4 ★ FT Weekend 21 March/22 March 2020
JA M E S S H OT T E R— WARSAW
Poland’s finance minister has dismissed
the EU’s economic response to thecoro-
navirus pandemic s “smoke and mir-a
rors”, and urged the bloc to do more to
help workers whose jobs are at risk from
thecollapse in economic activity.
The European Central Bank has
launched a€750bn expansion f itso
debt-buying programme in an effort to
calm markets roiled by the crisis. Brus-
sels has also relaxed budget rules and
allowed member states to redirect
money allocated for other purposes to
fight the virus, which has so far infected
more than 100,000 people across the
continent.
But Tadeusz Koscinski told the Finan-
cial Times that this was not enough, and
argued that the bloc should provide
funds to help businesses avoid laying off
staff as countries across the continent go
into lockdown to stem the escalating
spread of the virus.
“They have just given a new name to
old money and said they would turn a
blind eye if we break some fiscal rules.
They have not come out with a concrete
package,” he said.
“The problem is what do we do with
[workers’] salaries, and what do we do
with their social security? This is where I
think funding from the EU should be
coming in, that they fund the employee:
either they fund part of their social secu-
rity, or they fund part of their salary.”
EU officials have stressed that there
are limits to how much financial sup-
port can be made available directly
from the EU budget, which is nearing
the end of a seven-year cycle. Govern-
ments are also exploring ways to make
greater use of other central resources
such as the European Investment Bank
and the eurozone’s bailout fund.
The ECB yesterday expanded the
relief it was providing to banks by giving
them more leeway on harsh new
accounting rules, relaxing bad debt
reduction targets and delaying many of
its supervisory actions by six months.
The central bank said eurozone lend-
ers would have €120bn of capital relief,
allowing them to lend €1.8tn more if
they chose to. It also said that many
supervisory measures, such as remedial
actions and reviews of internal models,
would be postponed for six months.
In comparison with many European
countries, Poland has had fewcases of
the virus, with 378 infections and six
deaths confirmed y yesterday. But itb
was among the first EU states to intro-
duce aggressive measures against the
pandemic, rapidly shutting its borders,
banning large gatherings, and closing
schools and non-essential shops.
The border closures led tohuge
queues t crossing points with Germanya
and other states. Mr Koscinski said the
problems of the German border had
improved and Poland had cut the paper-
work for lorry drivers entering the
country. But he said it was unclear when
the restrictions would be lifted.
“If we controlled everything in the
c o u n t r y b u t s o m e o n e , s o m e -
where... has still got the pandemic
going on, we can’t open our borders,” he
said.K AT I E M A RT I N— LONDON
JA M E S P O L I T I A N D B R E N DA N G R E E L E Y
WASHINGTON
CO L BY S M I T H— NEW YORKThe Federal Reserve has stepped in to
supporttheUSmunicipalbondmarket
initslatesteffortthisweektoshieldthe
economy and markets from the impact
ofthecoronaviruspandemic.
Having alreadyslashed interest rates,
lined up a$700bn bond-buying pro-
gramme nd set upa dollar swap lines
with a clutch of central banks around
the world, the Fed saidyesterday that it
would expand a programme to support
local government financing through a
lending facility for money market
mutual funds.As US cities and states in stricken
areas have taken on the brunt of imme-
diate spending for the public health
response to the coronavirus pandemic,
the $3.9tnmunicipal bond market ash
been wracked by volatility in recent
days. Investors dumped the debt in
droves, pulling $12.2bn from municipal
mutual funds in the week ending on
Wednesday, according to data from
Lipper.
Borrowing costs have surged as a
result, with yields on municipal debt
maturing in 10 years soaring nearly a
full percentage point in the past week to
2.6 per cent.
According to a statementyesterday
by the Fed’s board of governors, thecentral bank has “expanded its pro-
gramme of support for the flow of credit
to the economy by taking steps to
enhance the liquidity and functioning
of crucial state and municipal money
markets”.
The Fed said that the Federal Reserve
Bank of Boston would widen the money
market mutual fund liquidity facility,
which it set up on Wednesday to back-
stop money market funds facing
redemptions, to provide loans secured
by municipal debt with maturities of up
to a year. It said it would accept “high-
quality assets purchased from single
state and other tax-exempt municipal
money market mutual funds”.
The Fed had faced calls to address thedislocations that have cropped up in the
muni market.This week, Vikram Rai,
head of municipal strategy at Citigroup,
urged the central bank to buy municipal
debt directly as part of its sset pur-a
chases programme.
