2 ★ FINANCIAL TIMES Friday13 March 2020

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CO R O N AV I R U S

TA N YA P OW L E Y —LONDON
M I C H A E L P E E L— BRUSSELS

Donald Trump’s ban on citizens of many
European countries from entering the
US for 30 days in response to the corona-
virus outbreak is an unprecedented
measure that will have repercussions
for passengers and airlines.
The ban affecting the 26 countries in
the Schengen area, which comes into
effect at midnight,is based on the large
number of cases in Europe and is similar
to restrictions from China and Iran.
Airline stocks, hit hard during the
Covid-19 outbreak, fell further follow-
ing the president’s intervention.

Countries affected

Austria, Belgium, the Czech Republic,
Denmark, Estonia, Finland, France,
Germany, Greece, Hungary, Iceland,
Italy, Latvia, Liechtenstein, Lithuania,
Luxembourg, Malta, the Netherlands,
Norway, Poland, Portugal, Slovakia,
Slovenia, Spain, Sweden and Switzer-
land. he ban could be extended to theT
UK and Ireland if infection rates rise
rapidly, say analysts.

Extent of the ban

Any travel between Schengen area
countries and the US is banned. Coun-
tries most affected will be Germany,
France and the Netherlands. Schengen
residents cannot enter the US but Amer-
icans returning home will be admitted.
The restriction will affect 3,500 flights
a week and up to 800,000 passengers,
say aviation analysts at Bernstein.
During April, 1,741 flights were sched-
uled from Germany to the US, from
France 1,570, and from the Netherlands
1,212, according to data from OAG, the
aviation data consultancy.
In comparison, if the UK were to be
rolled into the ban, the impact would be
much larger — 4,121 flights were sched-
uled to the US in the month.

Airlines with most to lose

Transatlantic flights account for a big
part of long-haul profits, which means
the big European and US airlines have
much to lose, analysts say. Likely to be
hit hardest areLufthansa f Germanyo
andAir France-KLM, the Franco-Dutch

carrier, among European airlines, and

Delta nda United Airlines f the US.o

IAG, which ownsBritish Airways, is

the least exposed of the big groups

because the ban does not include the

UK. ButIberia, its Spanish carrier, will

feel the weight of the ban. Large Euro-

pean and US airlines that operate joint

ventures across the Atlantic will be

affected.

Daniel Roeska, analyst at Bernstein,

said the Lufthansa-United Airlines ven-

ture has a 36 per cent share of the trans-

atlantic market, Air France-KLM-Delta

29 per cent and IAG-American Airlines

11 per cent.

Norwegian Air Shuttle, the struggling

low-cost airline, is exposed because half

its businessis transatlantic flights.

Gerald Khoo, analyst at Liberum, said

Lufthansa and Air France-KLM are cut

off from their most profitable routes at

the start of the summer season. He

added in a note that these groups may

require “additional capital” to cope.

Impact on airline industry

It will heap more pressure on an indus-

trystruggling because of the spread of

coronavirus, with tens of thousands of

cancelled flights and concerns about the

impact of the disease on earnings.

Iata, the airline trade body, warned

last week that the outbreak could cost

global carriers up to $113bn in lost reve-

nues this year. Once the ban is imposed,

it will have to reassess these forecasts.

Alternative arrangements

Some aviation commentators say peo-

ple in continental Europe could travel to

the UK and Ireland and fly on to the US

from there. However, it is not clear

whether this will be permitted by the US

authorities or how they will ensure the

ban is enforced.

John Grant of OAG said that people

had made use of the “most obscure and

circuitous” routes to get home or make a

visit when similar bans had been

imposed.

Restrictions in Europe

All states have powers to tighten border

controls in time of emergency. Schen-

gen states can impose time-limited and

proportionate curbs. Austria, for exam-

ple, has closed its border with Italy,

with exceptions for through and goods

traffic.

But under EU law, citizens of the bloc

can normally cross borders freely, while

travel to non-EU European countries is

also generally straightforward.

EU freedom of movement rules still

apply to the UK, as a former member

state, during the post-Brexit transition

period in force until the end of the year.

There is also the possibility of heavy

political costs — and the risk of retalia-

tory action — were, say, a non-Schengen

European country to ban arrivals from

the 26-state area. There would also be

the practical problem in some cases of

policing land borders.

O

n Wednesday night the

global pandemic met US

nationalism. It will not

take long to see which

comes off better. As Presi-

dent Donald Trump was addressing the

nation, the Dow futures market nose-

dived. His Europe travel ban came just a

few hours after the US stock market

entered bear territory — a fall of 20 per

cent or more — for the first time since

the global financial crisis. It also fol-

lowed the World Health Organization’s

declaration of a global pandemic. Mr

Trump’s address was meant to calm the

waters. By the time he finished they

were considerably rougher.

