foreignpolicy--2020-03-18--Is the Coronavirus Crash Worse Than the 2008 Financial Crisis?

Is the Coronavirus Crash Worse Than the 2008 Financial Crisis ?
In May 2018 , President Donald Trump restructured and downsized the pandemic preparedness unit .
Of course , it seems ill-judged in retrospect .
But he was not the first president to do so .
The National Security Council ’ s ( NSC ) global health security unit was set up under Bill Clinton in 1998 .
Years later , first George W. Bush and then Barack Obama would shut it down , only to reestablish it shortly afterward .
The fact is that bureaucracies have never known how @ @ @ @ @ @ @ like pandemics .
They sit awkwardly within the conventional silos of modern government and models of risk assessment .
If this is true for the NSC , it is even more so for those charged with economic policymaking .
Among the tail risks widely discussed in economic policy circles , a deliberate shutdown of national economies on the grounds of a public health emergency has never been seriously considered .
Of course , we ’ ve spoken of “ contagion ” in financial crises , but we ’ ve meant it metaphorically—not literally @ @ @ @ @ @ @ the financial uncertainty spreading from the downturn in real estate—by way of subprime to funding markets and from there to the balance sheets of major banks—could threaten an economic heart attack .
It was this massive financial shock , piled on top of the losses to households from a downturn in the real estate sector , that caused economic activity to contract .
In the worst of times , over the winter of 2008-2009 , more than 750,000 job losses were recorded every month—a total of 8.7 million over the course of the @ @ @ @ @ @ @ and Chrysler stumbled toward bankruptcy .
For the global economy , it unleashed the largest contraction in international trade ever seen .
Thanks to massive intervention of both monetary and fiscal policy , it did not become a deep and prolonged recession .
After a contraction of 4.2 percent in gross domestic product , a recovery began in the second half of 2009 .
Unemployment peaked at 10 percent in October 2009 .
It is too early to confidently predict the course of the economic downturn facing us due to the coronavirus .
@ @ @ @ @ @ @ global manufacturing industry was already shaky in 2019 .
Now we are deliberately shutting down the world ’ s major economies for at least several months .
Factories are closing , shops , gyms , bars , schools , colleges , and restaurants shuttering .
Early indicators suggest job losses in the United States could top 1 million per month between now and June .
That would be a sharper downturn than in 2008-2009 .
For sectors like the airline industry , the impact will be far worse .
In the oil industry @ @ @ @ @ @ @ unleashed a ruthless price war among OPEC , Russia , and shale producers .
This will stress the heavily indebted energy sector .
If price wars spread , we could face a ruinous cycle of debt-deflation that will jeopardize the world ’ s huge pile of corporate debt , which is twice as large as it was in 2008. International trade will sharply contract .
In the division of labor among different branches of economic policy , addressing the coronavirus recession is a classic task for targeted fiscal policy : tax cuts and @ @ @ @ @ @ @ is less stimulus than a comprehensive national safety net to prevent bankruptcies and long-term financial damage .
Once we have survived the epidemic we will need investments in public health infrastructure big and small .
Every country clearly needs hugely improved surveillance , modeling , and emergency facilities , as well as substantial reserve capacity .
All of this , in due course , will offer excellent opportunities to productively spend money and create high-quality jobs .
Unlike in 2008 , there will even be sectors that naturally expand .
Spending on health @ @ @ @ @ @ @ 18 percent of U.S. economic activity , will likely explode .
With social distancing , we are , in effect , being mandated to resort to the impersonal delivery and conference systems of the Amazons and Zooms of this world .
( If only we already had drones at the ready to deliver billions of care packages . )
But as in 2008 , before we can tackle the recession , there is another threat to deal with : the risk of a financial heart attack .
A recession is different from a @ @ @ @ @ @ @ what we began facing the week of March 8 .
It is that threat that continues to haunt the markets .
The immediate trigger was the breakdown of oil talks and Saudi Arabia ’ s announcement of a price war .
On top of the worsening coronavirus news from Italy , this shocked markets and induced a contraction in lending and a flight to safety .
The demand for cash was insatiable .
The reality began to sink in that what started as an external biological shock to the economy might be mutating @ @ @ @ @ @ @ credit .
A sudden credit crunch exposes those that have too much debt and weak business models and have taken excessive risk .
Their distress spreads to the rest by way of business closures , job losses , and fire sales of otherwise good assets .
Matters are made even worse if the economic victims have financed their activities with borrowing , such that their losses eventually strike the balance sheets of creditors that were unwise enough to lend to them .
Fear of these repercussions contracts credit across the board .
In @ @ @ @ @ @ @ center of the storm .
Given the consolidation of their balance sheets , it is less likely that America ’ s big banks will run into difficulty this time .
But Europe ’ s banks never truly recovered from the double shock of 2008 and the eurozone crisis .
Italy ’ s public finances are in precarious balance .
On Wall Street , fund managers of all kinds have been booking large losses and are facing huge demand for cash .
A hard-pressed oil-producing country might be forced to offload assets from a @ @ @ @ @ @ @ for otherwise good assets and unleashing a chain reaction .
The most disconcerting sign has been the fact that as stock markets plunged , U.S. sovereign debt fell in price , too .
That should not happen .
Treasuries should function as safe havens .
If their prices fall , it means that enough investors are desperate enough for cash to move even the biggest market .
Toward the end of the week , markets were hoping for goods news from the European Central Bank ( ECB ) .
Instead , bank president @ @ @ @ @ @ @ by seeming to signal that the ECB had no mandate to support Italy .
She was forced to take the remarkable step of apologizing , not to Italy , but to her board .
The Fed ’ s measures , announced at an extraordinary press conference Sunday , were blunt : It dropped interest rates to zero , embarking on a fourth round of quantitative easing .
It is broadly the same toolkit it used in 2008 .
These are not policies tailor-made for the pandemic .
But that is not the point @ @ @ @ @ @ @ the impact of the pandemic .
As the Fed and ECB have both insisted , that is a task for fiscal policy .
Faced with the coronavirus pandemic , the limited but essential role of the central banks is to prevent the credit system from becoming a risk in its own right .
There has not been as much international coordination among the central banks as there eventually was in fighting the 2008 global financial crisis .
But explicit coordination may not be necessary .
We have spent enough time digesting the experience @ @ @ @ @ @ @ knows the playbook , and everyone knows that the Fed must lead .
The global financial system is dollar-based .
And that is why the most significant step toward cooperation this past weekend was the announcement concerning the standing liquidity swap lines among the major central banks : the U.S. Federal Reserve , the Bank of Japan , the Bank of England , the Bank of Canada , the ECB , and the Swiss National Bank .
The swap lines in their current iteration were first put in place at the end of @ @ @ @ @ @ @ dollars was available not only for banks and financial actors based in New York but to the entire global financial system .
In 2013 , these channels were made permanent among the major central banks .
The move this past weekend lengthened the term of the swaps and reduced the interest margin the Fed charges .
We used to worry that Trump and the Republican economic nationalists in his administration would challenge this ultimate expression of global central bank cooperation .
After all , the swap lines mean that the Fed provides dollars @ @ @ @ @ @ @ one would expect the “ Make America Great Again ” crowd to approve of .
But it turns out that when you face a pandemic and you ’ re arguing over whether it is safe to leave your home , no one cares about nationalist principles .
The Fed ’ s actions did not stop the selling on financial markets , and it remains to be seen whether the policies will have to be widened .
As each new bottleneck is revealed in the credit system , expect more action .
First , @ @ @ @ @ @ @ repurchase agreement market , where Treasurys and other bonds are lent out for cash .
Now , it is supporting the commercial paper market , where big businesses borrow money for three months at a time from investors like money market mutual funds .
But the far more basic limitation of central bank action to date concerns the wider world .
The recent swap line measures apply only to the innermost circle of advanced economies .
Although it was widened during the global financial crisis , even then only 14 central banks were @ @ @ @ @ @ @ drip feed of dollars .
Amongst Emering Markets only South Korea , Brazil and Mexico were included .
The rest were relegated to dependence on the International Monetary Fund .
But since 2008 , the boundary between the most sophisticated emerging market economies and their advanced economy counterparts has become increasingly blurry .
South Korea has so far weathered the storm in exemplary fashion .
Its public health measures along with those of Taiwan appear to be the best in the world .
But in a panic , money flows toward the center @ @ @ @ @ @ @ only the beginnings of a flow into U.S. dollar-denominated assets by investors .
But several emerging markets are already coming under severe financial pressure .
The outflow of foreign funds since the beginning of 2020 has been dramatic .
In the past eight weeks since coronavirus fears began spreading , $ 55 billion has flowed out of emerging markets , a drain twice as large as that seen in 2008 or during the “ taper tantrum ” of 2013 .
This will exert severe pressure on countries like Mexico and Brazil , which @ @ @ @ @ @ @ infrastructure , and fragile finances .
The real question concerns China .
In 2008 , China played a strong hand .
It did not suffer a financial run .
Its gigantic fiscal and monetary stimulus delivered a giant boost to both its national economy and those who export to it .
No swap line was ever seriously contemplated between the Fed and the People ’ s Bank of China ( PBC ) .
Since then , the PBC has established its own swap network .
But that supplies renminbi , not dollars .
@ @ @ @ @ @ @ the shutdown of a large part of the Chinese economy and will likely induce a dramatic contraction in global trade , the question is how large the demand might be for dollar funding on the part of China ’ s globalized businesses .
Since 2008 , their activities abroad have expanded dramatically and , like other emerging market businesses , they borrow heavily in the American currency .
China ’ s official reserve managers have a large stock of dollars .
But like other great reserve stockpiles , they are held not in @ @ @ @ @ @ @ last thing the world needs right now , given the uncertainty in Treasury markets , is for Beijing to be forced to liquidate that stockpile .
That could offset all of the Fed ’ s efforts to stabilize the U.S. government funding market .
On the other hand , is it not easy to imagine the Fed taking Chinese currency as collateral for a large dollar swap .
The Fed would not want to risk the ire of anti-China hawks in Congress .
Faced with a global health emergency and the common interest @ @ @ @ @ @ @ only hope that the technocratic imagination trumps the evident temptation on both sides to politicize the crisis .

