foreignpolicy--2020-03-17--Trump’s Big Turnaround: Cash Payments Instead of a Payroll Tax Cut

The Trump administration , finally grasping the gravity of the coronavirus pandemic , is scrambling to craft an emergency economic rescue package , after the Federal Reserve threw the financial equivalent of the kitchen sink at plunging markets and a sputtering economy to no avail .
On Tuesday , just hours after the White House was reportedly preparing to present a new stimulus package heavy on the kind of tax cuts that U.S. President Donald Trump previously favored , the administration gave that up and now plans to just mail money to Americans in hopes of tiding them over .
@ @ @ @ @ @ @ while Trump still prefers a payroll tax cut , they need something that can deliver relief to Americans now .
“ And when I say now , I mean in the next two weeks , ” not six to eight months under tax relief , Mnuchin said .
The growing , if belated , effort by the administration to grapple with what appears to be a massive economic hit from the outbreak of the new coronavirus is ramping up after one of the worst weeks on Wall Street in history , wiping out @ @ @ @ @ @ @ office and sending U.S. government bond yields to near-historic lows—not a good sign .
The latest reports are that the administration is looking at a package of $ 1 trillion to $ 1.2 trillion , which would include a big dose of cash payments , loan guarantees , and more—well beyond anything the Obama administration was able to deploy more than a decade ago during the worst financial crisis since the Great Depression , making crystal clear how quickly the virus outbreak has morphed in Trump ’ s view from a Democratic “ @ @ @ @ @ @ @ the world ’ s biggest economy .
What ’ s this about mailing out checks ?
The administration has leaped onto a bandwagon that has gained surprising momentum in recent days : the idea of offering direct cash payments to U.S. citizens to act as a lifeline during what are expected to be weeks , if not months , of economic disruption , layoffs , lost wages , and mounting bills .
Mnuchin wouldn ’ t say how big his direct stimulus would be—though he hinted it would be bigger than most congressional @ @ @ @ @ @ @ a $ 1,000 one-time payment .
The administration ’ s pivot addresses two concerns that top economists have been arguing for weeks : Any fiscal stimulus the administration undertakes needs to be quick and needs to target people who are going to be the hardest-pressed for cash to buy food , pay rent , and pay medical bills .
Mnuchin promised a quick start to the program , assuming Congress is on board , and said it would be means-tested , so it would presumably benefit more than the uber-wealthy .
With many @ @ @ @ @ @ @ France closed on Monday ) and many U.S. cities following suit , the economic consequences of the virus outbreak are becoming clear , even if the duration of the pain still isn ’ t .
Trump on Monday spoke of virus-related disruptions at least through the summer ; some clinical experts figure a near-total shutdown for more than a year is the only way to avoid large-scale deaths from COVID-19 .
The biggest questions surround the size of the payout .
Many proposals in Congress , like Republican Sen. Mitt Romney ’ s @ @ @ @ @ @ @ , are dismissed as “ laughable ” by experts who say they are far too small ; other House proposals have discussed potential payments up to $ 4,000 for certain individuals .
Tentative plans from the White House reportedly include an initial tranche of $ 250 billion in direct payments , followed by another $ 250 billion as needed a month later .
Italy , in contrast , just unveiled as part of its latest , $ 28 billion stimulus package a 600 euro ( $ 660 ) recurring monthly payment to workers @ @ @ @ @ @ @ , when the U.S. economy was the “ strongest ever ” in his words , U.S. President Donald Trump was pushing for a cut to the payroll tax—the amount that employers and their workers pay into Social Security every two weeks in their paycheck .
Still late Monday , it was the centerpiece of the White House ’ s $ 850 billion package .
But as lawmakers from both sides of the aisle and economists of all stripes have pointed out , it ’ s a grossly inadequate tool to use for the @ @ @ @ @ @ @ congressional Joint Economic Committee laid out all the reasons why .
The administration seemed to take those arguments on board with Tuesday ’ s surprising about-face .
First , a payroll tax cut only offers benefits to those with a job , and , as the Institute on Taxation and Economic Policy has extensively documented , it heavily favors higher-income workers—not the unemployed or the retired .
So a payroll tax cut would do little or nothing for people who would be among the most vulnerable during a prolonged virus-related downturn .
Second @ @ @ @ @ @ @ benefits would come in the weekly or biweekly paycheck , they would be doled out in small amounts over time , rather than landing as a lump sum that could act as a true financial bridge to stave off foreclosures , debt collectors , or medical bills .
( A full payroll tax holiday , which Trump floated last week , would have meant an extra $ 130 or so in every biweekly paycheck for someone making $ 50,000 a year ; the current proposal would have been about half that . )
@ @ @ @ @ @ @ to prompting by lobbies like the U.S. Chamber of Commerce , included a partial payroll tax holiday for employers , too .
The idea is to reduce some of the financial pressure on businesses facing a prolonged downturn , but there ’ s little evidence that those savings would benefit workers struggling with even greater financial pressures .
And finally , the whole reason the payroll tax exists is to provide Social Security with a dedicated funding stream that is free from the log-rolling and hostage-taking that makes up the rest of the @ @ @ @ @ @ @ billion or so from the fund now to offer short-term tax cuts means that shortfall would have to be replaced later from somewhere else ( even as deficits and the national debt soar ) —or simply make it easier for politicians to argue they must cut Social Security benefits altogether , as Trump has advocated .
What about that airline bailout ?
U.S. airlines are reportedly asking for a rescue package for their industry of about $ 54 billion to $ 58 billion , a mix of grants , loans , and tax @ @ @ @ @ @ @ a much bigger threat to commercial aviation than the terrorist attacks of Sept. 11 , 2001 .
While Mnuchin , who has been in constant contact with U.S. airline CEOs , said loan guarantees were under consideration in the latest relief package , it ’ s not clear how much the administration has signed off on the industry ’ s wish list .
There are reasons for a too-big-to-fail bailout : The airline industry is undoubtedly of systemic importance , unlike other leisure sectors clamoring for support , from casinos to cruise ships @ @ @ @ @ @ @ 2.4 million jobs directly and 7.3 million in all , providing about $ 290 billion in direct GDP and more than $ 800 billion indirectly , through travel and tourism .
So letting them all go broke—as the industry now fears could happen globally by May—is hardly an option .
The problem is that a bailout of airlines would risk being a political replay of some of the Wall Street bailouts in the wake of the financial crisis .
U.S. airlines such as Delta just enjoyed a series of gangbuster years , raking @ @ @ @ @ @ @ increased business ( and massive tax breaks thanks to the Trump tax reforms ) .
Instead of saving even a portion of that firehose of cash flow to build a rainy day fund for the downturn that they all knew was inevitable , the U.S. industry as a whole , Bloomberg calculates , blew 96 percent of their cash flow on share buybacks to benefit executives and shareholders .
Now that those billions of dollars have vaporized in the market downturn , taxpayers are being asked to take it on the chin , @ @ @ @ @ @ @ aid on securing public equity in the bailed-out carriers .
What are other countries doing ?
Like the United States , which is angling toward including about $ 300 billion in loan guarantees in the rescue package , nearly every other major economy is racing to craft its second or third stimulus package .
France on Monday announced a war plan to deal with the downturn that includes about 45 billion euros ( $ 50 billion ) in direct support and more than 300 billion euros ( $ 330 billion ) in government @ @ @ @ @ @ @ downturn ; French President Emmanuel Macron has said bankruptcies will not be permitted to happen and nationalizations are not off the table as the crisis continues .
Italy , among the hardest-hit European countries , just wrapped up its second , $ 28 billion stimulus package with additional support for parents at home due to school closures , support for small businesses , and the outright nationalization ( again ) of the troubled airline Alitalia .
The United Kingdom , now working on its second bailout package in as many weeks , plans @ @ @ @ @ @ @ billion pounds , and is talking of U.S.-style direct financial support for the threatened aviation sector , as well as other hospitality sectors .
Japan is throwing another $ 15 billion into low-interest loans for small businesses .
But there is one looming problem for the worst-hit countries , such as Spain and Italy .
Bond spreads—the difference between what investors demand for buying German , gold-plated , super-safe bonds , and riskier Southern European bonds—are creeping up again .
That happened in 2012 , at the height of the European debt crisis @ @ @ @ @ @ @ , and Spain .
Memories of the repeated beatings the bond market inflicted linger long and are conditioning the response to this crisis .
And that is creating some bizarre—and potentially very counterproductive—ironies .
In Spain , where socialists with a further-left coalition partner are in power , there ’ s no Trump-style free-spending : Despite the urgency of providing some sort of shot in the arm to an economy where nearly all businesses are shut , the government is leery of widening the deficit and getting mugged again by the market .

The Trump administration, finally grasping the gravity of the coronavirus pandemic, is scrambling to craft an emergency economic rescue package, after the Federal Reserve threw the financial equivalent of the kitchen sink at plunging markets and a sputtering economy to no avail.
The Trump administration, finally grasping the gravity of the coronavirus pandemic, is scrambling to craft an emergency economic rescue package, after the Federal Reserve threw the financial equivalent of the kitchen sink at plunging markets and a sputtering economy to no avail.
On Tuesday, just hours after the White House was reportedly preparing to present a new stimulus package heavy on the kind of tax cuts that U.S. President Donald Trump previously favored, the administration gave that up and now plans to just mail money to Americans in hopes of tiding them over.
U.S. Treasury Secretary Steven Mnuchin said that while Trump still prefers a payroll tax cut, they need something that can deliver relief to Americans now. “And when I say now, I mean in the next two weeks,” not six to eight months under tax relief, Mnuchin said.
The growing, if belated, effort by the administration to grapple with what appears to be a massive economic hit from the outbreak of the new coronavirus is ramping up after one of the worst weeks on Wall Street in history, wiping out nearly all the gains since Trump took office and sending U.S. government bond yields to near-historic lows—not a good sign.
