RUTHFULLY YOURS

The European Union’s much-touted campaign to vaccinate 450 million Europeans against Covid-19 has gotten off to an inauspicious start. The vaccination rollout has been plagued by bureaucratic sclerosis, poorly-negotiated contracts, penny-pinching and blame shifting — all wrapped in a shroud of secrecy. The result is a needless and embarrassing shortage of vaccines, and yet another a crisis of legitimacy for the EU.

As of February 11, the EU had administered vaccines to approximately 4.5% of its adult population, compared to 14% in the United States, 21% in the United Kingdom and 71% in Israel, according to statistics compiled by Our World in Data. The EU’s vaccination fiasco comes as many European countries are struggling to combat an extremely virulent third wave of the coronavirus and healthcare systems across the continent are once again at breaking points.

The current imbroglio, months in the making, was triggered on January 22, when AstraZeneca, the Anglo-Swedish pharmaceutical company, notified the EU that, due to production problems at a plant in Belgium, initial deliveries of its Covid-19 vaccine would be reduced by 60% in the first quarter of 2021. The company said that it would deliver to the EU only 31 million doses by the end of March, rather than the 80 million doses originally pledged.

A few days earlier, the US-based pharmaceutical company, Pfizer, and its German partner, BioNTech SE, slowed supplies of their vaccine to the EU. Pfizer said that the temporary move was necessary to reconfigure its production plants to increase long-term supply of the vaccine.

European officials, caught off guard amid mounting public anger, resorted to the blame-game by accusing the pharmaceutical companies of failing to honor their contractual commitments. On January 29, the European Commission made public a heavily redacted version of the 42-page contract between the European Commission and AstraZeneca. European officials apparently hoped this move would swing public opinion to their side.

The redactions, however, were ineptly made in such a way that the original text was easily decipherable by tech-savvy members of the public. The now-public text revealed that European negotiators agreed to unusually lenient procurement terms, and that AstraZeneca is under no contractual obligation to deliver a specific quantity of doses within certain time frames. According to the contract, AstraZeneca is only required to make “best reasonable efforts” to deliver the vaccines on schedule.

“It is hard to define the 42 pages as a contract,” concluded Johan Van Overtveldt, chairman of the European Parliament’s budget committee. “This is more a declaration of good intentions.”

In an interview with the German newspaper Die Welt, the CEO of AstraZeneca, Pascal Soriot, admitted that the company was two months behind in production but blamed the supply shortages on the EU’s delays in signing the contracts:

“We’ve also had teething issues like this in the UK supply chain, but the UK contract was signed three months before the European vaccine deal. As a result, with the UK we have had an extra three months to fix all the glitches we experienced….

“We didn’t commit with the EU, by the way. It’s not a [contractual] commitment we have to Europe: it’s a best effort. We said we are going to make our best effort. The reason why we said that is because the EU at the time wanted to be supplied more or less at the same time as the UK, even though the EU’s contract was signed three months later. So, we said, ‘ok, we’re going to do our best, we’re going to try, but we cannot commit contractually because you are three months behind UK.’ We knew it was a super-stretch goal and we know the pandemic is a major issue…. Basically, we said we’re going to try our best, but we can’t guarantee we’re going to succeed. In fact, we are getting there even though we are a little bit delayed.”

Markus Ferber, a German Member of the European Parliament (MEP), noted:

“The anger is justified. If I conclude a contract, but there are no obligations for the manufacturer…then it is not a balanced contract.”

European leaders had hoped the vaccine rollout — organized by the European Commission on behalf of all 27 EU member states — would restore confidence in the European Union after Covid-19 systematically destroyed many of the foundational myths — European solidarity, open borders, multilateralism — underpinning European unification.

In her November 2020 “State of the Union” address, European Commission President Ursula von der Leyen announced a grandiose “European Health Union.” In what appeared to be an unabashed power grab, she said that more centralization of decision-making power in Brussels was necessary to fight Covid-19 as well as future pandemics:

“Our aim is to protect the health of all European citizens. The coronavirus pandemic has highlighted the need for more coordination in the EU, more resilient health systems, and better preparation for future crises. We are changing the way we address cross-border health threats. Today, we start building a European Health Union, to protect citizens with high quality care in a crisis and equip the Union and its Member States to prevent and manage health emergencies that affect the whole of Europe.”