In May 2018, President Donald Trump restructured and downsized the pandemic preparedness unit. Of course, it seems ill-judged in retrospect. But he was not the first president to do so. The National Security Council’s (NSC) global health security unit was set up under Bill Clinton in 1998. Years later, first George W. Bush and then Barack Obama would shut it down, only to reestablish it shortly afterward. The fact is that bureaucracies have never known how to treat low-probability, high-stakes biomedical risks like pandemics. They sit awkwardly within the conventional silos of modern government and models of risk assessment.
In May 2018, President Donald Trump restructured and downsized the pandemic preparedness unit. Of course, it seems ill-judged in retrospect. But he was not the first president to do so. The National Security Council’s (NSC) global health security unit was set up under Bill Clinton in 1998. Years later, first George W. Bush and then Barack Obama would shut it down, only to reestablish it shortly afterward. The fact is that bureaucracies have never known how to treat low-probability, high-stakes biomedical risks like pandemics. They sit awkwardly within the conventional silos of modern government and models of risk assessment.
If this is true for the NSC, it is even more so for those charged with economic policymaking. Among the tail risks widely discussed in economic policy circles, a deliberate shutdown of national economies on the grounds of a public health emergency has never been seriously considered. Of course, we’ve spoken of “contagion” in financial crises, but we’ve meant it metaphorically—not literally.
In 2008, we saw how the financial uncertainty spreading from the downturn in real estate—by way of subprime to funding markets and from there to the balance sheets of major banks—could threaten an economic heart attack. It was this massive financial shock, piled on top of the losses to households from a downturn in the real estate sector, that caused economic activity to contract. In the worst of times, over the winter of 2008-2009, more than 750,000 job losses were recorded every month—a total of 8.7 million over the course of the recession. Major industrial companies like GM and Chrysler stumbled toward bankruptcy. For the global economy, it unleashed the largest contraction in international trade ever seen. Thanks to massive intervention of both monetary and fiscal policy, it did not become a deep and prolonged recession. After a contraction of 4.2 percent in gross domestic product, a recovery began in the second half of 2009. Unemployment peaked at 10 percent in October 2009.
It is too early to confidently predict the course of the economic downturn facing us due to the coronavirus. But a recession is inevitable. The global manufacturing industry was already shaky in 2019. Now we are deliberately shutting down the world’s major economies for at least several months. Factories are closing, shops, gyms, bars, schools, colleges, and restaurants shuttering. Early indicators suggest job losses in the United States could top 1 million per month between now and June. That would be a sharper downturn than in 2008-2009. For sectors like the airline industry, the impact will be far worse. In the oil industry, the prospect of market contraction has unleashed a ruthless price war among OPEC, Russia, and shale producers. This will stress the heavily indebted energy sector. If price wars spread, we could face a ruinous cycle of debt-deflation that will jeopardize the world’s huge pile of corporate debt, which is twice as large as it was in 2008. International trade will sharply contract.
In the division of labor among different branches of economic policy, addressing the coronavirus recession is a classic task for targeted fiscal policy: tax cuts and government spending. What we need now is less stimulus than a comprehensive national safety net to prevent bankruptcies and long-term financial damage. Once we have survived the epidemic we will need investments in public health infrastructure big and small. Every country clearly needs hugely improved surveillance, modeling, and emergency facilities, as well as substantial reserve capacity. All of this, in due course, will offer excellent opportunities to productively spend money and create high-quality jobs. Unlike in 2008, there will even be sectors that naturally expand. Spending on health care, which already accounts for almost 18 percent of U.S. economic activity, will likely explode. With social distancing, we are, in effect, being mandated to resort to the impersonal delivery and conference systems of the Amazons and Zooms of this world. (If only we already had drones at the ready to deliver billions of care packages.)
Listen Now: Don't Touch Your Face A new podcast from Foreign Policy covering all aspects of the coronavirus pandemic Learn More
But as in 2008, before we can tackle the recession, there is another threat to deal with: the risk of a financial heart attack. A recession is different from a panic. And a financial panic is what we began facing the week of March 8. It is that threat that continues to haunt the markets.
The immediate trigger was the breakdown of oil talks and Saudi Arabia’s announcement of a price war. On top of the worsening coronavirus news from Italy, this shocked markets and induced a contraction in lending and a flight to safety. The demand for cash was insatiable. The reality began to sink in that what started as an external biological shock to the economy might be mutating into an internal collapse in confidence and credit.
A sudden credit crunch exposes those that have too much debt and weak business models and have taken excessive risk. Their distress spreads to the rest by way of business closures, job losses, and fire sales of otherwise good assets. Matters are made even worse if the economic victims have financed their activities with borrowing, such that their losses eventually strike the balance sheets of creditors that were unwise enough to lend to them. Fear of these repercussions contracts credit across the board.
In 2008, the banks were at the center of the storm. Given the consolidation of their balance sheets, it is less likely that America’s big banks will run into difficulty this time. But Europe’s banks never truly recovered from the double shock of 2008 and the eurozone crisis. Italy’s public finances are in precarious balance. On Wall Street, fund managers of all kinds have been booking large losses and are facing huge demand for cash. A hard-pressed oil-producing country might be forced to offload assets from a sovereign wealth fund, thereby depressing prices for otherwise good assets and unleashing a chain reaction.
The most disconcerting sign has been the fact that as stock markets plunged, U.S. sovereign debt fell in price, too. That should not happen. Treasuries should function as safe havens. If their prices fall, it means that enough investors are desperate enough for cash to move even the biggest market.
Toward the end of the week, markets were hoping for goods news from the European Central Bank (ECB). Instead, bank president Christine Lagarde managed to make matters worse by seeming to signal that the ECB had no mandate to support Italy. She was forced to take the remarkable step of apologizing, not to Italy, but to her board. The Fed’s measures, announced at an extraordinary press conference Sunday, were blunt: It dropped interest rates to zero, embarking on a fourth round of quantitative easing. It is broadly the same toolkit it used in 2008.
These are not policies tailor-made for the pandemic. But that is not the point. The point is to not address the impact of the pandemic. As the Fed and ECB have both insisted, that is a task for fiscal policy. Faced with the coronavirus pandemic, the limited but essential role of the central banks is to prevent the credit system from becoming a risk in its own right.
There has not been as much international coordination among the central banks as there eventually was in fighting the 2008 global financial crisis. But explicit coordination may not be necessary. We have spent enough time digesting the experience of the global financial crisis. Everyone knows the playbook, and everyone knows that the Fed must lead. The global financial system is dollar-based. And that is why the most significant step toward cooperation this past weekend was the announcement concerning the standing liquidity swap lines among the major central banks: the U.S. Federal Reserve, the Bank of Japan, the Bank of England, the Bank of Canada, the ECB, and the Swiss National Bank.
The swap lines in their current iteration were first put in place at the end of 2007 to ensure that funding in U.S. dollars was available not only for banks and financial actors based in New York but to the entire global financial system. In 2013, these channels were made permanent among the major central banks. The move this past weekend lengthened the term of the swaps and reduced the interest margin the Fed charges.
We used to worry that Trump and the Republican economic nationalists in his administration would challenge this ultimate expression of global central bank cooperation. After all, the swap lines mean that the Fed provides dollars on demand to its foreign counterparts—not something one would expect the “Make America Great Again” crowd to approve of. But it turns out that when you face a pandemic and you’re arguing over whether it is safe to leave your home, no one cares about nationalist principles.
The Fed’s actions did not stop the selling on financial markets, and it remains to be seen whether the policies will have to be widened. As each new bottleneck is revealed in the credit system, expect more action. First, the Fed increased its support for the repurchase agreement market, where Treasurys and other bonds are lent out for cash. Now, it is supporting the commercial paper market, where big businesses borrow money for three months at a time from investors like money market mutual funds. But the far more basic limitation of central bank action to date concerns the wider world.
The recent swap line measures apply only to the innermost circle of advanced economies. Although it was widened during the global financial crisis, even then only 14 central banks were given access to the Fed’s drip feed of dollars. Amongst Emering Markets only South Korea, Brazil and Mexico were included. The rest were relegated to dependence on the International Monetary Fund. But since 2008, the boundary between the most sophisticated emerging market economies and their advanced economy counterparts has become increasingly blurry.
South Korea has so far weathered the storm in exemplary fashion. Its public health measures along with those of Taiwan appear to be the best in the world. But in a panic, money flows toward the center. So far, we have seen only the beginnings of a flow into U.S. dollar-denominated assets by investors. But several emerging markets are already coming under severe financial pressure. The outflow of foreign funds since the beginning of 2020 has been dramatic. In the past eight weeks since coronavirus fears began spreading, $55 billion has flowed out of emerging markets, a drain twice as large as that seen in 2008 or during the “taper tantrum” of 2013. This will exert severe pressure on countries like Mexico and Brazil, which have large populations, relatively weak public infrastructure, and fragile finances.
The real question concerns China. In 2008, China played a strong hand. It did not suffer a financial run. Its gigantic fiscal and monetary stimulus delivered a giant boost to both its national economy and those who export to it. No swap line was ever seriously contemplated between the Fed and the People’s Bank of China (PBC). Since then, the PBC has established its own swap network. But that supplies renminbi, not dollars. Faced with a crisis that has forced the shutdown of a large part of the Chinese economy and will likely induce a dramatic contraction in global trade, the question is how large the demand might be for dollar funding on the part of China’s globalized businesses. Since 2008, their activities abroad have expanded dramatically and, like other emerging market businesses, they borrow heavily in the American currency. China’s official reserve managers have a large stock of dollars. But like other great reserve stockpiles, they are held not in cash but in U.S. Treasurys.
The last thing the world needs right now, given the uncertainty in Treasury markets, is for Beijing to be forced to liquidate that stockpile. That could offset all of the Fed’s efforts to stabilize the U.S. government funding market. On the other hand, is it not easy to imagine the Fed taking Chinese currency as collateral for a large dollar swap. The Fed would not want to risk the ire of anti-China hawks in Congress.
Faced with a global health emergency and the common interest in maintaining economic stability, one can only hope that the technocratic imagination trumps the evident temptation on both sides to politicize the crisis.