The world’s leading central banks co-
ordinated againyesterday to improve
the supply of US dollars to companies
and market participants outside the US.
In a joint statement, the US, eurozone,
UK, Swiss, Japanese and Canadian cen-
tral banks announced that dollar auc-
tions for seven-day maturities would
now take place daily rather than weekly,
aiming to guarantee that dollars would
be available and no one need sell assets
at knock down prices to get them.N A J M E H B OZO R G M E H R A N D
M O N AVA R K H A L A J— TEHRAN
Overwhelmed with exhaustion and
working up to 19 hours a day asIran
tries to combat the spread of coronavi-
rus, Aref, a nurse in a small town in the
south-west of the country, has started to
worry about his own health.
About 24 medical staff have diedin
the Islamic republic, not least because of
a lack of medical equipment in one of
thecountriesworst hit by the virus.
“We are running this small hospital
with minimum facilities. We do not have
hazmat suits and instead wear surgical
gowns which keep our heads and faces
exposed and we are short of latex and
sterile gloves,” said Aref, 25, who sleeps
in a house with five other nurses to ro-p
tect their families from the virus.
In an ideal world, medical staff would
change face masks frequently toavoid
spreading the virus, but Aref keeps his
in his pocket during his seven-hour shift
“to repeatedly use it, which means I may
be a carrier of the virus myself”. He did
not want to publish the name of the
town for fear of repercussions.
Iran’s medical system, with its highly
specialised doctors, has long been seen
as one of the best in the region, attract-
ing patients from nearby countries. As
the virus spreads — there are more than
1,400 fatalitiesand Iranian epidemiolo-
gists fear it could reach 60 per cent of
Iran’s 80m population — medical staff
have been hailed as heroes.
“Defenders of health will be treated
like defenders of our borders,” said
Saeed Namaki, Iran’s health minister,
hailing the doctors who died of corona-
virus as “martyrs”. President Hassan
Rouhani said this week that “we bow to
doctors and nurses”.
But many,such as Aref, complain of a
lack of equipment and support. “We
decided to put our own money and buy
medical equipment to safeguard our
staff. We have no doubt casualties are
going up and fear shortages may
become more severe,” one surgeon at a
state-affiliated hospital in Tehran said.
Analysts said thiswas partly because
of tough sanctions, introduced in the
wake of US president Donald Trump’s
decision to abandon the nuclear deal
agreed between the Islamic republicand world powers. While food and med-
icine are exempted, i mports are fre-
quently delayed because Iran is cut off
from the international financial system.
“When the government doesn’t have
the money and coronavirus has para-
lysed an already weak economy, how
can it quarantine cities and buy medical
equipment?” said Ahmad Ghavidel,
head of the Iranian Haemophilia Soci-
ety. “We definitely blame the US sanc-
tions for our high number of deaths and
consider this a war crime... as iviliansc
are harmed.”
The Islamic republic hasappealed for
international help to secure equipment
such as test kits, ventilators, hazmat
suits, gloves and masks. Unlawful US“
sanctions drained Iran’s economic
resources, impairing ability to fight
#COVID19,” said Iran’s foreign minister
Mohammad Javad Zarifon Twitter.
Those who try to import medical
goods describe complicated supply
chains. “Medical universities in Gilan
and Mazandaran call me and say if the
equipment does not arrive, nurses and
doctors will abandon jobs,” said the
director of one trading company. “We
need to have permission to import med-ical equipment at the shortest possible
time instead of going through a Turkish
channel, then to UAE, back to Turkey
and finally to Tehran.”
There are no test kits in Aref’s town,
which has a population of about
100,000. Patients with symptoms are
given a basic blood test. If the results —
they arrive four days later — indicate an
infection, they are then given a corona-
virus test, but only if the referral hospi-
tals have capacity.In the interim, the
patients go about their normal lives.
“We sent a patient with an ambulance
to [a nearby hospital] but there was no
capacity to do a test or admit him. The
ambulance came back and the patient
went home,” Aref said.
All of this has added to fears thatthe
real incidence of the infection
is greaterthan official figures suggest.
For now, there is no respite in sight for
the country’s doctors. “We expect
deaths to keep going up while our ICU
beds are already full,” said Sara, a doctor
in north-eastern city of Mashhad.