EC Vice-President for Promoting the European Way of Life, Margaritis Schinas, added:

“Today, we are taking a big, meaningful step towards a genuine EU Health Union. We are strengthening our common crisis management to prepare and respond to serious cross border threats to health. Our EU agencies need to be equipped with stronger mandates to better protect EU citizens. To fight the COVID-19 pandemic and future health emergencies, more coordination with more efficient tools at EU level is the only way forward.”

Von der Leyen also promised that the EU’s administrative prowess would save not only Europe but the rest of the world from the ravages of Covid-19:

“This vaccine will be a breakthrough in the fight against the coronavirus, and a testament to what partners can achieve when we put our minds, research and resources together. The European Union will do all in its power to ensure that all peoples of this world have access to a vaccine, irrespective of where they live.”

EU Commissioner for Health and Food Safety Stella Kyriakides added:

“Working together will increase our chances of securing access to a safe and effective vaccine at the scale we need and as quickly as possible. It will ensure fair and equitable access for all across the EU and globally, thus offering the best opportunity of finding a permanent exit strategy from the COVID-19 crisis. This is the EU at its best: pooling resources, joining efforts, bringing tangible results to the everyday lives of people. No one is safe until everyone is safe and we will leave no stones unturned in our efforts to protect EU and global citizens.”

On January 29, however, in a sudden about-face, Kyriakides abruptly announced plans to impose export controls to prevent shipments of the Covid-19 vaccine from leaving the European Union. She said that EU citizens must be vaccinated first.

Kyriakides’ announcement, specifically aimed at preventing AstraZeneca from using its plant in Belgium to fulfill its contract obligations with the United Kingdom, was a direct attack on the EU-UK Trade and Cooperation Agreement signed a just month earlier. The move, which undermined the foundation of the Brexit deal that took four years of arduous negotiations to complete, set off a firestorm of criticism and triggered yet another self-inflicted public relations disaster for the European Union.

“For Europe to say they are going to control exports [of the vaccine] is contrary to what they said a few months ago, that they were going to give access to everybody,” said Soriot, the CEO of AstraZeneca. The Archbishop of Canterbury, Justin Welby, added:

“The European Union was originally inspired by Christian social teaching — at the heart of which is solidarity. Seeking to control the export of vaccines undercuts the EU’s basic ethics. They need to work together with others.”

Now that the vaccine debacle has become the top political issue in Europe today, European leaders appear to be looking to Russia for salvation. In an effort to save face, European regulators reportedly are considering fast-tracking approval of the Russian-made Sputnik V Covid vaccine for use in Europe. Such a move would have been unthinkable just a few weeks ago. That the EU would suddenly cling to Russia, which is under a panoply of EU sanctions for its actions in Ukraine, amounts to massive geopolitical humiliation.

In a January 27 interview with the German broadcaster ZDF, Markus Söder, the Bavarian premier and possible future German chancellor, laid blame for the botched vaccine rollout squarely at the feet of the EU:

“The European Commission ordered too late, limited its focus to only a few pharmaceutical companies, agreed on a price in a typically bureaucratic EU manner and completely underestimated the fundamental importance of the situation.

“We now have a situation where grandchildren in Israel are already vaccinated but the grandparents here are still waiting. That’s just completely wrong.

“It cannot be that such a large continent, which is so economically strong and has so many large pharmaceutical companies, is unable to produce more vaccines.”

Select Commentary

European analysts — pro- and anti-EU — have been scathing in their criticism of the way the European Commission has mishandled the vaccine rollout.

In an essay published by the UK-based Spectator, columnist Matthew Lynn wrote that the vaccine disaster has undermined the EU’s legitimacy in three ways:

“First, the EU is by its very design a technocratic elite, without much in the way of democracy. Of course, that’s fine if you like that sort of thing. In the political theory seminars there have always been respectable arguments for letting the experts run everything without all the messy business of elections. There is a catch, however. The technocrats have to be genuinely technically competent, otherwise what’s the point? The vaccine disaster suggests the EU’s technocrats are third division, and even that is probably generous.