The latest reports are that the administration is looking at a package of $1 trillion to $1.2 trillion, which would include a big dose of cash payments, loan guarantees, and more—well beyond anything the Obama administration was able to deploy more than a decade ago during the worst financial crisis since the Great Depression, making crystal clear how quickly the virus outbreak has morphed in Trump’s view from a Democratic “hoax” to a life-or-death threat to the world’s biggest economy.
What’s this about mailing out checks?
The administration has leaped onto a bandwagon that has gained surprising momentum in recent days: the idea of offering direct cash payments to U.S. citizens to act as a lifeline during what are expected to be weeks, if not months, of economic disruption, layoffs, lost wages, and mounting bills. Mnuchin wouldn’t say how big his direct stimulus would be—though he hinted it would be bigger than most congressional proposals floating around, which amount to a $1,000 one-time payment.
The administration’s pivot addresses two concerns that top economists have been arguing for weeks: Any fiscal stimulus the administration undertakes needs to be quick and needs to target people who are going to be the hardest-pressed for cash to buy food, pay rent, and pay medical bills. Mnuchin promised a quick start to the program, assuming Congress is on board, and said it would be means-tested, so it would presumably benefit more than the uber-wealthy.
With many countries in Europe in near-total shutdown (France closed on Monday) and many U.S. cities following suit, the economic consequences of the virus outbreak are becoming clear, even if the duration of the pain still isn’t. Trump on Monday spoke of virus-related disruptions at least through the summer; some clinical experts figure a near-total shutdown for more than a year is the only way to avoid large-scale deaths from COVID-19.
The biggest questions surround the size of the payout. Many proposals in Congress, like Republican Sen. Mitt Romney’s plan for a $1,000 direct stimulus, are dismissed as “laughable” by experts who say they are far too small; other House proposals have discussed potential payments up to $4,000 for certain individuals. Tentative plans from the White House reportedly include an initial tranche of $250 billion in direct payments, followed by another $250 billion as needed a month later.
Italy, in contrast, just unveiled as part of its latest, $28 billion stimulus package a 600 euro ($660) recurring monthly payment to workers and the self-employed.
Who’s afraid of a payroll tax cut?
Even last year, when the U.S. economy was the “strongest ever” in his words, U.S. President Donald Trump was pushing for a cut to the payroll tax—the amount that employers and their workers pay into Social Security every two weeks in their paycheck. Still late Monday, it was the centerpiece of the White House’s $850 billion package. But as lawmakers from both sides of the aisle and economists of all stripes have pointed out, it’s a grossly inadequate tool to use for the job at hand; Democrats on the congressional Joint Economic Committee laid out all the reasons why. The administration seemed to take those arguments on board with Tuesday’s surprising about-face.
First, a payroll tax cut only offers benefits to those with a job, and, as the Institute on Taxation and Economic Policy has extensively documented, it heavily favors higher-income workers—not the unemployed or the retired. So a payroll tax cut would do little or nothing for people who would be among the most vulnerable during a prolonged virus-related downturn.
Second, as Mnuchin acknowledged, since the benefits would come in the weekly or biweekly paycheck, they would be doled out in small amounts over time, rather than landing as a lump sum that could act as a true financial bridge to stave off foreclosures, debt collectors, or medical bills. (A full payroll tax holiday, which Trump floated last week, would have meant an extra $130 or so in every biweekly paycheck for someone making $50,000 a year; the current proposal would have been about half that.)
Third, the latest proposal, thanks to prompting by lobbies like the U.S. Chamber of Commerce, included a partial payroll tax holiday for employers, too. The idea is to reduce some of the financial pressure on businesses facing a prolonged downturn, but there’s little evidence that those savings would benefit workers struggling with even greater financial pressures.
And finally, the whole reason the payroll tax exists is to provide Social Security with a dedicated funding stream that is free from the log-rolling and hostage-taking that makes up the rest of the congressional budget process. Swiping $500 billion or so from the fund now to offer short-term tax cuts means that shortfall would have to be replaced later from somewhere else (even as deficits and the national debt soar)—or simply make it easier for politicians to argue they must cut Social Security benefits altogether, as Trump has advocated.
What about that airline bailout?
U.S. airlines are reportedly asking for a rescue package for their industry of about $54 billion to $58 billion, a mix of grants, loans, and tax relief that would enable them to survive a much bigger threat to commercial aviation than the terrorist attacks of Sept. 11, 2001. While Mnuchin, who has been in constant contact with U.S. airline CEOs, said loan guarantees were under consideration in the latest relief package, it’s not clear how much the administration has signed off on the industry’s wish list.
There are reasons for a too-big-to-fail bailout: The airline industry is undoubtedly of systemic importance, unlike other leisure sectors clamoring for support, from casinos to cruise ships. Aviation in North America supports about 2.4 million jobs directly and 7.3 million in all, providing about $290 billion in direct GDP and more than $800 billion indirectly, through travel and tourism. So letting them all go broke—as the industry now fears could happen globally by May—is hardly an option.
The problem is that a bailout of airlines would risk being a political replay of some of the Wall Street bailouts in the wake of the financial crisis.
U.S. airlines such as Delta just enjoyed a series of gangbuster years, raking in billions of dollars each year from increased business (and massive tax breaks thanks to the Trump tax reforms). Instead of saving even a portion of that firehose of cash flow to build a rainy day fund for the downturn that they all knew was inevitable, the U.S. industry as a whole, Bloomberg calculates, blew 96 percent of their cash flow on share buybacks to benefit executives and shareholders. Now that those billions of dollars have vaporized in the market downturn, taxpayers are being asked to take it on the chin, angering many who propose conditioning providing federal aid on securing public equity in the bailed-out carriers.
What are other countries doing?
Like the United States, which is angling toward including about $300 billion in loan guarantees in the rescue package, nearly every other major economy is racing to craft its second or third stimulus package. France on Monday announced a war plan to deal with the downturn that includes about 45 billion euros ($50 billion) in direct support and more than 300 billion euros ($330 billion) in government loan guarantees for businesses threatened with a downturn; French President Emmanuel Macron has said bankruptcies will not be permitted to happen and nationalizations are not off the table as the crisis continues.
Italy, among the hardest-hit European countries, just wrapped up its second, $28 billion stimulus package with additional support for parents at home due to school closures, support for small businesses, and the outright nationalization (again) of the troubled airline Alitalia.
The United Kingdom, now working on its second bailout package in as many weeks, plans a loan guarantee package north of 300 billion pounds, and is talking of U.S.-style direct financial support for the threatened aviation sector, as well as other hospitality sectors. Japan is throwing another $15 billion into low-interest loans for small businesses.
But there is one looming problem for the worst-hit countries, such as Spain and Italy. Bond spreads—the difference between what investors demand for buying German, gold-plated, super-safe bonds, and riskier Southern European bonds—are creeping up again. That happened in 2012, at the height of the European debt crisis, and nearly ruined Greece, Italy, and Spain. Memories of the repeated beatings the bond market inflicted linger long and are conditioning the response to this crisis. And that is creating some bizarre—and potentially very counterproductive—ironies.
In Spain, where socialists with a further-left coalition partner are in power, there’s no Trump-style free-spending: Despite the urgency of providing some sort of shot in the arm to an economy where nearly all businesses are shut, the government is leery of widening the deficit and getting mugged again by the market.


foreignpolicy--2020-03-17--Sisi and Erdogan Are Accomplices of the Coronavirus

Sisi and Erdogan Are Accomplices of the Coronavirus The Centers for Disease Control and Prevention ’ s manual for global and national health emergencies makes one thing clear : A critical component of fighting a pandemic such as COVID-19 is clear , consistent , science-based information that is communicated through a trusted and respected source .
When people are worried about their health , they want information from the person in a white lab coat .
Given the gravity of current circumstances there is no risk of sounding melodramatic , so I would add a second requirement for effectively combating @ @ @ @ @ @ @ when you see it : It ’ s the sense of community and social trust engendered by natural empathy .
There is a short supply around the world of both competent expertise and genuine sense of the common good .
The United States is certainly not exempt from the shortage .
But the problem is acute across the Middle East , North Africa , and Turkey .
The entire region is experiencing a wave of coronavirus cases , but the official numbers from government health ministries do not offer a clear picture of @ @ @ @ @ @ @ not know or because they are lying about the extent of infections .
Among the hardest-hit countries is Qatar , with one of the world ’ s worst outbreaks per capita .
At least the Qataris have money to throw at the problem .
Not so Egypt or Algeria or Tunisia .
There is precious little data on testing , but one can safely assume that whatever has been done pales in comparison to what is necessary .
Much of this stems from incompetence , complacency , and lack of basic decency among @ @ @ @ @ @ @ has led to a deadly breakdown of social trust .
I am not suggesting that Iraqis , Egyptians , Palestinians , Turks , Saudis , and others lack the capacity to empathize with their fellow citizens .
Rather , the disdain their leaders have for the societies they oversee has robbed them of social cohesion , necessarily rendering it harder to survive and recover at a time of crisis .
This is a recipe for the kind of disaster in the Middle East that boggles the mind .
Before moving on , let @ @ @ @ @ @ @ Middle East my belief that U.S. President Donald Trump ’ s administration ’ s response to the coronavirus pandemic has been nothing less than appalling and profoundly irresponsible .
Both Trump and Vice President Mike Pence have proved themselves to be the least credible voices on the crisis , both failing to reassure anyone that the U.S. government under their leadership could manage the situation and , in the process , putting people in harm ’ s way .
History will render judgment on their contribution to the collapse of trust in the @ @ @ @ @ @ @ the press , and science , and its impact on the many Americans who might have remained healthy but were instead infected and died .
