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Germany and France impose fresh curbs to slow Covid-19 spread

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Germany’s federal and state governments agreed on Wednesday to shut down parts of the economy and toughen restrictions on social contact, in a bid to stem a record rise in coronavirus infection rates.

As the rise in infections stoked alarm across the continent, France’s president Emmanuel Macron announced a new one-month national lockdown.

Stocks slumped to their lowest level since May. The region-wide Stoxx 600 index fell 3 per cent on Wednesday and has lost more than 5 per cent since the end of last week as local markets in Frankfurt, Paris and London have endured bouts of selling. Wall Street’s benchmark S&P 500 index closed down 3.5 per cent. London’s FTSE fell 2.8 per cent.

The new regulations in Germany will be imposed from Monday and last until the end of November. They require all restaurants, bars, and most public entertainment to be closed. Football matches in the Bundesliga and other professional sports fixtures will be held without spectators. Schools, day care centres, hair salons and retailers will remain open.

Chancellor Angela Merkel said on Wednesday: “We have to act, and act now, to prevent an acute national health emergency.”

She acknowledged that the measures being introduced were “hard . . . and burdensome”. “It’s a heavy day for political decision makers,” she added.

Ms Merkel will meet regional heads of state again in two weeks, a statement released after the meeting said, in order to evaluate the effectiveness of the measures and to make any necessary adjustments.

In a televised address to the French nation on Wednesday evening, Mr Macron said: “Like all our neighbours, we are submerged by the acceleration of the virus.” He warned that the “second wave” would “probably be harder and more murderous than the first”.

France’s president Emmanuel Macron addressed the nation on Wednesday night © Reuters

Mr Macron said the lockdown — involving travel restrictions, the closure of borders to non-EU travellers and the closure of all bars and restaurants — would be different from the one imposed in the spring because schools, factories and companies would stay open, while visits to old people’s homes and funerals would be permitted.

“The economy must not stop nor collapse,” he said.

The French lockdown will apply from midnight on Thursday to at least the beginning of December. The spring lockdown lasted from mid-March to mid-May, and sharply reduced the spread of coronavirus.

Earlier in the day in Brussels, Ursula von der Leyen, European Commission president, announced plans to improve EU-wide coronavirus testing and tracing as part of a package of measures triggered by the pandemic’s resurgence in Europe.

Speaking ahead of a videoconference of EU premiers and presidents on Thursday, Ms von der Leyen said that the Covid-19 situation was “very serious” and required a stronger EU response.

Prof Peter Piot, director of the London School of Hygiene & Tropical Medicine and a special adviser to Ms von der Leyen, warned that the numbers of new infections now emerging in the EU were “really staggering”.

“The resurgence we are seeing now after the initial successes over the summer shows how fragile these gains are,” he said. “We kind of relaxed too much the measures that are basically about behaviour — [and] we are paying a high price.”

On Tuesday, France reported 523 Covid-19 deaths during the previous 24 hours, the highest total since April 22. In Germany, coronavirus cases rose by 11,409 to 449,275 on Tuesday.

The trends in the EU’s two leading powers reflect a wider continental tilt as countries scramble to deal with large rises in case numbers. Some have said they fear that hospitals will be overwhelmed unless more severe social controls are imposed.

Belgium, headquarters of the EU, is the second worst affected country of the 31 comprising the European Economic Area and the UK, according to data published on Wednesday by the European Centre for Disease Prevention and Control. Belgium had a 14-day cumulative number of 1,424.2 Covid-19 cases per 100,000 people, behind only the Czech Republic on 1,448.7. France suffered 659.9 cases, the UK 424.1 and Germany 156.2.

In the UK, more English regions were braced for further restrictions as the British government announced 310 deaths from Covid-19 the previous day.

With Downing Street scientific advisers arguing for the whole country to enter tougher restrictions by December, one aide said: “We are seeing the data every day and the last couple of days in particular have been looking increasingly concerning.”

Latest coronavirus news

Follow FT’s live coverage and analysis of the global pandemic and the rapidly evolving economic crisis here.

Additional reporting by Jim Pickard in London



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Armenia’s prime minister claims military is plotting a coup

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Armenia’s prime minister has claimed the country’s military is plotting a “coup,” and taken to the streets with his supporters after senior army figures in the former Soviet republic called on him to resign.

