Minister for Finance Paschal Donohoe was interviewed on Eamon Dunphy's podcast this week and gave the clearest and most in-depth exposition of Government policy on the coronavirus crisis and its economic consequences. Thirty-minute deep dives with leading politicians are rare these days and the insights given by Donohoe added to my estimation of him as the most thoughtful and underrated policymaker around today.
That’s not to say that all of his answers stacked up. A robust defence of the Government’s handling of the health crisis would not, I suspect, have convinced many doubters, particularly those in the zero-Covid camp. But he did make the convincing – to me at least – point that even if we had stayed locked down throughout December we would not be looking at a faster reopening of the economy today.
Thanks mostly to the advent of the variants, we would still be locked down now, carrying an even worse economic burden.
More generally, he suggested that some of the wishes of the zero-Covid protagonists are precisely that: a wish list rather than implementable, practical, policy proposals. The land border is the argument most often cited here. Others have noted that New Zealand doesn't have Irish or UK-style connectivity via lorry drivers and all the others involved in international trade.
Variants
The aims of the zero-Covid campaigners are laudable and shared by us all. But we are not the decision-makers, faced with extreme uncertainty and constantly changing conditions. Donohoe’s point about the variant is an important one. The UK has grown its own variant without any connection with its border.
The way in which travel and airports have become a focus for some scientists verges, in my view, on a distraction. They have allowed the idea to grow that if only we seal the country off, most of the hard work is done.
I fully realise that they will cry foul and point to their multi-point strategy that has airports and borders as just one of many areas to focus on. But from a media/PR perspective they haven’t done enough to refocus attention on to all of the other aspects of their strategy.
One scientist contacted me recently about tourism, saying that stopping international travel is, for him, an ethical issue. Actual decision-makers will, at this point, bang their heads against their Zoom screens. As Britain and many others have shown, if you can’t figure out how to stop your own citizens from interacting, you won’t stop the virus and you risk your own variants.
The furore over the Oxford/AstraZeneca vaccine rumbles on. Ireland has joined many other European countries with limits on distribution, a few days after a row about how the European Union is not getting its hands on enough.
We don’t know enough about the reasons for the decisions to restrict AstraZeneca’s jab. It flies in the face of advice from the European Medicines Agency (EMA) that, despite acknowledged data limitations, it is judged to be both safe and efficacious for all age groups.
Trial data
The decision to limit vaccinations is one of those tough calls in the face of both uncertainty and risk. From what we know from trial data and the many UK citizens who have now received the jab, it appears safe. So the worry must be that it won’t work. European scientists and governments either have access to more data than the EMA or they simply disagree with its recommendations. We need details about all of this.
If the vaccine doesn’t work for the over-70s it is probably worth making some people wait for a vaccination that has better efficacy. Over time, that will, probably, lead to a better health and economic outcome.
But it suggests that some people will be vaccinated later than they could have been. If the AstraZeneca vaccine does work, that could mean more people will die than would otherwise have been the case. And economic reopening is delayed longer than necessary. I’m glad I’m not a decision-maker.
We do need to be told the sequence of events, the requisite criteria, for potentially deploying the AstraZeneca vaccine to older age groups: the circumstances which will lead to a change of minds.
On the economy, Donohoe was quick to contrast the US and European policy responses. And to suggest it is horses for courses. The US is engaged in a remarkable real-time policy experiment: fiscal stimulus that could, if all current plans are implemented, amount to 25 per cent of GDP or more.
Donohoe suggested that Europe’s numbers, feeble by headline comparison, nevertheless stack up because of the automatic social safety nets that we possess and the US does not. True, but by no means the whole truth.
President Joe Biden clearly intends to run the US economy as hot as possible, for a long as possible. That's a truly radical agenda, fully aided and abetted by both the US Treasury and the Federal Reserve. It's about much more than social safety nets. It's a full-on assault on the economic insecurity that is a big driver of populism. It's an economic language that Europe simply doesn't speak.