That stipulated , let ’ s turn back to the Middle East .
Who among the current crop of leaders of major Middle Eastern countries can people turn to for clear , dispassionate , fact-based information ?
Egyptian President Abdel Fattah al-Sisi ?
Turkish President Recep Tayyip Erdogan ?
Saudi Crown Prince Mohammed bin Salman ?
These are strongmen who command significant amounts of resources , but they @ @ @ @ @ @ @ need now .
There is no evidence that they are more prepared to offer their citizens any more than the obfuscation and misdirection that the White House has for Americans , though with likely direr consequences .
Perhaps Middle Eastern leaders will rise to the occasion .
One can only hope , but the track record suggests disaster compounded by arrogance , incompetence , and brutality .
Egypt is the most worrisome in the coronavirus crisis .
The country is huge , its population having recently surpassed 100 million , with nearly one-quarter @ @ @ @ @ @ @ How do Egyptians practice social distancing in such a megalopolis , especially in its poorer districts ?
Egypt ’ s public health infrastructure is fragile at best , and the private sector is not well-positioned to fill in the gaps by issuing guidelines or helping to organize testing , as it has done in the United States .
On top of these challenges is the very fact that the Egyptian leadership ’ s first inclination is to lie .
They are most certainly lying about the rate of coronavirus infection—as of Monday , @ @ @ @ @ @ @ believe that Egypt has 166 cases of COVID-19 and four deaths .
Modelers at the University of Toronto indicate that it could be closer to 20,000 , and Sisi and his advisers no doubt understand that figure to be far more plausible .
The Egyptian leadership has nevertheless stuck with the message of an ostensibly small number of infections , downplaying the extent of the crisis for fear of harming the tourism industry .
After years of decline following the uprising that overthrew then President Hosni Mubarak , the 2015 bombing of a @ @ @ @ @ @ @ and the disappearance of an EgyptAir flight over the Mediterranean in 2016 , last year was a banner year for visitors to Egypt .
The authorities in Cairo want to maintain the momentum and keep the dollars flowing , so—just like the U.S. president—they have been emphasizing that COVID-19 is just like a cold that most people get over relatively quickly .
Of course , this conveniently overlooks the fact that the crew and foreign passengers on a now-infamous Nile riverboat , the MS A ’ Sara , have all been quarantined and @ @ @ @ @ @ @ , including the United States , Canada , Greece , and France , can be traced back to tourist travel in Egypt .
Even the Egyptians could not willfully ignore reality forever , so they instituted some half-measures , including permitting the suspension of Friday prayer at mosques , curtailing organized tours in Luxor , cutting back on cultural events , and closing universities .
In an implicit recognition that the country is sitting on top of a COVID-19 bomb , Sisi has directed $ 6 billion—a significant sum for Egypt—to respond to @ @ @ @ @ @ @ behind , however , that even if the authorities ramp up testing , any hope of containment is long gone .
When the wave of infections hits Egypt , as it inevitably will , Sisi is unlikely to be the kind of figure that can calm an anxious nation and stem the resulting instability that will threaten the region and Europe .
He is no longer the savior of July 3 , 2013 , who rescued the country from the abyss , who elicits the loyalty of the citizenry .
Instead , he @ @ @ @ @ @ @ his own people as brutal , unwise , and dishonest .
Although Egypt is most worrisome , Turkey is only better off because it has a functioning health care system and good public health infrastructure .
This is a credit to the ruling Justice and Development Party .
But Erdogan ’ s government has been lying to the Turks and has only recently taken half-measures to prevent the spread of the disease .
Why , one might ask , given the situation in the EU , did the government go forward with mass @ @ @ @ @ @ @ ?
The message from imams was reportedly focused on the importance of “ social distancing , ” but the damage was done .
Turkey ’ s infection rate will undoubtedly spike ; nevertheless , in the absence of widespread testing , Turkish business leaders are still encouraging people to visit malls and shop .
Through the early phases of the pandemic , Erdogan , who has otherwise involved himself in every facet of public life both large and small , remained silent .
This is a man more worried about taking the blame @ @ @ @ @ @ @ than the health and safety of his people .
When the need for drastic public health measures becomes impossible to ignore , there is no telling how the public will react .
If the scene in Cairo a few weeks ago , in which hundreds tried to storm the Central Public Health Laboratories to obtain a coronavirus test , is any indication of what might come , countries in the region are in serious trouble .
Marked by political and social systems that are rigged so that all the benefits flow to the @ @ @ @ @ @ @ , but more pronounced and brutal—testing , health care , and basic needs will be distributed unevenly , and will further erode trust and radicalize societies in a variety of ways .
Does anyone believe that Saudi elites will wait in line for coronavirus tests ?
No .
The wealthy will hoard what they can before fleeing , leaving the rest to fend for themselves and face the tear gas and water cannons of the riot police .
What about the armies of Bangladeshi , Indian , Pakistani , and Filipino guest workers @ @ @ @ @ @ @ be a black hole of coronavirus infections .
They have little , if any , protections in the societies that can not run without them , but they have power in numbers .
The many dimensions of this virus and how it can upend already fragile societies are truly frightening .
Sisi and Erdogan are not unique , just illustrative of the added layer of complications that people in the Middle East face as they confront the coronavirus pandemic .
The utter disdain the leaders harbor for their people and the related brutality @ @ @ @ @ @ @ treated has undermined—individually and collectively—the basic humanity , in the form of basic community , necessary for people to cope and survive .
What kind of governments beat people who are desperate for a test that will be the difference between the ability to feed their families and not ?
What kind of system destroys much of its scientific community on the basis of guilt by association , conspiracy theories , and the political needs of a dear leader ?
Who would dare speak out publicly and offer another way in a place @ @ @ @ @ @ @ his ideas about society are good ?
There are no societal backstops in these places , leaving people on their own to grapple with fear , stress , resignation , illness , and possible death .
If we have learned anything from this global health crisis , it is that there are no borders , no nationalisms , no differences to the way coronavirus ravages the human respiratory system .
There are only differences in the quality of leadership , and the resulting senses of humanity in the nations they oversee .
The @ @ @ @ @ @ @ both fronts .

The Centers for Disease Control and Prevention’s manual for global and national health emergencies makes one thing clear: A critical component of fighting a pandemic such as COVID-19 is clear, consistent, science-based information that is communicated through a trusted and respected source. When people are worried about their health, they want information from the person in a white lab coat.
The Centers for Disease Control and Prevention’s manual for global and national health emergencies makes one thing clear: A critical component of fighting a pandemic such as COVID-19 is clear, consistent, science-based information that is communicated through a trusted and respected source. When people are worried about their health, they want information from the person in a white lab coat.
Given the gravity of current circumstances there is no risk of sounding melodramatic, so I would add a second requirement for effectively combating the coronavirus—humanity. You know basic humanity when you see it: It’s the sense of community and social trust engendered by natural empathy.
There is a short supply around the world of both competent expertise and genuine sense of the common good. The United States is certainly not exempt from the shortage. But the problem is acute across the Middle East, North Africa, and Turkey. The entire region is experiencing a wave of coronavirus cases, but the official numbers from government health ministries do not offer a clear picture of the problem, either because they do not know or because they are lying about the extent of infections. Among the hardest-hit countries is Qatar, with one of the world’s worst outbreaks per capita. At least the Qataris have money to throw at the problem. Not so Egypt or Algeria or Tunisia. There is precious little data on testing, but one can safely assume that whatever has been done pales in comparison to what is necessary.
Much of this stems from incompetence, complacency, and lack of basic decency among the region’s leaders, which has led to a deadly breakdown of social trust. I am not suggesting that Iraqis, Egyptians, Palestinians, Turks, Saudis, and others lack the capacity to empathize with their fellow citizens. Rather, the disdain their leaders have for the societies they oversee has robbed them of social cohesion, necessarily rendering it harder to survive and recover at a time of crisis. This is a recipe for the kind of disaster in the Middle East that boggles the mind.
[Mapping the Coronavirus Outbreak: Get daily updates on the pandemic and learn how it’s affecting countries around the world.]
Before moving on, let me stipulate for any critics in the Middle East my belief that U.S. President Donald Trump’s administration’s response to the coronavirus pandemic has been nothing less than appalling and profoundly irresponsible. Both Trump and Vice President Mike Pence have proved themselves to be the least credible voices on the crisis, both failing to reassure anyone that the U.S. government under their leadership could manage the situation and, in the process, putting people in harm’s way. History will render judgment on their contribution to the collapse of trust in the United States’ institutions of government, the press, and science, and its impact on the many Americans who might have remained healthy but were instead infected and died.
That stipulated, let’s turn back to the Middle East. Who among the current crop of leaders of major Middle Eastern countries can people turn to for clear, dispassionate, fact-based information? Egyptian President Abdel Fattah al-Sisi? Turkish President Recep Tayyip Erdogan? Saudi Crown Prince Mohammed bin Salman? These are strongmen who command significant amounts of resources, but they are hardly the strong leaders that people need now. There is no evidence that they are more prepared to offer their citizens any more than the obfuscation and misdirection that the White House has for Americans, though with likely direr consequences. Perhaps Middle Eastern leaders will rise to the occasion. One can only hope, but the track record suggests disaster compounded by arrogance, incompetence, and brutality.
Egypt is the most worrisome in the coronavirus crisis. The country is huge, its population having recently surpassed 100 million, with nearly one-quarter of those people in greater Cairo. How do Egyptians practice social distancing in such a megalopolis, especially in its poorer districts? Egypt’s public health infrastructure is fragile at best, and the private sector is not well-positioned to fill in the gaps by issuing guidelines or helping to organize testing, as it has done in the United States. On top of these challenges is the very fact that the Egyptian leadership’s first inclination is to lie. They are most certainly lying about the rate of coronavirus infection—as of Monday, Sisi’s government would have people believe that Egypt has 166 cases of COVID-19 and four deaths. Modelers at the University of Toronto indicate that it could be closer to 20,000, and Sisi and his advisers no doubt understand that figure to be far more plausible.