foreignpolicy--2020-03-18--U.N. Diplomacy In The Age of Contagion

U.N. Diplomacy In The Age of Contagion

U.N .
Diplomacy In The Age of Contagion The corridors of the United Nations headquarters took on a ghostly silence this week as some vulnerable diplomats began to pack their bags and flee New York City , while all but essential U.N. staff were ordered to stay away from Turtle Bay and told to manage the world ’ s problems from the safety of their computers at home .
But the world ’ s most intractable crises—wars in Syria and Yemen , the masses of refugees seeking safety beyond their borders , nuclear standoffs in Iran and North Korea—refused to @ @ @ @ @ @ @ ability of the U.N. and its member states to manage an international order that was already stretched to the limit .
In recent weeks , the U.N. has stopped rotating new soldiers into its peacekeeping missions , fearing the spread of the new coronavirus into some of the most vulnerable countries on earth .
Private consultations by the Security Council on a range of crises—such as Syria and Yemen—have been put on hold indefinitely .
Disrupted supply chains are imposing strains on the U.N. ’ s ability to ship essential goods—from computers to @ @ @ @ @ @ @ relief officials , and international charities , are growing increasingly concerned that the crisis will prompt donor governments to redirect foreign assistance into domestic stimulus programs aimed at keeping their economies afloat .
The epicenter of world diplomacy has stalled as diplomats struggled to fundamentally rethink the way they do business in the wake of a chilling Saturday warning by New York health officials that the coronavirus had spread widely throughout the city .
“ Everyone in New York should consider themselves exposed , ” to the coronavirus , Demetre Daskalakis , New @ @ @ @ @ @ @ disease control , told a group of more than 200 foreign diplomats on Saturday , according to the transcript released on Monday .
Diplomatic delegations , including Canada , Colombia , Ethiopia , and Indonesia , informed colleagues that they were sending nonessential staff to their homes in the New York area to work over the coming weeks .
Others were sending those more vulnerable to the virus back home .
“ We are sending a few people back who are at special medical risk ( prior conditions ) or feel particular emotional @ @ @ @ @ @ @ ) , ” one U.N.-based diplomat wrote in a text to Foreign Policy .
Other delegations are taking a similar approach , the diplomat said .
“ The Permanent Mission of Canada will continue to maintain its reduced footprint for essential staff only , with all other personnel working remotely from home until Monday , March 30 , ” according to a diplomatic note issued on Monday .
“ The mission stands in solidarity with the diplomatic community in its collective effort to contain this unprecedented situation across New York City and the @ @ @ @ @ @ @ , informed other member states that it would be closing its U.N. mission as of Monday , March 16 .
The U.N. Security Council , meanwhile , has essentially stopped meeting in its chamber around its iconic horseshoe table and is unlikely to reopen for the foreseeable future , issuing its edicts from a remote computer .
One council diplomat said that sensitive closed-door meetings that are critical for hammering out differences would be put off for the “ foreseeable future.
” On Tuesday , the U.N. and China—which holds the presidency of @ @ @ @ @ @ @ new , secure teleconferencing program to allow the 15-nation council to hold public meetings .
In a Monday ’ s letter to council members , China ’ s U.N .
Ambassador Zhang Jun said that all meetings of the council would be canceled throughout this week .
But Zhang , who is facing pressure from Russia to continue meetings at the U.N. , said the council is “ considering a physical council meeting next week ” to adopt a number of measures , including a pair of resolutions renewing the mandates of a @ @ @ @ @ @ @ panel of experts monitoring sanctions violations against North Korea .
In the event that the council does meet , Zhang urged his colleagues “ to do their utmost to minimize the risks of transmitting infection and to ensure the safety and well being of all colleagues , taking necessary measures during physical meeting such as using hand sanitizer and wearing face masks.
” Russia has insisted in recent days that the U.N. Charter requires important decisions of the council be taken inside the chamber .
“ In the current circumstances it is important @ @ @ @ @ @ @ world that [ the ] UN and its Security Council are functioning , ” Vassily Nebenzia , Russia ’ s U.N. ambassador , wrote Monday in a letter to Zhang .
“ We shouldn ’ t be afraid to gather from time to time in [ the ] UNSC Chamber .
After all the preventative measures taken by the Secretary General [ the ] UN is one of the safest venues in NYC and the risk of getting the virus there is much lower than when we go to a shop for basic @ @ @ @ @ @ @ , we are ready to further explore technical options for some members to join others via VTC , but only upon the understanding that Russia and others who are prepared to be heading to [ the ] UNSC [ the U.N. Security Council ] chamber , will be given such an opportunity to , ” he added .
“ Let ’ s show to the world that the Security Council is ready to face the challenge posed by COVID-19 and that its members are not intimated to fulfill their responsibilities assigned to the @ @ @ @ @ @ @ Secretary-General António Guterres ordered all but essential staff to “ telecommute and work remotely , unless their physical presence in the building is need to carry out essential work in New York and around the world , ” according to a copy of the letter , which was obtained by Foreign Policy .
He said he would reassess the order—which would end on April 12—in three weeks .
The decision—which expanded on a previous , more limited telecommuting order—was issued just hours after three staff members at UNICEF showed up to work with @ @ @ @ @ @ @ they were not diagnosed as infected with coronavirus .
But New York City ’ s senior infectious disease official , Daskalakis , told delegates Saturday that “ if someone in New York currently is experiencing upper respiratory symptoms like the flu , it is less likely going to be the flu than it ’ s going to be COVID-19.
” “ Our aim is twofold : reduce our physical presence at United Nations headquarters and continue delivering on our mandate , ” Guterres said .
“ It is essential that we reduce social @ @ @ @ @ @ @ clear instructions of the World Health Organization to minimize the risks of transmitting the infection.
” The order has left the U.N. building largely empty .
A photograph posted by a reporter on Twitter showed the typically crowded U.N. delegates lounge empty , with the exception of a lone bartender .
It was dubbed “ Ghost Lounge.
” “ It is strangely quiet , ” said Stéphane Dujarric , the U.N. ’ s chief spokesman , noting that Guterres and a small core of essential staff remained in the building this week .
@ @ @ @ @ @ @ immediate priority in New York is to take mitigation measures to “ make sure we do not make the crisis in New York any worse .
We are trying to mitigate the threat in terms of being good neighbors in the city in which we live.
” U.N. sources say the organization is still grappling with how to best reorient its works to address the crisis .
Last week , the U.N. ’ s top officials met behind closed doors to try to develop a strategy to pursue their mandates in a time @ @ @ @ @ @ @ tasked Deputy Secretary-General Amina Mohammed to lead an effort to think about bigger-picture issues , such as the impact this crisis may have in widening already yawning economic inequality gaps .
“ The secretary-general has asked the deputy secretary-general to bring the U.N. development system together to address the social and economic impact of the COVID-19 pandemic , in all its aspects , ” Dujarric told Foreign Policy .
“ It is important that the response is centered around the human crisis , as much as it is focused on inclusive economies.
” @ @ @ @ @ @ @ , has frozen rotations of troops from contributing countries into peacekeeping missions .
The move follows expressions of concern , particularly in Africa , that foreign peacekeeping troops from countries that have been hit hardest by the virus not spread it in their countries .
For instance , the U.N. asked South Korea , where the coronavirus saw an early surge , not to rotate in new peacekeepers into South Sudan , which has yet to confirm an outbreak of the bug .
South Korea—which has had greater success than most countries in @ @ @ @ @ @ @ to extend one of its units in South Sudan for another three months .
But South Korean officials remain concerned that those staying behind might face greater risks if they were to be infected on their mission .
“ Some countries have been asked to delay rotations by three months to maintain operational strength and execute their mandated tasks , ” according to a statement by a U.N. peacekeeping spokesperson “ We will continue to review as the situation develops .
In the meantime , peacekeeping missions are putting in place a series @ @ @ @ @ @ @ , security and health of all U.N. personnel , while maintaining continuity of operations .
”

