When it comes to emerging infectious diseases – those newly recognized in humans or in new locations – it is not only what we know that matters but also what we do not know.

An outbreak of a new coronavirus first reported in Wuhan, China, which has so far led to more than 500 confirmed cases and multiple deaths across five countries (and two continents) has prompted the question from several corners of the world: Should we be worried?

Although expert teams coordinated by the World Health Organization (WHO) are working on key questions to get answers as soon as possible, the level of uncertainty is still high.

We do not yet know exactly how deadly the disease is, how best to treat those who get sick, precisely how it is spreading, nor how stable the virus is. It is thought that the virus spread from an animal source, but the exact source is yet to be confirmed and the disease is now in human populations and appears to be spreading from human to human.

It is such uncertainty, inherent in emerging infectious disease outbreaks, that warrants concern. Until they are resolved, it is appropriate for the world to be concerned. It is useful to remember that most established scourges of humanity such as HIV, influenza and tuberculosis likely started as emerging infectious diseases that jumped the species barrier from animals to humans.

Shortly after the Chinese authorities reported the first cases of ‘mystery pneumonia’ in Wuhan, China, to WHO, the virus causing the disease was isolated and identified as being part of the coronavirus family. It belongs to the same virus family as SARS, a highly contagious and life-threatening coronavirus that caused a nine-month epidemic in 2003 that affected 26 countries and resulted in more than 8,000 infections and nearly 800 deaths.

A second novel coronavirus that emerged in 2012 and persists today – MERS, or Middle East Respiratory Syndrome – is less contagious (spread by close contact rather than coughing and sneezing).

The differences between the SARS coronavirus and the MERS coronavirus highlight that, despite belonging to the same virus family, pathogens do not necessarily behave in the same way. It is as yet unknown whether the new virus is, or will turn out to be, more like SARS or MERS, or neither. 

Chinese authorities have confirmed that there is human-to-human transmission. However, it is not yet established whether it is sustained, which would make the outbreak more difficult to control. As of 23 January, the number of cases range from 500 confirmed cases up to an estimated 1,700 cases, according to a disease outbreak model by Imperial College London.

Likewise, we do not know to what extent the virus is able to mutate and if so, how rapidly. Generally, coronaviruses are known to be able to mutate, with the risk that a less contagious form of the virus becomes highly contagious. This could have an impact not only on the transmission pattern and rate but also the death rate. The virus could change in either direction, to become either more or less of a threat.

It is important to take a precautionary approach while uncertainty persists. It is also important not to overreact and for measures to be scientifically sound. Concern over this outbreak is due, but panic is not.

Three virtual networks of experts supporting the response – one of virologists, one of epidemiologists and one of clinicians – are working on the key pieces of the jigsaw puzzle: watching the virus, watching the transmission patterns, and watching the people who have been infected. It is crucial to maintain the ongoing investigation of the disease, stay focused on the science and to keep sharing the necessary information.

Professor Heymann, who previously led the World Health Organization’s response to SARS and has been advising the organization on its response to the coronavirus, outlines the key facts relating to this outbreak and reflect on the challenges it poses. 

An outbreak of a new coronavirus first reported in Wuhan, China has so far spread to dozens of countries, led to tens of thousands of confirmed cases and almost 2,000 deaths. The World Health Organization has declared the situation a global health emergency thereby prompting questions from around the world about how worried the public should be and how can governments, media, civil society and the global health community best tackle new infectious disease outbreaks?

What do we know – and what do we not know – about this coronavirus at the moment? What lessons learned from previous outbreaks have been applied – and not applied – to this outbreak? How can governments and the media balance public awareness and the risk of panic? And what measures can be taken to reduce the risk of stigma and discrimination of populations during this and other outbreaks?

The measures taken to limit the spread of the coronavirus - in particular social distancing -  come with significant economic costs, as the drop both in demand for goods and services and in supply due to workers being at home sick will create a short-term economic shock not seen in modern times.

Sectors that are usually less affected by regular economic swings such as transport and tourism are being confronted with an almost total collapse in demand. In the airline sector, companies are warning they might only be able to hold out for a few months more.

Building on the calls to provide income support to all citizens and shore up businesses, European leaders should now be giving explicit permission to the European Central Bank (ECB) to provide whatever financial support is needed.

Although political leaders have responded to the economic threat, the measures announced across the continent have mainly been to support businesses. The crisis is broader and deeper than the current response.

Support for weaker governments

The ECB already reacted to COVID-19 by announcing measures to support the banking system, which is important to guarantee the continuity of the European financial system and to ensure financially weaker European governments do not have to confront a failing banking system as well.

Although government-subsidised reduced working hours and sick pay are a solution for many businesses and workers, crucially they are not for those working on temporary contracts or the self-employed. They need direct income support.

This might come down to instituting something that looks like a universal basic income (UBI), and ensuring money keeps flowing through the economy as much as possible to help avoid a cascade of defaults and significant long-term damage.

But while this is likely to be the most effective remedy to limit the medium-term impact on the economy, it is particularly costly. Just as an indication, total compensation of employees was on average around €470bn per month in the eurozone last year.

Attempting to target payments using existing welfare payment channels would reduce costs, but is difficult to implement and runs the risk of many households and businesses in need missing out.

The increase in spending and lost revenue associated with these support measures dwarf the fiscal response to the 2008-09 financial crisis. The eurozone economy could contract by close to 10% this year and budget deficits are likely be in double digits throughout the bloc.

The European Commission has already stated member states are free to spend whatever is necessary to combat the crisis, which is not surprising given the Stability and Growth Pact - which includes the fiscal rules - allows for such eventualities.

Several eurozone countries do probably have the fiscal space to deal with this. Countries such as Germany and the Netherlands have run several years of balanced budgets recently and significantly decreased their debt levels. For countries such as Italy, and even France, it is a different story and the combination of much higher spending and a collapse in tax revenue is more likely to lead to questions in the market over the sustainability of their debt levels. In order to avoid this, the Covid-19 response must be financed collectively.

The Eurogroup could decide to use the European Stability Mechanism (ESM) to provide states with the funds, while suitably ditching the political conditionality that came with previous bailout. But the ESM currently has €410bn in remaining lending capacity, which is unlikely to be enough and difficult to rapidly increase.

