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European lockdowns tighten as pandemic intensifies

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Your level-headed briefing on how the coronavirus epidemic is affecting the markets, global business, our workplaces and daily lives, with expert input from our reporters and specialists across the globe.

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Highest one-day jump in US infections since summer outbreak

Countries across Europe are reimposing painful restrictions on public life as a surge in coronavirus infections heightens fears the pandemic is tightening its grip, bringing another public health emergency closer just as winter approaches.

In Germany, the Czech Republic and Poland, infections hit record daily highs on Thursday while France imposed evening curfews on its biggest cities and Londoners faced new limits on socialising indoors.

Sweden remains an exception by not imposing strict curbs, which analysts attribute in part to its longstanding neutrality and belief that it is a “moral superpower” that seeks to act rationally, whereas it perceives the behaviour of other countries to be based on political calculations or emotions.

The Covid-19 pandemic worsens in Europe. Map showing reported cases per 100,000 people in the past 14 days to October 14.

Lancashire on Friday agreed arrangements with the UK government under which the county in north-west England will introduce onerous social and economic restrictions, doubling the number of people in England living under the tightest rules to 3.1m.

Liverpool, which entered so-called tier 3 restrictions on Wednesday, struggles to operate safely in a public health emergency because of inequality mixed with people’s resignation at diktats from London, seen as far removed from the city.

But Boris Johnson, the prime minister, remains in a stand-off with Greater Manchester, which is refusing to introduce tier 3 restrictions unless the government provides increased wage subsidies for workers at businesses forced to shut.

Such political tensions, reflecting trade-offs with the economy, are also being played out in the US. Several of the most fiercely contested states in the presidential election suffered sharp increases in cases this week, pushing the number of infections nationwide to their highest one-day jump since a summer outbreak.

Wisconsin, Ohio and North Carolina — which Donald Trump won four years ago but where statewide polling shows Democratic challenger Joe Biden either even or leading — recorded record jumps in cases, according to local health departments. Arizona and Florida, which are also viewed as “swing states” that Mr Biden could win after they voted for Mr Trump in 2016, had big jumps in infections.

Markets

Beijing sold dollar debt directly to US buyers for the first time, with a $6bn offering drawing record demand on the back of China’s economic recovery from the pandemic. The bonds sold by China’s finance ministry on Thursday drew orders worth more than $27bn, or roughly $10bn more than an offering of the same size last year, according to bankers on the deal.

Global stock markets snapped a three-session losing streak, lifted by upbeat earnings results that helped offset concerns over a surge in coronavirus cases in Europe and the US. Wall Street’s S&P 500 benchmark opened 0.4 per cent higher and the tech-heavy Nasdaq Composite rose 0.5 per cent.

A need to be financially resilient, plus more spare time and increased boredom in the absence of alternative distractions such as sport as a result of the pandemic has helped drive a growing number of small and new investors into the market. But Merryn Somerset Webb warns “it is worth remembering that there is never anything safe about stock markets in the short term”. 

Business

UK pub chain JD Wetherspoon has slumped to a loss for the first time in 36 years and has condemned new trading restrictions brought in to try to cut coronavirus infection rates. The 872-strong pub company reported a £34m loss in the year ending in July on revenues almost a third lower at £1.2bn. Tim Martin, the group’s chairman, said the three-month lockdown had “gone on longer than necessary”.

Chart showing US banks’ 2020 Q3 results (year-on-year change, %)

Morgan Stanley closed out Wall Street’s earnings season on a high, with booming markets driving a 25 per cent increase in third-quarter earnings and fuelling the bank’s calls to be allowed to resume share buybacks. The bank posted net income of $2.7bn for the quarter, far better than the $2bn forecast by analysts polled by Refinitiv.

US retail sales grew in September at their fastest pace in three months even as concerns linger over the economic recovery amid uncertainty about additional stimulus measures. Retail sales rose 1.9 per cent last month, driven by strong spending on vehicles, clothing and sporting goods, the commerce department said on Friday.

