It had been such a nice, almost-normal summer until the latest (Is it the third? The fourth?) wave of the covid-19 pandemic hit, causing much of the continent to go back under special measures.
Austria was one of the first to go back into lockdown, along with Slovakia. Germany has moved to a restrictive policy aimed at persuading the vaccine holdouts and stragglers to go and get a jab in the arm. Even the UK, which was one of the last countries to do a lockdown nearly two years ago and which made a big song and dance about its own Freedom Day back in July, has now asked people to begin wearing masks again.
A fourth wave is apparently not bad enough, though, as numbers in Germany suggest that it is going to be much, much rougher than its predecessors. The Robert Koch Institute reports today that over 73,000 people have tested positive in the last 24 hours, 8,000 more than yesterday.
The incidence has also been astounding. On 8 November, Deutsche Welle reported that the rate went over 200 for the first time. A week later, it went over 300. As of today, it is at 439.2. Reuters has reported that the daily death toll from covid reached 446 earlier this week, the highest in nine months. The latest statistics show that there were 388 deaths yesterday.
Increased transmissibility and mutations
None of this good, but that is not with the reckoning that may be the Omicron variant. Although it was first reported as having come out of South Africa, it now seems to have been in the Netherlands a few weeks ago.
Omicron has the potential to be nasty, although we are still some weeks away from a definitive answer as to whether it will be. According to the WHO, it is a ‘variant of concern’, much in the way that a pilot may look over at a flaming wing of the plane they are flying and label that ‘a development of concern’.
Moderna, in a press release a week ago, said: “The recently described Omicron variant includes mutations seen in the Delta variant that are believed to increase transmissibility and mutations seen in the Beta and Delta variants that are believed to promote immune escape. The combination of mutations represents a significant potential risk to accelerate the waning of natural and vaccine-induced immunity.”
So not good, then?
Stock market slide
The markets have been quick to respond to the presence of Omicron (and, as an aside, that name does sounds like the knock-off Transformers toy your mum tried to convince you was kosher), and it was not with a sense of relief or excitement. CNBC reported that ‘global markets have been rattled once again’ by the news that the strain could evade vaccines.
It went on: “Shares in Asia Pacific fell during Tuesday’s trade, led by declines of 2.4% for South Korea’s Kospi and 1.6% for Hong Kong’s Hang Seng index. Japan’s Nikkei 225 also shed 1.6%. European stocks fell on Tuesday morning to all but erase Monday’s gains, after the market attempted to begin a rebound following Friday’s sharp global sell-off.
“The pan-European Stoxx 600 index was down 1% by early afternoon. Stateside, Dow futures were down more than 300 points in premarket trade, as vaccine efficacy concerns reversed the uptick in sentiment following president Joe Biden’s assertion that economic lockdowns and further travel restrictions were currently off the table.”
And it continued: “Spot gold prices rose 0.4% to around $1,792 per troy ounce, while fellow traditional safe haven the Japanese yen also climbed. The dollar was down 0.7% versus the yen at 112.73 by early afternoon in Europe. The yield on the benchmark 10-year Treasury note — which moves inversely to prices — dropped by 10 basis points to 1.4374% at 8:30 a.m. ET, while the 30-year Treasury bond yield fell 7 basis points to 1.8085%.
“In the crypto space, bitcoin dropped sharply early in the day but recovered to just below $58,000 just after midday in Europe. Oil prices also retreated, with international benchmark Brent crude sliding 3.9% to $70.60 per barrel and US crude dropping 4.3% to $66.88.”
Reuters reported that the averages on Wall Street fell more than 1% on Wednesday.
It added: “After having advanced as much as 1.9% by late morning, the S&P 500 gave up all its gains in the afternoon along with the Dow and Nasdaq, which fell the most on the day. All three indexes breached key technical levels during the session.”
Running out of strategies
Omicron might turn out to be less worrying than first thought. Everyone certainly hopes so.
But the way I see it, nations and governments do not have much ammunition left with which to fight it. The initial lockdowns that were meant to ‘flatten the curve’ morphed into a series of repeating lockdowns over two years. Some children are now into their third year of interrupted schooling. The NHS waiting list could double. Vaccinations within Germany have tailed off. Disinformation is rife.
And the protests are growing louder. Ten of thousands marched in Vienna to protest its latest lockdown and there were riots in the Netherlands. The goodwill that many had towards a public health issue has, frankly, dissipated as civil rights and liberties have been suffocated in the cause of the common good.
It seems doubtful that public spending can weather much more. Apart from ridiculous schemes in the UK like Eat Out to Help Out, which was state-subsidised stupidity resulting in deaths, governments have largely wielded an open chequebook to deal with covid-19.
In October, the US-based Council on Foreign Relations wrote: “The massive spending in response to the covid-19 pandemic has taken the budget deficit to levels not seen since World War II. This expansion follows years of ballooning debt—totalling nearly $17trn in 2019—that will now be even more difficult to reduce.”
The US is not the only one. According to Martin Armstrong, senior data journalist at Statista: “The covid-19 pandemic has led to levels of UK government debt and borrowing unprecedented in the post-war era and the latest figures for government debt as a share of GDP reveal another grim economic milestone has been reached. As this infographic shows, general government gross debt equalled 103.6% of national GDP – far outstripping levels seen as a result of the 2008 financial crisis which peaked in 2014/15 at 84.9% of GDP.”
Germany, too: “Germany’s public finances went into the red for the first time since 2013 as the coronavirus pandemic took its toll on the country’s economy last year, according to official figures released [earlier in April]. Covid lockdown measures drove up public spending and hit tax revenue hard enough to produce the largest deficit since German reunification in 1991.”
It seems as if there are not many good options left to deal with the pandemic, with pressure both financially and socially. Further lockdowns look likely.
They always say that the night is at its darkest in the moments before dawn.
Does anyone have the correct time?