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The Egyptian leadership has nevertheless stuck with the message of an ostensibly small number of infections, downplaying the extent of the crisis for fear of harming the tourism industry. After years of decline following the uprising that overthrew then President Hosni Mubarak, the 2015 bombing of a Russian airliner over the Sinai Peninsula, and the disappearance of an EgyptAir flight over the Mediterranean in 2016, last year was a banner year for visitors to Egypt. The authorities in Cairo want to maintain the momentum and keep the dollars flowing, so—just like the U.S. president—they have been emphasizing that COVID-19 is just like a cold that most people get over relatively quickly. Of course, this conveniently overlooks the fact that the crew and foreign passengers on a now-infamous Nile riverboat, the MS A’Sara, have all been quarantined and that infections in a number of countries, including the United States, Canada, Greece, and France, can be traced back to tourist travel in Egypt.
Even the Egyptians could not willfully ignore reality forever, so they instituted some half-measures, including permitting the suspension of Friday prayer at mosques, curtailing organized tours in Luxor, cutting back on cultural events, and closing universities. In an implicit recognition that the country is sitting on top of a COVID-19 bomb, Sisi has directed $6 billion—a significant sum for Egypt—to respond to the outbreak. They are so far behind, however, that even if the authorities ramp up testing, any hope of containment is long gone. When the wave of infections hits Egypt, as it inevitably will, Sisi is unlikely to be the kind of figure that can calm an anxious nation and stem the resulting instability that will threaten the region and Europe. He is no longer the savior of July 3, 2013, who rescued the country from the abyss, who elicits the loyalty of the citizenry. Instead, he is already widely seen by many of his own people as brutal, unwise, and dishonest.
Although Egypt is most worrisome, Turkey is only better off because it has a functioning health care system and good public health infrastructure. This is a credit to the ruling Justice and Development Party. But Erdogan’s government has been lying to the Turks and has only recently taken half-measures to prevent the spread of the disease. Why, one might ask, given the situation in the EU, did the government go forward with mass gatherings such as Friday prayers last week? The message from imams was reportedly focused on the importance of “social distancing,” but the damage was done. Turkey’s infection rate will undoubtedly spike; nevertheless, in the absence of widespread testing, Turkish business leaders are still encouraging people to visit malls and shop. Through the early phases of the pandemic, Erdogan, who has otherwise involved himself in every facet of public life both large and small, remained silent. This is a man more worried about taking the blame for the illnesses and deaths to come than the health and safety of his people. When the need for drastic public health measures becomes impossible to ignore, there is no telling how the public will react.
If the scene in Cairo a few weeks ago, in which hundreds tried to storm the Central Public Health Laboratories to obtain a coronavirus test, is any indication of what might come, countries in the region are in serious trouble. Marked by political and social systems that are rigged so that all the benefits flow to the wealthy and connected—not unlike the United States, but more pronounced and brutal—testing, health care, and basic needs will be distributed unevenly, and will further erode trust and radicalize societies in a variety of ways. Does anyone believe that Saudi elites will wait in line for coronavirus tests? No. The wealthy will hoard what they can before fleeing, leaving the rest to fend for themselves and face the tear gas and water cannons of the riot police. What about the armies of Bangladeshi, Indian, Pakistani, and Filipino guest workers throughout the Persian Gulf? They will be a black hole of coronavirus infections. They have little, if any, protections in the societies that cannot run without them, but they have power in numbers. The many dimensions of this virus and how it can upend already fragile societies are truly frightening.
Sisi and Erdogan are not unique, just illustrative of the added layer of complications that people in the Middle East face as they confront the coronavirus pandemic. The utter disdain the leaders harbor for their people and the related brutality with which many Middle Easterners have been treated has undermined—individually and collectively—the basic humanity, in the form of basic community, necessary for people to cope and survive. What kind of governments beat people who are desperate for a test that will be the difference between the ability to feed their families and not? What kind of system destroys much of its scientific community on the basis of guilt by association, conspiracy theories, and the political needs of a dear leader? Who would dare speak out publicly and offer another way in a place where a capricious ruler has deemed only his ideas about society are good? There are no societal backstops in these places, leaving people on their own to grapple with fear, stress, resignation, illness, and possible death.
If we have learned anything from this global health crisis, it is that there are no borders, no nationalisms, no differences to the way coronavirus ravages the human respiratory system. There are only differences in the quality of leadership, and the resulting senses of humanity in the nations they oversee. The Middle East—like the United States—is failing on both fronts.


foreignpolicy--2020-03-17--The Coronavirus Crisis Is a Diplomatic Opportunity for the United States and Iran

The Coronavirus Crisis Is a Diplomatic Opportunity for the United States and Iran If Iran ’ s leaders thought things couldn ’ t get worse , they were wrong .
The country faces three simultaneous crises : a public health emergency that is worsening by the hour , tensions with the United States that have once again grown in the past few days , and an economic picture that could go from troubled to dire in a matter of months .
The confluence of a coronavirus pandemic , security threats , and financial troubles has deepened the political system ’ @ @ @ @ @ @ @ last month ’ s parliamentary elections that saw the lowest turnout in the Islamic Republic ’ s history .
Washington might view this as a validation of its so-called maximum pressure strategy against Tehran , but if it fails to capitalize on this moment to de-escalate tensions and lay the groundwork for a mutually beneficial diplomatic settlement , the leadership in Tehran is likely to become more aggressive in the region , increasing the risk of a conflict that neither side appears to want .
Since the dramatic escalations of late 2019 and @ @ @ @ @ @ @ killing of the Islamic Revolutionary Guard Corps commander Qassem Suleimani and Iranian missile strikes on Iraqi bases hosting U.S. forces , both Iran and the United States appeared content to return to their respective corners .
The impact of the rapidly spreading disease and collapsing oil prices will present huge challenges to an economy already beset by government mismanagement and under siege from U.S. sanctions .
But there has been a steady stream of incidents in Iraq , with at least seven attacks near U.S. diplomatic facilities inside Baghdad ’ s Green Zone @ @ @ @ @ @ @ January and February .
These attacks spiked on March 11 following a barrage of rockets that killed three members of the U.S.-led coalition , including two Americans , and injured more than a dozen others at an Iraqi army base , Camp Taji , north of Baghdad .
U.S. Secretary of Defense Mark Esper subsequently assessed that “ Iranian-backed Shiite militia groups ” were responsible .
Secretary of State Mike Pompeo warned that “ those responsible must be held accountable.
” A day later , the United States retaliated against an Iranian-backed Iraqi @ @ @ @ @ @ @ fired more rockets into Camp Taji on March 14 and again on March 17 .
This latest moment of peril is playing out against the backdrop of a dramatic COVID-19 outbreak in Iran , which has the third-highest number of confirmed cases and fatalities anywhere in the world .
The Iranian government was slow in responding to the outbreak ; and when it finally realized its scale and scope , Tehran was hampered by shortages caused by sanctions .
Moreover , the government has kept a worryingly tight grip on the information flow @ @ @ @ @ @ @ the death toll—currently listed as 988—is probably much higher than the official figures suggest .
With Tehran ’ s initial response being dismissive of the risks of the virus ’ s spread and slow to mobilize against it , the government is now pleading for international assistance .
Having already scored several calamitous own goals in recent months—raising fuel prices with little warning in November 2019 , then violently suppressing subsequent protests , and in January downing a Ukrainian civilian airliner in the apparent belief it was an incoming U.S. missile—the government ’ @ @ @ @ @ @ @ increase the population ’ s sense that its leadership is incompetent .
Meanwhile , the impact of the rapidly spreading disease and collapse in oil prices will likely present almost unprecedented challenges to an economy that is already beset by government mismanagement and under siege from U.S. sanctions .
One Iranian official calculated a drop of 18 percent in trade as a result of the pandemic—and that was before Iraq , a key regional trade partner , announced a full closure of the two countries ’ common land borders and the price of @ @ @ @ @ @ @ .
( While Iran ’ s exports have been blocked by the United States since April 2019 , it has continued to make sales to China , albeit at sharply reduced levels . )
The combination of reduced regional trade , evaporation of remaining oil revenue , and COVID-19 ’ s impact on domestic business could prove catastrophic .
But that doesn ’ t mean that Tehran will bow to U.S. pressure and back down .
Indeed , since May 2019 , when the Iranian government chose to counter U.S. maximum pressure with @ @ @ @ @ @ @ , the system ’ s hard-liners have contended that high-risk brinkmanship yields greater dividends than restraint .
The coronavirus outbreak has now put more pressure on the leadership ’ s calculus .
Feeling besieged and with no obvious diplomatic exit ramp , Iran might conclude that only a confrontation with the United States might change a trajectory that ’ s heading in a very dangerous direction .
This is also the view of Gen. Kenneth McKenzie , the head of U.S. Central Command , who told Congress on March 10 that the outbreak @ @ @ @ @ @ @ of decision-making , more dangerous rather than less dangerous.
” With U.S. President Donald Trump focused on the domestic economic and electoral effects of the coronavirus and the Iranian leadership highly reluctant to display any weakness to the United States , neither side is likely in the mood to engage the other .
That would be a missed opportunity .
Indeed , both Washington and Tehran have floated ideas that , if acted upon , could break the current vicious cycle .
Pompeo has urged the Iranian government—which furloughed tens of thousands of @ @ @ @ @ @ @ in prisons—to free U.S. prisoners and other dual and foreign nationals on humanitarian grounds .
