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Viennese voters turn their backs on populist Freedom party

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Viennese voters deserted the rightwing populist Freedom party and its former leader on Sunday, delivering a resounding victory for centrist politics in the Austrian city’s important municipal elections. 

Vienna’s elections are watched as a bellwether for Austrian politics, thanks both to the city’s size relative to Austria’s overall population — it is home to 1.9m of the country’s 8.8m citizens — and the capital’s status as the bastion of Austria’s once dominant Social Democratic party. 

The regional election was the first ballot box test for the new national government of conservative Austrian chancellor Sebastian Kurz and his handling of the Covid pandemic. Mr Kurz formed a groundbreaking coalition with Austria’s Green party in January after his coalition with the far-right Freedom party disintegrated in scandal in May last year. 

Mr Kurz’s Austrian People’s party bounced back from its lowest ever share of the vote in Vienna in 2015, gaining 18.7 per cent, doubling from 9.4 per cent previously. The election’s victor, however — as widely predicted — was the socialist SPÖ, whose share of the vote rose to 41.7 per cent, from 39.6 five years ago, meaning Michael Ludwig will be comfortably returned to the powerful Vienna mayoralty. Mr Ludwig must negotiate a coalition with the Greens or liberal Neos — also both winners on Sunday — to form a city government. 

The results are not final: this year a far larger than normal number of postal votes — about 380,000 — will not be counted until Monday. The current results are based on projections by the SORA institute, a pollster, which said they had a 2 per cent margin of error. 

People’s party candidate Gernot Blümel — who is also Austria’s finance minister — said there was “nothing but joy” at the result. “The ÖVP is back in Vienna,” he said.

Chancellor Sebastian Kurz, of the Austrian People’s Party, declared the result a vote of confidence in the government’s policies
Chancellor Sebastian Kurz, of the Austrian People’s Party, declared the result a vote of confidence in the government’s policies © LUKAS BARTH-TUTTAS/EPA-EFE/Shutterstock

Mr Kurz, who counts Mr Blümel as one of his closest allies, and was featured prominently across the campaign, declared the result a huge vote of confidence in the policies of his government. 

“This result makes it the eighth state election success for us in a row, and is a sign that the turquoise path continues to gain approval,” Mr Kurz wrote in a tweet on Sunday night — referring to the rebranded colour scheme he gave the People’s party when he took over at the age of 30 in May 2017.

While the People’s party swept up votes from the right — not least by cannibalising many of their hardline positions on immigration and social welfare — analysts said its victory was as much down to the failures of its opponents as its own successes — recent weeks saw Mr Blümel and his campaign team make several bad errors. 

“Four winners, two losers” declared the Austrian state broadcaster of the results on Sunday evening: Freedom party and Team HC Strache — a schismatic grouping led by the Freedom party’s disgraced former leader — suffered badly at the polls. 

Since it left national government last year, the Freedom party has been racked by internal division and growing apathy from its former support base.

Vienna was formerly a stronghold for the party, which had made deep inroads among the city’s large formerly left-leaning working class.

The Freedom party’s share of the vote fell from 30.8 per cent to just 7.5 per cent — relegating it from the city’s second largest party, with a shot at the mayoralty, to the fifth largest, with severe consequences for its national credibility.

Meanwhile, Heinz-Christian Strache, the party’s former leader, who broke with the party earlier this year, polled just 3.6 per cent with his “Team HC” grouping — below the 5 per cent threshold required to take up any seats in the Vienna government. 

For Mr Strache, who was the vice-chancellor of Austria in Mr Kurz’s first government before a political graft scandal engulfed him, the result may mark the end of his political career. 

“It is hard to see how he can could come back into politics from [this result],” said Thomas Hofer, a prominent Austrian political analyst. “He had a very bad campaign.” 

The populist right in general, said Mr Hofer, had been completely wrong footed by the coronavirus crisis — which forced candidates from across the political spectrum to abandon campaigns based on city finances, social care and immigration. 

