The Delta coronavirus variant that swept the UK has become dominant in Portugal and appeared in clusters across Germany, France and Spain, prompting European health officials to warn further action is needed to slow its spread.
While the new strain, which first emerged in India, still only accounts for a fraction of the total coronavirus cases in mainland Europe, it is gaining ground, according to a Financial Times analysis of global genomic data from the virus tracking database Gisaid. It accounts for 96 per cent of sequenced Covid-19 infections in Portugal, more than 20 per cent in Italy and about 16 per cent in Belgium, the FT’s calculations show.
The small but rising number of cases have raised concerns that the Delta variant could halt the progress the EU has made over past the two months in bringing new infections and deaths down to their lowest level since at least the autumn.
“We are in the process of crushing the virus and crushing the pandemic, and we must in no way let the Delta variant get the upper hand,” France’s health minister, Olivier Véran, told reporters at a Paris vaccination centre on Tuesday.
Véran said that 2 per cent to 4 per cent of virus samples being analysed in France were showing as the Delta variant: “You might say this is still low but it is similar to the situation in the UK a few weeks ago.” The FT’s analysis of Gisaid’s data suggests this figure could be higher.
In Portugal, community transmission of the variant has been detected in the greater Lisbon area, where more than 60 per cent of the country’s new coronavirus cases in the past week have been identified. Non-essential travel to and from the city has been banned in an effort to prevent the spike in cases spreading to the rest of the country.
Scientists across the continent are now looking to the UK — where Covid-19 cases have tripled in the past month and the Delta variant accounts for about 98 per cent of all new infections — for clues about what may happen next and which measures may need to be taken.
After official data showed the Delta variant appeared to increase the risk of hospitalisation by 2.2 times compared with the Alpha variant, the UK government this week imposed a one month delay to the removal of its remaining coronavirus restrictions.
“The decisions the UK makes to reopen life and society will serve as a laboratory for us in Europe,” said Bruno Lina, a virologist in Lyon who advises the French government and helps co-ordinate variant sequencing in the country.
Whether the clusters of Delta infections peppering the EU turn into bigger outbreaks will depend in part on how many people have been fully vaccinated, scientists said, as well as people’s behaviour now that many restrictions on life and business are being lifted.
Recent UK government research has highlighted the need to complete vaccination programmes as quickly as possible. According to data gathered by Public Health England, the first dose of a Covid-19 vaccine is generally less effective against the Delta variant than with the previous strains. Two doses increases protection against symptomatic infection with Delta from 33 per cent to 81 per cent.
While in the UK about 46 per cent of the population has been fully immunised, vaccination rates in most countries in mainland Europe are hovering at between 20 per cent and 30 per cent. About 26 per cent of the population in France has been fully vaccinated.
French authorities are currently trying to contain an outbreak in the Landes region, near the Spanish border, where 125 cases of the Delta variant have been confirmed by genetic sequencing and another 130 are suspected, representing about 30 per cent of recent infections in the area. Clusters of the Delta variant have also been identified in recent weeks in the southern suburbs of Paris and an art school in Strasbourg.
In each case health officials have responded with the same formula: increased contact tracing and a renewed push to vaccinate people in the affected areas.
“If we keep vaccination going at a good pace, and some non-pharmaceutical interventions like masks indoors, we can still repress the circulation of the virus this summer,” said Lina, the French virologist. “This variant will displace the other ones — we must keep that in mind — but it doesn’t mean that it will lead to a new epidemic wave.”
Some scientists fear the Delta variant may have already spread further but gone undetected given that less of the genomic sequencing needed to identify variants has been completed in mainland Europe. While the UK has sequenced more than 500,000 Sars-Cov-2 genomes, Germany, France and Spain have sequenced about 130,000, 47,000 and 34,000 respectively.
“It’s costly, it’s time consuming and it was neglected,” said Antoine Flahault, director of the Institute of Global Health at the University of Geneva.
Denmark, however, has sequenced a high proportion of cases and still only identified a small number of Delta infections, even though the variant arrived in the country at approximately the same time as in the UK.
This could be explained partly, experts said, by differences in demographics and movement, including the number of cases imported into the country from regions with a high prevalence, such as India, and the living conditions in the communities into which it is seeded.
The difference in the pace of Delta’s spread across European countries remained “a little bit of a mystery”, said Jeff Barrett, director of the Covid-19 Genomics Initiative at the Wellcome Sanger Institute in Cambridge.
Still, many experts believe that wherever the Delta variant is introduced, it will eventually become dominant. The key, they say, will be to increase the proportion of fully vaccinated people, while slowing transmission of the virus as much as possible.
“We have to keep the messaging very clear,” said Lina in Lyon. “This is not over.”
Additional reporting by Daniel Dombey, Peter Wise, Guy Chazan and Clive Cookson
Ransomware attacks rise despite US call for clampdown on cybercriminals
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In mid-June, US president Joe Biden held talks with his Russian counterpart Vladimir Putin to discuss a recent scourge of cyber attacks against the US, including by Russian-based criminal ransomware hackers.