His purpose was to convey that he has

a grip on the epidemic. Having spent

weeks playing down the threat, Mr

Trump had already tied one of his arms

behind his back. The previous day he

told Americans to “stay calm. This will

go away.” A few weeks ago he described

the epidemic as a Democratic “hoax”.

Then on Wednesday night he pivoted.

He suspended alltravel from Europefor

30 days. For the first time since the sec-

ond world war, direct US travel to the

European continent will be closed off.

He excluded the UK and Ireland from

the ban despite the fact that Britain has

almost half the number of US infections

with less than a fifth of its population.

Moreover, his action contradicted

expert guidelines. TheWHO clearly

advises gainst international travela

bans because they stifle the flow of med-

icines and aid and “may divert

resources from other interventions”.

Mr Trump has been badly shaken by

the stock market fall that has wiped out

most of the gains of his administration.

Yet his actions will almost certainly

deepen market pessimism. In addition

to the chilling effect on transatlantic

trade, Mr Trump has elevated the

uncertainty risk. To put it bluntly, no

one has much clue what he will do next.

The same applies to themanner in

which he is addressing the US economic

fallout. Two weeks agohe said the $8.5bn

that the Democrats had requested to

tackle the virus was too high. He only

asked for $2.5bn. On Wednesday, he

called for a three-month suspension of

the payroll tax, which will cost at least

$300bn — more than 100 times larger.

At the same press conference two

weeks ago Mr Trump blamed the stock

market decline on the previous night’s

Democratic presidential debate. On

Wednesday he had still not shaken off

the idea that the coronavirus was a con-

spiracy to deny him re-election.

Perhaps the biggest fallout of Mr

Trump’s address was what he did not

say. His most glaring omission was any

plan to increase America’s capacity to

test for infections. Epidemiologists say

accurate testing is the single most effec-

tive method to counter the disease’s

spread. It allows the authorities to iso-

late clusters, trace the movement of the

virus and make critical decisions on

where the biggest risks lie. That is what

places such as Taiwan, Singapore and

South Korea have done so effectively

without resorting to the draconian

measures taken in China.

The US has tested fewer than 6,

people out of a population of 327m. By

contrast, the Netherlands, with 17m peo-

ple, is testing that many every day. South

Korea, with 51m people, is testing 10,

a day. The shortage of US kits stems from

federal bureaucratic delays. One simple

fix would be to import them from Ger-

many, which are WHO-approved.

Mr Trump said nothing about tests

other than that health insurers would

waive co-pay charges on those being

tested. That moderate incentive is irrele-

vant ntil the US has a capacity to screenu

more people.He could have tackled the

problem at a stroke by saying the US

would import as many kits as necessary.

But that would have undercut the spirit

of his message: the epidemic comes from

a “foreign virus”, he said; America must

therefore narrow its access to the world.

It is unclear how Europe and other

countries will respond. In an ideal situa-

tion, America’s president would have

acknowledged that the pathogen knows

no borders and has no political loyalties.

It poses a common threat that requires a

co-ordinated global response.

That is not the way Mr Trump thinks.

Public health officials saymillions of

Americans will probably be infected. The

official totalstands at1,312. Mr Trump

has never faced a crisis onthis scale —

and it is still in its early stages. His reme-

dies so far are cause for deep concern.

Who will he blame when they fail?

[email protected]

Trump’s handling of crisis does little to calm nerves

He has elevated the

uncertainty risk. To put it

bluntly, no one has much

clue what he will do next

US travel ban set

to hit big airlines

and passengers

across Europe

Trump’s unprecedented move will affect

3,500 flights a week from 26 countries

K I R A N STAC E Y— WASHINGTON

H A N N A H KU C H L E R— NEW YORK

The chaos surrounding coronavirus

testing in the US has punctured the rep-

utation of the US Centers for Disease

Control and Prevention, and led many

to question whether the main US public

health body is able to cope with the

crisis.

The CDC has until recently enjoyed a

reputation as one of the leading public

health organisations in the world, hav-

ing played a vital role in mitigating pre-

vious global outbreaks such as Zika,

Ebola and Sars.

But following a decade of gradual

budget cuts, some experts believe the

organisation’s inability to test more

potential coronavirus patients points to

more substantial problems which could

hamper its response in the weeks to

come.

Zeke Emanuel, professor of health-

care management at the University of

Pennsylvania, said: “One of the things

we learnt from Ebola is that you have to

have a functioning health system going

into a crisis, you can’t rely on one spring-

ing up in the midst of a rapidly moving

disease. “It is becoming clear to us now

what happens when you don’t have a

fully functioning CDC.”

Robert Redfield, the CDC’s director,

has spent much of the last few days

defending his organisation’s reputation.

He told Congress on Wednesday his

organisation had begun an investigation

into problems with the testing kits

which it sent to hospitals in the early

days of the outbreak, which contributed

to far fewer people being tested in the

US than elsewhere.

South Korea has tested 196,000 peo-

ple.As of Monday, CDC had tested just

under 4,900, though private laborato-

ries have tested more.