Global economy

Line chart showing spending in UK pubs compared with last year (%)

Covid-19 is calling last orders on British pubs, with estimates that up to a quarter of the UK’s 39,700 pubs, which collectively generate annual sales of £23bn, may not survive. “I can’t see the light at the end of the tunnel until Easter and I’m scared for this pub that I love,” said Sonia Couperthwaite, one of four remaining employees of Ye Olde Man and Scythe in Bolton, which has survived fires, floods, wars and a local massacre since it started trading in 1251.

China’s National Bureau of Statistics will reveal if the country’s economic rebound from the pandemic remains on track when it releases its estimate for third-quarter gross domestic product growth on Monday. The IMF revised upwards its full-year projection for Chinese growth to 1.9 per cent this week.

Professor Arvind Subramanian, of India’s Ashoka University, argues that developing economies must not succumb to export pessimism: reports of globalisation’s demise have been greatly exaggerated. Covid-19 could accelerate the growth of services exports — and even if global manufacturing exports stagnate, those of most developing countries can still grow rapidly, as long as they gain market share, he says.

Science

Gilead’s Covid-19 treatment remdesivir has no substantial effect on a patient’s chances of survival, a clinical trial by the World Health Organization has found, delivering a significant blow to hopes of identifying existing medicines to treat the disease. “Remdesivir, hydroxychloroquine, lopinavir and interferon regimens appeared to have little effect on in-hospital mortality,” the study found.

“Long Covid” has left many patients with debilitating, varied symptoms months after the initial infection has cleared, raising fears about the long-term health costs of the pandemic. Patients infected in the first wave of the virus have continued to suffer disorders in the brain, lungs, heart, gut, liver, skin and other parts of the body, according to a review of the disease conducted by the UK National Institute for Health Research.

The first confirmed case of Covid-19 reinfection in the US has added to doubts about “herd immunity” from the virus and worried experts because the patient became more seriously ill following the second infection. Other cases have been recorded in Hong Kong, Belgium, the Netherlands and Ecuador, but this is only the second time a patient has shown more serious symptoms when the virus returned.

Get in touch

How is your workplace dealing with the pandemic? And what do you think business and markets — and our daily lives — will look like after lockdown? Please tell us by emailing covid@ft.com. We may publish your contribution in an upcoming newsletter. Thanks

Chart showing readers’ responses to the question: At what level of net wealth, including the main home, pensions, art and all other assets, should an annual tax be levied?

In response to the article Wealth tax: FT Money readers are divided, which explored one radical idea to help pay towards the costs of coronavirus, reader Dr Hot writes:

Executive Summary — unanimous support for a tax on people ‘richer than me’

The essentials

Lunch with Atul Gawande: the literary surgeon famous for changing the way people think about the end of life believes the questions facing Americans during coronavirus are moral, rather than technical. He calls for “Medicare for all”, sick pay to allow the ill to stay away from work and doctors to listen to what patients want. “The dying have to have access to a family member. Just out of sheer humanity.”

Final thought

Wynton Marsalis, the veteran trumpeter and composer
Wynton Marsalis, the veteran trumpeter and composer

Wynton Marsalis, the jazz maestro noted for the sharpness of his appearance as well as his playing, has long scrambled around the borders of the personal, the cultural and the political. “The fact that I had an afro and played classical music concertos was an issue,” he recalled. His autumn tour is titled “The Sound of Democracy” and his playful new album, The Ever Fonky Lowdown, is a swipe at material and spiritual corruption and populism.



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Europe

EU pledges aid to Lithuania to combat illegal migration from Belarus

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EU immigration updates

In the latest sign of deteriorating relations between the EU and Belarus, Brussels has promised extra financial aid and increased diplomatic heft to help Lithuania tackle a migrant crisis that it blames on neighbouring Belarus and its dictator Alexander Lukashenko.