Nikol Pashinyan has faced months of protests demanding he step down after the defeat of Armenian forces in a six-week war with neighbouring Azerbaijan that ended in November.

The army weighed in on Thursday, calling on the prime minister to quit after he fired the first deputy chief of staff for criticising him.

A letter to the prime minister signed by 40 senior officers warned Pashinyan not to use force against demonstrators, but did not say whether the army would act to remove him from power.

“The current government’s ineffective management and serious mistakes in foreign policy have put the country on the brink of collapse,” the officers wrote on Facebook.

Pashinyan later fired the chief of the general staff, Onik Gasparyan, ordered police to secure government buildings in Yerevan and told his supporters in the capital’s Republic Square to avoid violent clashes.

Demonstrators at an opposition rally in Yerevan demand the resignation of Nikol Pashinyan. They cheered as a fighter jet flew overhead © Artem Mikryukov/Reuters

Describing the situation as “manageable” the prime minister denied he was planning to flee the country and said the army’s statement was an “emotional reaction” to a dispute over the defeat in the Nagorno-Karabakh conflict.

“We have no enemies in Armenia. I am calling for calm,” Pashinyan said, according to Russian news agency Interfax. “Of course, the situation is tense, but we need dialogue, not confrontation.”

He later took to the streets with several thousand supporters and a megaphone — an echo of the 2018 “velvet revolution” that swept him to power following a march across the country that galvanised popular support. A few thousand opposition supporters gathered at a different square and cheered as a fighter jet flew overhead.

Pashinyan has fought off calls for his resignation since signing a Moscow-brokered peace deal in November that cemented territorial gains for Azerbaijan in Nagorno-Karabakh. The mountainous enclave in the South Caucasus is internationally recognised as part of Azerbaijan, but is populated by ethnic Armenians who seized control after a war that broke out in the dying days of the Soviet Union.

Azerbaijan, a mostly Muslim country and a close ally of Turkey, launched an offensive in September with the aim of retaking the entire enclave. Armenia’s army was ill prepared for oil-rich Azerbaijan’s modern drone fleet and significant backing from Ankara.

More than 3,300 Armenian soldiers died in the conflict, with a further 9,000 wounded. Thousands of civilians were displaced, including some who set their own homes on fire as they fled land now under control of Azerbaijan.

Russia, the traditional regional power broker and Armenia’s most important ally, remained neutral even as several previous ceasefires failed and has deployed 2,000 peacekeepers to secure the region.

Pashinyan admitted the terms were “unbelievably painful for me and my people” but argued the concessions were necessary to prevent further losses.

The devastating defeat sparked fury among Armenians who stormed the country’s parliament and attacked its speaker, demanding the prime minister’s resignation.

Pashinyan backtracked on a pledge to step down after snap elections earlier this month and remained in office in the face of opposition from Armenia’s ceremonial president, three parliamentary opposition parties, and key church leaders.

The Kremlin said on Thursday it was “following events in Armenia with caution” but considered them “exclusively Armenia’s internal matter”.

Dmitry Peskov, President Vladimir Putin’s spokesman, told reporters Russia was “calling on everyone to be calm” and said “the situation should remain within constitutional limits,” according to Interfax.



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German accounting watchdog chief to step down in wake of Wirecard

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The head of Germany’s accounting watchdog is to step down following mounting political pressure over corporate governance shortcomings exposed by the Wirecard fraud.

Edgar Ernst, the president of the Financial Reporting Enforcement Panel (FREP), said on Wednesday he would depart by the end of this year. He is the third head of a regulatory body to lose his job in the wake of one of Germany’s biggest postwar accounting scandals.

The collapse of Wirecard, which last summer filed for insolvency after uncovering a €1.9bn cash hole, triggered an earthquake in Germany’s financial and political establishment.

Felix Hufeld, president of BaFin, the financial regulatory authority, and his deputy Elisabeth Roegele were pushed out by the German government in January for failing to act on early red flags suggesting misconduct at Wirecard. Ralf Bose, the head of Germany’s auditors supervisor Apas, was fired after disclosing he traded Wirecard shares while this authority was investigating the company’s auditor, EY. The German government is also working to revamp the country’s accounting supervision and financial oversight.

