4 ★ † FINANCIAL TIMES Friday 20 March 2020
CO R O N AV I R U S
‘N
ot all superheroes wear capes,” said the
leader. “Some wear scrubs and gowns.” The
leader was Leo Varadkar, Ireland’s prime
minister — not Donald Trump or Boris
Johnson. Plagues, like all crises, reveal
character; none more so than in leaders. Its critical traits
are honesty, courage and decency.
In the past few days, Mr Trump has shown that he finally
grasps the scale of the coronavirus threat. Alas, the US
president has spent just as much energy pretending he
understood it all along. He is thus undercutting his own
message, which depends on being trusted.
The manual for handling plagues dates at least to
Marcus Aurelius, the Roman emperor who was eventually
killed by an epidemic. While wealthy Romans fled to their
villas, Aurelius stayed in the capital and led by example.
Mr Trump is so far fulfilling the first. He is badly under-
shooting on the second.
Aurelius took advice and empowered qualified people to
lead. Mr Trump wasted critical weeks refusing to heed the
alarm bell from federal health experts, including Anthony
Fauci, the immunologist who heads the National Institute
of Allergy and Infectious Diseases.
The Roman emperor spread the burden of fighting the
pestilence among classes. He raised taxes on Rome’s
aristocracy, sold his own imperial luxuries and paid for the
funerals of ordinary people.
Mr Trump has agreed to $500bn to tide Americans over
the coming weeks. He has no appetite for levying a sur-
charge on America’s wealthiest, although it would cement
national sentiment and
transfer cash to those
who would spend it. Nor
has Mr Trump consid-
ered suspending rent,
utility bills and the debt
payments of society’s
poorest — as France’s
President Emmanuel
Macron did this week.
Instead, he is pushing for a $50bn bailout for US airlines,
which have spent almost all of their free cash flow in the
past decade on share buybacks. Mr Trump is resisting calls
for any strings, such as capping executive pay, retaining
staff and contractors, and agreeing to forgo buybacks.
If the moral of ancient plagues is too misty, the lessons of
the 2008 financial crisis are surely fresh. Today’s populism
was partly spurred by the self-indulgence with which Wall
Street spent its bailout money. Mr Trump would not want
to be on the wrong side of another backlash.
But the most important quality is human solidarity.
Aurelius rubbed shoulders with the mob and shared their
sorrows. Modern epidemiology rules out such intimacy. It
is to be hoped that Mr Trump will stop shaking hands with
everyone he greets on television.
He could also take a leaf from world leaders who are bet-
ter versed on how to lead in times of collective adversity.
That does not include Mr Johnson, who has also squan-
dered time betting on rash nostrums, or China’s Xi Jinping,
who has yet to be pictured anywhere near ordinary
Chinese. But there are others who do know how to lead.
Mr Varadkar’s address on Tuesday had two ingredients
that are so far missing from Mr Trump’s messaging. The
first was to identify with people suffering everywhere. “We
are in this together,” he said. “To the people of China, Spain
and Italy. We are with you. To all those living in the shadow
of what is to come. We are with you.”
By contrast, Mr Trump is now routinely referring to the
pathogen as the #chinavirus. This risks stoking racial
scapegoating. It is also bad diplomacy. China supplies
more than 80 per cent of America’s active pharmaceutical
ingredients. Keeping trade flows open will be vital to US
national security during this pandemic.
Mr Varadkar’s second ingredient was to elevate ordinary
people. He asked Ireland to come together by staying
apart. The people who will risk the most are healthcare
workers. They need the protective gear and medical equip-
ment that are lacking in too many US hospitals. “Never will
so many ask so much of so few,” Mr Varadkar said.
Hospital staff battling an invisible enemy are the equiva-
lent of the second world war pilots fighting the Luftwaffe.
Which role will Mr Trump play? Currently he is hovering
between Marshal Philippe Pétain and General Charles de
Gaulle. Let us hope he knows enough history to choose.[email protected]GLOBAL INSIGHT
WASHINGTON
Edward
Luce
Empathetic Varadkar
provides Trump with
a lesson in leadership
‘We are in this
together. To the
people of China,Spain and Italy.