The death of any of those inmates from COVID-19 would be a stain Iran might find hard to erase .
Conversely , Iran has asked the International Monetary Fund for emergency funding and a substantial list of essential equipment ranging from gloves and masks to portable respiration and X-ray machines .
If the Trump administration stands in the way of such basic needs—by voting against an IMF loan to Iran—the United States would find it hard to overcome @ @ @ @ @ @ @ .
The most logical and mutually beneficial outcome would be a two-phased humanitarian de-escalation .
Iran would first agree to furlough all detained foreigners and the United States would transfer the medicine and medical equipment Iran needs The most logical and mutually beneficial outcome would be a two-phased humanitarian de-escalation .
Iran would need to first agree to furlough all detained foreigners as the U.S. facilitates the transfer of medicine and medical equipment Iran needs to contain the outbreak and save lives without any sanctions-related delays .
In the second phase , the @ @ @ @ @ @ @ the IMF loan to Iran while Tehran freezes its nuclear escalation and reins in its allied groups in Iraq , preventing any further attacks on U.S. forces and assets .
This phase could also comprise another prisoner swap , either on par with the one-for-one exchange that happened back in December or , even better , a broader exchange of prisoners .
This would be a win-win : putting tensions with Iran on ice , providing Trump with another success in his efforts to free Americans detained abroad , and providing Tehran with @ @ @ @ @ @ @ save lives at home .
Since 2018 , when the Trump administration pulled out of the nuclear deal with Iran , Washington and Tehran have been on a collision course pitting unrealistic U.S. demands against Iranian inflexibility .
For either side to let a possible diplomatic off-ramp pass by would mean that a dangerous and deadly situation might again take a turn for the worse .

If Iran’s leaders thought things couldn’t get worse, they were wrong. The country faces three simultaneous crises: a public health emergency that is worsening by the hour, tensions with the United States that have once again grown in the past few days, and an economic picture that could go from troubled to dire in a matter of months.
If Iran’s leaders thought things couldn’t get worse, they were wrong. The country faces three simultaneous crises: a public health emergency that is worsening by the hour, tensions with the United States that have once again grown in the past few days, and an economic picture that could go from troubled to dire in a matter of months.
The confluence of a coronavirus pandemic, security threats, and financial troubles has deepened the political system’s legitimacy crisis in the wake of last month’s parliamentary elections that saw the lowest turnout in the Islamic Republic’s history. Washington might view this as a validation of its so-called maximum pressure strategy against Tehran, but if it fails to capitalize on this moment to de-escalate tensions and lay the groundwork for a mutually beneficial diplomatic settlement, the leadership in Tehran is likely to become more aggressive in the region, increasing the risk of a conflict that neither side appears to want.
Since the dramatic escalations of late 2019 and early 2020, which culminated in the killing of the Islamic Revolutionary Guard Corps commander Qassem Suleimani and Iranian missile strikes on Iraqi bases hosting U.S. forces, both Iran and the United States appeared content to return to their respective corners.
[Mapping the Coronavirus Outbreak: Get daily updates on the pandemic and learn how it’s affecting countries around the world.]
But there has been a steady stream of incidents in Iraq, with at least seven attacks near U.S. diplomatic facilities inside Baghdad’s Green Zone and U.S. military installations in Iraq throughout January and February. These attacks spiked on March 11 following a barrage of rockets that killed three members of the U.S.-led coalition, including two Americans, and injured more than a dozen others at an Iraqi army base, Camp Taji, north of Baghdad.
U.S. Secretary of Defense Mark Esper subsequently assessed that “Iranian-backed Shiite militia groups” were responsible. Secretary of State Mike Pompeo warned that “those responsible must be held accountable.” A day later, the United States retaliated against an Iranian-backed Iraqi militia in Iraq, which in turn fired more rockets into Camp Taji on March 14 and again on March 17.
This latest moment of peril is playing out against the backdrop of a dramatic COVID-19 outbreak in Iran, which has the third-highest number of confirmed cases and fatalities anywhere in the world. The Iranian government was slow in responding to the outbreak; and when it finally realized its scale and scope, Tehran was hampered by shortages caused by sanctions. Moreover, the government has kept a worryingly tight grip on the information flow to save face, prompting fears that the death toll—currently listed as 988—is probably much higher than the official figures suggest.
Listen Now: Don't Touch Your Face A new podcast from Foreign Policy covering all aspects of the coronavirus pandemic Learn More
With Tehran’s initial response being dismissive of the risks of the virus’s spread and slow to mobilize against it, the government is now pleading for international assistance. Having already scored several calamitous own goals in recent months—raising fuel prices with little warning in November 2019, then violently suppressing subsequent protests, and in January downing a Ukrainian civilian airliner in the apparent belief it was an incoming U.S. missile—the government’s response to the coronavirus crisis could increase the population’s sense that its leadership is incompetent.
Meanwhile, the impact of the rapidly spreading disease and collapse in oil prices will likely present almost unprecedented challenges to an economy that is already beset by government mismanagement and under siege from U.S. sanctions.
One Iranian official calculated a drop of 18 percent in trade as a result of the pandemic—and that was before Iraq, a key regional trade partner, announced a full closure of the two countries’ common land borders and the price of crude tumbled below $30 per barrel. (While Iran’s exports have been blocked by the United States since April 2019, it has continued to make sales to China, albeit at sharply reduced levels.) The combination of reduced regional trade, evaporation of remaining oil revenue, and COVID-19’s impact on domestic business could prove catastrophic.
But that doesn’t mean that Tehran will bow to U.S. pressure and back down. Indeed, since May 2019, when the Iranian government chose to counter U.S. maximum pressure with a blend of nuclear and regional provocations, the system’s hard-liners have contended that high-risk brinkmanship yields greater dividends than restraint.
The coronavirus outbreak has now put more pressure on the leadership’s calculus. Feeling besieged and with no obvious diplomatic exit ramp, Iran might conclude that only a confrontation with the United States might change a trajectory that’s heading in a very dangerous direction. This is also the view of Gen. Kenneth McKenzie, the head of U.S. Central Command, who told Congress on March 10 that the outbreak “probably makes them, in terms of decision-making, more dangerous rather than less dangerous.”
With U.S. President Donald Trump focused on the domestic economic and electoral effects of the coronavirus and the Iranian leadership highly reluctant to display any weakness to the United States, neither side is likely in the mood to engage the other.
That would be a missed opportunity. Indeed, both Washington and Tehran have floated ideas that, if acted upon, could break the current vicious cycle. Pompeo has urged the Iranian government—which furloughed tens of thousands of convicts due to fears of an epidemic in prisons—to free U.S. prisoners and other dual and foreign nationals on humanitarian grounds. The death of any of those inmates from COVID-19 would be a stain Iran might find hard to erase.
Conversely, Iran has asked the International Monetary Fund for emergency funding and a substantial list of essential equipment ranging from gloves and masks to portable respiration and X-ray machines. If the Trump administration stands in the way of such basic needs—by voting against an IMF loan to Iran—the United States would find it hard to overcome the impression that it had acted inhumanely.
The most logical and mutually beneficial outcome would be a two-phased humanitarian de-escalation. Iran would first agree to furlough all detained foreigners and the United States would transfer the medicine and medical equipment Iran needs
The most logical and mutually beneficial outcome would be a two-phased humanitarian de-escalation. Iran would need to first agree to furlough all detained foreigners as the U.S. facilitates the transfer of medicine and medical equipment Iran needs to contain the outbreak and save lives without any sanctions-related delays.
In the second phase, the U.S. government could agree not to block the IMF loan to Iran while Tehran freezes its nuclear escalation and reins in its allied groups in Iraq, preventing any further attacks on U.S. forces and assets. This phase could also comprise another prisoner swap, either on par with the one-for-one exchange that happened back in December or, even better, a broader exchange of prisoners. This would be a win-win: putting tensions with Iran on ice, providing Trump with another success in his efforts to free Americans detained abroad, and providing Tehran with some economic reprieve and the means to save lives at home.
Since 2018, when the Trump administration pulled out of the nuclear deal with Iran, Washington and Tehran have been on a collision course pitting unrealistic U.S. demands against Iranian inflexibility. For either side to let a possible diplomatic off-ramp pass by would mean that a dangerous and deadly situation might again take a turn for the worse.


foreignpolicy--2020-03-17--South Asia’s Coronavirus Cases May Be the Tip of the Iceberg

South Asia ’ s Coronavirus Cases May Be the Tip of the Iceberg Welcome to Foreign Policy ’ s weekly South Asia Brief .
The highlights this week : Nations brace for the community spread of the coronavirus , Sri Lanka considers delaying its elections , and a top Kashmiri leader is freed .
If you would like to receive South Asia Brief in your inbox every Tuesday , please sign up here .
The number of reported cases of the new coronavirus continues to rise across South Asia .
Pakistan , which borders both Iran and China—two of the @ @ @ @ @ @ @ its number of cases double for a second consecutive day ( the latest tally is 236 ) .
But across the region , a paucity of testing means those figures are just the tip of the iceberg .
Despite being home to one-sixth of the world ’ s population , India has conducted fewer tests than South Korea , which has only 51 million people .
According to the New York Times , South Korea has tested 4,800 people per million while India has tested just five per million .
After initial delays @ @ @ @ @ @ @ groups of hundreds of people were still gathering for Holi celebrations ) most South Asian countries have now put in place strict restrictions on travel and large gatherings .
The question is whether such moves have come too late to prevent widespread community transmission , especially given how densely populated the region ’ s cities and towns tend to be .
At this point , there are several causes for serious concern .
As testing expands—India , for example , has only 52 testing centers—more cases of the coronavirus will be discovered .
