Taking the Politics Out of the Virus, For Now

(Bloomberg) --

World leaders are cranking into action. Each day brings a new (virtual) meeting. European leaders will chat Thursday over videoconference, the same day as the Group of 20.

The messaging is that coordinated action is here to support individuals and companies and economies.

Within their own borders, some leaders are still going their own way. U.K. Prime Minister Boris Johnson, having championed the idea of “herd immunity,” has only just accepted the need for a full lockdown.

President Donald Trump argues the American economy can’t be idled for long as the U.S. “was not built to be shut down,” putting him at odds with state governors. Congress is still bickering about a stimulus package.

But in some corners of the world politics seems to be taking a back seat, at least for now.

Romanian lawmakers ended more than a month of wrangling to approve a new government led by Prime Minister Ludovic Orban, giving him the power to confront the coronavirus outbreak.

Belgium, without a full-time government since December 2018, saw opposition members back caretaker Prime Minister Sophie Wilmes to address the shocks from the pandemic.

In South Africa, a meeting on the virus between President Cyril Ramaphosa and the leaders of opposition parties saw them declare a truce in their nonstop fighting.

And in Israel, what currently counts for a government after three inconclusive elections is trying to find a way, despite the lack of an approved budget, to boost assistance by up to $3.8 billion for businesses and workers.

These may prove to be brief moments of unity. At least in some places though, the broader need seems to be trumping the competition of politics.

Global Headlines

Competing package | U.S. House Speaker Nancy Pelosi unveiled a $2.5 trillion stimulus plan that would force lenders to grant temporary reprieves from mortgage, car and credit card payments, provide rent holidays to residents of public housing and cut student-loan borrowers’ debt by $10,000. Democrats blocked Senate Majority Leader Mitch McConnell’s second attempt to advance his own $1.8 trillion plan yesterday, saying its loan program for companies lacked transparency and oversight.

Tightening up | On the same day Italy finally saw a dip in virus deaths (even though numbers rose in France and Spain), the U.K. went into a full lockdown as Europe scrambles to mitigate the social and economic impact of the pandemic. Prime Minister Boris Johnson, under pressure over claims he’d acted too slowly, banned all unnecessary movement of people for at least three weeks.

• The army will help enforce a three-week lockdown in South Africa, though limits on movement will be hard to maintain in its sprawling townships.
• Thailand will declare a state of emergency for a month starting March 26.

Danger zone | Hours after departing Kabul yesterday, Secretary of State Michael Pompeo said the U.S. will cut assistance to Afghanistan by $1 billion this year and warned more reductions could come. He cited the failure of President Ashraf Ghani and former Chief Executive Abdullah Abdullah to form a unity government since a disputed election last year, and the risk that creates for a recent U.S.-Taliban deal to bring an end to what has become America’s longest war.

Lessons learned | As China begins to recover from its coronavirus epidemic, officials and the public are calling for a new focus on cleaning up an environment that’s damaging people’s health. While the disease prompted a shutdown that eliminated the equivalent of almost 1.5 billion tons of carbon dioxide in China, the reduction may be short-lived as the world’s second-biggest economy restarts.

• Read more here on how the declining cost of carbon-emission certificates is denting a key green ambition.

Crude war | Nigeria’s decision to offer crude in April at unusually large discounts has opened a new front in the oil price war between some of the world’s largest OPEC+ countries, including Russia and Saudi Arabia. The move could prove to be a key development in a market hit by collapsing demand caused by the coronavirus because West African crude competes directly with oil pumped in the North Sea, which is a worldwide benchmark.

• Click here for more on who has the most firepower as OPEC pursues its supply war.

What to Watch

• Euro-area finance ministers will seek a first agreement on “pandemic credit lines” from the bloc’s bailout fund today, which could be made available to any country that needs one.
• A summit of G-7 foreign ministers will take place via teleconference after an in-person meeting in Pittsburgh was canceled.
• Japanese Prime Minister Shinzo Abe will speak with the president of the International Olympics Committee today about the Tokyo games after acknowledging a delay may be unavoidable.

Tell us how we’re doing or what we’re missing at balancepower@bloomberg.net.

And finally ... The city where the virus first emerged will come out of mass quarantine on April 8. Wuhan, in China’s Hubei province, will allow transportation to resume and people to leave. Hubei reported that new infections dropped to zero on March 19, which helps President Xi Jinping project confidence that his government has stemmed the world’s first major outbreak. But even as Hubei’s numbers dwindle, Asia faces another concern — this time from imported cases.
 

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