29 January 2021

What does the vaccine fiasco promise for ‘European solidarity’?

By

“The best advertisement for Brexit,” the major German newspaper Die Zeit proclaimed on Wednesday. In the increasingly bitter vaccine battle between AstraZeneca and the EU – which some are already describing as outright war, the European Commission has “acted slow, bureaucratic, and protectionist. And when something goes wrong, it’s always someone else’s fault”.

In this case, as Oni Oviri wrote on these pages yesterday, the EU has tried to blame the pharmaceutical companies themselves for its own myriad failures. In another transparent attempt at distraction, the Commission has also launched into a decidedly unsavoury spat with the UK, which had the temerity to order its own vaccines three months ahead of its European neighbours.

As far as AstraZeneca itself is concerned, the situation remains confusing, as its CEO Pascal Soriot made clear in a wide-ranging interview on Tuesday. Problems have come up in the production of vaccines, but the company argues it doesn’t have an obligation to ship the 80 million doses to the EU that it committed to, since it only has a “best effort” contract, meaning they will try to ship as many as possible without being bound to a particular number.

And what of the EU-UK flare-up? Well, in most walks of life, whoever orders first would expect to get their goods first.  The EU, however, is having none of it. In a heated press conference earlier this week, Health Commissioner Stella Kyriakides argued that “first come, first served   [may]…work at the neighborhood’s butcher, but not in contracts and in our advanced purchase agreements”.

She was less clear, however, on how the EU would force Astra to move production away from the UK to the continent. Kyriakides’ line is that this isn’t even really about contracts per se, but vaccine companies actually having a moral and societal responsibility “which they need to uphold”. Apparently, though, that “moral responsibility” doesn’t extend to fulfilling its existing contract with another country if it happens to be inconvenient for the EU.

Who is actually correct in this debate – Soriot or Kyriakides – is difficult to decipher. In many ways, its his word against hers. Take the “best effort” clause, which Soriot argues is in the contract, but the Commission insists it is not. They can’t both be telling the truth and, in fairness, AstraZeneca is not helping matters by refusing to publish the contract to back up its claims.

Either way, the fact EU leaders are now trying to make companies to seek approval to ship vaccines outside the bloc shows just how desperate they are getting. There’s only so much deflecting they can do though. And the truth, as Oni writes in her piece, is that “Europe’s vaccination catastrophe is not a story of bad luck, but of political and bureaucratic ineptitude” on the part of both Brussels and national governments.

The problems with the European Medical Agency’s slow approval of vaccines, particularly compared to countries like the UK and Israel, are well documented. But the much bigger problem is that there simply haven’t been nearly enough vaccines even when they have been authorised. Whereas Israel has vaccinated 31% of its population, the UK 10.7%, and the U.S. 6.5%, the EU is still stuck back at 1.7%.

Whereas Israel and the UK in particular have ramped up its strategy to vaccinate ever more people per day, the EU has been stuck in stagnation. And while there certainly have been problems in many member states to actually procure the vaccines that they have received, the main problem is that there haven’t been enough doses: Denmark, for instance, was on track to follow Israel and the UK in its positive examples of large-scale vaccination efforts , until it ran out of vaccines in mid-January. Indeed, while EU officials have often complained of national governments shifting the blame to Brussels to prevent a political crisis of their own, this really is a crisis made in Berlaymont.

Cent wise, Euro foolish

It’s also becoming increasingly clear that the EU has undermined its own strategy by playing hardball on price. The Commission initially focused on AstraZeneca instead of Pfizer/BioNTech and Moderna because its vaccine is significantly cheaper. When both Pfizer and Moderna offered the EU more vaccines, they turned the offer down  – much to the surprise of the companies themselves. When German Health Minister Jens Spahn argued during summer that the European Commission should buy more BioNTech doses, he was shot down – reportedly because the French government wanted to prioritise a French company Sanofi, even though it hadn’t actually produced an effective vaccine (indeed, it is now planning to help produce the BioNTech vaccine from July onwards).  It seems that even in the grip of the worst crisis the EU has ever faced, national interests took precedence over that famed ‘European solidarity’.

That the Commission doesn’t want to admit this is understandable: if they were to face reality, the repercussions would be immense. In the short term, calls for both national leaders and the Commission’s top officials – not least president Ursula von der Leyen herself – would surely grow ever louder. The longer term ramifications would also be profound. Mismanagement on this scale has the potential to seriously undermine the relationship between Brussels and national governments (though Brussels may well claim the crisis underlines the need for a “health union”). Indeed, we are already seeing European unity fraying, as some member states buy extra doses, despite an initial agreement not to do so. Even the most ardent Europhile would be hard-pressed to see the vaccine fiasco as anything but a disaster for ‘the project’.

In the meantime, we can expect the bullying tactics to continue: complaints that Pfizer/BioNTech are not shipping enough, that AstraZeneca is trying to screw Brussels over, or that the dastardly Brits are hogging the supplies at the expenses of Europeans. Whether any of this will have the desired effect of swinging public opinion behind the EU remains to be seen. But judging by the Commission’s vaccine-related efforts so far, I wouldn’t bet much on its success.

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Kai Weiss is a Research and Outreach Officer at the Austrian Economics Center and a board member at the Hayek Institute.

Columns are the author's own opinion and do not necessarily reflect the views of CapX.