Financial Times Europe - 08.04.2020

2 ★ FINANCIAL TIMES Wednesday8 April 2020

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CORONAVIRUS

R O B I N H A R D I N G— TOKYO

Japan is gambling that it can control the

spread of coronavirus without a full

lockdown as Shinzo Abe yesterday

declared a “state of emergency”.

The prime minister’s declaration will

give governors in seven prefectures the

power to request business closures to

increase social distancing. It follows a

rise in the number ofcoronavirus asesc

in Japan to more than 4,000 nationwide.

But the closures are not compulsory

and many shops, restaurants and facto-

ries will be allowed to stay open to keep

the economy ticking over, raising ques-

tions about how effective the new meas-

ures will be.

“Even with the state of emergency

declaration, the expert opinion is we do

not need to lock down our cities like

they have done abroad,” said Mr Abe,

who pledged a ¥39tn ($359bn) package

of public support equivalent to about

7 per cent of annual economic output.

“As a government, we aim to minimise

the impact on the economy and society.”

The state of emergency will initially

apply to seven urban prefectures that

make up about half of Japan’s economy

— Tokyo, Kanagawa, Saitama, Chiba,

Osaka, Hyogo and Fukuoka — but gov-

ernment officials said the list might

expand. It will last for one month, unless

renewed.

Mr Abe’s experiment will be closely

watched by other nations because it will

test whether a country can control Cov-

id-19 without a full lockdown, despite

having a significant number of cases and

no mass testing for coronavirus.

“It’s very hard to know if the state of

emergency is justified or whether it will

be effective because Japan hasn’t done

the testing,” said Masahiro Kami, head

of the Medical Governance Research

Institute. Japan has conducted about

45,000 tests for the virus, far fewer than

South Korea, which has administered

about almost half a million tests.

The Tokyo metropolitan government

is expected to request the closure of

gyms, theatres, cinemas, cram schools,

karaoke boxes, museums, libraries,

department stores, shopping centres,

bars and night clubs, among other busi-

nesses.

But a range of facilities considered

essential will be allowed to stay open.

They include supermarkets, pharma-

cies, convenience stores, hotels, facto-

ries, restaurants, railways and bus

services, allowing a much wider range

of economic activity than in other

countries.

The public will be asked to stay home

unless it is essential to go out, but com-

muting to work is an acceptable reason

to leave the house. Withschools having

closed more than a month ago, there is

already somehygiene fatigue n Japan.i

Dr Kami was doubtful that the declara-

tion would make a big difference to pub-

lic behaviour.

Even with only a partial lockdown,

the state of emergency is expected to hit

Japan’s economy hard, prompting Mr

Abe to launch Japan’s largest stimulus

package ever — amounting to about 20

per cent of gross domestic product if

loan guarantees are included.

The government will make direct

cash payments of ¥300,000 ($2,756) to

households that have lost income in the

crisis.

“This will be one of the largest eco-

nomic support packages worldwide,

with a record level of financing support,

¥26tn in deferred social security pay-

ments for the first time in this country,

¥6tn in direct cash distributions and an

unprecedented overall scale of ¥39tn in

public spending,” said Mr Abe.

Kiichi Murashima, an economist at

Citi in Tokyo, said the package was cru-

cial but it was “more economic relief

than economic stimulus” and what hap-

pened to output would depend on how

quickly the virus was brought under

control.

Japan

Abe gambles on partial lockdown in ‘state of emergency’

Tokyo: many shops, factories and

restaurants will stay open nationwide

Cases so far

Norway to reopen kindergartens

and primary schools this month

Norway has followedDenmark in setting out a time-

table to reopen kindergartens and primary schools for

the youngest childrenthis month. Erna Solberg,prime

minister, said kindergartens could reopen from April

20 and primary schoolsa week later. All schools were

closed in Norway on March 12.Denmark said kinder-

gartens and primary schoolswould open on April 15.

Some parents and teachers have expressed concern

about exposing children while the rest of society is shut.

Spanish football league faces €1bn loss

Mistaken belief in disease prevention

leads to 600 Iran alcohol-related deaths

The number of Iranians who died of alcohol poisoning

reached 600 yesterday based on a mistaken assump-

tion that drink could help ward off coronavirus.

Gholamhossein Esmaili, Iran’s judiciary spokesman,

said yesterday that 3,000 people were poisoned across

the country. “Those distributing non-standard alcohol

in Khuzestan and Khorasan provinces have been

arrested and will be held accountable for putting

people’s lives at risk,” he said.