The corridors of the United Nations headquarters took on a ghostly silence this week as some vulnerable diplomats began to pack their bags and flee New York City, while all but essential U.N. staff were ordered to stay away from Turtle Bay and told to manage the world’s problems from the safety of their computers at home.
The corridors of the United Nations headquarters took on a ghostly silence this week as some vulnerable diplomats began to pack their bags and flee New York City, while all but essential U.N. staff were ordered to stay away from Turtle Bay and told to manage the world’s problems from the safety of their computers at home.
But the world’s most intractable crises—wars in Syria and Yemen, the masses of refugees seeking safety beyond their borders, nuclear standoffs in Iran and North Korea—refused to go away, heightening concerns about the ability of the U.N. and its member states to manage an international order that was already stretched to the limit.
In recent weeks, the U.N. has stopped rotating new soldiers into its peacekeeping missions, fearing the spread of the new coronavirus into some of the most vulnerable countries on earth. Private consultations by the Security Council on a range of crises—such as Syria and Yemen—have been put on hold indefinitely. Disrupted supply chains are imposing strains on the U.N.’s ability to ship essential goods—from computers to truck parts—to its far-flung operations. U.N. relief officials, and international charities, are growing increasingly concerned that the crisis will prompt donor governments to redirect foreign assistance into domestic stimulus programs aimed at keeping their economies afloat.
The epicenter of world diplomacy has stalled as diplomats struggled to fundamentally rethink the way they do business in the wake of a chilling Saturday warning by New York health officials that the coronavirus had spread widely throughout the city. “Everyone in New York should consider themselves exposed,” to the coronavirus, Demetre Daskalakis, New York City’s deputy commissioner for disease control, told a group of more than 200 foreign diplomats on Saturday, according to the transcript released on Monday.
[Mapping the Coronavirus Outbreak: Get daily updates on the pandemic and learn how it’s affecting countries around the world.]
Diplomatic delegations, including Canada, Colombia, Ethiopia, and Indonesia, informed colleagues that they were sending nonessential staff to their homes in the New York area to work over the coming weeks. Others were sending those more vulnerable to the virus back home.
“We are sending a few people back who are at special medical risk (prior conditions) or feel particular emotional stress (recently arrived, not settled),” one U.N.-based diplomat wrote in a text to Foreign Policy. Other delegations are taking a similar approach, the diplomat said.
“The Permanent Mission of Canada will continue to maintain its reduced footprint for essential staff only, with all other personnel working remotely from home until Monday, March 30,” according to a diplomatic note issued on Monday. “The mission stands in solidarity with the diplomatic community in its collective effort to contain this unprecedented situation across New York City and the Tri-State area.”
St. Lucia, meanwhile, informed other member states that it would be closing its U.N. mission as of Monday, March 16.
The U.N. Security Council, meanwhile, has essentially stopped meeting in its chamber around its iconic horseshoe table and is unlikely to reopen for the foreseeable future, issuing its edicts from a remote computer. One council diplomat said that sensitive closed-door meetings that are critical for hammering out differences would be put off for the “foreseeable future.”
On Tuesday, the U.N. and China—which holds the presidency of the Security Council this month—were testing a new, secure teleconferencing program to allow the 15-nation council to hold public meetings.
In a Monday’s letter to council members, China’s U.N. Ambassador Zhang Jun said that all meetings of the council would be canceled throughout this week.
But Zhang, who is facing pressure from Russia to continue meetings at the U.N., said the council is “considering a physical council meeting next week” to adopt a number of measures, including a pair of resolutions renewing the mandates of a U.N. political mission in Somalia and a panel of experts monitoring sanctions violations against North Korea. In the event that the council does meet, Zhang urged his colleagues “to do their utmost to minimize the risks of transmitting infection and to ensure the safety and well being of all colleagues, taking necessary measures during physical meeting such as using hand sanitizer and wearing face masks.”
Listen Now: Don't Touch Your Face A new podcast from Foreign Policy covering all aspects of the coronavirus pandemic Learn More
Russia has insisted in recent days that the U.N. Charter requires important decisions of the council be taken inside the chamber.
“In the current circumstances it is important to show to the rest of the world that [the] UN and its Security Council are functioning,” Vassily Nebenzia, Russia’s U.N. ambassador, wrote Monday in a letter to Zhang. “We shouldn’t be afraid to gather from time to time in [the] UNSC Chamber. After all the preventative measures taken by the Secretary General [the] UN is one of the safest venues in NYC and the risk of getting the virus there is much lower than when we go to a shop for basic needs.
“With this in mind, we are ready to further explore technical options for some members to join others via VTC, but only upon the understanding that Russia and others who are prepared to be heading to [the] UNSC [the U.N. Security Council] chamber, will be given such an opportunity to,” he added. “Let’s show to the world that the Security Council is ready to face the challenge posed by COVID-19 and that its members are not intimated to fulfill their responsibilities assigned to the U.N. Charter.”
On Friday, U.N. Secretary-General António Guterres ordered all but essential staff to “telecommute and work remotely, unless their physical presence in the building is need to carry out essential work in New York and around the world,” according to a copy of the letter, which was obtained by Foreign Policy. He said he would reassess the order—which would end on April 12—in three weeks.
The decision—which expanded on a previous, more limited telecommuting order—was issued just hours after three staff members at UNICEF showed up to work with flu symptoms. At the time, they were not diagnosed as infected with coronavirus. But New York City’s senior infectious disease official, Daskalakis, told delegates Saturday that “if someone in New York currently is experiencing upper respiratory symptoms like the flu, it is less likely going to be the flu than it’s going to be COVID-19.”
“Our aim is twofold: reduce our physical presence at United Nations headquarters and continue delivering on our mandate,” Guterres said. “It is essential that we reduce social contact to a minimum and follow the clear instructions of the World Health Organization to minimize the risks of transmitting the infection.”
The order has left the U.N. building largely empty. A photograph posted by a reporter on Twitter showed the typically crowded U.N. delegates lounge empty, with the exception of a lone bartender. It was dubbed “Ghost Lounge.”
“It is strangely quiet,” said Stéphane Dujarric, the U.N.’s chief spokesman, noting that Guterres and a small core of essential staff remained in the building this week.
Dujarric said the U.N.’s chief immediate priority in New York is to take mitigation measures to “make sure we do not make the crisis in New York any worse. We are trying to mitigate the threat in terms of being good neighbors in the city in which we live.”
U.N. sources say the organization is still grappling with how to best reorient its works to address the crisis. Last week, the U.N.’s top officials met behind closed doors to try to develop a strategy to pursue their mandates in a time of pandemic.
The U.N. chief has tasked Deputy Secretary-General Amina Mohammed to lead an effort to think about bigger-picture issues, such as the impact this crisis may have in widening already yawning economic inequality gaps.
“The secretary-general has asked the deputy secretary-general to bring the U.N. development system together to address the social and economic impact of the COVID-19 pandemic, in all its aspects,” Dujarric told Foreign Policy. “It is important that the response is centered around the human crisis, as much as it is focused on inclusive economies.”
The U.N. peacekeeping department, for instance, has frozen rotations of troops from contributing countries into peacekeeping missions. The move follows expressions of concern, particularly in Africa, that foreign peacekeeping troops from countries that have been hit hardest by the virus not spread it in their countries.
For instance, the U.N. asked South Korea, where the coronavirus saw an early surge, not to rotate in new peacekeepers into South Sudan, which has yet to confirm an outbreak of the bug. South Korea—which has had greater success than most countries in containing the virus’s spread—has agreed to extend one of its units in South Sudan for another three months. But South Korean officials remain concerned that those staying behind might face greater risks if they were to be infected on their mission.
“Some countries have been asked to delay rotations by three months to maintain operational strength and execute their mandated tasks,” according to a statement by a U.N. peacekeeping spokesperson “We will continue to review as the situation develops. In the meantime, peacekeeping missions are putting in place a series of mitigation measures to promote the safety, security and health of all U.N. personnel, while maintaining continuity of operations.”


foreignpolicy--2020-03-18--The Virus Has Exposed the Recklessness of Trump’s “America First”

The Virus Has Exposed the Recklessness of Trump ’ s “ America First ” Last weekend , the German newspaper Die Welt reported that the administration of U.S. President Donald Trump had sought to entice a German company working on a coronavirus vaccine to move its research operations from Europe to the United States .
According to an unnamed German official quoted by the Berlin-based paper , the Trump administration ’ s intent was to have the eventual vaccine “ only for America.
” There was a time when a story like this—the United States sneaking around the back of @ @ @ @ @ @ @ seemed unthinkable .
It ’ s still unclear what exactly happened .
Was there an attempt to buy the company ?
With private money or public funds ?
Trump ’ s new acting director of national intelligence who remains ambassador to Germany , Richard Grenell , denied the report .
Jens Spahn , the German health minister , confirmed it .
It seems likely that there was some sort of overture—even if it is also likely that we don ’ t have all the facts .
As former ambassador Steven Pifer observed on @ @ @ @ @ @ @ time when a story like this—the United States sneaking around the back of a close ally to steal medicine—would have seemed unthinkable , the past behavior of the Trump administration makes it seem entirely plausible .
The story is now out there , and there has been no small amount of hand-wringing over the damage that has surely been done to the image of the United States and the U.S.-German relationship : Imagine the reaction of the German people , who are dutifully following Chancellor Angela Merkel ’ s request to self-isolate in @ @ @ @ @ @ @ as they read that the U.S. president was trying to buy critical medical research with the hopes of using it only for his own country .
Add this to the fact that in Italy , it is China , not the United States , that is delivering medical equipment and assistance as the Italian health system bends under the strain of the pandemic .
And furthermore , that Trump last week announced restrictions on travelers to the United States from Europe without prior coordination with European partners or even a word of warning @ @ @ @ @ @ @ past week has marked a relative low point in trans-Atlantic relations .
The past week also underscores two consistent failings of Trump ’ s foreign policy : First , that the Trump administration is lousy at preserving the trust and goodwill that is essential to sustained , cooperative relationships with other governments .
And second , that the coronavirus pandemic is laying clear the folly of Trump ’ s “ America First ” theory of foreign policy—and of other approaches to foreign policy , on both the left and the right , that @ @ @ @ @ @ @ welfare and interests of the United States can be protected and defended separately and apart from the welfare of the world .
What ’ s so disheartening about the idea that Trump might try to poach a vaccine for exclusive use in the United States is not the craven greediness of it ; it ’ s that it so obviously misunderstands the nature of the threat this pandemic poses .
Countries need to cooperate internationally to ensure that somewhere in the world—anywhere in the world—a vaccine is discovered as quickly as possible , @ @ @ @ @ @ @ be globally accessible .
It is plain stupid to think that hoarding medical research that could yield interventions that would treat or protect against a pandemic would actually serve U.S. interests.America ’ s failure to lead in a moment of global crisis will have lasting effects on its stature in the world .
The United States needs a functioning European economy .
American farmers and businesses depend on trade with the rest of the world .
U.S.-based multinationals depend on foreign workforces .
Pandemics can cause instability and conflict that endanger American troops @ @ @ @ @ @ @ is a global power : The world depends on the United States , and the United States depends on the world .
The response to the coronavirus might have been more efficient if it had first appeared in a country that wasn ’ t authoritarian and didn ’ t suppress news about the virus in the early weeks .
And it might have been more effective if the United States were helping to lead and coordinate the world ’ s response to the outbreak , rather than claiming for weeks that the virus @ @ @ @ @ @ @ therefore was nothing to be concerned about , before pursuing a set of policies that surprised the closest U.S. allies .
When I was in government , I often wanted to tell people that they couldn ’ t use the words “ Marshall Plan ” in meetings : It seemed like every meeting about a crisis somewhere in the world had one person who would say , “ What we need is a Marshall Plan for [ insert country or region ] .
” And while that trope became frustratingly predictable , it @ @ @ @ @ @ @ of great need can be moments of great opportunity for American leadership .
For a generation or more , the Marshall Plan ’ s intent and effects had a lasting impact on the popularity of and trust in the United States across Europe .
Trump ’ s mismanagement of the domestic coronavirus response has been dire .
America ’ s failure to lead in a moment of global crisis will have lasting effects on its stature in the world .