Biden has said he told Putin in no uncertain terms that “certain critical infrastructure should be off limits to cyber attack — period”. Nevertheless, data show that ransomware attacks continue apace, including in sectors such as healthcare and education. It is unclear whether Biden will take further action in light of this.
Ransomware, which usually involves hackers seizing an organisation’s data or computer systems and only releasing access if a ransom is paid, has long plagued businesses large and small. The first known ransomware virus, PC Cyborg, was recorded in 1989, with victims infected via floppy disk and told to send a $189 cheque to an address in Panama.
Today, these financially motivated hacks are far more sophisticated — and are proliferating fast. Attacks have quadrupled during the pandemic, SonicWall data show, partly because the shift to remote working has left staff more vulnerable than if they were connecting to more secure corporate networks.
Additionally, hackers have swapped demanding cheques for requesting hard-to-track cryptocurrencies, meaning that as the price of bitcoin has risen during the past year, the business of ransomware has become all the more lucrative. It is also easier to launch attacks with little to no technical knowhow, given the growing market for “ransomware-as-a-service”, where hackers maintain their ransomware code but rent it out to others and take a cut of any extortion payouts.
While known attacks have reached unprecedented levels, the story of what we do not know — given that there are few rules around disclosure — may be far worse. Earlier this week, Bryan Vorndran, assistant director of the FBI Cyber Division and other cyber agency officials called for mandatory reporting rules around attacks, so that accurate data can be gathered and analysed by the US government.
Small businesses with little spare resources have tended to be the hardest hit by ransomware attackers. But the matter was thrust into the spotlight earlier this year after several audacious attacks on critical infrastructure such as the Colonial Pipeline, which led to fuel shortages for several days on the US east coast, the Irish health system and Brazilian meat supplier JBS. All of these attacks were believed to originate from Russia-based ransomware hackers, although the US government has accused Chinese state-backed groups of also orchestrating attacks.
The number of ransomware gangs stretches into the dozens and continues to proliferate as the economics remain so profitable. Vorndran said the FBI tracked 100 gangs, using an algorithm to rank them and the effect that each has on the economy. The largest one rakes in an estimated $200m a year in revenues, he said.
To help victims fight the gangs, a cottage industry for “ransomware negotiators” has emerged. These middlemen are tasked by victims with haggling down the ransom payments. As go-betweens, they also collect data on attacks, learning the playbooks of various groups in order to best know how to speak to them.
According to data from Coveware, the average ransom payment has fallen in the second quarter to $136,576, from more than $200,000 in the first quarter, amid an emergence of smaller ransomware groups. But in the majority of attacks — about 80 per cent — hackers are using the newer tactic of threatening to leak data as extra leverage in extorting victims. About half of these “leak threat” victims paid out in the second quarter, Coveware said.
Unfortunately, the negotiators’ services continue to be in high demand. According to data on reported attacks collated by Recorded Future, in the US there have been 10 attacks on healthcare, nine on schools and 10 on public state and local government groups during June and July this year. Despite Biden urging Putin last month to crack down on the criminal groups and warning against attacks on 16 critical entities, attacks on many of these key sectors have continued.
“The volume of targeted attacks on government organisations and enterprises that impact civilians, countries and the global economy will not end without a change in approach,” said Bill Conner, the chief executive of SonicWall.
France delays EDF reforms after failure to agree terms with Brussels
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France has been forced to delay the restructuring of state-owned utility EDF after it failed to agree the terms with the EU, a setback to a major economic reform promised by President Emmanuel Macron.
“Significant progress has been made in our discussions with the European Commission, but to date we have not reached an overall agreement,” said a government official. “Therefore it is not possible to submit a draft law to parliament if the principle points of the reform have not been agreed to in advance.”
Jean-Bernard Lévy, EDF chief executive, on Thursday declined to provide a specific timetable for when the reform could be completed, but analysts said it would likely prove difficult at least until after the French presidential elections next April.
“I regret that this reform that is indispensable to EDF cannot happen now,” said Levy. “Our short term [prospects] are guaranteed, but our medium and long term are not if we want to play in the big leagues, which is what is expected of EDF.”
Dubbed Project Hercules, the planned overhaul of EDF was meant to give it the financial firepower to invest in both nuclear and renewable energy in the coming decades.
An important element would be changing the mechanism and regulated prices at which EDF sells nuclear power, which provides 70 per cent of France’s electricity. France wanted to push through higher regulated prices for nuclear power, so EDF could pay down heavy debts and absorb the high costs of maintaining its nuclear reactors.
But Brussels would have to approve such a change because of its remit to ensure free competition in the energy sector and to prevent member states from unfairly bailing out companies.
The plan would effectively split up EDF by creating a government-owned mother company, EDF Bleu, containing the nuclear assets as well as a hydroelectric subsidiary. Another subsidiary, EDF Vert, would house renewable assets, the networks and services businesses, and would be publicly listed with about a third sold to raise funds to boost EDF’s green energy investments.