So this leaves the ECB to pick up the tab of national governments’ increase in spending, as the only institution with effectively unlimited monetary firepower. But a collective EU response is complicated by the common currency, and particularly by the role of the ECB.

The ECB can’t just do whatever it likes and is limited more than other major central banks in its room for manoeuvre. It does have a programme to buy government bonds but this relies on countries agreeing to a rescue programme within the context of the ESM, with all the resulting political difficulties.

There are two main ways that the ECB could finance the response to the crisis. First, it could buy up more or all bonds issued by the member states. A first step in this direction would be to scrap the limits on the bonds it can buy. Through self-imposed rules, the ECB can only buy up to a third of every country’s outstanding public debt. There are good reasons for this in normal times, but these are not normal times. With the political blessing of the European Council, the Eurosystem of central banks could then start buying bonds issued by governments to finance whatever expenditure they deem necessary to combat the crisis.

Secondly, essentially give governments an overdraft with the ECB or the national central banks. Although a central bank lending directly to governments is outlawed by the European treaties, the COVID-19 crisis means these rules should be temporarily suspended by the European Council.

Back in 2012, the then president of the ECB, Mario Draghi, proclaimed the ECB would do whatever it takes, within its mandate, to save the euro, which was widely seen as a crucial step towards solving the eurozone crisis. The time is now right for eurozone political leaders to explicitly tell the ECB that together they can do whatever it takes to save the eurozone economy through direct support for businesses and households.

In the past few weeks, European Union member states have implemented measures such as social distancing, school and border closures and the cancellation of major cultural and sporting events in an effort to curb the spread of COVID-19. Such measures are expected to have significant economic and political consequences, threatening near or total collapse of certain sectors. Moreover, the management of the health and economic crises within the EU architecture has exposed tensions and impasses in the extent to which the EU is willing to collaborate to mitigate pressures on fellow member states.

The panellists will examine the European Union's response to a series of cascading crises and the likely impact of the pandemic on individual member states. Can the EU prevent an economic hit from developing into a financial crisis? Are the steps taken by the European Central Bank to protect the euro enough? And are member states expected to manage the crisis as best they can or will there be a united effort to mitigate some of the damage caused?  

This event is part of a fortnightly series of 'Business in Focus' webinars reflecting on the impact of COVID-19 on areas of particular professional interest for our corporate members.

Not a corporate member? Find out more.

As the COVID-19 pandemic presents the greatest threat to human health in over a century, people turn to their states to resolve the crisis and protect their health, their livelihoods and their future well-being.

How leaders perform and respond to the pandemic is likely to define their premiership - and this therefore presents a tremendous opportunity to write themselves into the history books as a great leader, rescuing their people from a crisis. Just as Winston Churchill did in World War Two.

Following Churchill’s advice to “never let a good crisis go to waste”, if leaders take decisive action now, they may emerge from the COVID-19 crisis as a national hero. What leaders must do quickly is to mitigate the crisis in a way which has a demonstrable impact on people’s lives.

Given the massive shock caused by the pandemic to economies across the world, it is not surprising that heads of state and treasury ministers have implemented enormous economic stimulus packages to protect businesses and jobs – this was to be expected and has been welcome.

National heroes can be made

But, in essence, this remains primarily a health crisis. And one obvious area for leaders to act rapidly is strengthening their nation’s health system to stop the spread of the virus and successfully treat those who have fallen sick. It is perhaps here that leaders have the most to gain - or lose - and where national heroes can be made.

This is particularly the case in countries with weak and inequitable health systems, where the poor and vulnerable often fail to access the services they need. One major practical action that leaders can implement immediately is to launch truly universal, publicly-financed health reforms to cover their entire population – not only for COVID-19 services but for all services.

This would cost around 1-2% GDP in the short-term but is perfectly affordable in the current economic climate, given some of the massive fiscal stimuluses already being planned (for example, the UK is spending 15% GDP to tackle COVID-19).

Within one to two years, this financing would enable governments to implement radical supply side reforms including scaling up health workforces, increasing the supply of essential medicines, diagnostics and vaccines and building new infrastructure. It would also enable them to remove health service user fees which currently exclude hundreds of millions of people worldwide from essential healthcare. Worldwide these policies have proven to be effective, efficient, equitable and extremely popular.

And there is plenty of precedent for such a move. Universal health reform is exactly what political leaders did in the UK, France and Japan as post-conflict states emerging from World War Two. It is also the policy President Kagame launched in the aftermath of the genocide in Rwanda, as did Prime Minister Thaksin in Thailand after the Asian Financial Crisis in 2002, and the Chinese leadership did following the SARS crisis, also in 2003.

In China’s case, reform involved re-socialising the health financing system using around 2% GDP in tax financing to increase health insurance coverage from a low level of one-third right up to 96% of the population.

All these universal health coverage (UHC) reforms delivered massive health and economic benefits to the people - just what is needed now to tackle COVID-19 - and tremendous political benefits to the leaders that implemented them.

When considering the current COVID-19 crisis, this strategy would be particularly relevant for countries underperforming on health coverage and whose health systems are more likely to be overwhelmed if flooded with a surge of patients, such as India, Pakistan, Bangladesh, Myanmar, Indonesia and most of sub-Saharan Africa, where many governments spend less than 1% of their GDP on health and most people have to buy services over the counter.

But also the two OECD countries without a universal health system – the United States and Ireland – are seeing the threat of COVID-19 already fuelling the debate about the need to create national, publicly-financed health system. And the presidents of South Africa, Kenya and Indonesia have already committed their governments to eventually reach full population coverage anyway, and so may use this crisis to accelerate their own universal reforms. 

Although difficult to predict which leaders are likely to grasp the opportunity, if some of these countries now fast-track nationwide UHC, at least something good will be coming from the crisis, something which will benefit their people forever. And ensuring everyone accesses the services they need, including public health and preventive services, also provides the best protection against any future outbreaks becoming epidemics.

Every night large audiences are tuning in to press briefings fronted by their heads of state hungry for the latest update on the crisis and to get reassurance that their government’s strategy will bring the salvation they desperately need. To truly improve health security for people across the world, becoming UHC heroes could be the best strategic decision political leaders ever make.