We are with you’F T R E P O RT E R S
Central banks around the world cut
interest rates and indicated they were
considering taking action to support
their currencies yesterday, in the latest
steps to combat the financial and eco-
nomic consequences of the coronavirus
pandemic.
The Bank of England unveiled an
emergency interest rate cut for the sec-
ond time in just over a week, trimming
its main bank rate to 0.1 per cent.
In a special meeting yesterday, the
Bank of England’s Monetary Policy
Committee also voted to increase its
quantitative easing programme by
£200bn to a total of £645bn. The cen-
tral bank said it had acted after condi-
tions in the UK gilt market had “deterio-
rated as investors have sought shorter-
dated instruments that are closer sub-
stitutes for highly liquid central bank
reserves”. It added: “As a consequence,
UK and global financial conditions have
tightened.”
The Swiss National Bank said it would
use its huge balance sheet to sell billions
of francs in the coming weeks to keep its
five-year battle to hold down the cur-
rency on track.
The SNB announced it would hold its
benchmark interest rate at minus 0.
per cent yesterday — despite many mar-
ket participants expecting a cut as the
fallout from the coronavirus pandemic
spreads — and instead shifted gear to
signal a “significant” scaling up of artifi-
cial market interventions.
The move will pit the central bank
against the US government: in January
Washington threatened officially to des-
ignate the SNB as a currency manipula-tor, thanks to the bank’s activities in
forex markets.
Policymakers in Bern believe the
potentially disastrous economic and
financial consequences of the coronavi-
rus pandemic leave them with few
options, however.
Norway’s central bank said it was con-
sidering intervening to prop up the
krone as its currency has shed a fifth of
its value in just a fortnight.
Taiwan cut interest rates for the first
time since June 2016 as it tried to soften
the economic blow from the coronavi-
rus pandemic. The central bank cut its
benchmark rate by 25 basis points to
1.125 per cent on Tuesday.
The bank said it expected economic
growth to slow to 1.07 per cent in the
first half of this year as a result of the
pandemic and lowered its forecast for
the full year from 2.57 per cent to 1.
per cent. While the outlook appears
optimistic compared with some expec-tations of a global recession, it marks a
sharp slowdown from the 2.7 per cent
gross domestic product growth Taiwan
saw last year.
In a statement, the bank said: “If the
global supply chain gradually resumes
production, Taiwan’s export momen-
tum may be revived, and combined with
deferred private consumption and the
support of the government’s rescue
measures for domestic demand, eco-
nomic growth in the second half may
rise again.”
The Philippines’ central bank cut
rates by half a percentage point to 3.
per cent.
The Reserve Bank of Australia said it
was prepared to intervene to boost
liquidity in foreign exchange markets, if
required, following sharp falls in the
value of the Australian dollar yesterday.
“Liquidity is thin but it hasn’t been to
the point where we needed to inter-
vene,” said Philip Lowe, RBA governor.Global action
Central banks cut rates as options ebb
Policymakers around
world consider action
to support currencies
‘Liquidity is
thin but ithasn’t been
to the pointwhere we
needed tointervene’
Philip Lowe,
governor,
Reserve Bank
of AustraliaA N D R E S S C H I PA N I A N D B RYA N H A R R I S
S AO PAU LO
J U D E W E B B E R— M E X I C O C I T Y
M I C H A E L STOT T— LO N D O N
The leaders of Brazil and Mexico have
been heavily criticised for their
approach to coronavirus, greeting sup-
porters outdoors and shunning medical
precautions even as other countries in
the region lock down.
São Paulo, Rio de Janeiro and Brasília
echoed to cries of protest on Wednesday
night against President Jair Bolsonaro’s
handling of the pandemic. Thousands of
citizens banged pots and pans from
their windows and balconies and turned
their lights on and off, shouting
“Bolsonaro out”.
Mr Bolsonaro provoked anger by
describing the reaction to the virus as
“hysteria” and last Sunday greeted sup-
porters with hugs and handshakes out-
side the presidential palace.
The rightwing Brazilian leader was
supposed to be in quarantine after 17
members of his delegation on a recent
trip to Florida to meet Donald Trump
tested positive for Covid-19.