“The corona crisis meant this campaign was not about hospitals, budgetary mismanagement, or any of the topics it could have been. The crisis made everything new.” 

The election was about “solidarity” said Mr Hofer.

The Freedom party and Mr Strache had both labelled the pandemic “corona madness” and called for an end to restrictions on public life.

Mr Hofer nevertheless added that the result did not mean the Freedom party — one of Europe’s oldest and best established rightwing populist movements, with a long record of serving in national and regional governments — was out for good: on Sunday the party’s main focus had been to stamp out the threat posed by their former leader Mr Strache, he said, which it had done. The coming months would be decisive for its future as it plotted a path back to popularity. 



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EU plans digital vaccine passports to boost travel

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Brussels is to propose a personal electronic coronavirus vaccination certificate in an effort to boost travel around the EU once the bloc’s sluggish immunisation drive gathers pace.

Ursula von der Leyen, European Commission president, said on Monday the planned “Digital Green Pass” would provide proof of inoculation, test results of those not yet jabbed, and information on the holder’s recovery if they had previously had the disease.

“The Digital Green Pass should facilitate Europeans‘ lives,” von der Leyen wrote in a tweet on Monday. “The aim is to gradually enable them to move safely in the European Union or abroad — for work or tourism.”

The plan, expected to be outlined this month, is a response to a push by Greece and some other EU member states to introduce EU “vaccination passports” to help revive the region’s devastated travel industry and wider economy. 

But the commission’s proposed measures will be closely scrutinised over concerns including privacy, the chance that even inoculated people can spread Covid-19, and possible discrimination against those who have not had the opportunity to be immunised.

In an immediate sign of potential opposition, Sophie Wilmès, Belgium’s foreign minister, raised concerns about the plan. She said that while the idea of a standardised European digital document to gather the details outlined by von der Leyen was a good one, the decision to style it a “pass” was “confusing”. 

“For Belgium, there is no question of linking vaccination to the freedom of movement around Europe,” Wilmès wrote in a tweet. “Respect for the principle of non-discrimination is more fundamental than ever since vaccination is not compulsory and access to the vaccine is not yet generalised.”

The travel sector tentatively welcomed the news of Europe-wide vaccine certification as a way to rebuild confidence ahead of the crucial summer season, but warned that regular and rapid testing was a more efficient and immediate way to allow the industry to restart.

Fritz Joussen, chief executive of Tui, Europe’s largest tour operator, said “with a uniform EU certificate, politicians can now create an important basis for summer travel”. But he added that testing remained “the second important building block for safe holidays” while large numbers of Europeans awaited a jab.

Marco Corradino, chief executive of online travel agent Lastminute.com, said he feared the infrastructure needed would not be ready in time for the summer season: “It will not work . . . at EU level because it is too complicated and would not be in place by June.”

He suggested that bilateral deals, such as the one agreed between Greece and Israel in February to allow vaccinated citizens to travel without the need to show a negative test result, had more potential.

Vaccine passport sceptics argue it would be unfair to restrict people’s travel rights simply because they are still waiting for their turn to be jabbed. 

Gloria Guevara, CEO of the World Travel and Tourism Council, said it was important not to discriminate against less advanced countries and younger travellers, or those who simply cannot or choose not to be vaccinated. “Future travel is about a combination of measures such as comprehensive testing, mask-wearing, enhanced health and hygiene protocols as well as digital passes for specific journeys,” she added.

A European Commission target to vaccinate 70 per cent of the bloc’s 446m residents by September means many people are likely to go through summer unimmunised.

While some countries around the world have long required visitors to be vaccinated against infectious diseases such as yellow fever, a crucial difference with coronavirus is that those inoculations are available to travellers on demand. 

Questions also remain about the risk of people who have already been vaccinated passing on coronavirus if they contract the disease.