As the US surgeon general warns Americans to brace for ‘our Pearl Harbor moment’, the US faces a week in which it may see the worst of the global pandemic. The absence of US leadership at the global level has enabled the Security Council’s inaction. And at the G7, President Trump actively obstructed efforts to agree a joint statement.

US efforts to increase its support of international aid to the tune of $274million are minimal, not least in light of a 50% reduction in its support for the World Health Organization (WHO) and radically diminished support for other global health programmes as well. International coordination is essential to mitigate unregulated competition for critical medical supplies, manage border closures, and guarantee international economic stability.

True, it won’t be possible to control the epidemic at home if the global effort to defeat the pandemic fails. But the absence of leadership from Washington at home is palpable. And what happens at home sets a natural limit on America’s internationalism.

Both solution and problem

In response to the coronavirus crisis, the US state is proving to be a solution - and a problem. The dramatic response to the economic crisis is evident with the $2.3trillion stimulus package signed into law by President Trump boldly supported by both Democrats and Republicans in the most significant piece of bipartisan legislation passed in decades.

America’s political economy is unrecognisable, moving left and looking increasingly more European each week as Congress and the executive branch agree a series of stimulus packages designed to protect citizens and businesses. Some elements of this legislation were more familiar to Americans, notably $200bn in corporate tax breaks.

But Congress also agreed unemployment insurance, and cheques - one in April, one in May – to be sent directly to those Americans most directly hit by the economic impact of COVID-19. In effect, this is adopting a temporary universal basic income.

The stimulus plan also dedicated $367bn to keep small businesses afloat for as long as the economy is shuttered. Already the government is negotiating a fourth stimulus package, but the paradox is that without rigorous steps to halt the health crisis, no level of state intervention designed to solve the economic response will be sufficient.

The scale of the state’s economic intervention is unprecedented, but it stands in stark contrast to Washington’s failure to coordinate a national response to America’s health crisis. An unregulated market for personal protective equipment and ventilators is driving up competition between cities, states, and even the federal government.

In some cases, cities and states are reaching out directly beyond national borders to international organisations, foreign firms and even America’s geopolitical competitors as they search for suppliers. In late March, the city of New York secured a commitment from the United Nations to donate 250,000 protective face masks.

Now Governor Cuomo has announced New York has secured a shipment of 140 ventilators from the state of Oregon, and 1,000 ventilators from China. The Patriots even sent their team plane to China to pick up medical supplies for the state of Massachusetts. And following a phone call between President Putin and President Trump, Russia sent a plane with masks and medical equipment to JFK airport in New York.

Networks of Chinese-Americans in the United States are rapidly mobilising their networks to access supplies and send them to doctors and nurses in need. And innovative and decisive action by governors, corporates, universities and mayors drove America’s early response to coronavirus.

This was critical to slowing the spread of COVID-19 by implementing policies that rapidly drove social distancing. But the limits of decentralized and uncoordinated action are now coming into sharp focus. President Trump has so far refused to require stay-at-home orders across all states, leaving this authority to individual governors. Unregulated competition has driven up prices with the consequence that critical supplies are going to the highest bidder, not those most in need.

Governor Cuomo’s call for a nationwide buying consortium has so far gone unheeded and, although the Federal Emergency Management Agency has attempted to deliver supplies to states most in need, the Strategic National Stockpile is depleting fast. Without critical action, the federal government risks hindering the ability of cities and states to get the supplies they need.

But President Trump is reluctant to fully deploy his powers under the Defense Production Act (DPA). In March, he did invoke the DPA to require certain domestic manufacturers to produce ventilators. But calls for it to be used to require manufacturers to produce PPE (personal protective equipment), control costs, and manage allocations has so far gone unheeded by a president generally opposed to state interventions for managing the economy.

It is true that federalism and a deep belief in competition are critical to the fabric of US history and politics, and innovations made possible by market values of entrepreneurism and competition cannot be underestimated. In the search for a vaccine, this could still prove to be key.

But with current estimates that more Americans will die from coronavirus than were killed in the Korean and Vietnam wars combined, it is clear now is the time to reimagine and reinvent the role of the American state.

In the absence of a coordinated effort driven by the White House, governors are working together to identify the areas of greatest need. Whether this will lead to a recasting of the American state and greater demand for a deeper and more permanent social safety net is a key question in the months ahead.

In the short-term the need for coordinated state action at the national level is self-evident. US leadership globally, to manage the health crisis and its economic impacts, is also vital. But this is unlikely to be forthcoming until America gets its own house in order.

Panellists discuss the significance of investing in mental health and the return on the individual, the economy and society. 

Although the economic and societal benefits of investing in health are increasingly recognized, less than two per cent of national health budgets globally are spent on mental health, despite the enormous impact it has on citizens and countries around the world. 

With the global health emergency of COVID-19 accelerating conversations around mental wellness and productivity, governments around the world are under increasing pressure to respond to the immediate challenges of ensuring both physical and mental health. 

Given that mental illness typically rises in times of economic recession and health crises, how are individuals, businesses and societies thinking about this issue? How can governments ensure mental health is integrated in global health coverage? And what role does technology play in mental health provision?

This event was run in partnership with United for Global Mental Health, within the framework of the Speak Your Mind (SYM) nationally led and globally united campaign that calls on leaders to provide quality mental health for all. 

UnitedGMH aims to unite global efforts on mental health and provides advocacy, campaigning and financing support to global institutions, businesses, communities and individual change-makers seeking greater action on global mental health. 

The World Health Organization (WHO) declared the spread of COVID-19 to be a Public Health Emergency of International Concern (PHEIC) on January 30 this year and then characterized it as a pandemic on March 11.

Declaring a PHEIC is the highest level of alert that WHO is obliged to declare, and is meant to send a powerful signal to countries of the need for urgent action to combat the spread of the disease, mobilize resources to help low- and middle-income countries in this effort and fund research and development on needed treatments, vaccines and diagnostics. It also obligates countries to share information with WHO.

Once the PHEIC was declared, the virus continued to spread globally, and WHO began to be asked why it had not yet declared the disease a pandemic. But there is no widely accepted definition of a pandemic, generally it is just considered an epidemic which affects many countries globally.