Lithuania detained 287 illegal migrants on Sunday, more than it did in the entirety of 2018, 2019, and 2020 combined, the vast majority of them Iraqis who had flown to Belarus’s capital Minsk before heading north to cross into the EU state. Almost 4,000 migrants have been detained this year, compared with 81 for the whole of 2020. 

“What we are facing is an aggressive act from the Lukashenko regime designed to provoke,” Ylva Johansson, the EU commissioner for home affairs told reporters on Monday after talks with Lithuania’s prime minister Ingrida Simonyte. “The situation is getting worse and deteriorating . . . There is no free access to EU territory.”

The EU imposed sweeping sanctions against Lukashenko’s regime in June, after he fraudulently claimed victory in last year’s presidential election and then led a brutal campaign to violently suppress protesters and jail political opponents. Lukashenko has ruled Belarus since 1994.

The rising concern over the migrant crossings, which EU officials say is a campaign co-ordinated by Lukashenko’s administration, comes as one of the country’s athletes competing in the Tokyo Olympic Games sought refuge in Poland after team management attempted to fly her home against her will after she publicly criticised their actions.

Johansson said the EU would provide €10m-€12m of immediate emergency funding and would send a team of officials to the country to assess the requirements for longer-term financial assistance, including for extra border security and facilities to process those attempting to enter.

Simonyte said that Vilnuis would require “tens of millions of euros” by the end of the year if the number of people attempting to cross the border continued at the current pace.

Lithuania’s foreign minister Gabrielius Landsbergis told the Financial Times in June that Belarus was “weaponising” illegal immigration to put pressure on the Baltic country over its housing of several opposition leaders. Since then, the flow of illegal immigrants from Iraq, Syria, and several African countries has increased sharply.

Iraqi diplomats visited Vilnius at the end of last week after Lithuania’s foreign minister flew to Baghdad in mid-July. Johannson said on Monday that EU diplomats were engaged in “intensive contacts” with Iraqi officials, which she said were “more constructive than we had hoped”.

State carrier Iraqi Airways offers flights from four Iraqi airports to Minsk, according to its website. Former Estonian president Toomas Ilves suggested on Twitter that the EU could cut its aid to Iraq “immediately until they stop these flights”.

Speaking at the border with Belarus on Monday, Johansson added that the tents provided by Lithuania were unsuitable for families. Lithuania’s interior minister Agne Bilotaite said she hoped the number of illegal migrants would subside in the coming months but that Vilnius was planning to build some housing to accommodate them over the upcoming winter.



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Britain’s wrong-headed approach to refugees

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UK immigration updates

Thanks to the bravery of volunteers who run towards storms at sea to rescue ships’ crews, few British institutions command as much respect as the Royal National Lifeboat Institution. The charity, however, has recently had to negotiate a different kind of storm, over its efforts to help refugees who get into difficulties crossing the Channel from France. Nigel Farage, the former Brexit party leader, accused it of running a taxi service for illegal trafficking gangs. Last week, the RNLI said it had received hundreds of thousands of pounds of extra donations in response.

The RNLI has become embroiled in a now familiar story when the summer months allow more small boats to make the Channel crossing. Compared with the flows to other countries such as Spain, Italy and Greece, only a handful of migrants attempt the journey. That makes the UK’s inability to control the border in an effective and humane way — and shabby treatment of those who do make it across — no less of a scandal.

Britain’s strategy for stemming the flow has relied mostly on paying the French authorities to limit the number of boats crossing and return any that leave to France, while deterring would-be migrants through the unwelcoming environment that awaits them. Just as EU countries are dependent on their neighbours for keeping entrants down — whether Morocco for Spain or Belarus for Lithuania — the UK needs French co-operation to control the mutual border. Diplomatic spats, whether over Brexit or extra Covid quarantine restrictions on arrivals from France, have made that harder.

The UK approach manages to be simultaneously ineffective and cruel. Yvette Cooper, chair of the home affairs select committee, wrote last week to home secretary Priti Patel to complain of unacceptable conditions in the holding facility for migrants who make it to the Kent coast. A recent unannounced visit by MPs found most of those remaining in the overcrowded facility sitting on a thin mattress on the floor, with women and children in the same room as adult men.