La Liga, Spain’s top football division, which includes Real

Madrid, pictured, is facing potential losses of up to €1bn

owing to thepandemic. The competition is suspended

and is unlikely to resume until the end of May at the

earliest, the leaguesaid esterdayy.

1,381,

and 78,269 deaths as at 18.30 BST, April 7

Source: Johns Hopkins University

Read more at ft.com/coronavirus

CORONAVIRUS

ROUND-UP

White House in talks with senators to

boost loan scheme for small businesses

The White House is in talks with US senators to expand

a government lending programme for suffering small

businesses by more than $200bn.

Mitch McConnell, the Kentucky Republican and Sen-

ate majority leader, said additional funding for a

$350bn lending fund for small businesses needed to be

approved rapidly, given the high level of demand. “Bil-

lions of dollars have already landed and tens of billions

more are already in the pipeline,” he said.

Bangkok gives go-ahead for $58bn

stimulus, the largest in south-east Asia

Thailand’s government yesterday approved a $58bn

stimulus package, backed by the Bank of Thailand, to

support households and businesses in the face of the

pandemic, marking the largest state intervention of its

kind seen in south-east Asia since the outbreak began.

The measures include 500bn baht ($15.3bn) worth of

soft loans to support small and midsize enterprises and

a 400bn baht fund to be set up to enhance the liquidity

of the corporate bond market.

C L I V E C O O KS O N— LONDON

The president of the European Research

Council — the EU’s top scientist — has

resigned after failing to persuade Brus-

sels to set up a large-scale scientific pro-

gramme to fight Covid-19.

Professor Mauro Ferrari, who started

a four-year term as leader of Europe’s

flagship scientific institution on January

1, submitted his resignation to Euro-

pean Commission president Ursula von

der Leyenyesterday.

“I have been extremely disappointed

by the European response to Covid-19,”

hesaid in a statement.

“I arrived at the ERC a fervent sup-

porter of the EU [but] the Covid-19 cri-

sis completely changed my views,

although the ideals of international col-

laboration I continue to support with

enthusiasm.”

The ERC, set up in 2007 to fund

Europe’s best scientists, has become one

of the world’s most prestigious funding

agencies with a budget of about €2bn

a year.

Prof Ferrari, an Italian-American pio-

neer of nanomedicine, said his rift with

the commission started in early

March “as it became evident that the

pandemic would be a tragedy of possi-

bly unprecedented proportions”.

He said he proposed then to set up a

special ERC programme to combat

Covid-19.

“I thought that at a time like this, the

very best scientists in the world should

be provided with resources and oppor-

tunities to fight the pandemic, with new

drugs, new vaccines, new diagnostic

tools, new behavioural dynamic

approaches based on science, to replace

the oft-improvised intuitions of political

leaders,” he said.

But the ERC Scientific Council, its gov-

erning body, unanimously rejected the

idea, he said, on the grounds that its

remit allowed it to fund only “bot-

tom-up” research proposed by scien-

tists, rather than larger “top-down”

programmes with objectives set by EU

leaders.

“I argued that this was not the time for

scientific governance to worry exces-

sively about the subtleties of the distinc-

tions between bottom-up versus top-

down research,” said Prof Ferrari, who

spent much of his career as a prominent

cancer researcher in the US.

He said he got a second chance when

Ms von der Leyen asked him for

his views on addressing the pandemic.

He then developed a plan “to which

she contributed substantial directives”.

“The very fact that I worked directly

with her created an internal political

thunderstorm,” he claimed.

“The proposal was passed on to dif-

ferent layers of European Commission

administration, where I believe it disin-

tegrated upon impact.”

Prof Ferrari also lamented “the com-

plete absence of co-ordination of health-

care policies among member states, the

recurrent opposition to cohesive finan-

cial support initiatives, the pervasive

one-sided border closures” throughout

the EU.

With the commission’s agreement,

after Prof Ferrari became ERC president

he remained a part-time affiliate profes-

sor at the University of Washington

School of Pharmacy in Seattle.

He now plans to set up an interna-

tional research initiative to fight Cov-

id-19 from the US.

Rift

Top EU scientist quits over policy snub

ERC president ‘extremely

disappointed’ at Brussels

response to research idea

G E O R G E PA R K E R A N D S E BA ST I A N PAY N E

LONDON

It was when Boris Johnson’s cabinet

ministers were asked to join a confer-

ence call on Monday evening with Mark

Sedwill, Britain’s top civil servant, that

they knew the coronavirus crisis was

taking a dark new turn. “It’s never good

news when you get a call like that,” said

one minister.