Potentially more deadly

The term has hitherto been applied almost exclusively to new forms of flu, such as H1N1 in 2009 or Spanish flu in 1918, where the lack of population immunity and absence of a vaccine or effective treatments makes the outbreak potentially much more deadly than seasonal flu (which, although global, is not considered a pandemic).

For COVID-19, WHO seemed reluctant to declare a pandemic despite the evidence of global spread. Partly this was because of its influenza origins — WHO’s emergency programme executive director said on March 9 that ‘if this was influenza, we would have called a pandemic ages ago’.

He also expressed concern that the word traditionally meant moving — once there was widespread transmission — from trying to contain the disease by testing, isolating the sick and tracing and quarantining their contacts, to a mitigation approach, implying ‘the disease will spread uncontrolled’.

WHO’s worry was that the world’s reaction to the word pandemic might be there was now nothing to be done to stop its spread, and so countries would effectively give up trying. WHO wanted to send the message that, unlike flu, it could still be pushed back and the spread slowed down.

In announcing the pandemic two days later, WHO’s director-general Dr Tedros Adhanom Ghebreyesus reemphasised this point: ‘We cannot say this loudly enough, or clearly enough, or often enough: all countries can still change the course of this pandemic’ and that WHO was deeply concerned ‘by the alarming levels of inaction’.

The evidence suggests that the correct message did in fact get through. On March 13, US president Donald Trump declared a national emergency, referring in passing to WHO’s announcement. On March 12, the UK launched its own strategy to combat the disease. And in the week following WHO’s announcements, at least 16 other countries announced lockdowns of varying rigour including Austria, Belgium, Canada, Czech Republic, Denmark, Finland, France, Germany, Hungary, Netherlands, Norway, Poland, Portugal, Serbia, Spain and Switzerland. Italy and Greece had both already instituted lockdowns prior to the WHO pandemic announcement.

It is not possible to say for sure that WHO’s announcement precipitated these measures because, by then, the evidence of the rapid spread was all around for governments to see. It may be that Italy’s dramatic nationwide lockdown on March 9 reverberated around European capitals and elsewhere.

But it is difficult to believe the announcement did not have an effect in stimulating government actions, as was intended by Dr Tedros. Considering the speed with which the virus was spreading from late February, might an earlier pandemic announcement by WHO have stimulated earlier aggressive actions by governments?

Declaring a global health emergency — when appropriate — is a key part of WHO’s role in administering the International Health Regulations (IHR). Significantly, negotiations on revisions to the IHR, which had been ongoing in a desultory fashion in WHO since 1995, were accelerated by the experience of the first serious coronavirus outbreak — SARS — in 2002-2003, leading to their final agreement in 2005.

Under the IHR, WHO’s director-general decides whether to declare an emergency based on a set of criteria and on the advice of an emergency committee. IHR defines an emergency as an ‘extraordinary event that constitutes a public health risk through the international spread of disease and potentially requires a coordinated international response’.

In the case of COVID-19, the committee first met on January 22-23 but were unable to reach consensus on a declaration. Following the director-general’s trip to meet President Xi Jinping in Beijing, the committee reconvened on January 30 and this time advised declaring a PHEIC.

But admittedly, public recognition of what a PHEIC means is extremely low. Only six have ever been declared, with the first being the H1N1 flu outbreak which fizzled out quickly, despite possibly causing 280,000 deaths globally. During the H1N1 outbreak, WHO declared a PHEIC in April 2009 and then a pandemic in June, only to rescind both in August as the outbreak was judged to have transitioned to behave like a seasonal flu.

WHO was criticized afterwards for prematurely declaring a PHEIC and overreacting. This then may have impacted the delay in declaring the Ebola outbreak in West Africa as a PHEIC in 2014, long after it became a major crisis. WHO’s former legal counsel has suggested the PHEIC — and other aspects of the IHR framework — may not be effective in stimulating appropriate actions by governments and needs to be reconsidered.

When the time is right to evaluate lessons about the response, it might be appropriate to consider the relative effectiveness of the PHEIC and pandemic announcements and their optimal timing in stimulating appropriate action by governments. The effectiveness of lockdowns in reducing the overall death toll also needs investigation.

Attendance at this event is by invitation only.

Please note the speaker will be speaking in a personal capacity.

The Polish election on 13 October resulted, as expected, in a victory for of the ruling Law and Justice party (PiS).

But despite again securing a slim majority in parliament, it has not been wholly a triumph for PiS. And though there continue to be concerns about the party’s authoritarian tendencies, the election has illuminated some important nuances to its support and appeal, which hold lessons for politics across Europe.

Even though some opinion polls had suggested PiS were close to winning a supermajority in parliament that would have allowed it to pursue constitutional changes, the party fell short of that target, while it lost its majority in the Senate. Thus, while PiS may well renew its efforts to consolidate its control over the state apparatus and the media or meddle with the justice system, it becomes much more difficult with the opposition controlling the Senate and being able to scrutinize laws or have a say in the appointment of public officials.

Most importantly, the election result has shown that while Polish citizens were willing to reward a party that delivered on promises of economic growth and redistribution, they were not ready to hand a blank cheque for full-blown institutional realignment to PiS. Tellingly, many moderate candidates in PiS lists performed quite well among the party’s voters. 

Even though they rewarded a party that at times employed harsh rhetoric against Brussels, Polish voters have long expressed some of the strongest rates of support for EU membership, according to Eurobarometer surveys. The government has also faced massive protests against its most radical initiatives, such as reform of the judicial system and a law to almost completely ban abortion that was ultimately scrapped. It is therefore more likely that the party’s radicalism kept it from increasing its share, rather than helping it to secure victory.

This is not to say that the threat of illiberalism does not remain alive in Poland. But it shows that the degree of PiS dominance in Poland has never been comparable to that of Fidesz in Hungary, with which it is often compared.

This was reflected in the party’s own rhetoric. In the election campaign the government mostly focused on its economic record, recognizing that much of its support is conditional on conventional measures of political success like voter welfare. PiS may not give up on its ambition to establish a ‘new Polish republic’, but the elections have made it clear that economic stability rather than political radicalism will ensure its longevity in power – with the latter perhaps even being a liability as the party experiences fatigue in office.