“Me and my husband [a radiologist]
are already exhausted and disappointed
to realise that all leave has been indefi-
nitely cancelled.”H E L E N WA R R E L L —LONDON
R I C H A R D M I L N E —HELSINKIMika Ihamuotila wasin charge of one of
Finland’s biggest bankswhen he took a
month off work to learn what to do in
the event of a national crisis, such as a
war, cyber attack or even a pandemic.
He and40 other people — chief execu-
tives, MPs, ministers, military officers,
senior journalists and civil servants —
had been selected to participate inFin-
land’s National Defence Course.
“It meant that leading Finns get the
opportunity to go through different
parts of society — logistics, food, energy,
banking payments, defence nd so on —a
and get a picture of how things work in
crisis,” said Mr Ihamuotila, now het
chairman of fashion brand Marimekko,
of the training he attendedalmost two
decades ago.
“I don’t think such a course exists
anywhere else. My guess would be that
Finland is better prepared for coronavi-
rus due to this.”
While Nordic and Baltic nations —
ever aware of a threat from nearby Rus-
sia — have long involved their citizens in
contingency planning,western Euro-
pean countries such as France and Brit-
ain,have traditionally kept such strat-egyat arm’s length from the public. As
governments across the world fight the
coronavirus pandemic with lockdowns,
social istancing and orders for the sickd
to self-isolate, even those which have no
history of civil defence are having to
engage their citizens in collective action
against contagion.
Boris Johnson, UK prime minister, has
urged Britons to “look out for each other
and commit wholeheartedly to a
national effort”.
“We are at war,” French president
Emmanuel Macron told the nation this
week. “Everyone needs to get together
on one single objective: slow down the
spread of the epidemic.”
There has been some panic buying in
Nordic countries and they share wider
concerns about broadband provision
with many people working from home.
Still, their civic engagement prior to the
crisis looks prescient.
Two years ago, the Swedish authori-
ties were derided for their decision to
distribute a pamphlet to all 4.7m house-
holds elling them how to behave in caset
of a war, cyber attack or natural disas-
ter.If Crisis or War Comes ontains listsc
of what foods to store at home, such as
potatoes, long-life bread, pre-cookedlentils nd “blueberry and rosehipa
soup”.It also advises on where to find
trusted sources of news and how to spot
disinformation.
Svante Werger, senior adviser at Swe-
den’s civil contingencies agency the
MSB, said the decision to educate the
public was a revival of Sweden’s cold
warstrategy, which hadlapsed s ten-a
sions between Russia and the west eased
in the early 1990s. “[Government offi-
cials] felt like individuals were taking
too much for granted,” he said. “The
electricity always works, that there’s
money in cash machines or on our
credit cards, that we can always buyfood at our local supermarket, that the
water in our kitchen is clean... we are
so used to that that we have no margins
if that should fail.”
Increasingly, there are calls for west-
ern European countries to reconsider
their approach.Therise in hybrid war-
fare, involving state-sponsored cyber
attacks, has put all Nato countries no
the virtual front line. James Arbuthnot,
a former UK defence minister, argues
that a move to more active resilience
against both hostile states and natural
crises re long overdue.a
“The idea that the British public can’t
be trusted with the truth is, and always
was, total nonsense,” he said, adding
thatrecent messagesfrom the UK prime
ministerrepresent a “profound change”
from the way that government has
treated the population in the past.
“Suddenly the government is saying,
you need to look out for yourselves and
you need to look out for each other as we
come together as a nation,” Lord
Arbuthnot said. “Maybe we’ll be able to
look back on the coronavirus episode as
the time when the UK began to recog-
nise throughout the country its degree
of personal and individual responsibil-
ity — to each other and to ourselves.”CO R O N AV I R U S
Jobs threat
Poland attacks
EU aid as ‘smoke
and mirrors’
Finance minister calls for
funds aimed at allowing
businesses to avoid lay-offs
Local government debt
Fed acts to support US municipal bond market
Tehran. ealthcare staffH
Iran’s exhausted medics face high risk
Shortage of kit adds to
doctors’ woes as sanctions
complicate supply chains
Contingency plansNordic nations get ahead in crisis management
Infected:
medics at a
Tehran hospital
treat a patient
suffering from
coronavirus
Mohammad Ghadamali/AP‘We
definitelyblame the
USsanctions
for our highnumber of
deaths andconsider
this a warcrime’
Troops from Sweden’s Skaraborg
regiment on a field exercise in 2017MARCH 21 2020 Section:World Time: 20/3/2020- 18:23 User:john.conlon Page Name:WORLD3 USA, Part,Page,Edition:EUR, 4, 1