“Next, it has shattered the myth of market power. The EU has built itself on the idea that the Single Market worked better than lots of fragmented national economies. Its bargaining power, and sheer size, meant that companies, no matter how big and powerful they might be, would always have to bend to its will. Left to themselves, smaller countries, and even France and Germany, would simply be ignored. But that doesn’t seem to have worked in this case. Israel isn’t a big market. Nor on the world stage is Britain. Serbia, vaccinating at twice the rate of Germany, definitely isn’t. Small, it turns out, is fine.

“Finally, it has called into question its status as a ‘regulatory superpower.’ The EU has made a lot in the last decade of its ability to become the world’s leading rule and standard setter. It certainly isn’t a military superpower anymore, and its claims to be an economic one fade with every accumulated year of underperformance. But at least when it came to regulations it could argue it led the world. The EU’s rules would be the gold-standard that everyone else would have to follow. And yet why would anyone want to follow a regulator that makes such a hash of things?

“Any particular crisis will blow over eventually. Very few last more than a couple of weeks, and any industrial problem can always be fixed if you have unlimited money to throw at it. But the vaccine affair has exposed how hollow the EU has become — and that will do lasting damage.”

Guntram Wolff, director of the Bruegel think-tank in Brussels, wrote:

“Why is the EU lagging behind? …. As always in such complex issues, there is no single answer as to why this is happening…. Part of the explanation is that the EU ordered too few vaccines too late…. Purchases were slowed down further as the EU insisted that liability in case of negative side-effects on health remains with pharma companies and therefore rejected early emergency authorization…. EU funding has also proven insufficient… Last, the EU was not prepared for the pandemic…. Building a racing machine only when the race has started means delays.”

In an essay titled, “Why the EU Lost the Vaccine War,” Bruno Maçães, a Portuguese political scientist and former Portuguese Europe Minister, wrote that the bloc’s unease with technology was partly responsible for the delays:

“There is a lot that went wrong with the European Commission’s vaccination strategy. But before everything else, there was complacency…. There was no urgency in signing the necessary contracts with the most promising manufacturers, with protracted haggling over prices further delaying the process….

“During a pandemic, it makes a vital difference whether vaccines are available now or in two months’ time, both in terms of saving lives and resuscitating the economy….

“This was never understood in Brussels, with the Commission insisting it had secured billions of doses but forgetting to consider when these doses would be available. Even in normal times, being able to lead in key technological areas will sooner or later be translated into more visible forms of global power….

“The main question posed by the pandemic will be the one concerning technology. The responses adopted by governments around the world seem to fall into two main categories. Those countries able to leverage new and emerging technologies to fight the virus have done better in limiting the number of cases and fatalities, while managing to keep most of their economies and societies operational. The countries unable to use technology had to rely on lockdowns, quarantines, generalized closures and other physical restrictions — the same methods used to fight the Spanish Flu more than a century ago and, in many cases, with the same slow, painful results.

“I now fear that the European Union will find itself in the impossible situation of having to prolong some of the existing restrictions beyond the summer, while both Britain and the United States start to normalize. That is the cost of the vaccine delays: a very high cost in lives, prestige and further economic losses. The current crisis has the potential to spiral out of control. The imperative was to reduce the risks of that happening, no matter what the immediate financial cost. But again, to think technologically rather than legally is something that Brussels struggles with. Economies of scale, exponentials, tail risks — all foreign concepts.”

Bloomberg News, in an essay titled, “Faced With a Vaccine Emergency, the EU Made an Enemy of Everyone,” observed:

“The events leading up to the decision to control exports show von der Leyen’s team buckling under the immense pressure to fix its vaccination program. Beginning the week under fire for moving too slowly, they ended up possibly making things much, much worse by moving too fast.

“On top of the faltering vaccine program, which is likely to cost thousands of lives and billions in lost output, von der Leyen and her team have done real damage to the EU and its self-image as a champion of open markets and the rule of law.”

Adrian Wooldridge, political editor of UK-based magazine, The Economist, said,

“The EU Commission is very good at negotiating things like trade deals, but traditionally it hasn’t had competence in such matters as vaccines and contract negotiations, which were left to member states. The commission decided to aggrandize its competence and it wasn’t up to the job — it didn’t have the right people or the right skills.

“By contrast, Britain put a successful venture capitalist specializing in biosciences, Kate Bingham, in charge of its vaccine procurement program. Her competence is in buying vaccines and drawing up contracts, and that’s not the competence of Ursula Von der Leyen or anyone within her employ.”