Sir Mark’s confirmation that the UK

prime Ministerhad gone into intensive

care meant that the government,

already struggling to keep up with the

spread of the disease, had to adapt to a

situation where its leader was himself

stricken.

Mr Johnson’s instruction that

Dominic Raab, foreign secretary, should

deputise for him “as necessary” put the

spotlight on notoriously opaque consti-

tutional arrangements and how the gov-

ernment should function in an emer-

gency. Two British prime ministers in

the postwar era have temporarily

handed over the reins to other ministers

due to ill health: Anthony Eden and

Harold Macmillan.

Mr Raab, designated first secretary of

state by Mr Johnson in July last year, was

already viewed as the prime minister’s

de facto deputy, but his authority in this

crisis is rooted in the personal endorse-

ment given to him by the ailing premier

from London’s St Thomas’ hospital.

Although Mr Raab is seen by some in

the Conservative party as a wooden

media performer whose uncompromis-

ing views on Brexit have alienated some

colleagues, most ministers believe he

can hold down the job of de facto pre-

mier for weeks, if necessary.

“Whatever you think of the prime

minister’s politics, he has a big mandate

and is very popular as a person with vot-

ers,” said one minister. “Dominic’s posi-

tion is strong, based on the sympathy

people have for Boris.”

The idea that rivals for the top job

should use the moment of Mr Johnson’s

hospital stay to jockey for position is

seen as highly unlikely by cabinet minis-

ters, especially because such manoeu-

vring in a national crisis would be

widely condemned. “People are dying,”

said one Tory official.

Catherine Haddon, senior fellow at

the Institute for Government think-

tank, said it was “entirely possible for

government business to continue with-

out the PM present”.

“Constitutionally it is quite straight-

forward: we have a prime minister, he

remains prime minister, but others can

deputise for him,” she said. “His powers

are informal and political: the PM is the

figurehead at the top of government but

they also run the machine.”

Mr Raab has already spoken with cab-

inet ministers, promising a full discus-

sion and collective verdict on the next

big decision for the government: henw

to continue with lockdown measuresas

they come up for review over the Easter

weekend.

The government’s Covid-19 commit-

tee, which convenes at 9.15am daily, is

directing the government response. In

Mr Johnson’s absence, Mr Raab will

thrash out operational details with Rishi

Sunak, chancellor, Matt Hancock,

health secretary, and Michael Gove,

cabinet office minister.

Tensions already exist in the “war

cabinet” between Mr Hancock and Mr

Gove over the government’s response to

the risis. Mr Gove, whoc covets the top

job, is likely to eye Mr Raab enviously.

Meanwhile, the Treasury, anxious

about the economic costs of a prolonged

lockdown, and the Department of

Health, desperate to protect the

National Health Service from a surge in

cases, have also clashed, although min-

isters say relations between Mr Sunak

and Mr Hancock remain cordial.

Downing Street saidyesterday that

Buckingham Palace had agreed to sus-

pend the weekly audience of the Queen

and prime minister during Mr Johnson’s

spell in hospital, meaning that Mr Raab

will not be involved in the intimate dia-

logue between monarch and premier.

Nor will Mr Raab have the power to

hire or fire ministers. “The prime minis-

ter always remains the prime minister,”

Mr Gove told the BBCyesterday.

The first secretary would, however,

have the power to authorise military

action to defend Britain; the cabinet and

the National Security Council, which Mr

Raab will chair in Mr Johnson’s absence,

provide the framework for such action.

Letters from Mr Johnson to the com-

manders of submarines carrying Brit-

ain’s nuclear deterrent would remain

operative for as long as he remained

prime minister.

If Mr Raab also succumbed to the

virus or became otherwise incapaci-

tated, Downing Street said the baton

would pass to Mr Sunak, next in the offi-

cial cabinet pecking order. Priti Patel,

home secretary, would be the next in

line followed by Mr Gove.

Leadership. ole changeR

Raab steps into UK constitutional breach

Foreign secretary to deputise

forprime minister as opacity

of political system is laid bare

Under spotlight:

foreign secretary

Dominic Raab,

right, arrives at

Downing Street

yesterday to

brief the media

on Boris Johnson

and the virus

fight nationwide

Stefan Rousseau/PA Wire

‘This was

not the time

for scientific

governance

to worry

excessively

about...

bottom-up

versus

top-down

research’

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