Meanwhile, criminal prosecutors in Frankfurt are evaluating a potential criminal investigation into BaFin’s inner workings and on Wednesday asked the market authority to hand over comprehensive documents, the prosecutors office told the FT, confirming an earlier report by Handelsblatt. The potential scope of any investigation as well as the individuals who might be targeted is still unclear. BaFin declined to comment.

Ernst came under pressure as the parliamentary inquiry commission uncovered that he joined the supervisory board of German wholesaler Metro AG in an apparent violation of internal governance rules, which from 2016 banned FREP staff from taking on new supervisory board roles.

Last week, the former chief financial officer of Deutsche Post filed a legal opinion to parliament defending his move. He argued that his employment contract was older than the 2016 ban on board seats and hence trumped the tightened governance regulations.

The German government had subsequently threatened to ditch the private-sector body which currently has quasi-official powers.

In a statement published on Wednesday evening, FREP said that Ernst wants to open the door for a “fresh start” that would be untainted by the discussions around his supervisory board mandates. “FREP is losing a well-versed expert in capital markets,” the body said.



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Putin and Lukashenko’s ski fun shows cold shoulder to EU

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As news of new EU sanctions against Russia began to leak out of a meeting of bloc foreign ministers on Monday afternoon, Vladimir Putin and his Belarusian counterpart Alexander Lukashenko were discussing a different challenge to the Russian president.

“You can try to compete with Vladimir Vladimirovich,” Lukashenko, in ski gear, said to his son, Nikolai. “But you probably won’t catch up,” he added, with a smile to Putin as the Russian leader pushed off down the slope.

Putin and Lukashenko are the men behind Europe’s two repressive crackdowns over the past six months, who have both jailed or exiled their most prominent opponents and seen their security forces violently assault and detain thousands of peaceful protesters.

But in a summit in the snow-covered mountains of Sochi, on Russia’s southern coast, they revelled in their twosome of leaders shunned and sanctioned by Brussels, in a calibrated message to the EU that the cold-shoulder was mutual.

For foreign policy experts there were few details to digest, despite the complex negotiations going on behind the scenes as the two post-Soviet states seek to recalibrate their future relationship.

Putin is keen to deepen integration on Moscow’s terms. Lukashenko is desperate for Russian investment and trade co-operation but is loath to relinquish sovereignty. Yet in place of diplomatic negotiations and policy pronouncements, photographs and video footage of the two leaders enjoying each other’s company were in full display.

At the outset, Putin, in jeans and an open-collar shirt and blazer, greeted his guest with a handshake and a hug. “Even our appearance, clothes and so on, suggest that these are serious negotiations in ordinary clothes,” Lukashenko quipped. “It suggests that we are close people.”

Pleasantries exchanged, it was time for the salopettes and ski boots, and a shared chairlift to the summit. Putin, pushing off confidently, set off down the gentle slope, Lukashenko in his wake.

After a short ride on snowmobiles back to their chalets, discussions continued over more than six hours — and what appeared to be three different sized wine glasses.

“The optics for the international audience is that they have been able to maintain their positions and nothing can be done against them,” said Maryia Rohava, a research fellow at Oslo university specialising in post-Soviet relations.

“Now we’re talking not just about sanctions against Belarus but also against Russia,” she added. “And it seems like they look at that like, ‘Well, we don’t care . . . We’re just enjoying our winter break like autocrats do.’”

To be sure, the fun on the slopes was not wholly without power games. Putin was clear to underscore he was the senior partner, from wrongfooting his guest at the top of the ski lift to releasing photographs of their meeting showing Lukashenko scribbling notes as his host spoke.

But the mood music was in sharp contrast to Lukashenko’s last visit to Russia in September. Then, with protests raging and the Belarusian leader’s position looking shaky, Putin reprimanded his guest for mishandling the unrest and risking the toppling of an ageing post-Soviet regime that could weaken his own.

Then, in a businesslike and cold atmosphere, Lukashenko pleaded with Putin that “a friend is in trouble” and was granted a $1.5bn loan from Moscow — but not before his host remarked that Belarusian people should be given a chance to “sort this situation out”.

The absence of such language on Monday also sent a subtle signal to other illiberal regimes, particularly those on the outer rim of Europe who, like Belarus in the past, find themselves lured towards Brussels by economic opportunities but repelled by the reforms and democratic standards demanded in exchange.

The message to the likes of Georgia, Moldova, Armenia and Turkey is that Putin, whose relations with the EU are at rock bottom, is always ready to talk.



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