 





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EU must prepare for ‘era of pandemics’, von der Leyen says

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Europe must prepare its medical sector to cope with an “era of pandemics”, the European Commission president said, as she warned the bloc was still in its most difficult period for Covid-19 vaccine deliveries. 

Ursula von der Leyen told the Financial Times that the EU could not afford to sit still even once Covid-19 has been overcome, as she described her plans for a Europewide fast-reaction system designed to respond more quickly to emerging medical threats. 

“Europe is determined to enlarge its strength in vaccine production,” she said in a telephone interview. “It’s an era of pandemics we are entering. If you look at what has been happening over the past few years, I mean from HIV to Ebola to MERS to SARS, these were all epidemics which could be contained, but we should not think it is all over when we’ve overcome Covid-19. The risk is still there.” 

Von der Leyen last month unveiled plans for a biodefence preparedness plan called the HERA Incubator, which will combine researchers, biotech companies, manufacturers and public authorities to monitor emerging threats and work on adapting vaccines. This will become part of a Health Emergency Preparedness and Response Authority (HERA). 

The concept is an attempt to mirror some of the benefits conferred by America’s Biomedical Advanced Research and Development Authority, which is charged with the job of responding rapidly to new health threats.

“The US has a strong advantage by having BARDA . . . this is an infrastructure Europe did not have,” von der Leyen said. “But Europe has to build up to be prepared for whatever comes, and also for the next possible pandemics. This is the HERA incubator.” 

The EU remains within its “most difficult quarter without any question” for vaccine deliveries, she said, cautioning “many, many problems” could always occur within the production process.

Looking towards the second quarter, she pointed out that a second EU contract with BioNTech/Pfizer for their vaccine would kick in, alongside the new jab from Johnson & Johnson, which is expected to be authorised in March.

In an EU summit on Thursday, von der Leyen addressed vaccine production and the threat of virus mutations after a rocky start to the year, when she was hit by complaints from politicians in member states, including Germany, about supply shortfalls. 

Von der Leyen acknowledged to the European Parliament in early February that mistakes had been made in the EU’s vaccination effort, and the campaign remains behind those of the US and UK. Among the difficulties are continued production problems at AstraZeneca’s European facilities. 

Von der Leyen said she was sticking with the EU’s target for the delivery of 300m doses in the second quarter, saying the challenge will shift from vaccine production to national rollouts. As for AstraZeneca’s shipments, she said: “I need to see the proof of the pudding . . . It’s very good that they also delivered from the rest of the world, but they have to honour their contract and we want our fair share.”

Ursula Von der Leyen says she is sticking with the EU’s target for the delivery of 300m doses of the AstraZeneca vaccine in the second quarter © Remo Casilli/Reuters

The good news for the EU is its access to mRNA technology, which is used in the BioNTech/Pfizer vaccine and which scientists believe can be used to rapidly adapt to mutations, said von der Leyen. 

But she also supported French president Emmanuel Macron’s proposal to share up to 5 per cent of supplies to permit the vaccination of healthcare workers in developing countries.

“We all suffer from the fact that the scaling up was not and is not as rapid as we thought at the beginning. This has a general effect all over the world,” she said. “With production picking up I think we should never forget that only if everybody has access to vaccines will we overcome this virus.”

Von der Leyen added that the EU needed to be particularly concerned about developments in its immediate area. 

“The mutant story is worrying me the most,” she said. “When the virus is still raging in the neighbourhood, the probability that mutants will occur, that will come back, for example, to Europe, is only rising.”



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Did US hiring accelerate in February?

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Did US hiring accelerate in February?

US hiring picked up markedly in February from the previous month, economists have forecast ahead of the monthly employment report that is due to be released on Friday.

After the country lost 227,000 jobs in December, hiring rebounded in January — albeit with a modest gain of 49,000 jobs — as the rise in coronavirus infections abated and vaccinations accelerated.