@ @ @ @ @ @ @ India , a country that could serve as a proxy for the region , only 77 percent of deaths are actually registered .
Just 22 percent of deaths are certified by medical practitioners .
In other words , there could already have been deaths due to COVID-19 that have simply not been recorded .
If community spread of the coronavirus is already underway across South Asia , the region ’ s health care system will come under unprecedented stress .
Consider hospital beds , for example .
According to data from the OECD @ @ @ @ @ @ @ for every 1,000 people .
The United Kingdom has five times as many per capita ( 2.5 ) , Italy has more than six times as many per capita ( 3.2 ) , and South Korea has over 24 times as many per capita ( 12.3 ) .
If the number of infections in India rises exponentially , the country ’ s hospitals will struggle to cope .
India has just 0.8 doctors for every 1,000 people , while the corresponding numbers for the United Kingdom , Italy , and South Korea are @ @ @ @ @ @ @ .
Other South Asian countries have just as much cause to worry .
In an interview this week with the Associated Press , Pakistani Prime Minister Imran Khan candidly expressed his fears : “ If [ the coronavirus ] spreads , we will all have problems with our health facilities .
We just don ’ t have that capability .
We just don ’ t have the resources.
” There is a counterpoint , although it is not one I am convinced by .
Sometimes , broken systems can offer unlikely advantages in @ @ @ @ @ @ @ criticized the region ’ s pharmacies for selling antibiotics without a prescription , for example—a practice that is already contributing to antibiotic resistance .
If the coronavirus spreads , and patients can fight secondary bacterial infections with easily available antibiotics , they may lower the region ’ s death rates .
But it ’ s a dangerous hope to rely on , as is the theory that the region ’ s youthful demographics will automatically shield it from outbreaks .
As Sumit Ganguly writes in FP , India ’ s emergency response systems @ @ @ @ @ @ @ 2018 , the state of Kerala curtailed the spread of the Nipah virus , and the nation has a history of successful contact tracing in influenza outbreaks .
But the question now is whether the number of coronavirus cases will grow too high , too quickly , and overwhelm the country ’ s hospitals .
Have South Asia ’ s countries missed their chance to flatten the curve ?
It will be several weeks before we ’ ll have real data and answers .
Whatever happens , the pandemic will be a reminder @ @ @ @ @ @ @ they have long neglected health care infrastructure , especially for their lower-income populations .
As the chart below shows , South Asian nations have among the lowest rates of spending on health care as a proportion of their GDPs .
Sri Lanka ’ s election .
Opposition parties in Sri Lanka are calling for national elections to be postponed because of fears about the spread of the coronavirus .
On Monday , President Gotabaya Rajapaksa announced that the April 25 vote would go ahead as planned , but a growing number of politicians @ @ @ @ @ @ @ be too risky in a country that has already recorded 43 cases of the coronavirus .
Pakistan and China ’ s deep friendship .
In another strange symbol of what can only be described as fealty , Pakistan President Arif Alvi arrived in Beijing on Monday to convey support for China ’ s battle to recover from the world ’ s highest number of COVID-19 cases and deaths .
“ Long live China-Pakistan friendship !
” tweeted Zhao Lijian , China ’ s foreign ministry spokesman .
The visit was Alvi ’ s @ @ @ @ @ @ @ of the coronavirus has begun to slow in China , Pakistan is beginning to see a spurt in cases this week .
Kashmiri leader freed .
Farooq Abdullah , a three-time chief minister of India ’ s Jammu and Kashmir , was released from detention last week after seven months .
“ Now I will be able to go to Delhi and attend parliament and speak for you all , ” Abdullah told reporters in Srinagar , while refusing to speak more broadly about the security crackdown in his state .
Abdullah ’ @ @ @ @ @ @ @ a former chief minister , remains in detention .
New Delhi ’ s crackdown in Kashmir began on Aug. 5 , 2019 , after it revoked certain autonomies of the state and cut off internet access—and arrested thousands of political leaders and civilians .
Earlier this month , India returned some internet and social media services to Kashmir , although surfing speeds are still reportedly very slow .
Time to test your geography .
Given the fears over the spread of the coronavirus , I ’ ve been thinking about borders this week @ @ @ @ @ @ @ has the longest border ?
A ) India and Pakistan B ) Pakistan and Afghanistan C ) India and China D ) India and Bangladesh Scroll down for the answer .
Telecom taxes .
Officials from Vodafone ’ s Indian joint venture have long been clear that their company will go bankrupt if it has to pay $ 7.4 billion in retrospective taxes and spectrum fees .
It seems New Delhi is finally taking those claims seriously .
On Monday , the government asked the country ’ s Supreme Court to allow telecommunications @ @ @ @ @ @ @ repay their dues .
It is unclear whether the court will accept New Delhi ’ s request .
If Vodafone Idea were to collapse it would mean that one of the world ’ s biggest cellular markets would be reduced to a duopoly , with Bharti Airtel competing against Reliance Jio .
Yoga politics .
In April , Nepal will become the first country in the world to make yoga a required subject in elementary and junior high schools .
While the move may at first seem driven by reasons of health and @ @ @ @ @ @ @ that the reality is more complicated .
Yoga is increasingly seen as tied to Hinduism—and rising Hindu nationalism—leading critics to suggest the decision has something to do with trying to appease New Delhi .
And that may upset Beijing : The tiny Himalayan country has long been the subject of a tug-of-war between bigger neighbors India and China .
At more than 2,500 miles , India and Bangladesh share the world ’ s fifth-largest border ( The top four , in ascending order , are China and Mongolia , Argentina and Chile , @ @ @ @ @ @ @ the United States . )
That ’ s it for this week .
We welcome your feedback at newsletters @ foreignpolicy.com .
You can find older editions of South Asia Brief .
For more from FP , subscribe here or sign up for our other newsletters .

Welcome to Foreign Policy’s weekly South Asia Brief. The highlights this week: Nations brace for the community spread of the coronavirus , Sri Lanka considers delaying its elections, and a top Kashmiri leader is freed.
Welcome to Foreign Policy’s weekly South Asia Brief. The highlights this week: Nations brace for the community spread of the coronavirus, Sri Lanka considers delaying its elections, and a top Kashmiri leader is freed.
If you would like to receive South Asia Brief in your inbox every Tuesday, please sign up here.
South Asia’s Biggest Test
The number of reported cases of the new coronavirus continues to rise across South Asia. Pakistan, which borders both Iran and China—two of the world’s three worst-affected countries—has seen its number of cases double for a second consecutive day (the latest tally is 236). But across the region, a paucity of testing means those figures are just the tip of the iceberg. Despite being home to one-sixth of the world’s population, India has conducted fewer tests than South Korea, which has only 51 million people. According to the New York Times, South Korea has tested 4,800 people per million while India has tested just five per million.
After initial delays (as recently as last week, groups of hundreds of people were still gathering for Holi celebrations) most South Asian countries have now put in place strict restrictions on travel and large gatherings. The question is whether such moves have come too late to prevent widespread community transmission, especially given how densely populated the region’s cities and towns tend to be.
At this point, there are several causes for serious concern.
As testing expands—India, for example, has only 52 testing centers—more cases of the coronavirus will be discovered. But there are missing metrics. In India, a country that could serve as a proxy for the region, only 77 percent of deaths are actually registered. Just 22 percent of deaths are certified by medical practitioners. In other words, there could already have been deaths due to COVID-19 that have simply not been recorded.
If community spread of the coronavirus is already underway across South Asia, the region’s health care system will come under unprecedented stress. Consider hospital beds, for example. According to data from the OECD, India has just 0.5 hospital beds for every 1,000 people. The United Kingdom has five times as many per capita (2.5), Italy has more than six times as many per capita (3.2), and South Korea has over 24 times as many per capita (12.3). If the number of infections in India rises exponentially, the country’s hospitals will struggle to cope. India has just 0.8 doctors for every 1,000 people, while the corresponding numbers for the United Kingdom, Italy, and South Korea are 2.9, 4.0, and 2.3 respectively.
Other South Asian countries have just as much cause to worry. In an interview this week with the Associated Press, Pakistani Prime Minister Imran Khan candidly expressed his fears: “If [the coronavirus] spreads, we will all have problems with our health facilities. We just don’t have that capability. We just don’t have the resources.”
There is a counterpoint, although it is not one I am convinced by. Sometimes, broken systems can offer unlikely advantages in a crisis. Health experts have long criticized the region’s pharmacies for selling antibiotics without a prescription, for example—a practice that is already contributing to antibiotic resistance. If the coronavirus spreads, and patients can fight secondary bacterial infections with easily available antibiotics, they may lower the region’s death rates. But it’s a dangerous hope to rely on, as is the theory that the region’s youthful demographics will automatically shield it from outbreaks.
As Sumit Ganguly writes in FP, India’s emergency response systems sometimes hold up remarkably well. In 2018, the state of Kerala curtailed the spread of the Nipah virus, and the nation has a history of successful contact tracing in influenza outbreaks. But the question now is whether the number of coronavirus cases will grow too high, too quickly, and overwhelm the country’s hospitals. Have South Asia’s countries missed their chance to flatten the curve?
It will be several weeks before we’ll have real data and answers. Whatever happens, the pandemic will be a reminder to South Asia’s governments that they have long neglected health care infrastructure, especially for their lower-income populations. As the chart below shows, South Asian nations have among the lowest rates of spending on health care as a proportion of their GDPs.
What We’re Following
Sri Lanka’s election. Opposition parties in Sri Lanka are calling for national elections to be postponed because of fears about the spread of the coronavirus. On Monday, President Gotabaya Rajapaksa announced that the April 25 vote would go ahead as planned, but a growing number of politicians are arguing that campaigning and voting would be too risky in a country that has already recorded 43 cases of the coronavirus.