Last weekend, the German newspaper Die Welt reported that the administration of U.S. President Donald Trump had sought to entice a German company working on a coronavirus vaccine to move its research operations from Europe to the United States. According to an unnamed German official quoted by the Berlin-based paper, the Trump administration’s intent was to have the eventual vaccine “only for America.”
Last weekend, the German newspaper Die Welt reported that the administration of U.S. President Donald Trump had sought to entice a German company working on a coronavirus vaccine to move its research operations from Europe to the United States. According to an unnamed German official quoted by the Berlin-based paper, the Trump administration’s intent was to have the eventual vaccine “only for America.”
It’s still unclear what exactly happened. Was there an attempt to buy the company? With private money or public funds? Trump’s new acting director of national intelligence who remains ambassador to Germany, Richard Grenell, denied the report. Jens Spahn, the German health minister, confirmed it. It seems likely that there was some sort of overture—even if it is also likely that we don’t have all the facts. As former ambassador Steven Pifer observed on Twitter, while there once was a time when a story like this—the United States sneaking around the back of a close ally to steal medicine—would have seemed unthinkable, the past behavior of the Trump administration makes it seem entirely plausible.
The story is now out there, and there has been no small amount of hand-wringing over the damage that has surely been done to the image of the United States and the U.S.-German relationship: Imagine the reaction of the German people, who are dutifully following Chancellor Angela Merkel’s request to self-isolate in order to flatten the coronavirus curve, as they read that the U.S. president was trying to buy critical medical research with the hopes of using it only for his own country. Add this to the fact that in Italy, it is China, not the United States, that is delivering medical equipment and assistance as the Italian health system bends under the strain of the pandemic. And furthermore, that Trump last week announced restrictions on travelers to the United States from Europe without prior coordination with European partners or even a word of warning. Suffice it to say that the past week has marked a relative low point in trans-Atlantic relations.
[Mapping the Coronavirus Outbreak: Get daily updates on the pandemic and learn how it’s affecting countries around the world.]
The past week also underscores two consistent failings of Trump’s foreign policy: First, that the Trump administration is lousy at preserving the trust and goodwill that is essential to sustained, cooperative relationships with other governments. And second, that the coronavirus pandemic is laying clear the folly of Trump’s “America First” theory of foreign policy—and of other approaches to foreign policy, on both the left and the right, that are premised on the fiction that the welfare and interests of the United States can be protected and defended separately and apart from the welfare of the world.
What’s so disheartening about the idea that Trump might try to poach a vaccine for exclusive use in the United States is not the craven greediness of it; it’s that it so obviously misunderstands the nature of the threat this pandemic poses. Countries need to cooperate internationally to ensure that somewhere in the world—anywhere in the world—a vaccine is discovered as quickly as possible, and ultimately we need a vaccine to be globally accessible. It is plain stupid to think that hoarding medical research that could yield interventions that would treat or protect against a pandemic would actually serve U.S. interests.America’s failure to lead in a moment of global crisis will have lasting effects on its stature in the world.
The United States needs a functioning European economy. American farmers and businesses depend on trade with the rest of the world. U.S.-based multinationals depend on foreign workforces. Pandemics can cause instability and conflict that endanger American troops and interests overseas. The United States is a global power: The world depends on the United States, and the United States depends on the world.
The response to the coronavirus might have been more efficient if it had first appeared in a country that wasn’t authoritarian and didn’t suppress news about the virus in the early weeks. And it might have been more effective if the United States were helping to lead and coordinate the world’s response to the outbreak, rather than claiming for weeks that the virus was not going to affect it and therefore was nothing to be concerned about, before pursuing a set of policies that surprised the closest U.S. allies.
When I was in government, I often wanted to tell people that they couldn’t use the words “Marshall Plan” in meetings: It seemed like every meeting about a crisis somewhere in the world had one person who would say, “What we need is a Marshall Plan for [insert country or region].” And while that trope became frustratingly predictable, it of course reflected the fact that moments of great need can be moments of great opportunity for American leadership. For a generation or more, the Marshall Plan’s intent and effects had a lasting impact on the popularity of and trust in the United States across Europe. Trump’s mismanagement of the domestic coronavirus response has been dire. America’s failure to lead in a moment of global crisis will have lasting effects on its stature in the world.


foreignpolicy--2020-03-18--Life Under Lockdown: Here’s a Glimpse of What’s Coming for You, America

Life Under Lockdown : Here ’ s a Glimpse of What ’ s Coming for You , America MADRID—I realized the total lockdown in Spain was serious when I got pulled over by the cops while taking out the trash .
I ’ d taken the dog down , too , and the kids , since they hadn ’ t been outside in days .
It was midnight—right after we finished dinner—and I figured they could carry a trash bag and get a breath of air .
The dog had barely peed when the patrol car did a U-turn , @ @ @ @ @ @ @ I needed helpers with the trash bags ( and , let ’ s be honest , recycling all the bottles ) .
“ No hay excusas , caballero , ” the officer told me .
“ Kids inside.
” We were lucky ; fines for violating the lockdown can go as high as 30,000 euros .
It ’ s day three , but feels like day 30 , of a nationwide shutdown meant to curb , if not arrest , the spread of coronavirus in what has now become one of the worst-hit @ @ @ @ @ @ @ in Spain are up to 11,681 , with 525 deaths—scratch that : Since I started writing , cases are up to 13,716 and deaths to 558 .
The curve is steeper than Italy ’ s .
The prime minister , Pedro Sánchez , told a near-empty parliament Wednesday morning that the “ worst is yet to come.
” His wife has already tested positive for the coronavirus ; King Felipe , who will address the nation Wednesday evening , has been tested as well , through his came up negative .
There ’ @ @ @ @ @ @ @ Real Madrid team is in quarantine , which , given how they ’ ve been playing , is probably for the best .
There ’ s no Holy Week in Seville , no Fallas in Valencia .
It ’ s a glimpse of what ’ s coming for you , if it hasn ’ t already .
Italy ’ s been shut down for weeks ; France started Monday .
Some cities in the United States are already there ; the rest will be , sooner or later .
Nobody knows for how @ @ @ @ @ @ @ emergency was announced as a 15-day measure .
The day it was announced , the government said it would go longer .
Health experts say near-total shutdown might be needed until a vaccine for the new coronavirus is ready .
That could be next year .
Since I work from home anyway , I figured a lockdown would be no big deal .
I was wrong .
I ’ d swear the kids have been underfoot all day , every day for several years , though I am told schools have been closed @ @ @ @ @ @ @ is getting so bad I am seriously thinking of trying to dig out the stationary bike from wherever it ’ s buried .
Now my wife and I fight over who gets to take out the dog rather than who has to—dogs are the passport to being able to walk outside without getting questioned by the police , at least for adults .
Too bad all the parks are closed .
What used to be routine is now an adventure : You need gloves and a mask to go grocery shopping .
( @ @ @ @ @ @ @ stations , and , of course , tobacco shops are still open . )
I haven ’ t seen any panic shopping in our neighborhood ; plenty of toilet paper and pasta on the shelves .
Of course , it ’ s hard to panic shop too hard when you have to carry everything home a half mile or so on foot .
Even a half-case of beer gets heavy going uphill .
Friends in other parts of town say the bigger stores have a beach-town-in-August vibe of absurdly overfilled carts and soul-crushing @ @ @ @ @ @ @ a city like Madrid , and a country like Spain , is that nothing else is open .
The city that is said to have the most bars per capita doesn ’ t have any now .
No restaurants either .
All of the many , many Chinese-owned bodegas that dot the center city suddenly went on “ vacation ” at the beginning of March ; now they are shuttered .
All of those waiters and waitresses and cooks and bar owners and barbers and taxi drivers—how are they going to last two @ @ @ @ @ @ @ The government plans to throw plenty of cash at the problem—maybe 100 billion euros in loan guarantees , maybe more .
There are promises of more support for the unemployed .
Layoffs are being undone by law .
Who ’ s going to pay for that ?
Who ’ s going to have any money to go out to eat if and when anything does open ?
The prime minister is right : The worst is yet to come .
It ’ s going to get brutal in the summer .
Spain gets @ @ @ @ @ @ @ tourism .
Entire towns along the coast live off three months of insane work .
This year there won ’ t be any .
Unemployment before the virus hit was almost 14 percent , and more than 30 percent among the under-25s .
Spain was still , a decade after the financial crisis , licking its wounds and deeply scarred ; this is a death blow , not a body blow .
In the meantime , there ’ s not much to do except wait , and watch the curve ascend , and @ @ @ @ @ @ @ try to scream less at the kids .
On the plus side , the dog is looking antsy—I might just be able to slip outside again .
But no kids this time .

