a diplomatic spat with the UK and many other countries.
Article 16 is an emergency provision which would allow the suspension of parts of the protocol if it is causing societal, economic or environmental problems. The Commission wanted to effectively close the open border between Northern Ireland and the Republic to stop vaccines leaving the EU.
It is too early to say, however, whether Ursula von der Leyen, the President of the Commission, will come under pressure to resign in the wake of the crisis. Ireland’s EU Commissioner Mairead McGuinness, who was not notified about the intention to trigger Article 16, said the Commission had made a huge mistake, but it acknowledged its error immediately. Moreover, she said there was no question of von der Leyen resigning over the affair.
The President of the Commission had a small victory on Sunday as AstraZeneca announced that it would increase its supplies to the bloc from 31 million jabs to 40 million in the first quarter, and deliveries would commence next week. The pledge followed a conference call between von der Leyen and BionNTech/Pfizer, Moderna, AstraZeneca, Johnson & Johnson, Curevac and Sanofi. Emer Cooke, the head of the EMA was also on the call. The objective was to create a more structured approach to the supply of vaccines to the EU.
Irish government sources were briefing over the weekend that the UK’s offer to the supply vaccines to the EU, and in particular Ireland, had more to do with public relations than anything else.
Ireland has access to 1% of the commission’s portfolio of 2.3 billion vaccines. Michael Martin, the Taoiseach, said that the supply of vaccines will ramp up significantly from April onwards and it is still the government’s aim of inoculating 70% of the adult population by September. However, the major caveat is that there are no further glitches to the supply of vaccines to the region.
Jens Spahn, the German Health Minister, told the Frankfurter Allgemeine Zeitung newspaper last night that the Russian jab Sputnik V and Chinese vaccines could be used in Europe if they were approved by the EMA.
Angela Merkel will hold an emergency summit today to address immediate supply constraints.
Asian markets and US stock futures rallied overnight as there looked to be a respite in hostilities between retail investors and hedge funds. However, analysts are warning that any rally is likely to be short lived as data points to growing concerns over the extent of the economic slowdowns in the US and Europe.
WHAT ARE COMPANIES SAYING?
Ryanair said it may lose close to €1 billion in its current financial year, by far its worst ever performance, but Europe’s largest low-cost carrier said the crisis would create significant growth opportunities. The airline said it expects to post a loss of between €850-950m in its current financial year, which ends on March 31. This is around five times larger than its previous record annual loss posted in 2009 and compares to an €88m profit in the same period of 2019. “Covid-19 continues to wreak havoc across the industry,” the airline said in a statement. “FY21 will continue to be the most challenging year in Ryanair’s 35 year history.” Covid-19 restrictions cut Ryanair passenger numbers by 78% in the last three months of the year, the third quarter of its financial calendar, pushing it to a quarterly loss of €306m. That compares with a loss of €300m forecast in a company poll of analysts.
Financials & Real Estate
The pensions and investment platform has hiked its half-year dividend 6% after growth accelerated in the second quarter of its financial year. It attracted a record 84,000 new clients in the six months to end-December, 2020, and won £3.24bn of net new business, which was up 40% year-on-year. This new influx saw the average age of FTSE 100 company’s clientele continue to fall, with 47% of customers joining in the period being in the 30-54 age bracket and the overall average age of its client base fell to 37, having been 45 in 2012. Assets under administration were £120.6bn at the end of December, up 16% over six months and up 15% over 12. With profit before tax rising 10% to £188.4mln, the company said it has the liquidity and capital position to execute its strategy without financial constraint and so lifted the interim dividend to 11.9p per share. Trading in January was said to have been “similar to other lockdown periods with strong dealing volumes, significant client engagement and robust net new business and net new client numbers”. Looking to the rest of the second half, the launch of a cash ISA at end of December is expected to help drive momentum into the busy tax year-end. “Beyond this, things become less certain,” said chief executive Chris Hill, “but we remain committed to our client led strategy and will continue to invest to improve and increasingly personalise the client experience and our proposition”.
Billionaire property magnates the Reuben brothers have spent around €100m buying one of Venice’s oldest hotels, a vote of confidence in a luxury travel market upended by the pandemic. The 90,000 square foot Baglioni Hotel Luna, which dates back to the 12th century, is the latest in a string of hotel and retail investments made by David and Simon Reuben since the start of the coronavirus crisis. They invested around $3.8bn across the US and Europe last year, snapping up assets such as the Surrey Hotel on New York’s Upper East Side and the Corinthia Hotel in Rome. “We are passionate about high quality hotels and want to support where we can,” Simon Reuben, the younger of the two, told the Financial Times.
Consumer & Retail
JD Sports today followed on from last month’s $325 million takeover of the Shoe Palace chain with another major purchase in the US for nearly $500 million. The successful UK trainers giant is buying DTLR Villa, which owns 247 shops across 19 states, mainly in the north and east of the country. The group is based in Baltimore and was set up in 1982 as Downtown Locker Room. It rebranded as DTLR and merged with a Philadelphia chain called Sneaker Villa in 2017. JD Sports has been one of the few retailers to be thriving from its bricks and mortar shops despite the growth of online shopping killing off chains such as Debenhams and the Arcadia brands
Asos has snapped up Topshop and three other brands from Sir Philip Green’s collapsed Arcadia empire for just £265m. The deal, which includes the Topshop, Topman, Miss Selfridge and HIIT brands, will involve 300 employees transferring to Asos but does not include the brands’ 70 stores, meaning thousands of jobs are likely to be lost. Administrators for Sir Philip’s retail group said the buyer had paid another £65m for current and pre-ordered stock. The deal will be full funded from Asos’ cash reserves, the company said. The acquisition represents a changing of the high street guard as online disrupters assert their supremacy over beleaguered bricks-and-mortar rivals. It comes after Boohoo – set up only 15 years ago – acquired the Debenhams brand, but not its stores in a £55m deal. Some 10,000 staff are set to lose their jobs when Debenhams is relaunched as an online-only operation in March, bringing an end to the 243-year-old department chain’s 116 high street stores. Asos chief executive Nick Beighton said: “We are extremely proud to be the new owners of the Topshop, Topman, Miss Selfridge and HIIT brands.”
IN THE NEWS
Boris Johnson heralds vaccination victory for care homes – The Times
Ursula von der Leyen feels the heat over vaccine exports hiccup – Financial Times
France and Germany mull sanctions on vaccine providers as EU row over delays escalates – The Telegraph