Macron has argued that the changes are vital for EDF to flourish and keep up with rivals. Given that France owns almost 84 per cent of the group, the government had also hoped the reforms would lighten the state’s financial burden.
But the overhaul has been caught in wrangling with the commission. Le Monde reported that the key sticking point was how the relationship between the newly created entities would work and whether cash could freely flow between them as if the company were still fully integrated.
The French finance ministry, which has piloted the talks, and the Elysée Palace declined to comment further on the details.
EDF’s powerful labour unions had opposed the plan as a prelude to the group being broken up or privatised, and have also raised concerns that it would pave the way for nuclear energy to be marginalised.
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“We celebrate the knockout punch delivered to Hercules,” the far-left CGT union said. “The only aim of these manoeuvres is to pull off juicy financial transactions at the expense of consumers and EDF employees.”
EDF shares fell as much as 4 per cent on Thursday as the reform’s failure overshadowed strong second-quarter financial results that showed the utility rebounding as economic activity picked up despite the Covid-19 pandemic.
Barclays analysts wrote in a note that investors were being too pessimistic on the outlook for the reform even if its timing was hard to predict.
“We continue to believe that ultimately there will be an agreement between the EU and France on EDF’s reorganisation.”
Additional reporting by David Keohane
EU economy chief urges end to ‘muddling through’ with budget rules
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Brussels cannot afford to carry on fudging the application of its own fiscal rules to blunt their negative impact, the EU’s economics chief said as he called for a far-reaching legislative overhaul to help drive stronger public investment and growth.
Paolo Gentiloni said he wanted “renewed and reviewed” EU budget rules that would provide an incentive to public investment in the green and digital transitions, while fostering stability and durable economic growth.
“It is clear we cannot simply go back to normal,” Gentiloni said in an interview with the Financial Times. “You need common rules that are connected to the economic challenges we have. Otherwise, the risk is that the European Commission will spend the next decade finding creative ways to bypass its own rules, which I think is not the best solution we can have.”
The commission is due to restart this autumn a consultation on how to amend the rules surrounding the Stability and Growth Pact (SGP). The budget framework is currently suspended because of the Covid-19 crisis, but the rules are likely to be reimposed in 2023, and there will be a fierce debate ahead of that over how they should be reformed.
Janet Yellen, US Treasury secretary, this month added her voice to those arguing that the SGP restricts governments’ latitude to battle downturns as she called for the EU to reinforce its stimulus efforts. But fiscally conservative northern European member states will chafe against efforts to substantially loosen the rules, reigniting a north-south divide over economic policy.
Gentiloni said he did not see it as the commission’s role to question the EU treaty, which contains the basic goals of keeping public debt at 60 per cent of gross domestic product and deficits to 3 per cent. But he said he wanted the commission to propose reforms to legislation as it seeks to reflect post-pandemic realities, including the surge in average eurozone public debt burdens to 100 per cent of GDP.
He questioned whether the bloc should return to a “‘low for long situation’ — low inflation, low growth, low interest rates? Or should we try to use this crisis . . . to try to have stronger and more sustainable growth?”
He supported several changes, including adjusting the rules governing the mandated path for bringing down public debt ratios, which under the current framework would entail deep and punishing reductions following the debt blowouts over the past year.
The changes would entail a shift to more “simple and observable” criteria to manage fiscal policies, he said, referring to a suggestion from the European Fiscal Board, a commission advisory body, for a budget policy set according to an “expenditure rule” setting a ceiling on the growth rate of nominal public spending.
In addition, the rules would need to be changed to provide an incentive to public investment. This would help avoid repeating the aftermath of the financial crisis, when net investment drifted rapidly lower, stymying growth.
One idea is a “golden rule” excluding some specific growth-enhancing expenditure from the ceiling on spending growth, but Gentiloni stressed he was not wedded to that specific concept. “There are a lot of possible solutions, proposals, if we recognise the need to encourage, to strengthen, public investment in certain sectors.”
To “muddle through” with the budget rules might have previously seemed reasonable, Gentiloni said, but he argued that given the circumstances, legislative changes would be needed. “This is the only way to have real common rules, and not just common rules that are there to be bypassed,” he said.
Gentiloni reiterated the upbeat short-term economic outlook he offered this month when the commission published forecasts predicting the strongest growth in decades, with an expansion of 4.8 per cent this year and 4.5 per cent next.
While the spread of the Delta coronavirus variant presented a “downside risk” to growth, he stressed that the current situation was far more propitious given the rapid rate of Covid vaccinations. The EU, he pointed out, had caught up with the adult vaccination rate of the US.
“We know very well we’re not out of the woods. At the same time we should be very clear we’re in a different situation from the one last summer and the difference is caused by vaccines and vaccination,” Gentiloni said.
Indicators of individual mobility, and the stringency of lockdown measures, continued to point to a recovery “with speed”.
“I think the recovery will proceed. All in all our brighter forecast is still supported by what we see on the ground,” he said.
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