MADRID—I realized the total lockdown in Spain was serious when I got pulled over by the cops while taking out the trash.
MADRID—I realized the total lockdown in Spain was serious when I got pulled over by the cops while taking out the trash.
I’d taken the dog down, too, and the kids, since they hadn’t been outside in days. It was midnight—right after we finished dinner—and I figured they could carry a trash bag and get a breath of air. The dog had barely peed when the patrol car did a U-turn, blue lights flashing. I explained that I needed helpers with the trash bags (and, let’s be honest, recycling all the bottles). “No hay excusas, caballero,” the officer told me. “Kids inside.” We were lucky; fines for violating the lockdown can go as high as 30,000 euros.
It’s day three, but feels like day 30, of a nationwide shutdown meant to curb, if not arrest, the spread of coronavirus in what has now become one of the worst-hit countries in the outbreak. Confirmed cases in Spain are up to 11,681, with 525 deaths—scratch that: Since I started writing, cases are up to 13,716 and deaths to 558. The curve is steeper than Italy’s.
The prime minister, Pedro Sánchez, told a near-empty parliament Wednesday morning that the “worst is yet to come.” His wife has already tested positive for the coronavirus; King Felipe, who will address the nation Wednesday evening, has been tested as well, through his came up negative. There’s no Liga soccer matches; the Real Madrid team is in quarantine, which, given how they’ve been playing, is probably for the best. There’s no Holy Week in Seville, no Fallas in Valencia.
[Mapping the Coronavirus Outbreak: Get daily updates on the pandemic and learn how it’s affecting countries around the world.]
It’s a glimpse of what’s coming for you, if it hasn’t already. Italy’s been shut down for weeks; France started Monday. Some cities in the United States are already there; the rest will be, sooner or later. Nobody knows for how long. Spain’s state of emergency was announced as a 15-day measure. The day it was announced, the government said it would go longer. Health experts say near-total shutdown might be needed until a vaccine for the new coronavirus is ready. That could be next year.
Since I work from home anyway, I figured a lockdown would be no big deal. I was wrong. I’d swear the kids have been underfoot all day, every day for several years, though I am told schools have been closed less than two weeks. Cabin fever is getting so bad I am seriously thinking of trying to dig out the stationary bike from wherever it’s buried. Now my wife and I fight over who gets to take out the dog rather than who has to—dogs are the passport to being able to walk outside without getting questioned by the police, at least for adults. Too bad all the parks are closed.
What used to be routine is now an adventure: You need gloves and a mask to go grocery shopping. (Essential services—grocery stores, pharmacies, gas stations, and, of course, tobacco shops are still open.) I haven’t seen any panic shopping in our neighborhood; plenty of toilet paper and pasta on the shelves. Of course, it’s hard to panic shop too hard when you have to carry everything home a half mile or so on foot. Even a half-case of beer gets heavy going uphill. Friends in other parts of town say the bigger stores have a beach-town-in-August vibe of absurdly overfilled carts and soul-crushing lines.
The worst part, for a city like Madrid, and a country like Spain, is that nothing else is open. The city that is said to have the most bars per capita doesn’t have any now. No restaurants either. All of the many, many Chinese-owned bodegas that dot the center city suddenly went on “vacation” at the beginning of March; now they are shuttered.
All of those waiters and waitresses and cooks and bar owners and barbers and taxi drivers—how are they going to last two weeks, let alone two months? The government plans to throw plenty of cash at the problem—maybe 100 billion euros in loan guarantees, maybe more. There are promises of more support for the unemployed. Layoffs are being undone by law. Who’s going to pay for that? Who’s going to have any money to go out to eat if and when anything does open?
The prime minister is right: The worst is yet to come. It’s going to get brutal in the summer. Spain gets about 12 percent of its GDP from tourism. Entire towns along the coast live off three months of insane work. This year there won’t be any. Unemployment before the virus hit was almost 14 percent, and more than 30 percent among the under-25s. Spain was still, a decade after the financial crisis, licking its wounds and deeply scarred; this is a death blow, not a body blow.
In the meantime, there’s not much to do except wait, and watch the curve ascend, and worry about the older folks, and try to scream less at the kids. On the plus side, the dog is looking antsy—I might just be able to slip outside again. But no kids this time.


foreignpolicy--2020-03-18--With Biden Bearing Down, Trump Plays the ‘Wartime’ Leader

With Biden Bearing Down , Trump Plays the ‘ Wartime ’ Leader In a remarkable change of tack , U.S. President Donald Trump this week completely discarded his earlier cavalier approach to the coronavirus pandemic and assumed the role of a leader in a “ war ” against an “ invisible enemy , ” seeking to resurrect his presidency in the face of a global public health crisis and fast-faltering economy with less than eight months to go before the election .
With Democratic challenger Joe Biden all but assured of the nomination following crushing primary victories Tuesday against his @ @ @ @ @ @ @ Trump knows he needs to muster national support for an anti-virus campaign that is suddenly taking on the dimensions of a nation in wartime .
It is a role that others , including the New York Times editorial page , appear to be urging on him , and even Biden , in a livestream victory speech from Delaware Tuesday night after his big wins in Florida , Illinois , and Arizona , said the task ahead for any leader was “ akin to fighting a war.
” In the end , as Trump @ @ @ @ @ @ @ polls , it may well be the biggest act of his life—a career full of large-scale theatrics—and the only question is whether he can pull it off .
Earlier Tuesday , Trump and his team announced unprecedented measures including a nationwide program for abatement of the virus and the possibility of a trillion-dollar stimulus including billions in aid to businesses and workers .
“ We have to win this war , and ideally quickly , ” Trump said at a White House briefing as he somberly deferred to his top medical experts in @ @ @ @ @ @ @ in the past with the many military and economic advisors he has haphazardly discarded during his often-chaotic three-and-a-half-year tenure .
“ One day we ’ ll be standing up here and say , ‘ Well , we won.
’ ” The president kept up the wartime conceit later in the day , tweeting , “ The world is at war with a hidden enemy .
WE WILL WIN !
” Gone were the dismissive rants of a week ago ; the reckless blaming of his predecessor , Barack Obama , for the coronavirus @ @ @ @ @ @ @ seat-of-the-pants announcements about policies that didn ’ t even exist yet .
In its place was a refashioned Trump : somber , sober , a very presidential-seeming unifier of the nation ( even as he continued to take potshots at assorted Democrats such as Michigan Gov .
Gretchen Whitmer , allegedly for “ not doing enough ” ) .
One Trump biographer , Michael D ’ Antonio , said the president is demonstrating his typical cunning and showmanship , as well as survival instincts honed over a lifetime of near career deaths in @ @ @ @ @ @ @ considering his re-election so clearly the change in tone and sudden respect for experts is related to his concern that this is one problem for which bluster is insufficient , ” he said in an email .
“ By the way , his ability to act in a more conventional way suggests that his wildman routine is just that , a routine , and he has used it to manipulate us.
” Another Trump biographer , Gwenda Blair , also suggested the “ new ” Trump is little more than a performance , @ @ @ @ @ @ @ is retaining his ability to do what he does regularly : blame others .
“ He is handing things off to others right and left , perhaps in part a bow to their expertise ( although of course he recognized that this was a pandemic before anyone else , etc . )
, but I think it ’ s his version of deniability , ” she said in an email .
“ As things get worse , and they will , he can blame/keep blaming others.
” Trump ’ s performance was not @ @ @ @ @ @ @ repeatedly referring to his administration ’ s efforts to respond to the coronavirus as the best in the world , saying they ’ ve “ never been done before.
” He also appeared to use the pandemic to justify bringing supply chains and therefore jobs back to American shores , saying , “ I ’ ve been talking about this for years , ” and to assign blame to China , calling the pandemic the “ Chinese virus.
” But on the whole he is , for the moment , behaving like a @ @ @ @ @ @ @ he may be on to something .
Though a pandemic is nothing like a real war , it almost feels like one at the moment .
Wartime leaders do generally get a lot of slack from the electorate , as President George W. Bush did against John Kerry in 2004 , even as the Iraq invasion was going badly wrong .
And of course , famously , it was President Franklin D. Roosevelt who took the unprecedented step of running for reelection for a third term with the U.S. entry into World War @ @ @ @ @ @ @ fourth term in the middle of it .
But there are pitfalls too : If the sense of crisis over the coronavirus recedes well before November , the president could find himself in the position of wartime leaders who were abruptly discarded when the war was over .
President George H.W .
Bush went from a 90 percent approval rating after the Gulf War to ignominious defeat by a newcomer , Bill Clinton , in 1992 .
Even Britain ’ s Winston Churchill , perhaps the greatest leader of World War II , @ @ @ @ @ @ @ he lost in a landslide to the Labour Party .
This was only three months after Nazi Germany ’ s surrender , when Churchill ’ s approval rating had been about 80 percent .
Trump ’ s approval rating , of course , has never gotten higher than the mid-40s .
So portraying himself as the indispensable leader may be his only hope .
“ Wartime presidents do often win , ” said David Greenberg , a historian at Rutgers University .
“ Lincoln was expected to lose basically until [ Gen. William @ @ @ @ @ @ @ won in 1940 and 1944 but he was FDR .
So , yeah , it ’ s imaginable Trump wins—God help us .
”