Brazil had 428 confirmed cases of the
disease as of Wednesday evening, the
highest in Latin America, with four
fatalities. Health officials expect the
virus to spread widely in the coming
days but the national government has
not imposed lockdowns, although some
states and mayors have taken action.
The pandemic hit the continent rela-
tively late. The first coronavirus infec-
tion was confirmed only on February 25
in Brazil and the first death on March 7
in Argentina, although a lack of testing
makes the data uncertain. Medical care
in the region varies widely.
“Latin American health systems are
uneven and pretty weak,” said Shannon
O’Neil, senior fellow in Latin America
Studies at the Council on Foreign Rela-
tions in New York.
“More wealth generally means better
healthcare and with the coronavirus,
the divergences and disparities [in care
quality] will come to the fore.”
Andrés Manuel López Obrador,
Mexico’s leftwing leader, has also
drawn criticism for playing down
the risks of coronavirus. Mr
López Obrador posted a video
on Twitter of himself hugging and kiss-
ing supporters during a visit on Sunday
to Guerrero state under the headline:
“The people of the Costa Chica are
enthusiastic, rowdy and happy.”
In an extraordinary diplomatic spat
this week, Nayib Bukele, El Salvador’s
president, accused Mexico of being
irresponsible.
“I urge you to take drastic and hard-
hitting measures against this pandemic.
Mexico is a very big country and this
should be its responsibility. Otherwise,
in 20 days, the epicentre of the pan-
demic will not be Europe but North
America,” Mr Bukele tweeted.
Ms O’Neil described the attitude
shown by Mexico and Brazil, Latin
America’s biggest countries, to the pan-
demic as “nonchalant”. Mr López Obra-
dor’s behaviour was consistent with the
dismissive view of feminist protests he
displayed earlier this month, she said,
adding: “If it’s not his issue or his area of
interest, he discards it.”
On Tuesday, Mr López
Obrador was caught on cam-
era shunning hand sani-
tiser as he entered his daily
news conference.Mexico has reported 118 confirmed
cases of coronavirus but Jimena Blanco,
Americas head at Verisk Maplecroft, the
risk consultancy, indicated that this was
likely to be an underestimate because of
the country’s weak medical system, lim-
ited response to the crisis and lack of
testing.
Chile is particularly exposed because
of close trade links to China. It has
reported 238 cases of the virus and has
declared a state of exception, sending
troops on to the streets.
Colombia has also announced a state
of emergency and with many other
Latin American countries, including
Argentina, Bolivia, Chile, El Salvador
and Peru have closed frontiers to try and
control the spread of the virus. Experts
have questioned the usefulness of such
measures.
“It doesn’t make sense for Guatemala
and El Salvador to ban flights when their
problem is irregular cross-border flows
of people,” said Christopher Sabatini,
senior research fellow on Latin America
at Chatham House, the London think-
tank.
Peru has taken some of the region’s
most drastic measures, with PresidentMartín Vizcarra declaring a state of
emergency on March 15 and ordering
people to stay indoors. The country has
also announced measures to help the
poorest in the crisis, a one-off subsidy
of 380 soles ($106) to buy food and
medicine.
“The need to implement poverty con-
tainment measures to support the
maintenance of social distancing will be
required across the region,” said Ms
Blanco of Verisk.
Venezuela, which is suffering an acute
humanitarian crisis and economic col-
lapse exacerbated by US sanctions, is
Latin America’s worst-equipped coun-
try to deal with a pandemic, according
to the Global Health Security Index.
In an extraordinary change of tack,
Nicolás Maduro, the socialist president,
asked the IMF, an organisation he had
previously tried to leave, for $5bn to
tackle the virus. He was quickly turned
down.
The authorities in Venezuela have
confirmed 33 cases so far and the gov-
ernment has imposed a nationwide
quarantine regime.
Additional reporting by Benedict Mander
in Buenos Aires and Gideon Long in BogotáLatin America.Containment policies
Brazil and Mexico leaders under fire
Bolsonaro and López Obrador
accused of taking relaxed
attitude to spreading virus
International:
the flags of
countries hit by
the virus light
up the statue
of Christ the
Redeemer in Rio
de Janeiro.