Earlier this year, the High Court ruled that “squalid” conditions in the Napier Barracks, a temporary centre set up last year to house asylum seekers during the pandemic, were so bad as to be unlawful. While arrivals have declined since the peak seven years ago, cutbacks have led to a backlog in processing claims, leaving more in a legal limbo.

Since the start of the pandemic Britain has shut down other paths into the country, ending a resettlement scheme. This has ceded the ground to people traffickers. The “push factors” of the risk of violence and torture at home and “pull factors” of higher living standards mean many are still willing to resort to risky and illegal methods to try to reach the UK. Creating a harsh environment for those who make it has done little to dispel the widespread belief among migrants that Britain is a better destination than other European countries, and stem the flow.

That will not stop the government trying. Barristers have warned that a clause in draft border legislation could potentially make it a crime to help asylum seekers arrive in the UK, with a maximum penalty of life imprisonment; at present it is illegal to do so to earn a profit. The Home Office says the clause is aimed at criminal traffickers. But along with a suggestion to set up offshore processing centres, the provision has rightly earned criticism from human rights groups. If the government is unwilling to create safe and legal routes, its only option is to prevent people from coming in the first place. That, ultimately, will mean relying on France.



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Olympic organisers investigate after Belarusian runner seeks refuge

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Tokyo Olympics updates

A Belarusian runner due to compete at the Tokyo Olympics was taken to the airport against her wishes after making complaints about her coaches, according to media reports on Sunday night.

The International Olympic Committee, the Games organisers, said it had asked for clarification from the Belarus team about the status and whereabouts of Krystina Tsimanouskaya, who is due to compete in the women’s 200m sprint on Monday.

Belarus’ dictatorial leader Alexander Lukashenko and his regime are widely seen as international pariahs after he fraudulently claimed victory in last year’s presidential election and then embarked on a brutal campaign to suppress protesters and supporters of his rival, which has seen thousands beaten and jailed. 

Images and video circulated on social media sites by Belarusian opposition activists appear to show Tsimanouskaya at Tokyo’s Haneda airport, where she refused to board a plane and instead sought refuge with Japanese police.

Krystsina Tsimanouskaya took part in the heats for the women’s 100 metres on Friday but narrowly missed qualifying for the semi-finals © Aleksandra Szmigiel/Reuters

The IOC said it “has seen the reports in the media, is looking into it and has asked the [Belarus] national Olympic committee for clarification”.

Japanese police did not immediately respond to requests for comment.

The Belarusian Olympic Committee did not immediately respond to requests for comment, but a statement attributed to the body suggests she had been removed from competition by coaches on the advice of doctors advice about her “emotional, psychological state”.

Late on Sunday, Tsimanouskaya shared a screenshot of that statement on Instagram with the message: “This is a lie.”

“I am asking the International Olympic Committee for help, they are putting pressure on me and they are trying to take me out of the country without my consent,” Tsimanouskaya said in a video message reportedly recorded on Sunday evening from the airport and posted on social media.

A person close to Olympic officials said there remained “confusion” around the incident, adding they had been told that Tsimanouskaya had boarded a coach to the airport and had gone through the departures area to board a plane to Istanbul, where she then sought Japanese police to ask for asylum.

Belarusian opposition leader Sviatlana Tsikhanouskaya tweeted that she was grateful to the IOC for its quick reaction. “She has a right to international protection and to continue participation in the Olympics. It is also crucial to investigate Belarus’ NOC violations of athletes’ rights,” she said.

Tsimanouskaya on Friday appeared to criticise her coaches and team management in an Instagram post that said she had been “ignored” and that “people in higher ranks should respect us as athletes”.

The 24-year-old had taken part in the heats for the women’s 100 metres on Friday but narrowly missed on qualifying for the semi finals of the event. She is listed on official Olympics sites as due to compete in the first round of the 200 metres at the Olympic stadium on Monday morning.





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