Recent reports by TheEconomicTimes show that the European Commission has launched a legal proceeding against Anglo-Sweedish company Astra-Zeneca after reports already emerged that the new vaccine has not been respecting contract for the supply of the COVID-19 vaccine and not having reliable plans for delivering on time. As well as this the AZ vaccine has also been linked to blood clots and other side effects that all could have harmful impacts on consumer confidence. The delayed vaccine rollout is highly concerning news with the threat of another lockdown at risk of being implemented if indeed the R number begins to rise, and cases begging to grow rapidly once again.
The first hearing will be held at Brussels Court of First Instance from 9 a.m (0700 GMT) on Wednesday. The Proceedings shall be public and held under the emergency procedure in order to conclude it in a timely manner (in a matter of weeks) |, European Union’s executive Commission stated. This is absolutely essential to ensure the delays now experienced to countries' vaccine rollout programmes such as the UK, and indeed road maps too to aid economic recovery.
The EU’ decision came from the fact that AstraZeneca continually cut off the supply to the 27-nation bloc. As a result, not as many adults have been able to be immunised, as AZ has been the main vaccine supply throughout, with aid from the Pfizer vaccine too. This caused a delay in Europe’s rollout of the vaccine, which had a knock-on effect of slowing down the rollout in the USA and United Kingdom. As a direct result of this, this has slowed the UK’s and USA’s ability to bounce back from this virus massively, with fears that the road map will in fact be extended to full relaxation of restrictions, with public health being at the forefront of the UK government's priorities. Furthermore, this is ultimately essential to reopen businesses and get the country moving again. With the relaxation of restrictions on a knife-edge with relation to the vaccine rollout, this critical moment in time can be the next step to reduce the government’s monumental debt of over £2.4 trillion, and more importantly, get businesses and consumers operating and spending smoothly again.
Under Belgium law, the company tried its best to deliver its promised 300 million vaccine doses from December 2020 to June 2021, however, 180 million of these were to be delivered in the current second quarter. This further delay has placed the government's roadmap once more under speculation, as the arrangement and key dates underlined originally may need to be altered to fit current affairs. On March 12th the company stated that it would try to deliver a third of the promised 300 million doses with 70 million of those being in the second quarter. The EU wants as many of the promised 300 million doses as soon as possible but will allegedly settle for 130 million by the end of June. With the dates arranged by AZ, it is clear more needs to be done in order to meet the targets set by the EU to ensure full/herd immunization is met as soon as possible. With public health at the forefront of these debates, the more confidence consumers have.
Consumers are then more willing to leave their houses, as more people such as the millions asked to shield during the pandemic, do so, opening up to society. Therefore, improved public health will ensure economic recovery, as a flurry of spending from consumers will also incentivise an increase of businesses spending, allowing the government in the UK and abroad to obtain higher tax revenues. This then can be reinvested and re-injected into the economy, increasing aggregate demand and also funding long term projects to increase our productive capacities, such as the Hinkley Point power station, almost finished construction (costing EDF energy £23 billion). This amalgamation of factors ultimately leads to economic growth, which in the UK currently stands at 1.3% for Q4 of 2020.
Brussels will demand that AstraZeneca explain how the 224 million euros ($270 million) given to them in order to buy vaccine ingredients in September 2020 was not sufficient as they spent more than that. This will be discussed in the legal proceedings and in the Brussels court, as they have many questions to answer. Johnson & Johnson has warned the EU that it may not be able to deliver the 55 million doses that it had previously promised to supply in the second quarter. If the court is in fact successful against AZ, then this is a clear warning to sigh to J & J to not decrease production, as the supply and demand for these vaccines are at a critical point, and a fall in supply, as an economic perspective, is not an option.
However, this may not all be down to the Oxford-AZ producers, as the EU Bloc forgoes 100 million AstraZeneca shots it had the option to buy under the contract signed in August. This means that they the option to buy a vast amount more which would have been the safest option to avoid a potential fall in supply, which was/is a perpetual threat, and now a reality. As a result, this will be argued in court that if AZ was more prepared for higher volumes of vaccine demand, then they could have in fact produced excess, which in the long term would have smoothed out the whole vaccine programme. Currently, the EU is now relying heavily on the Pfizer-BioTech vaccine to inoculate over 70% of EU adults by the end of July, a staggering magnitude of the EU population, still waiting to receive the vaccine, with only 3 months to achieve this…
In judgement, the delays and complications with the AZ vaccine has a repercussion of local, and global issues all across the EU bloc, affected all aspects of public health and also economic recovery. The hearing which has now taken place and is underway, will provide the next steps to economic rebound and ultimately the confidence in whether or not we can escape the recent crisis with ease, or whether the rollercoaster has only just begun.
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Written by Euan Taylor
Research compiled by Jonas Theaker