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Panicked Euro Leaders Threaten Trade War as Vaccine Rollout Goes to Hell

Barbie Latza Nadeau
·7 min read
Robert Michael via Reuters
Robert Michael via Reuters

ROME— The development of COVID-19 vaccines was supposed to mark the end of the worst year in modern history, but less than a month into the rollout, European leaders are already panicking. Threats of trade wars and fierce infighting over short vaccine supplies are making the cure—or in this case, the vaccine—just as divisive as the finger-pointing that marked the beginning of this nightmare.

Coronavirus Explodes in Italy, Threatening Europe. Can It Be Contained?

German Chancellor Angela Merkel delivered a thinly veiled threat against the U.S. on how Europe should deal with American “vaccine nationalism” in her address to the World Economic Forum being held virtually instead of in Davos this year. Germany has been briefing European regulators against the British-made AstraZenica vaccine, which is already having delivery problems even before it is officially approved by the EU to such an extent that European Commission President Ursula von der Leyen has threatened the company and warned that the EU might now block exports of any vaccines made in Europe to the U.K. But even European diplomats aren’t entirely sure just what they are arguing about, except that their own countries should come first as the bloc struggles to recover from the pandemic’s impact on their economies, health systems and population.

“Right now we have no idea what it’s about,” one EU diplomat said during a side meeting at the virtual World Economic Forum. “But blocking exports might be a little too much, since it would start a trade war with the US — six days after saying we should rebuild transatlantic relations.”

From the moment the European Union announced a unified effort to launch its “V-Day” COVID-19 vaccination rollout on Dec. 27, things started to go wrong.

Watch: EU demands AstraZeneca contract after delays

What was supposed to be a race to turn Europe—the first epicenter of the pandemic outside China—into a shining example of how public health systems could ensure a smooth rollout turned into a crawl because of reliance on private drug companies that many European health experts say aren’t willing or able to pull out all the stops at any cost to hurry up vaccine production since they are already offering the jabs at discount prices. So perturbed are the Italians, they have threatened legal action against the companies to make good on their promises, even if it means a loss in revenue.

Now, a month into the rollout, and after the EU paid $3.28 billion to several vaccine developers to ensure rapid development of the vaccines for their citizens, supply chain failure from Pfizer-BioNTech have delayed millions of vials from being delivered on time, meaning many countries that chose to vaccinate as many as they could in the beginning rather than holding back second doses are now concerned about fulfilling the double-dose protocol. The EU had underestimated Moderna’s success and only ordered a fraction of doses they have committed to from other companies which have yet to win approval. Coupled with concern over AstraZeneca‘s impending approval, European health care providers are now struggling to ensure that the millions who have already been vaccinated will get their second dose.

Many Europeans are skeptical as to why the supply chains are kinked, especially as Pfizer just announced it would be delivering vaccines earlier in the U.S. In Italy, especially, there has been concern that drug companies are favoring the U.S. and U.K. and robbing the EU of their promised doses.

Worse yet, if first doses for the next tier of recipients are delayed further, thousands more will die from the virus. Italian Deputy Health Minister Pierpaolo Sileri is leading the charge to launch legal action against the vaccine-makers. “By autumn we could vaccinate up to 45 million Italians, but I don't believe in these companies,” he said on a Sunday political program. “I want to see the vaccines.”

Pfizer’s delays have meant a reshuffling of rollout plans across Europe and the U.K. In Italy, over 80s, who are supposed to be the next in line after health-care workers and emergency teams, are now delayed by four weeks because the Italian health ministry now has to use first doses meant for the elderly as second doses for the health-care workers to fill the shortfall in Pfizer’s delivery.

To help fill the gap, AstraZeneca’s vaccine, developed with Oxford University, is expected to win approval by European regulators on Friday—despite since-retracted reports out of Germany that the jab won’t work on over-65s. Those reports were denied by the drug maker and belatedly by Germany’s health ministry which accused the media of misreading the data. After several tense days of AstraZeneca denials, several media outlets reported that Germany has long briefed the European regulators against the U.K. vaccine, suggesting that old rivalries are still in play post-Brexit.

Jens Spahn, Germany’s health minister, said Wednesday: “It’s not about E.U. first. It’s about Europe’s fair share. That’s why I think it would make sense to have a restriction on exports. It would mean that vaccines that leave the EU need a permit, so that at least we know what’s produced in Europe, what is leaving Europe, where it’s leaving Europe for, and we have a fair distribution.”

Germany is not just warning the U.K. over vaccine exports. German Chancellor Angela Merkel said on Tuesday that the U.S. is also playing a dangerous game in limiting vaccine exports. “The U.S. has a war act in force on the export of vaccines, and in some cases on important supplies for vaccines,” Merkel said Tuesday referring to the fact that the U.S. seems to be the only country where distribution is ahead of schedule, not behind. “That will trigger our basic instincts in Europe to say: if you’re missing anything you need in your supply chain for drugs or vaccines, you will take a look at home and make sure you get that sorted.”

Watch: What UK government COVID-19 support is available?

AstraZeneca then suddenly said that due to a manufacturing issue, they will fall short of the 300 million doses the EU has already paid for, of which 100 million doses were supposed to be ready to be distributed this weekend. “While there is no scheduled delay to the start of shipments of our vaccine should we receive approval in Europe, initial volumes will be lower than originally anticipated due to reduced yields at a manufacturing site within our European supply chain,” AstraZeneca said in a statement Monday. “We will be supplying tens of millions of doses in February and March to the European Union, as we continue to ramp up production volumes.” But with thousands already dying every day across the bloc, that delay will almost certainly cost lives.

Von der Leyen, the European Commission president, accused the British company of a “lack of clarity and insufficient explanations” and said they would also consider legal measures to make sure they get the vaccines they ordered. “Europe invested billions to help develop the world's first COVID-19 vaccines, to create a truly global common good,” she said during the World Economic Forum’s virtual Davos confab. “And now the companies must deliver. They must honor their obligations.”

The dustup between Europe and the U.K.’s AstraZeneca has now led to threats by Europe that it will impose strict export controls on all vaccines produced in Europe which, in a post-Brexit world, includes exports to the U.K. which has warned against “vaccine nationalism,” while bragging about its own early success. Since many of AstraZeneca’s doses are produced in European factories, that could mean that the U.K. drugmaker won’t get its own product. Those export controls would also impact Pfizer-BioNTech vaccines, most of which are produced in Belgium.

The European Union, which has fallen far behind the U.K. in the percentage of residents vaccinated, has signed six contracts with drugmakers for more than 2 billion doses for its 450 million residents. But since only Pfizer-BioNTech and Moderna are approved for use so far, the problem will only get worse. Hungary has grown so desperate for the doses they have just unilaterally approved Russia’s Sputnik vaccine and plan to start distributing it to fill the gap created by the supply shortfall.

Read more at The Daily Beast.

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