Similarly, despite the government’s antagonistic stance towards the EU on various issues, PiS never entertained ideas of withdrawing from the EU, as some of its critics feared earlier in its term. With the Polish economy deeply entwined with the European market and Poland expecting – probably for the last time – to receive substantial subsidies from the next EU budget, EU membership is a necessary precondition for the economic success for which PiS is claiming credit.

With the pro-European left returning to parliament but also an extreme party of the right winning representation, the next government will have a difficult balancing act as it tries to draw on the benefits of EU membership while maintaining its defiant image towards Brussels.

Ultimately, beneath the rhetoric and the posturing, PiS is a party that has shrewdly combined popular policies from the left and right, fulfilling promises of both cultural sovereignty and economic redistribution. Its reelection should not come as a surprise given that it fulfilled its electoral pledges by delivering some of the things that many voters in western Europe also crave but that mainstream parties there have largely failed to provide.

When we look back on Brexit, what will it tell us about Europe? Will it simply be that an insular UK was always different and destined to never fit in? Will it be that the UK's decision to leave revealed deeper problems with the EU? Or will it be that the threat created by the UK's withdrawal united the continent and saved the European project?

The speaker will explore Brexit through the prism of biblical and ancient Greek mythology. She will examine the reasons behind Britain’s decision to leave the EU and imagine a ‘better Europe’ that has learnt the lessons of the past and reconciled the divisions exposed by the Brexit vote. How can the EU reinvent itself and re-engage its citizens? And where does a post-Brexit UK fit?

Attendance at this event is by invitation only. 

Turkey witnessed some major developments over the last year. In August 2018, the dramatic Lira devaluation caused the Turkish economy to go into recession. In the 2019 local elections, which took place during the economic downturn, the Republican Peoples’ Party (CHP) mayoral candidates took control of Ankara and Istanbul after 25 years of dominance by the ruling Justice and Development Party (AKP).

The election results might lead to a rethink of the AKP leadership and consequences on Turkish politics will depend on Erdoğan’s interpretation of this reversal of his political fortune.

Will this affect the long-standing alliance between AKP and MHP that has characterised Turkish foreign policy for the past few years? What impact will this have on both the domestic and international level? Finally, will Turkey’s recent incursion into Syria have lasting effect on the country’s alliances with other powers and its standing?

In this context, the speaker will analyse the significance of these changes and the future trajectory of Turkish politics, economics and foreign policy.

The new European Commission has finally started its work this week. In a world increasingly defined by great power competition and deprived of the certainties of a strong transatlantic partnership, this might well be the first commission where foreign and security policy issues will be equally important to internal EU ones.

Amid an escalating Sino-American rivalry, there is a growing realization in Brussels that something has to change in the way the EU thinks and acts internationally.

Charting a more successful path forward will not be easy. Josep Borrell, the EU’s new high representative for foreign affairs and security policy, during his confirmation hearing, offered a hint as to what might be needed to get there: ‘The EU has to learn to use the language of power.”’

What might this mean in practice?

Four issues illustrate some of the key dilemmas ahead for the EU and its new executive.

Hard power

The most revealing of these concerns hard power.

For a union so addicted to the US security guarantee, and so used to the softer approaches of exercising its influence, this was always going to be a difficult discussion. The recent disagreement between Germany and France over the future of NATO gave a taste of how fraught and complex this discussion can be.

Underpinning it are three fundamental questions. If the EU has to enhance its capacity to defend its interests with military power, how (and how quickly) is it to move ahead, how much additional responsibility will that mean and to what degree will this responsibility need to be shouldered autonomously, potentially distancing itself from NATO or Washington? Moving forward with this agenda while balancing the competing interests of member states and preserving the fragile progress already achieved with initiatives such as PESCO will not be easy.

Discussion and debate among member states should not be discouraged, but the new commission has a role to play in ensuring that such discussion is constructive. Distracting talks about an EU army or a nuclear ‘Eurodeterrent’ should be shelved, with the focus as much as possible on acquiring tangible capabilities, getting the defence architecture right, ensuring operational readiness and spending defence budgets smartly.

How to use power

Great powers have traditionally been able to cooperate in certain areas while competing in others. Given their wide reach, powers like the US have generally not allowed disagreement on one issue to interfere with the ability to work together on others.

If the EU aspires to be a more assertive global player, it will need to grow comfortable with this compartmentalization. For example, if Brussels wants to stand up to Beijing regarding human rights, the South China Sea or issues of acquisition of European infrastructure, this should not mean that cooperation on areas such as peacekeeping, arms control or climate change needs to be blocked.

Footing the bill

Ursula von der Leyen, the new commission president, has announced that she wants an increase of 30% for external action in the 2021–27 Multi-annual Financial Framework (the EU budget). But with the Brexit budget gap looming, and little appetite to increase contributions or reduce the funds allocated to costly schemes, like the Common Agricultural Policy, compromises will have to be made for this to happen.

This will be one of the first key tests for the new commission. Power costs money, not just gestures, and therefore specific commitments already made under the Juncker mandate regarding the European Defence Fund or the new Neighbourhood, Development and International Cooperation Instrument need to be guaranteed, if not expanded.

Internal politics

None of these steps are possible if the internal workings of the EU become too dysfunctional. A stronger stance internationally would make the sometime incoherence of internal EU management more of a liability to the bloc’s credibility. For example, how can the EU advocate for the rule of law beyond its borders while some of its own member states violate the same principles? 

And there remains the perpetual question of how much more power member states are willing to cede – if any – to deliver faster and more efficient decision-making. If the bloc’s reflexes – often slow, consensual and risk averse – are out of place with the role of a modern great power, how does the commission envision introducing decision-making mechanisms, like qualified majority voting, in foreign and security policy matters?

Borrell’s résumé shows his extensive experience in handling critical policy dossiers. He is also expected to travel less than his predecessor, being mindful of the even heavier institutional work ahead, not least in working with a more politically fragmented European Council and a more politicized European Parliament.

Ultimately, learning the language of power might mean that the EU finally deals with the basics of international affairs as a coherent and cohesive actor, rather than as an occasional ensemble. This endeavour clearly lacks a fixed path or destination. But the new commission seems to be mindful that the EU will have to find new ways to use power as the world changes around it. In doing so, it should keep in mind that the language of power is best articulated not with words, but with actions.