In an essay titled, “The Best Advertisement for Brexit,” Die Zeit, one of the most pro-EU newspapers in Germany, wrote:

“In the dispute over the delivery delay of the AstraZeneca vaccine, the EU Commission is currently making the best advertisement for Brexit: It is acting slowly and bureaucratically and is resorting to protectionism. And if something goes wrong, it’s everyone else’s fault. This is how many Britons see the EU and so the prejudices have been confirmed: ‘Now I understand Brexit better,’ an AstraZeneca employee said on television.”

In another article titled, “Europe Loses the Vaccination Competition,” Die Zeit wrote:

“This is a disaster for the European Commission. Since last autumn, their spokespersons have repeatedly referred to the necessarily secret nature of the negotiations with the pharmaceutical companies. Again and again the message was: ‘Trust us! We have a clear mandate from all EU member states and we are in a position of strength vis-à-vis the manufacturers.’ European ideology was certainly involved: ‘together we are superior to all others and therefore we do not get involved in a global race for vaccines.'”

In an op-ed titled, “How Europe Dodges Responsibility for its Vaccine Fiasco,” the UK-based magazine, The Economist, wrote that EU member states share responsibility for the current state of affairs:

“Start with the body Mrs von der Leyen heads: the commission. It took months to sign contracts for covid-19 vaccines, something that could have been done in weeks. Shrugging off liability — ensuring that the drug firms were on the hook should anything go wrong — was prioritized over speedy delivery. The row with AstraZeneca was badly handled. In a mix of institutional panic and fury, Mrs von der Leyen demanded export controls on any vaccines heading out of the EU. This threat of a blockade led to concern from Tokyo to Ottawa, rather undermining the EU’s claim to be the doughtiest defender of the rules-based trading system….

“But no one forced national governments to put the commission in charge. Legally, EU institutions have barely any responsibility for the health care of the continent’s citizens, which is left to national governments. Rather than deal with the tricky politics of some EU countries buying more vaccines than others, governments outsourced the job to the commission. Commission negotiators, used to arguing over simpler things like beef quotas in trade deals, were tasked with dealing with makers of novel pharmaceuticals. Reshuffling institutional responsibilities while in the middle of a crisis is risky, yet surprisingly normal in the EU. The job of overseeing a project costing €2.7bn ($3.35bn) to vaccinate 450m people was handed to a department whose main previous concern was food labelling — all at the behest of national capitals.”

Roland Tichy, founder of the influential German blog, Tichys Einblick, predicted that the vaccine debacle would result in EU member states clawing back decision-making powers from the European Commission:

“Ursula von der Leyen combines decisiveness with ineptitude. She represents a confused ideology and despises democracy and self-determination. Her blind belief in the blessings of a central (istic) bureaucracy destroys the diversity and efficiency of European states and cities. Ursula von der Leyen could be the nail in the coffin of this kind of union of bureaucrats and ideologues. Nobody needs this kind of paternalistic EU except for failed politicians and far too many overpaid bureaucrats who use it to expand their own power, importance and income.

“Ursula von der Leyen involuntarily is setting the pace. She is a pacemaker for an EU that is being cut back to size in the direction of the original European Economic Community: a common Europe without borders — but with lively democracies that work for their citizens instead of reducing them to being subjects of the EU.”

In scathing commentary published by Bild, Germany’s largest-circulation newspaper, chief political reporter Peter Tiede concluded:

“This is a health disaster of unprecedented proportions. For us Germans and for all of Europe! The EU’s vaccination order is a debacle. One that will cost lives.

“The United States launched the largest vaccination program in history (‘Warp Speed’) last April. And what did the EU do?

“It created the biggest trust-destruction program in its history: too bureaucratic, too stingy and above all too slow. With this, Brussels and all of the national governments involved have achieved one thing: to confirm the weakness of Europe.

“Worse still: At all levels, those in power in Brussels and Berlin respond to indignant and disappointed citizens with arrogance — ‘It’s not our fault!’

“This epochal failure must be investigated down to the last detail and there must be consequences. Not sometime in the future. NOW! Anyone who has negotiated and approved this has to go.”

Soeren Kern is a Senior Fellow at the New York-based Gatestone Institute.