Pakistan and China’s deep friendship. In another strange symbol of what can only be described as fealty, Pakistan President Arif Alvi arrived in Beijing on Monday to convey support for China’s battle to recover from the world’s highest number of COVID-19 cases and deaths. “Long live China-Pakistan friendship!” tweeted Zhao Lijian, China’s foreign ministry spokesman. The visit was Alvi’s first to China. While the spread of the coronavirus has begun to slow in China, Pakistan is beginning to see a spurt in cases this week.
Kashmiri leader freed. Farooq Abdullah, a three-time chief minister of India’s Jammu and Kashmir, was released from detention last week after seven months. “Now I will be able to go to Delhi and attend parliament and speak for you all,” Abdullah told reporters in Srinagar, while refusing to speak more broadly about the security crackdown in his state. Abdullah’s son, Omar Abdullah, also a former chief minister, remains in detention.
New Delhi’s crackdown in Kashmir began on Aug. 5, 2019, after it revoked certain autonomies of the state and cut off internet access—and arrested thousands of political leaders and civilians. Earlier this month, India returned some internet and social media services to Kashmir, although surfing speeds are still reportedly very slow.
Question of the Week
Time to test your geography. Given the fears over the spread of the coronavirus, I’ve been thinking about borders this week. Which pair of South Asian countries has the longest border?
A) India and Pakistan
B) Pakistan and Afghanistan
C) India and China
D) India and Bangladesh
Scroll down for the answer.
South Asia Inc.
Telecom taxes. Officials from Vodafone’s Indian joint venture have long been clear that their company will go bankrupt if it has to pay $7.4 billion in retrospective taxes and spectrum fees. It seems New Delhi is finally taking those claims seriously. On Monday, the government asked the country’s Supreme Court to allow telecommunications firms a period of 20 years to repay their dues.
It is unclear whether the court will accept New Delhi’s request. If Vodafone Idea were to collapse it would mean that one of the world’s biggest cellular markets would be reduced to a duopoly, with Bharti Airtel competing against Reliance Jio.
Odds and Ends
Nepalese people take part in a yoga session to mark International Yoga Day in Kathmandu on June 21, 2015.
Yoga politics. In April, Nepal will become the first country in the world to make yoga a required subject in elementary and junior high schools. While the move may at first seem driven by reasons of health and well-being, the New York Times reports that the reality is more complicated. Yoga is increasingly seen as tied to Hinduism—and rising Hindu nationalism—leading critics to suggest the decision has something to do with trying to appease New Delhi. And that may upset Beijing: The tiny Himalayan country has long been the subject of a tug-of-war between bigger neighbors India and China.
And the Answer Is…
D) India and Bangladesh.
At more than 2,500 miles, India and Bangladesh share the world’s fifth-largest border (The top four, in ascending order, are China and Mongolia, Argentina and Chile, Kazakhstan and Russia, and Canada and the United States.)
That’s it for this week.


foreignpolicy--2020-03-17--The Coronavirus Is Reducing Merkel’s EU Legacy to Ashes

The Coronavirus Is Reducing Merkel ’ s EU Legacy to Ashes The German government surprised most international observers on Friday by announcing its own version of a “ bazooka ” to protect the German economy from the economic and financial consequences of the coronavirus .
German Finance Minister Olaf Scholz pledged unlimited credit for businesses affected by the pandemic alongside an expansion of its short-time work scheme , which gives support for companies that are forced to reduce working hours of their employees .
After years of adhering to financial orthodoxy and obsessing about moral hazard , the German government @ @ @ @ @ @ @ boldly in response to a crisis .
This might prove an effective Band-Aid to stop the bleeding in Germany .
But the sheer scale and speed of the coronavirus outbreak will likely require a Europe-wide fiscal response if the continent hopes to avoid to prevent another eurozone financial crisis that could be the death knell for the 19-country currency union .
German Chancellor Angela Merkel has given little indication whether she is willing to lead such an effort—and her record is highly discouraging .
The EU response to the coronavirus crisis has been @ @ @ @ @ @ @ and utter lack of European coordination or solidarity .
The European Commission unveiled a 37-billion-euro ( $ 41 billion ) Coronavirus Response Investment Initiative last week that allows members to increase public health care spending to combat the virus .
Ursula von der Leyen , the European Commission ’ s president , also recently announced a Schengen travel ban , an export authorization scheme to prevent vital medical equipment from leaving the EU single market , and help in securing ventilators and testing kits .
But it is hard to disagree with the @ @ @ @ @ @ @ a recent poll , agreed with the statement that the “ EU was not helping [ them ] .
” And yet the EU ’ s reticence is consistent with Merkel ’ s preferred vision for Europe .
Unless she quickly realizes the error of her earlier ways , one of the victims of the coronavirus may turn out to be her own carefully cultivated EU legacy .
For more than 10 years , four German governments led by Merkel have preached the virtues of austerity in the eurozone .
She passed a @ @ @ @ @ @ @ , insisted on fiscal consolidation elsewhere , and proudly celebrated budget surpluses since 2014 .
Even Scholz , a member of the Social Democratic Party , has been reluctant to abandon the so-called schwarze Null ( the “ black zero ” of a balanced budget ) in the past few years , despite rising domestic and international pressure to loosen Germany ’ s purse strings .
Rather , Germany ’ s vision for the EU was to encourage structural reforms and fiscal consolidation aimed at enhancing the bloc ’ s international competitiveness .
@ @ @ @ @ @ @ countries in need in order to prevent a collapse of the financial system , while expansionary monetary policy , rather than loose fiscal policy , was used to preserve the eurozone ’ s integrity .
The coronavirus crisis exposes this house of cards for what it is and provides a glimmer of how Merkel ’ s earlier vision for the EU can unravel and fail .
The eurozone recorded a slow recovery from its previous debt crisis , and economic discontent remains extremely widespread in many countries after more than a decade of @ @ @ @ @ @ @ EU response to it provided a hotbed for a surge in Euroskeptic populism across the continent , which already put the survival of the eurozone at risk prior to the outbreak of the pandemic .
The economic crisis induced by COVID-19 thus comes at a critical moment for the EU , and the Merkel government clearly recognizes the severity of it .
In effect it is both a supply and a demand shock to the economy .
As large parts of Europe are quarantined or voluntarily going into self-isolation , economic activity will @ @ @ @ @ @ @ international supply chains interrupted by border closures and necessary inputs no longer available , both foreign and domestic demand will rapidly fall at the same time .
No wonder stock markets are in free fall .
The German crisis response this time , as compared with the previous financial crisis , will need to be informed by the fact that monetary policy alone will not be enough .
With interest rates at or below zero and unconventional monetary policies already stretched to the limit , central banks ’ room for maneuver is severely @ @ @ @ @ @ @ European Central Bank ( ECB ) president , called for fiscal action in response to the crisis last week—although she also seemed to imply that widening spreads between Italian and German bond yields was not the ECB ’ s problem , which added to crisis-stricken Italy ’ s financial stress .
Lagarde ’ s performance is consistent with expectations that , as a lawyer and politician , she would take a more strict and legalistic approach to the ECB ’ s governing mandate than her predecessor Mario Draghi , an economist and former @ @ @ @ @ @ @ to financial markets .
This is all the more reason for the German government to take a leading role in crafting a coordinating European response to the crisis .
After years of austerity measures encouraged by Merkel ’ s governments , state capacity across the EU has been weakened , automatic stabilizers undermined , and domestic demand dampened .
Aggressive fiscal stimulus packages will be necessary to combat the economic crisis , but many countries in the eurozone—not least Italy—are still burdened with large piles of government debt .
To overcome this problem @ @ @ @ @ @ @ its position on eurozone governance and EU integration .
It will need to abandon previously drawn red lines and show more solidarity with its European partners than it has in the past decade .
Scholz has already stated that EU states with higher debt levels should have the flexibility to pass fiscal measures .
On Monday , the Eurogroup pledged “ to do whatever it takes to effectively address the current challenges.
” Collectively , EU finance ministers promised a fiscal boost of 1 percent of gross domestic product .
Yet budgetary resources @ @ @ @ @ @ @ and supranational resources are small .
The European Stability Mechanism can be used to help countries in need , but the conditions under which that help is supplied should be loosened .
Currently , member states have to agree to a program of structural reforms and fiscal consolidation before funds can be disbursed in order to avoid moral hazard .
But moral hazard is not an issue in case of an EU-wide external shock as this one .
Rather , the current crisis provides a golden opportunity to finally complete the eurozone ’ @ @ @ @ @ @ @ of a European deposit insurance scheme , Eurobonds or common debt instruments , and an EU budget that is big enough to deal with EU-wide external shocks .
Merkel has always argued that German voters would be against such steps , but the new risks that accompany the current shock will demonstrate the necessity of completing the eurozone ’ s architecture .
She should use her vast reserve of built-up political capital to explain as much to the German public .
Rather than expediently accommodate her electorate ’ s preferences against what they @ @ @ @ @ @ @ Merkel should finally attempt to change German preferences in the direction of stability through solidarity .
Germany should also immediately lead the way in the European Union by pushing for even more expansive stimulus at home .
Germany ’ s healthy fiscal position should make it easier to justify bold measures .
In 2019 , the finance ministry collected a record surplus of 13.5 billion euros ( $ 15 billion ) .
While Berlin had again planned to balance its books in 2020 , Scholz last Friday explicitly acknowledged that it may be @ @ @ @ @ @ @ 2020 and go into the red .
As a Social Democrat , Scholz never fetishized the schwarze Null the way his German conservative colleagues did after it was instituted by then Finance Minister Wolfgang Schäuble in 2014 .
Rather , Scholz believed that the balanced budget policy was popular among voters and feared an electoral backlash if his party should abandon it without a compelling reason for doing so .