In a remarkable change of tack, U.S. President Donald Trump this week completely discarded his earlier cavalier approach to the coronavirus pandemic and assumed the role of a leader in a “war” against an “invisible enemy,” seeking to resurrect his presidency in the face of a global public health crisis and fast-faltering economy with less than eight months to go before the election.
In a remarkable change of tack, U.S. President Donald Trump this week completely discarded his earlier cavalier approach to the coronavirus pandemic and assumed the role of a leader in a “war” against an “invisible enemy,” seeking to resurrect his presidency in the face of a global public health crisis and fast-faltering economy with less than eight months to go before the election.
With Democratic challenger Joe Biden all but assured of the nomination following crushing primary victories Tuesday against his last challenger, Sen. Bernie Sanders, Trump knows he needs to muster national support for an anti-virus campaign that is suddenly taking on the dimensions of a nation in wartime. It is a role that others, including the New York Times editorial page, appear to be urging on him, and even Biden, in a livestream victory speech from Delaware Tuesday night after his big wins in Florida, Illinois, and Arizona, said the task ahead for any leader was “akin to fighting a war.”
In the end, as Trump strives to climb back up in the polls, it may well be the biggest act of his life—a career full of large-scale theatrics—and the only question is whether he can pull it off. Earlier Tuesday, Trump and his team announced unprecedented measures including a nationwide program for abatement of the virus and the possibility of a trillion-dollar stimulus including billions in aid to businesses and workers.
“We have to win this war, and ideally quickly,” Trump said at a White House briefing as he somberly deferred to his top medical experts in a way that he has rarely done in the past with the many military and economic advisors he has haphazardly discarded during his often-chaotic three-and-a-half-year tenure. “One day we’ll be standing up here and say, ‘Well, we won.’”
The president kept up the wartime conceit later in the day, tweeting, “The world is at war with a hidden enemy. WE WILL WIN!” Gone were the dismissive rants of a week ago; the reckless blaming of his predecessor, Barack Obama, for the coronavirus’s spread; the careless, seat-of-the-pants announcements about policies that didn’t even exist yet. In its place was a refashioned Trump: somber, sober, a very presidential-seeming unifier of the nation (even as he continued to take potshots at assorted Democrats such as Michigan Gov. Gretchen Whitmer, allegedly for “not doing enough”) .
One Trump biographer, Michael D’Antonio, said the president is demonstrating his typical cunning and showmanship, as well as survival instincts honed over a lifetime of near career deaths in business. “The president never stops considering his re-election so clearly the change in tone and sudden respect for experts is related to his concern that this is one problem for which bluster is insufficient,” he said in an email. “By the way, his ability to act in a more conventional way suggests that his wildman routine is just that, a routine, and he has used it to manipulate us.”
Another Trump biographer, Gwenda Blair, also suggested the “new” Trump is little more than a performance, and by deferring to the experts he is retaining his ability to do what he does regularly: blame others. “He is handing things off to others right and left, perhaps in part a bow to their expertise (although of course he recognized that this was a pandemic before anyone else, etc.), but I think it’s his version of deniability,” she said in an email. “As things get worse, and they will, he can blame/keep blaming others.”
Trump’s performance was not without its typical Trumpian flourishes, including repeatedly referring to his administration’s efforts to respond to the coronavirus as the best in the world, saying they’ve “never been done before.” He also appeared to use the pandemic to justify bringing supply chains and therefore jobs back to American shores, saying, “I’ve been talking about this for years,” and to assign blame to China, calling the pandemic the “Chinese virus.” But on the whole he is, for the moment, behaving like a new, very different Trump.
And he may be on to something. Though a pandemic is nothing like a real war, it almost feels like one at the moment. Wartime leaders do generally get a lot of slack from the electorate, as President George W. Bush did against John Kerry in 2004, even as the Iraq invasion was going badly wrong. And of course, famously, it was President Franklin D. Roosevelt who took the unprecedented step of running for reelection for a third term with the U.S. entry into World War II imminent, and then winning a fourth term in the middle of it.
But there are pitfalls too: If the sense of crisis over the coronavirus recedes well before November, the president could find himself in the position of wartime leaders who were abruptly discarded when the war was over. President George H.W. Bush went from a 90 percent approval rating after the Gulf War to ignominious defeat by a newcomer, Bill Clinton, in 1992. Even Britain’s Winston Churchill, perhaps the greatest leader of World War II, was shocked when in late July 1945 he lost in a landslide to the Labour Party. This was only three months after Nazi Germany’s surrender, when Churchill’s approval rating had been about 80 percent.
Trump’s approval rating, of course, has never gotten higher than the mid-40s. So portraying himself as the indispensable leader may be his only hope. “Wartime presidents do often win,” said David Greenberg, a historian at Rutgers University. “Lincoln was expected to lose basically until [Gen. William Tecumseh] Sherman took Atlanta; FDR won in 1940 and 1944 but he was FDR. So, yeah, it’s imaginable Trump wins—God help us.”


foreignpolicy--2020-03-19--Europe’s Central Bank, in About-Face, Swoops in to Save a Virus-Afflicted Continent

Europe ’ s Central Bank , in About-Face , Swoops in to Save a Virus-Afflicted Continent The European Central Bank swooped in Wednesday night with a 750 billion-euro fix to avert an immediate economic crisis in Europe from the coronavirus pandemic , throwing a vital lifeline to debt-strapped countries that plan to spend furiously to limit damage but are leery of the solvency problems they suffered in the last financial crisis .
Yet with emerging markets under siege and developed economies elsewhere screeching to a halt , there are no signs yet of the broader international cooperation needed to get @ @ @ @ @ @ @ in a decade or more .
On the contrary , U.S. President Donald Trump on Wednesday reaffirmed that he would continue his trade war with Europe .
“ We are facing an absolutely unprecedented challenge ; it never happened during the financial crisis , it never even happened in wartime , ” said Alicia Coronil Jonsson , the chief economist at Singular Bank , a Spanish private bank .
“ With so much debt in Italy and Spain , the ECB intervention was really needed.
” And memories are still fresh of how @ @ @ @ @ @ @ the entire European project during the last crisis—making the ECB move a bid to help not just Southern Europe but the whole economic and financial cohesion of the continent .
“ The challenge that Spain , Italy , and France are up against—it could be systemic for the whole eurozone , ” Jonsson said .
“ That ’ s why this intervention isn ’ t just to narrow bond spreads , but to give the whole zone more stability.
” Even as EU nations have announced massive new stimulus plans to provide short-term @ @ @ @ @ @ @ some affected countries such as Italy , Spain , and Greece suffer from higher borrowing costs than other countries , like Germany , which threatened to tie their hands as they try to stanch the bleeding .
Those different costs are reflected in bond spreads , which have been widening since the crisis began .
Only a week ago ECB chief Christine Lagarde suggested those spreads weren ’ t her problem , but she appears to have changed her mind after getting attacked by critics in the more vulnerable EU member states .
@ @ @ @ @ @ @ a surprise move to spend up to 750 billion to purchase bonds and other securities .
The Pandemic Emergency Purchase Program , the European Central Bank ’ s belated rejoinder to the U.S. Federal Reserve ’ s own embrace of similar measures , will run through the end of the year at least and has already brought a measure of relief to hard-pressed government bonds in places like Spain , Italy , and Greece .
As striking as the size of the ECB ’ s intervention was the tone of the message it @ @ @ @ @ @ @ absolutely whatever is needed to stem the runaway crisis—pledging , the bank said , to do “ as much as necessary and for as long as needed , ” keeping open “ all options and all contingencies.
” “ They were trying to channel this ‘ whatever it takes ’ spirit , a message that had been in doubt until yesterday , ” said Claus Vistesen , the chief eurozone economist at Pantheon Macroeconomics .
“ They had to say , ‘ We have a bazooka , we have a printing press , @ @ @ @ @ @ @ measures are off the table , he said .
“ To the extent that governments , and especially those in Southern Europe , have to mobilize a lot of fiscal resources , the ECB is getting behind that effort , ” he added .
“ Spreads were getting out of hand , and the ECB felt it had to correct the mistake it had made.
” Buying some time and freedom for European countries to borrow more , despite hefty government debt already , is getting more important by the day because Italy @ @ @ @ @ @ @ are one-upping one another with hugely ambitious spending plans to bolster unemployment insurance , increase paid sick leave , and backstop loans to small businesses .
The free spending marks a sharp departure for many European countries , which have been forced to keep deficits small and worry about spending .
But , like the United States , which even before the coronavirus crisis blew its budget deficit wide open and added a huge amount of debt , countries are worrying less about how they ’ ll pay for the economic response—and almost @ @ @ @ @ @ @ .
“ The notion that there shouldn ’ t be too much worry about debt is quite apt .
With secular stagnation , with interest rates lower for longer , you can borrow interest free in the current conditions , and I don ’ t see that changing anytime soon , ” said Nicolas Véron of the Peterson Institute for International Economics .
But no one should think even the colossal amounts being pledged will be a cure-all .
“ There ’ s no way to make this a pleasant moment—there will be @ @ @ @ @ @ @ said .
“ It ’ s a matter of damage control.
” Even so , Spain , scarred by memories of the beating it took on debt markets in the last financial crisis , was hesitant just days ago to announce a hefty stimulus package .
But it changed course on Wednesday and said it would provide at least 100 billion euros in public aid , with a total package that could rise to 200 billion ; France , Britain , and Italy have all redoubled their own multibillion-dollar emergency packages as the @ @ @ @ @ @ @ clearer , with major economies coming almost to a standstill .
But if the immediate crisis in Europe seems to be averted , fresh brush fires are spreading for the global economy .
Manufacturing is increasingly being disrupted by supply chain and safety concerns , with European and U.S. automakers closing their doors temporarily .
Emerging markets are getting walloped by the crisis , with massive outflows of capital , threatening many of the nations that were expected to provide a boost of growth this year .
The reverberations of the economic crisis @ @ @ @ @ @ @ of global growth .
The United States , the eurozone , and Japan are already in recession , said Robin Brooks , the chief economist at the Institute of International Finance , who just slashed his global growth outlook even further , to 0.4 percent .
But even that assumes a second-half recovery , which could get derailed by rising credit stress as the economic pain of lockdowns and travel bans percolate through all economies , he noted .
So far , most countries have tried to tackle the economic fallout on their @ @ @ @ @ @ @ increased swap lines with a number of countries , which could help alleviate a shortage of U.S. dollars that grease the global economy , international cooperation more broadly has been conspicuous by its absence .
China and the United States , the two biggest economies , are trading insults and blame for the virus as the bilateral relationship goes off the rails .
Trump has only redoubled his “ America First ” message by reportedly seeking to poach a German-made vaccine for exclusive use in the United States and maintaining his costly trade @ @ @ @ @ @ @ trade .
Trump ’ s trade war with China , including tariffs on many imported medical supplies , has directly undermined the U.S. ability to respond to a medical emergency—as the administration was explicitly warned about .
His maintenance of tariffs , reiterated Wednesday , is further straining relations with other big countries right when more cooperation , not confrontation , is needed .
“ Coordinated action is needed , and it ’ s needed soon , ” said Matthew Goodman , senior vice president at the Center for Strategic and International Studies @ @ @ @ @ @ @ the immediate aftermath of the 2008 financial crash that helped craft a joint monetary and fiscal response to the shock .
And major economies , like those in the G-20 , can prod the International Monetary Fund , the World Bank , and other multilateral bodies into playing a more proactive role , rather than leaving each country to fend for itself .
“ There are a bunch of things that need to be done that would be force multipliers ; individual countries can only go so far , ” he said .
@ @ @ @ @ @ @ the G-20 , has convened a virtual meeting of the group next week , but Goodman says he doesn ’ t have high expectations of a concerted approach ; Saudi Arabia , after all , helped detonate the current market meltdown by starting an oil price war with Russia .
“ The United States and China , the EU , the big EU member states , Japan—this isn ’ t going to work unless these countries say , ‘ We ’ re willing to work together , ’ ” Goodman said .
“ @ @ @ @ @ @ @ .
”