What does the UK election result mean for Brexit and forthcoming trade negotiations with the EU?

The most important thing is that it means Brexit will definitely happen. Since the referendum, we’ve had three-and-a-half years of continued uncertainty where all outcomes were still possible. We now know that Brexit will become irreversible from 31 January.

That’s the biggest thing, because I think that will have a big psychological impact on politics, both in the UK and also on the EU side. The EU has been working with a partner that has been unsure about its direction, and perhaps some had still hoped that the process might still be reversed, but that direction is now completely clear.

Obviously the first order of business is to pass the withdrawal agreement, which should be pretty straightforward given the majority that the Conservatives have. That’s a formality now.

Then, the question becomes about the level of ambition for the next year. It is an exceptionally ambitious timetable to negotiate, ratify and implement a new relationship before the end of the transition period in December 2020.

What is achievable by the end of next year?

I think there are three possible outcomes here. One: that timetable doesn’t work and Boris Johnson follows through on his pledge to leave the transition period anyway, leading to a ‘no trade deal’ outcome.

Two: the negotiations are able to deliver something by the end of 2020, either because the depth and ambition of any agreement is relatively low level (what Michel Barnier has called a ‘vital minimum’)  and/or because they come up with some type of compromise on the process which is not called an extension, but something else: a type of temporary agreement or a new implementation period.

This is a situation where you might have a bare-bones agreement for the end of the transition period, but with an extended period of negotiation for different unresolved issues. The EU will probably insist upon level playing field guarantees and fishing access rights as a component of any such agreement.

Three: Boris Johnson breaks his manifesto pledge not to extend the transition. Now, he has stared down the barrel of leaving with no deal before and he made a political judgment that it was better to make significant compromises on his negotiating position than to follow through with ‘no deal’. I suspect he might make that same judgment again.

No option is ideal. The first is the most economically disruptive, the second means the EU will be in an even stronger position to dictate terms and the third means breaking a manifesto pledge.

How important is that end of transition deadline now? It was an important issue for the Brexit Party and hardliners in the European Research Group of Conservative MPs. But given the size of a majority, he may need to worry less about them. Is the transition deadline that important to people who voted Conservative, especially if he can show that he has taken the UK out of the EU by the end of January?

I think there may indeed be some political space for Johnson here, given the size of his majority and given that the first phase of Brexit will have been done, along with the debate about withdrawal.

There will be a lot of difficult, technical negotiations in all sorts of areas, some of which I think will become quite rancorous, but won’t necessarily become front page news in the way some of the first phase of negotiations has, not least because you won’t have the theatre of a hung parliament.

Hopefully, there will be more focus on the substance of the agreement, and the debate will be about the consequences of divergence versus staying more aligned with the EU, which is basically the central question now about the future relationship.

I still think for UK prime ministers to pick arbitrary dates, and then to make domestic political promises based around them, actually undermines the UK’s negotiating position. It would be in Britain’s interest to have more flexibility rather than a ticking clock.

Moving to the other big story from the night, the SNP won 48 of 59 seats in Scotland. How does the debate over Scotland’s future in the United Kingdom play out from here?

The SNP has really strengthened its position, more than many expected. This is now set up for a huge constitutional struggle over the future of the United Kingdom.

I think there is a key dilemma for Scottish independence supporters, which is that on the one hand Brexit greatly strengthens the political case for independence. The difference between the political preferences in Scotland and the rest of the UK, particularly in England, is a perfect demonstration of that.

At the same time, once the UK has left the EU, independence becomes much more difficult technically and economically. There will be many of the same difficulties that there have been in discussing Northern Ireland’s relationship with the Republic of Ireland. There will be a difficult debate over the currency. There are all sorts of challenges to creating a trade or regulatory border between England and Scotland. This is particularly true if there is a harder Brexit outcome, where Britain leaves the EU without a large amount of regulatory alignment.

On demands for a second independence referendum, I think in the first instance Boris Johnson will simply refuse to hold one. It’s probably not in his short-term interest to do anything else. Theresa May played it this way in 2017, repeatedly saying ‘now is not the time’.

In a similar way I think Johnson will just try to ride the pressure out, to the point where the SNP will need to face the challenges of advocating independence with the UK outside the EU. The next flashpoint will be the elections to the Scottish Parliament in 2021.

Ultimately, though, it will become a democratically unsustainable position if Scotland continues to vote for the SNP, and refusing to sanction a second independence referendum might only reinforce that sentiment.

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This roundtable brings together German experts to discuss the country’s role in Europe and the world. Over the course of two sessions, Germany’s EU and wider foreign policy will be examined, with speakers sharing their views on where the country finds itself at the beginning of 2020 and what drives its current priorities across a number of areas. Participants will also compare perspectives on what a post-Merkel Germany might look like, now that the future leadership of CDU, Germany’s largest political party, is under question.

The event will comprise two separate sessions. Participants are welcome to attend either one or both.

08.30 – 09.30
Germany in the EU and the Eurozone

Speaker: Mark Schieritz, Economics Correspondent, Die Zeit
Chair: Quentin Peel, Associate Fellow, Europe Programme, Chatham House

Germany’s voice remains possibly the most important in any debate within the EU, including in those around the future of the Eurozone. The country has long been seen as the stalwart of the European economy and its government has always played a key role in driving Eurozone policy. However, most recent EU-wide attempts at reform have fallen short of what many claim needs to be done to complete the monetary union. The recently announced Eurozone budgetary instrument, for instance, remains very small and only focused on investment instead of stabilisation. The German government has been reluctant to go along with French President Emmanuel Macron and his structural reform proposals, though some other member states remain sceptical of his ideas for further integration too.

How can German attitudes towards the future of the Eurozone be explained? Is the government’s resistance to ambitious EU-wide economic reforms shared across the political spectrum in Germany? What stands in the way of further Eurozone reform when it comes to other EU member states? And will Germany’s reluctance to engage with reforms in this area, make it more difficult for the country to build coalitions when it comes to other EU policy areas?