Economists polled by Bloomberg anticipate that the US will add 145,000 jobs in February, pushing the unemployment rate 1 percentage point to 5.3 per cent. If that forecast holds, it would mark the strongest pace of hiring since November.

The prospect of a resurgence was bolstered by data released last Thursday showing that filings for first-time jobless benefits fell to a three-month low in the week ending February 20.

The labour market stumbled in the final stretch of 2020 under the weight of the pandemic’s upswing in the autumn, which prompted tighter restrictions on businesses and social activity across the US.

The leisure and hospitality sector alone shed 597,000 jobs in December and January, according to labour department figures, whereas the January payroll gains were concentrated in government employment and professional and business services.

However, the outlook is brighter for the coming months, particularly with the expected passing of the Biden administration’s $1.9tn stimulus plan, which last week won the support of a large group of senior Wall Street executives, and further vaccination progress.

“US households appeared quite febrile at the end of 2020 as the cocktail of a worsening health situation, weakening employment and expiring fiscal aid weighed on private sector confidence and restrained mobility,” analysts at Oxford Economics said. “Fortunately, we see hope on all three fronts.” Matthew Rocco

Will eurozone inflation continue to rise?

Eurozone inflation hit its highest level since the start of the coronavirus pandemic in January, after five months of falling prices. On Tuesday the bloc’s statistics body will publish a preliminary estimate of February’s level, which is expected to continue the upward trend.

Many economists are predicting a steady rise over the spring on the back of higher energy costs, continuing supply chain disruptions that have raised costs for retailers and manufacturers, and the reversal of a VAT tax cut in Germany.

“For eurozone inflation, the only way is up,” said Carsten Brzeski, economist at ING, who forecast that headline consumer price inflation in the bloc would reach 1.3 per cent in February, from an 11-month high of 0.9 per cent in January.

Claus Vistesen, chief economist at Pantheon Macroeconomics, said a further increase in the price of oil — international benchmark Brent crude is up more than 30 per cent this year — could be the biggest driver of inflation in coming months.

A change in the inflation basket of goods and services is also at play. The 2021 basket reflects that people are consuming more food, where prices are rising, and less recreation activity, where prices are generally falling.

The European Central Bank has forecast that price growth will rise to 1.5 per cent in the fourth quarter this year before dipping to 1.2 per cent a year later — still under its target of below but close to 2 per cent.

“The ECB will not contemplate raising its policy rates until eurozone inflation expectations and wage inflation have increased substantially and persistently,” said Andrew Kenningham, economist at Capital Economics. “That is probably several years away.” Valentina Romei

Line chart of By date of forecast, % showing Economists revise up their eurozone inflation forecast for 2021

Can the copper bull run continue?

If, as the commodity market adage goes, the cure for high prices is high prices, where does that leave copper?

The world’s most important industrial metal, used in everything from electric vehicles to power cables, has risen more than 100 per cent from its pandemic lows in March last year.

Last week it hit a 10-year high above $9,500 a tonne before falling back as speculators piled in and a Chinese brokerage amassed a $1bn long position on the Shanghai Futures Exchange. 

A growing number of banks and brokers believe the bull run will continue and copper will go on to surpass its all-time high of $10,190 reached in February 2011. 

Citi and Goldman Sachs are both predicting big supply deficits for 2021 that would further drain already-low stockpiles of the metal, citing strong demand from China but also the rest of the world as the economic strain from the coronavirus pandemic eases. 

Unlike previous cycles, a dearth of “shovel-ready” copper projects means a flood of supply is not going to hit the market and send prices tumbling. If anything, even higher prices might be needed to spur production of low-grade ores in far-flung parts of the world where it is difficult to build a mine.

“It takes 15 years from discovery to navigating approvals to ultimately getting a development up and running in our industry,” Anglo American chief executive Mark Cutifani said. “So you can’t just wiggle your nose. It does need high prices, but it also needs time.” Neil Hume



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