The European Central Bank swooped in Wednesday night with a 750 billion-euro fix to avert an immediate economic crisis in Europe from the coronavirus pandemic, throwing a vital lifeline to debt-strapped countries that plan to spend furiously to limit damage but are leery of the solvency problems they suffered in the last financial crisis.
The European Central Bank swooped in Wednesday night with a 750 billion-euro fix to avert an immediate economic crisis in Europe from the coronavirus pandemic, throwing a vital lifeline to debt-strapped countries that plan to spend furiously to limit damage but are leery of the solvency problems they suffered in the last financial crisis.
Yet with emerging markets under siege and developed economies elsewhere screeching to a halt, there are no signs yet of the broader international cooperation needed to get to grips with the biggest economic disaster in a decade or more. On the contrary, U.S. President Donald Trump on Wednesday reaffirmed that he would continue his trade war with Europe.
“We are facing an absolutely unprecedented challenge; it never happened during the financial crisis, it never even happened in wartime,” said Alicia Coronil Jonsson, the chief economist at Singular Bank, a Spanish private bank. “With so much debt in Italy and Spain, the ECB intervention was really needed.”
And memories are still fresh of how fragile Southern European economies nearly blew up the entire European project during the last crisis—making the ECB move a bid to help not just Southern Europe but the whole economic and financial cohesion of the continent.
“The challenge that Spain, Italy, and France are up against—it could be systemic for the whole eurozone,” Jonsson said. “That’s why this intervention isn’t just to narrow bond spreads, but to give the whole zone more stability.”
Even as EU nations have announced massive new stimulus plans to provide short-term relief as lockdowns close entire economies, some affected countries such as Italy, Spain, and Greece suffer from higher borrowing costs than other countries, like Germany, which threatened to tie their hands as they try to stanch the bleeding. Those different costs are reflected in bond spreads, which have been widening since the crisis began.
Only a week ago ECB chief Christine Lagarde suggested those spreads weren’t her problem, but she appears to have changed her mind after getting attacked by critics in the more vulnerable EU member states. On Wednesday the ECB stepped in with a surprise move to spend up to 750 billion to purchase bonds and other securities. The Pandemic Emergency Purchase Program, the European Central Bank’s belated rejoinder to the U.S. Federal Reserve’s own embrace of similar measures, will run through the end of the year at least and has already brought a measure of relief to hard-pressed government bonds in places like Spain, Italy, and Greece.
As striking as the size of the ECB’s intervention was the tone of the message it sent, one of commitment to do absolutely whatever is needed to stem the runaway crisis—pledging, the bank said, to do “as much as necessary and for as long as needed,” keeping open “all options and all contingencies.”
“They were trying to channel this ‘whatever it takes’ spirit, a message that had been in doubt until yesterday,” said Claus Vistesen, the chief eurozone economist at Pantheon Macroeconomics. “They had to say, ‘We have a bazooka, we have a printing press,’” to reassure markets that no measures are off the table, he said.
“To the extent that governments, and especially those in Southern Europe, have to mobilize a lot of fiscal resources, the ECB is getting behind that effort,” he added. “Spreads were getting out of hand, and the ECB felt it had to correct the mistake it had made.”
Buying some time and freedom for European countries to borrow more, despite hefty government debt already, is getting more important by the day because Italy, Spain, France, and others are one-upping one another with hugely ambitious spending plans to bolster unemployment insurance, increase paid sick leave, and backstop loans to small businesses.
The free spending marks a sharp departure for many European countries, which have been forced to keep deficits small and worry about spending. But, like the United States, which even before the coronavirus crisis blew its budget deficit wide open and added a huge amount of debt, countries are worrying less about how they’ll pay for the economic response—and almost certainly the extra spending needed for recovery.
“The notion that there shouldn’t be too much worry about debt is quite apt. With secular stagnation, with interest rates lower for longer, you can borrow interest free in the current conditions, and I don’t see that changing anytime soon,” said Nicolas Véron of the Peterson Institute for International Economics.
But no one should think even the colossal amounts being pledged will be a cure-all.
“There’s no way to make this a pleasant moment—there will be disruption no matter what,” Véron said. “It’s a matter of damage control.”
Even so, Spain, scarred by memories of the beating it took on debt markets in the last financial crisis, was hesitant just days ago to announce a hefty stimulus package. But it changed course on Wednesday and said it would provide at least 100 billion euros in public aid, with a total package that could rise to 200 billion; France, Britain, and Italy have all redoubled their own multibillion-dollar emergency packages as the economic carnage from the pandemic has become clearer, with major economies coming almost to a standstill.
But if the immediate crisis in Europe seems to be averted, fresh brush fires are spreading for the global economy. Manufacturing is increasingly being disrupted by supply chain and safety concerns, with European and U.S. automakers closing their doors temporarily. Emerging markets are getting walloped by the crisis, with massive outflows of capital, threatening many of the nations that were expected to provide a boost of growth this year. The reverberations of the economic crisis have driven forecasters to increasingly gloomy projections of global growth.
The United States, the eurozone, and Japan are already in recession, said Robin Brooks, the chief economist at the Institute of International Finance, who just slashed his global growth outlook even further, to 0.4 percent. But even that assumes a second-half recovery, which could get derailed by rising credit stress as the economic pain of lockdowns and travel bans percolate through all economies, he noted.
So far, most countries have tried to tackle the economic fallout on their own. While the U.S. Fed has increased swap lines with a number of countries, which could help alleviate a shortage of U.S. dollars that grease the global economy, international cooperation more broadly has been conspicuous by its absence.
China and the United States, the two biggest economies, are trading insults and blame for the virus as the bilateral relationship goes off the rails. Trump has only redoubled his “America First” message by reportedly seeking to poach a German-made vaccine for exclusive use in the United States and maintaining his costly trade war despite pleas to remove barriers to trade. Trump’s trade war with China, including tariffs on many imported medical supplies, has directly undermined the U.S. ability to respond to a medical emergency—as the administration was explicitly warned about. His maintenance of tariffs, reiterated Wednesday, is further straining relations with other big countries right when more cooperation, not confrontation, is needed.
“Coordinated action is needed, and it’s needed soon,” said Matthew Goodman, senior vice president at the Center for Strategic and International Studies, noting the broad international cooperation in the immediate aftermath of the 2008 financial crash that helped craft a joint monetary and fiscal response to the shock. And major economies, like those in the G-20, can prod the International Monetary Fund, the World Bank, and other multilateral bodies into playing a more proactive role, rather than leaving each country to fend for itself.
“There are a bunch of things that need to be done that would be force multipliers; individual countries can only go so far,” he said.
Saudi Arabia, the current head of the G-20, has convened a virtual meeting of the group next week, but Goodman says he doesn’t have high expectations of a concerted approach; Saudi Arabia, after all, helped detonate the current market meltdown by starting an oil price war with Russia.
“The United States and China, the EU, the big EU member states, Japan—this isn’t going to work unless these countries say, ‘We’re willing to work together,’” Goodman said. “I’m not holding my breath.”