09.45 – 11.00
German Foreign Policy in Perspective

Speakers: Joshua Webb, Programme Manager, Berlin Foreign Policy Forum and the Berlin Pulse, Koerber Stiftung
Dr Nicolai von Ondarza, Deputy Head, EU/Europe Research Division, German Institute for International and Security Affairs (SWP)
Chair: Dr Uta Staiger, Executive Director, UCL European Institute

Historically, Germany has been reluctant to play too active a role on the global stage, relying on its place at the heart of Europe and the transatlantic alliance. However, the current uncertain global context appears to have led to some rethinking on how the country can ensure its voice is being heard internationally, especially where its values are being challenged and its interests are at stake.

What drives German foreign policy in 2020? What are domestic priorities when it comes to trade, security and Germany’s place in the world? What shifts in public opinion may have been engendered by Brexit and Donald Trump’s presidency? What does the rise of China – and China’s growing interest in Europe – mean for Germany’s wider Asia policy?  Finally, what role will Germany play in a post-Brexit Europe? And what are the country’s priorities in its future relationship with the UK?

The speakers will discuss these and other questions, sharing the findings of a recent German public opinion survey and compare these with international expert perspectives. 

Perhaps it will be second time lucky. At the end of April, Germany’s Christian Democratic Union (CDU) will elect a new party leader to follow in the footsteps of Angela Merkel. An emergency party congress has been summoned to do that after the surprise resignation of Annegret Kramp-Karrenbauer, Merkel’s chosen successor.

The plan is to leave the decision on who will be the CDU candidate for chancellor at the next election until after Germany’s EU presidency concludes in December. So Merkel will keep her job until 2021, and the new leader will have to learn to live with her.

The three leading candidates are Armin Laschet, Friedrich Merz and Norbert Röttgen, all from the state of North Rhine-Westphalia. Two of the three – Merz and Röttgen – were sacked by Merkel from their former jobs. They have not forgotten. Only Armin Laschet, currently CDU leader in North Rhine-Westphalia and state premier, can be described as a Merkel loyalist, true to her centrist mantra.

He is the man to beat, having teamed up with Jens Spahn, the 39-year-old health minister, who is popular with party conservatives. Spahn will run as his deputy, so the team straddles the left-right divide in the party. But the contest still seems set to be a bitter battle between pro- and anti-Merkel factions that could leave the party badly split.

After nearly 15 years as chancellor, and 18 years as CDU leader, Merkel remains the most popular politician in Germany. In spite of criticism that she lacks vision, her caution and predictability appear to be just what most German voters like.

But her term in office has also seen the steady shrinking of the centre ground in German politics, with the rise of the environmentalist Green party and the far-right Alternative for Germany (AfD) at the expense of the centre-right CDU and the centre-left Social Democratic Party (SPD).

The battle for the soul of the CDU is between those who think Merkel has been too left-wing, and want a more conservative leader to win back AfD voters, and those who believe that the CDU must stay in the centre, and prepare for a future coalition with the Greens. Merz is seen as the former, Laschet and Röttgen the latter.

Unless Laschet emerges as the clear winner in April, the leadership contest is likely to leave Germany sorely distracted by domestic politics just as it takes over the EU presidency in the second half of the year. Instead of Merkel having a triumphant international swansong on the EU stage, she could be battling to protect her inheritance at home.

The one area on which all three leadership candidates seem to agree is foreign policy: they all want Germany to take more leadership and responsibility, and for the European Union to play a bigger role in security, defence and international affairs. They are all Atlanticists, but critical of Donald Trump’s ‘America First’ stance. All are on the record criticizing the chancellor – at least tacitly – for not having a more vigorous foreign policy.

There the similarity ends.

On the right, the 64-year-old Merz is both the most conservative and the most popular with the party grassroots. He fell out with the chancellor when she took over his job as CDU leader in parliament in 2002. He quit politics to become a corporate lawyer (and a millionaire), but never lost his political ambition. He is an economic liberal but socially conservative, a strong critic of Merkel’s migration policy and her lack of clear leadership. Critics say he is a man of the past, and not a team player.

On the EU, he believes Germany is ‘leaving too much to the French’. If France and Germany cannot agree on financial matters, he said at the London School of Economics in February, they should instead forge a stronger EU industrial policy focused on creating more ‘European champions’.

Laschet, the Merkel loyalist, is four years younger, and from the left of the party. Like Merz, he is a former member of the European parliament. In 2015, he defended Merkel’s open border policy to accept refugees stranded in the Balkans. On Russia, however, he is more critical, calling for a new effort to re-engage with Vladimir Putin. Most recently, at the Munich Security Conference, he called for stronger Franco-German relations, and more support for the eurozone reforms proposed by Emmanuel Macron.

As CDU leader in North Rhine-Westphalia, Laschet has the strongest power base. He earned his political spurs there by winning the last state election in 2017, in contrast to Röttgen, who lost to the SPD and Greens five years earlier.

Röttgen, chairman of the Bundestag foreign affairs committee, is the surprise candidate. Once a Merkel favourite, they fell out when she sacked him as environment minister after he lost the North Rhine-Westphalia election. By throwing his hat in the ring, he has forced it to become an open contest. He is independent-minded and outspoken, but not as bitterly hostile to the chancellor as Merz, so he could be a compromise candidate.

Laschet is clearly the man Merkel would find it easiest to live with. The decision will be taken by a party congress, not a grassroots ballot, which gives him a better chance. But Merz is the most eloquent orator and seen as the best campaigner. The challenge for party members is whether they believe it is better to swing right and squeeze the AfD, or stick to the centre to hold onto voters tempted by the Greens, who have replaced the SPD as the second-most popular party in Germany.

The race is wide open. So is the future of the CDU. The only prediction one can make with much certainty is that as long as Merkel remains chancellor, any successor will struggle to get out of her shadow.

The measures taken to limit the spread of the coronavirus - in particular social distancing -  come with significant economic costs, as the drop both in demand for goods and services and in supply due to workers being at home sick will create a short-term economic shock not seen in modern times.

Sectors that are usually less affected by regular economic swings such as transport and tourism are being confronted with an almost total collapse in demand. In the airline sector, companies are warning they might only be able to hold out for a few months more.