“Testing availability remains extraor-

dinarily limited in the US,” said Michael

Mina, assistant professor of epidemiol-

ogy at the Harvard School of Public

Health, who estimates the US is five

weeks behind where it should be at this

stage of the outbreak, given the time it

had to prepare.

Emails published bythe New York

Times earlier this week show research-

ers in Seattle found cases of coronavirus

spreading around the community far

sooner than was announced by public

health officials. But the test that identi-

fied the cases had not been approved by

the Food and Drug Administration, and

so officials at the CDC reportedly

stopped it from being used more widely.

Mr Redfield insisted on Wednesday

the testing problems were not indicative

of a wider failure at his organisation.

“From the outset CDC and the US gov-

ernment partners implemented an

aggressive multilayer strategy to slow

the introduction of this virus to the

United States to buy time for our scien-

tists to learn how this virus behaves,” he

said. But separately, he admitted that

budget cutshad taken their toll. “The

truth is we’ve underinvested in the pub-

lic health labs,” he said during a congres-

sional hearing earlier this week.

Between 2010 and 2019, CDC’s fund-

ing was cut by 10 per cent in real terms,

according tofigures collated y Trustb

for America’s Health, which carries out

research into US public health policy.

From 2003 until 2019, the organisation’s

funding for state and local preparedness

was cut by a third, the TFAH found.

John Auerbach, chief executive of

TFAH, said that before Congress passed

$8bn in emergency funding to fight the

disease last week, “most states did not

have enough money to continue to fund

a significant surge in capacity beyond a

relatively brief period”.

Perhaps the most serious criticism

has been that the CDC’s first function —

to inform the public of the scale of the

problem and advise them to take the

appropriate action — is being under-

mined by the president.

Donald Trump has sought to play

down the risk of the outbreak, and has

at times appeared to contradict the

advice given by the CDC.

CDC

Chaotic US response puts health agency’s reputation to test

GLOBAL INSIGHT

Edward

Luce

Nurses in Los Angeles protest over

the CDC’s response to coronavirus

Going nowhere: many Europeans
will be unable to fly to US for 30 days

Brazil

Official

who met

Trump has

Covid-

A Brazilianofficial who

met US president Donald

Trump on Saturday has

tested positive for

coronavirus. Fabio

Wajngarten, President Jair

Bolsonaro’s press secretary,

right, posted a photo of

himself online standing

next to Mr Trump and

Mike Pence, vice-president,

in Florida. He is now in

quarantine.

Instagram/Fabio Wajngarten

M I C H A E L P E E L A N D J I M B R U N S D E N

BRUSSELS

EU leaders in Brussels have criticised

President Donald Trump’s “unilateral”

ban on travel rom many Europeanf

countries and warnedthe coronavirus

pandemic s an international problemi

that demands co-ordinated action.

Ursula von der Leyen, European Com-

mission president, and Charles Michel,

president of the European Council of EU

national leaders, issued a joint state-

ment yesterday highlighting European

alarm at the US move.

“The coronavirus is a global crisis, not

limited to any continent and it requires

co-operation rather than unilateral

action,” they said. “The European Union

disapproves of the fact that the US deci-

sion to improve a travel ban was taken

unilaterally and without consultation.

The European Union is takingstrong

action o limit the spread of the virus.”t

EU diplomats expresseddismay at Mr

Trump’s decision to bar from the US

people who have spent time in the 26-

country Schengen passport-free travel

area during the previous 14 days. The

ban — which will not apply to US citizens

and their families, legal US residents

and some other individuals — covers

populous countries such as Germany,

France, Spain, Italy and Poland.

EU officials blindsided by the decision

said they were working out a response

ahead oftoday’s deadline for the meas-

ures to come into force. “The EU isn’t in

the habit of shooting from the hip,” said

Eric Mamer, commission spokesman.

Heiko Maas, German foreign minis-

ter, said the US decision “was not co-or-

dinated with us”.

He took issue with Mr Trump’s criti-

cism of Europe’s action. Coronavirus

was aglobal challenge, he said. “We will

not be able to meet it — not in the US

either — if decisions are made that come

served with assignments of guilt.”

Some observers questioned whether

the ban was political, in particular the

decision to spare the UK, one of Europe’s

biggest states. “Any attempt to contain

the #CoronaOutbreak is welcome, but

the decision of @realDonaldTrump to

exclude the UK from a European travel

ban is nothing short of irresponsible,”

tweeted Alexander Stubb, former Finn-

ish prime minister. “Viruses do not rec-

ognise borders. Decisions should be

based on facts, not politics.”

Diplomats pointed to flaws and com-

plications, such as allowing travel from

non-Schengen European countries with

confirmed coronavirus cases, such as

the UK, Ireland and Romania.

Other questions loom over ow Wash-h

ington plans to stop people travelling

from a Schengen country to a non-

Schengen country and then travelling

on to the US from there.

Additional reporting by Guy Chazan.

Response

EU condemns White House unilateral action

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