Below, Andrés
Manuel López
Obrador
Sergio Moraes/ReutersG U Y C H A Z A N— B E R L I N
Germany is to deploy the Bundeswehr
to help the eurozone’s largest economy
cope with the coronavirus.
Annegret Kramp-Karrenbauer, defence
minister, said troops would help treat
the sick, facilitate traffic flow and sup-
port the police and local authorities as
infection rates climb.
“We have called on all reservists,
especially those with medical experi-
ence, to register with us,” she said. “We
are providing healthcare professionals
wherever they are needed.
“If we have transport problems,
because so many trucks are held up at
the borders... the Bundeswehr has
vehicles and drivers who can take on the
work to supply the population.”
Her comments reflect growing con-
cern in Berlin that the infection rate
could soon climb to levels experienced
in Italy and Spain. Berlin is also con-
cerned about disruption to the supply of
essential goods after Poland closed its
border, creating traffic jams, some as
long as 40km.
The armed forces are not immune to
virus-related problems. Last week,
Alfons Mais, inspector of the army, went
into quarantine at home, and one of the
main military leadership academies has
closed. The Bundeswehr also pulled out
of Defender-Europe 20, billed as the big-
gest joint US war games on the continent
in 25 years, after corona prompted the
Pentagon to scale back the operation.
The use of the Bundeswehr at home is
contentious in Germany — a legacy of
two world wars — and the constitution
restricts domestic deployments.
Germany is not alone in using its army
to help deal with the crisis. In France,
Emmanuel Macron declared the coun-
try was “at war”, ordered a nationwidelockdown and said the military was set-
ting up a field hospital for 30 patients in
the eastern region of Alsace, site of a
large cluster of infections.
The defence ministry said six patients
in intensive care in an overcrowded hos-
pital in Mulhouse, also in the east,would be flown to army medical facili-
ties in the south.
In Italy, the armed forces are being
mobilised to help tackle the outbreak. A
plant run by the defence ministry in
Naples is manufacturing 100,
masks a day, while a military pharma-ceutical facility in Florence is producing
2,000 litres of disinfectant a day. Army
technicians have been assigned to help
Siare Engineering, Italy’s only ventilator
manufacturer, step up production.
The virus has forced many countries
to consider interventions that only a few
days ago would have been inconceiva-
ble. On Tuesday, the foreign ministry in
Berlin said it was chartering Lufthansa
aircraft to repatriate tens of thousands
of German tourists stranded in the Phil-
ippines, Morocco, Egypt and elsewhere.
Ms Kramp-Karrenbauer said mem-
bers of the 184,000-strong military
could be deployed to civilian occupa-
tions hit by the epidemic. “If police offic-
ers are infected with corona, the Bun-
deswehr will be able to step in to regu-
late traffic, or to protect buildings or
other sites, if needed,” she said. “We
have provided camp beds in certain
areas, and additional personnel.”The Bundeswehr is calling on all
reservist nurses, emergency paramed-
ics and laboratory assistants in its
20,000-strong medical service to regis-
ter for work. They will be deployed to
the army’s five hospitals, which are
increasing capacity to cope with civilian
cases.
Authorities in Berlin have also asked
the Bundeswehr to help set up a hospital
for up to 1,000 patients in the grounds of
the capital’s main exhibition centre.
The defence ministry was involved in
the corona emergency from the start.
The Luftwaffe repatriated Germans
from Wuhan early in the outbreak and
quarantined them in barracks in Germ-
ersheim, in the south-west.
The ministry also became the main
procurement agency for emergency
equipment.
Additional reporting by Victor Mallet in
Paris and Davide Ghiglione in RomeMobilisation
Armed forces in Germany and Italy given greater role in operations to counter disease
Helpinghand:
German soldiers
give food to
drivers trapped
in a long jamMARCH 20 2020 Section:World Time: 19/3/2020 - 18: 34 User: john.conlon Page Name: WORLD3 USA, Part,Page,Edition: USA, 4, 1