Scholz should not let this coronavirus crisis go to waste .
He finally has as good a reason as any to get rid @ @ @ @ @ @ @ can shield him against criticisms from conservative media outlets and the Christian Democratic Union , his coalition partner .
Thus far , Merkel herself has been largely absent in the crisis , with the exception of one press conference last week in which she warned her fellow Germans that up to 70 percent of the population was at risk of contracting the illness .
But in general , she has let her health minister , Jens Spahn , coordinate the government ’ s response .
Merkel is in the twilight of her career @ @ @ @ @ @ @ Having promised to step down at the end of this term , most likely in the summer of 2021 , she no longer has to worry about reelection .
Her legacy may well depend on whether she is able to take on Europe ’ s leadership mantle once more .
She is uniquely positioned to do so .
Ten years ago , in the midst of the eurozone crisis , Merkel famously claimed that “ the rules must not be oriented towards the weak , but toward the strong.
” She admitted at @ @ @ @ @ @ @ message , but said it was one of economic necessity .
It is time to turn that logic on its head .
In times of a global pandemic such as this one , the rules need to be flexible enough not just to allow for the survival of the weak , but also to spur a quick economic recovery once the worst is over and prevent the collapse of the eurozone .
The next few days and weeks will prove crucial .
They will show whether Merkel is up to the task—and whether @ @ @ @ @ @ @ EU crisis management of the previous 10 years has always been fatally flawed .

The German government surprised most international observers on Friday by announcing its own version of a “bazooka” to protect the German economy from the economic and financial consequences of the coronavirus. German Finance Minister Olaf Scholz pledged unlimited credit for businesses affected by the pandemic alongside an expansion of its short-time work scheme, which gives support for companies that are forced to reduce working hours of their employees. After years of adhering to financial orthodoxy and obsessing about moral hazard, the German government ostensibly revealed itself as willing to act boldly in response to a crisis.
The German government surprised most international observers on Friday by announcing its own version of a “bazooka” to protect the German economy from the economic and financial consequences of the coronavirus. German Finance Minister Olaf Scholz pledged unlimited credit for businesses affected by the pandemic alongside an expansion of its short-time work scheme, which gives support for companies that are forced to reduce working hours of their employees. After years of adhering to financial orthodoxy and obsessing about moral hazard, the German government ostensibly revealed itself as willing to act boldly in response to a crisis.
This might prove an effective Band-Aid to stop the bleeding in Germany. But the sheer scale and speed of the coronavirus outbreak will likely require a Europe-wide fiscal response if the continent hopes to avoid to prevent another eurozone financial crisis that could be the death knell for the 19-country currency union. German Chancellor Angela Merkel has given little indication whether she is willing to lead such an effort—and her record is highly discouraging.
The EU response to the coronavirus crisis has been lackluster, characterized mainly by a complete and utter lack of European coordination or solidarity. The European Commission unveiled a 37-billion-euro ($41 billion) Coronavirus Response Investment Initiative last week that allows members to increase public health care spending to combat the virus. Ursula von der Leyen, the European Commission’s president, also recently announced a Schengen travel ban, an export authorization scheme to prevent vital medical equipment from leaving the EU single market, and help in securing ventilators and testing kits. But it is hard to disagree with the 88 percent of Italians who, in a recent poll, agreed with the statement that the “EU was not helping [them].”
And yet the EU’s reticence is consistent with Merkel’s preferred vision for Europe. Unless she quickly realizes the error of her earlier ways, one of the victims of the coronavirus may turn out to be her own carefully cultivated EU legacy.
[Mapping the Coronavirus Outbreak: Get daily updates on the pandemic and learn how it’s affecting countries around the world.]
For more than 10 years, four German governments led by Merkel have preached the virtues of austerity in the eurozone. She passed a constitutional debt brake in Germany in 2009, insisted on fiscal consolidation elsewhere, and proudly celebrated budget surpluses since 2014. Even Scholz, a member of the Social Democratic Party, has been reluctant to abandon the so-called schwarze Null (the “black zero” of a balanced budget) in the past few years, despite rising domestic and international pressure to loosen Germany’s purse strings. Rather, Germany’s vision for the EU was to encourage structural reforms and fiscal consolidation aimed at enhancing the bloc’s international competitiveness. Limited and conditional solidarity was given to countries in need in order to prevent a collapse of the financial system, while expansionary monetary policy, rather than loose fiscal policy, was used to preserve the eurozone’s integrity.
The coronavirus crisis exposes this house of cards for what it is and provides a glimmer of how Merkel’s earlier vision for the EU can unravel and fail. The eurozone recorded a slow recovery from its previous debt crisis, and economic discontent remains extremely widespread in many countries after more than a decade of stagnation. The debt crisis and the EU response to it provided a hotbed for a surge in Euroskeptic populism across the continent, which already put the survival of the eurozone at risk prior to the outbreak of the pandemic. The economic crisis induced by COVID-19 thus comes at a critical moment for the EU, and the Merkel government clearly recognizes the severity of it. In effect it is both a supply and a demand shock to the economy. As large parts of Europe are quarantined or voluntarily going into self-isolation, economic activity will largely grind to a halt. With international supply chains interrupted by border closures and necessary inputs no longer available, both foreign and domestic demand will rapidly fall at the same time. No wonder stock markets are in free fall.
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The German crisis response this time, as compared with the previous financial crisis, will need to be informed by the fact that monetary policy alone will not be enough. With interest rates at or below zero and unconventional monetary policies already stretched to the limit, central banks’ room for maneuver is severely restricted. Christine Lagarde, the new European Central Bank (ECB) president, called for fiscal action in response to the crisis last week—although she also seemed to imply that widening spreads between Italian and German bond yields was not the ECB’s problem, which added to crisis-stricken Italy’s financial stress. Lagarde’s performance is consistent with expectations that, as a lawyer and politician, she would take a more strict and legalistic approach to the ECB’s governing mandate than her predecessor Mario Draghi, an economist and former banker who instinctively knew how to talk to financial markets.
This is all the more reason for the German government to take a leading role in crafting a coordinating European response to the crisis. After years of austerity measures encouraged by Merkel’s governments, state capacity across the EU has been weakened, automatic stabilizers undermined, and domestic demand dampened. Aggressive fiscal stimulus packages will be necessary to combat the economic crisis, but many countries in the eurozone—not least Italy—are still burdened with large piles of government debt.
To overcome this problem, Germany will have to finally shift its position on eurozone governance and EU integration. It will need to abandon previously drawn red lines and show more solidarity with its European partners than it has in the past decade. Scholz has already stated that EU states with higher debt levels should have the flexibility to pass fiscal measures. On Monday, the Eurogroup pledged “to do whatever it takes to effectively address the current challenges.” Collectively, EU finance ministers promised a fiscal boost of 1 percent of gross domestic product. Yet budgetary resources are asymmetrically distributed across the eurozone, and supranational resources are small. The European Stability Mechanism can be used to help countries in need, but the conditions under which that help is supplied should be loosened. Currently, member states have to agree to a program of structural reforms and fiscal consolidation before funds can be disbursed in order to avoid moral hazard.
But moral hazard is not an issue in case of an EU-wide external shock as this one. Rather, the current crisis provides a golden opportunity to finally complete the eurozone’s unfinished business, including the creation of a European deposit insurance scheme, Eurobonds or common debt instruments, and an EU budget that is big enough to deal with EU-wide external shocks. Merkel has always argued that German voters would be against such steps, but the new risks that accompany the current shock will demonstrate the necessity of completing the eurozone’s architecture. She should use her vast reserve of built-up political capital to explain as much to the German public. Rather than expediently accommodate her electorate’s preferences against what they see as a fiscal transfer union, Merkel should finally attempt to change German preferences in the direction of stability through solidarity.
Germany should also immediately lead the way in the European Union by pushing for even more expansive stimulus at home. Germany’s healthy fiscal position should make it easier to justify bold measures. In 2019, the finance ministry collected a record surplus of 13.5 billion euros ($15 billion). While Berlin had again planned to balance its books in 2020, Scholz last Friday explicitly acknowledged that it may be necessary to pass an emergency budget for 2020 and go into the red. As a Social Democrat, Scholz never fetishized the schwarze Null the way his German conservative colleagues did after it was instituted by then Finance Minister Wolfgang Schäuble in 2014. Rather, Scholz believed that the balanced budget policy was popular among voters and feared an electoral backlash if his party should abandon it without a compelling reason for doing so. Scholz should not let this coronavirus crisis go to waste. He finally has as good a reason as any to get rid of the schwarze Null, one that can shield him against criticisms from conservative media outlets and the Christian Democratic Union, his coalition partner.
Thus far, Merkel herself has been largely absent in the crisis, with the exception of one press conference last week in which she warned her fellow Germans that up to 70 percent of the population was at risk of contracting the illness. But in general, she has let her health minister, Jens Spahn, coordinate the government’s response. Merkel is in the twilight of her career and has nothing left to lose. Having promised to step down at the end of this term, most likely in the summer of 2021, she no longer has to worry about reelection. Her legacy may well depend on whether she is able to take on Europe’s leadership mantle once more. She is uniquely positioned to do so.
Ten years ago, in the midst of the eurozone crisis, Merkel famously claimed that “the rules must not be oriented towards the weak, but toward the strong.” She admitted at the time that it was a tough message, but said it was one of economic necessity. It is time to turn that logic on its head. In times of a global pandemic such as this one, the rules need to be flexible enough not just to allow for the survival of the weak, but also to spur a quick economic recovery once the worst is over and prevent the collapse of the eurozone. The next few days and weeks will prove crucial. They will show whether Merkel is up to the task—and whether she is prepared to admit that her EU crisis management of the previous 10 years has always been fatally flawed.