Building on the calls to provide income support to all citizens and shore up businesses, European leaders should now be giving explicit permission to the European Central Bank (ECB) to provide whatever financial support is needed.

Although political leaders have responded to the economic threat, the measures announced across the continent have mainly been to support businesses. The crisis is broader and deeper than the current response.

Support for weaker governments

The ECB already reacted to COVID-19 by announcing measures to support the banking system, which is important to guarantee the continuity of the European financial system and to ensure financially weaker European governments do not have to confront a failing banking system as well.

Although government-subsidised reduced working hours and sick pay are a solution for many businesses and workers, crucially they are not for those working on temporary contracts or the self-employed. They need direct income support.

This might come down to instituting something that looks like a universal basic income (UBI), and ensuring money keeps flowing through the economy as much as possible to help avoid a cascade of defaults and significant long-term damage.

But while this is likely to be the most effective remedy to limit the medium-term impact on the economy, it is particularly costly. Just as an indication, total compensation of employees was on average around €470bn per month in the eurozone last year.

Attempting to target payments using existing welfare payment channels would reduce costs, but is difficult to implement and runs the risk of many households and businesses in need missing out.

The increase in spending and lost revenue associated with these support measures dwarf the fiscal response to the 2008-09 financial crisis. The eurozone economy could contract by close to 10% this year and budget deficits are likely be in double digits throughout the bloc.

The European Commission has already stated member states are free to spend whatever is necessary to combat the crisis, which is not surprising given the Stability and Growth Pact - which includes the fiscal rules - allows for such eventualities.

Several eurozone countries do probably have the fiscal space to deal with this. Countries such as Germany and the Netherlands have run several years of balanced budgets recently and significantly decreased their debt levels. For countries such as Italy, and even France, it is a different story and the combination of much higher spending and a collapse in tax revenue is more likely to lead to questions in the market over the sustainability of their debt levels. In order to avoid this, the Covid-19 response must be financed collectively.

The Eurogroup could decide to use the European Stability Mechanism (ESM) to provide states with the funds, while suitably ditching the political conditionality that came with previous bailout. But the ESM currently has €410bn in remaining lending capacity, which is unlikely to be enough and difficult to rapidly increase.

So this leaves the ECB to pick up the tab of national governments’ increase in spending, as the only institution with effectively unlimited monetary firepower. But a collective EU response is complicated by the common currency, and particularly by the role of the ECB.

The ECB can’t just do whatever it likes and is limited more than other major central banks in its room for manoeuvre. It does have a programme to buy government bonds but this relies on countries agreeing to a rescue programme within the context of the ESM, with all the resulting political difficulties.

There are two main ways that the ECB could finance the response to the crisis. First, it could buy up more or all bonds issued by the member states. A first step in this direction would be to scrap the limits on the bonds it can buy. Through self-imposed rules, the ECB can only buy up to a third of every country’s outstanding public debt. There are good reasons for this in normal times, but these are not normal times. With the political blessing of the European Council, the Eurosystem of central banks could then start buying bonds issued by governments to finance whatever expenditure they deem necessary to combat the crisis.

Secondly, essentially give governments an overdraft with the ECB or the national central banks. Although a central bank lending directly to governments is outlawed by the European treaties, the COVID-19 crisis means these rules should be temporarily suspended by the European Council.

Back in 2012, the then president of the ECB, Mario Draghi, proclaimed the ECB would do whatever it takes, within its mandate, to save the euro, which was widely seen as a crucial step towards solving the eurozone crisis. The time is now right for eurozone political leaders to explicitly tell the ECB that together they can do whatever it takes to save the eurozone economy through direct support for businesses and households.

Please note this an online-only event.

According to a previously agreed timetable for phase two of Brexit talks, negotiations on the future EU-UK trade relations were scheduled to begin in March. Then a global pandemic hit. Despite the ongoing COVID-19 outbreak, the UK government insists that the Brexit negotiations are on track and there are currently no plans to extend the transition period beyond 2020.

However, the original timetable for trade talks was already widely seen as extremely constrained. Can negotiations still be done in time? With the decision on any possible extension to be made by July at the latest, can the two sides make sufficient progress by that point? Or would the ongoing public health crisis make requesting an extension to the transition period more politically viable for the UK government? Finally, if there is no extension, could Britain still leave the EU with no deal?

In this webinar, the speaker will discuss how the need to manage other challenges, such as the current COVID-19 outbreak, might affect the government’s approach to the negotiations with the EU. He will also share his insights on what to expect from the second phase of negotiations and on the most important lessons from phase one. 

Please note this an online-only event.

Norway is one of the few European countries that remains outside of the European Union. After the country’s population rejected the prospect of joining the EU twice, Norway’s relationship with the Union has been based on its membership of the European Economic Area (EEA), alongside Iceland and Liechtenstein.

The ‘Norway Model’ was often mentioned in the run up to the Brexit vote as a possible basis for Britain’s future relationship with the bloc, not least because it offers the least disruption to the current arrangement. Equally, Norway is not subject to the EU fisheries policy - an anticipated major issue in the next phase of Brexit talks. Nor is it part of the EU Customs Union.

Even though Prime Minister Johnson has now ruled out the type of deep economic and regulatory integration with the EU that Norway enjoys through its EEA membership, the country’s experience can still offer valuable lessons for the UK as it prepares to exit the transition period at the end of 2020.

In this session, the speaker will share Norway’s experience as a long-standing EEA member and discuss the challenges of engaging with the EU from the outside. What lessons can Norway offer the UK ahead of the negotiations on the future of UK-EU relations? What are the limits of its current arrangement with the EU? And is there any appetite among the Norwegian population to revisit it?

The new European Commission had a bold new agenda when it began its work in December 2019, with climate change, digital transformation and strengthening European democracy among its priorities. Less than six months later, the European continent is in the midst of the worst crisis since the second World War and business as usual has been taken over by crisis management.

Has COVID-19 monopolized the agenda in Brussels? What priorities are still on the table and what debates have fallen victim to the coronavirus? Is the current crisis reigniting and exacerbating existing faultlines in the EU or creating new ones?

Reflecting on his first four months as the Economist’s Charlemagne columnist, the speaker will share what decision-making in Brussels looks like during a pandemic and what debates are dominating conversations in the EU capital today.