Robert Madelin, FIPRA Chairman and Yahoo Finance’s Anjalee Khemlani joins the Yahoo Finance Live panel to discuss the new COVID-19 strain in UK and where the world stands with a successful vaccine.
BRIAN CHEUNG: All right, well, let's turn our attention internationally where it looks like the European stock markets are closing positive-- well, most of them at least. The FTSE 100 in London up about half a percentage point with the DAX down 3/4 of a percentage point and the CAC 40 in France up 1.3%.
But investors are working through a lot of headlines in the region. There's a new strain in the UK, as we've been discussing. It's been accounting for faster spread in London and southeast England. And that seemingly endless story of course of Brexit continuing with that December 31 deadline looming.
Joining us now is Robert Madelin. He's the chairman of FIPRA. He's a policy expert with a deep resume of policy experience in the UK and also in the EU. And Yahoo Finance's Anjalee Khemlani also joins us for this discussion.
But I want to begin with Robert. The big headline, again, that new strain. We've seen Belgium, Denmark, France, Germany, Italy suspending flights to and from the UK. But what's the immediate and the longer-term implications of that flare up in Europe, economically and/or politically?
ROBERT MADELIN: So viruses mutate, and the UK discovered this one, but it's probably in quite a number of other places already. The suspension of some travel was pretty sharp, and I think it was the response of other countries to the British warning. And today you've seen the European Commission saying across Europe maybe we can now ease that back a bit because we are coming up with a collective approach to surveillance of the new mutation.
ANJALEE KHEMLANI: Robert, Anjalee here. Looking at it from even the global impact-- because as you mentioned, it could be already in other countries. What are the steps that need to be taken by the UK further than just these travel bans in order to preserve not just their economy as they're working through Brexit but also to prevent even further spread as it stands right now?
ROBERT MADELIN: Right. So I think the we have to keep our eye on the vaccines ball. So everybody's rolling out the vaccines. We've got one both sides of the Atlantic. We need to get to three or four or five different vaccines-- Moderna, AstraZeneca-- getting into people's arms in the next three, four weeks because we expect those to be effective against the mutation as well as the original version of the virus, and that's what's going to enable everybody to begin unlocking. And across Europe, the leisure problems are the same as you have described earlier in this program. So that's the first point.
On Brexit, I am still an optimist. I think the real deadline is tomorrow evening European time, Wednesday the 23rd of December. I think there will be a deal. I think we will just squeeze a very small deal through, which will prevent a complete no-deal meltdown in UK relations with the rest of the continent of Europe. If we don't get that-- if you wake up on the 24th and there's no deal, that spells very big disruption in January, February.
SEANA SMITH: Robert, even if there is some sort of deal and it's one of the smaller deals that you were just mentioning and if we do see these restrictions drag on when it comes to COVID because of the mutated virus there, what are you looking at just from UK's perspective on the economy? Could we possibly see a contraction in the first quarter of 2021?
ROBERT MADELIN: I think it would be very hard for economic commentators to unpick the COVID impact, the new variation COVID impact, and Brexit. And with or without a deal, it's clear that Brexit is a hit to the economy. How quickly the UK can evolve out of that remains to be seen.
So the UK, like everybody else, is being hit by the pandemic and will be recovering. How quickly and where, that remains to be seen.
ANJALEE KHEMLANI: And we know that the UK was one of the first to really get vaccines going. They authorized Pfizer first, and they've got that rolling in right now. But when we're talking about the impact to, say, broader the world, we look at how different countries are responding differently to the virus, and I know that's been a conversation all year long. But what do you see in terms of the strengths and weaknesses of broadly the EU response versus, say, the US?
ROBERT MADELIN: So I think that if you look across Europe, the first few months-- March, April-- we were bad at keeping the traffic flowing, the technicians, and so on. That was a cross-continent problem of logistics which we recovered from fairly quickly.
In terms of the health-side coordination, I think it's been pretty good. As you've seen in other countries, different public-health authorities have experimented with different degrees of lockdown, and the results are sometimes prettier than others in terms of deaths and illness.
But I think that European coordination, especially on vaccine approval, is now going pretty well. The Pfizer vaccine is conditionally approved in Europe, which is a slightly stronger platform for rollout than emergency use, which is what they decided in the UK side. And we're hoping soon to get Moderna, AstraZeneca out. So I think that will be good news.
SEANA SMITH: So Robert, these vaccines get approved, and then, of course, the question is distribution and what the foundation is for that. In terms EU's plan, more specifically, the UK's plan, how has that been progressing, and do you think the foundation or the roadmap, I guess we could say, that should be laid out at this point is, in fact, implemented and it will be successful?
ROBERT MADELIN: So across Europe as a whole, as Anjalee said, the UK has begun injecting, and so has Switzerland. And by the end of December-- so especially 27, 28, 29, most of the member states of the European Union will be giving the first injections of the first available vaccine. I expect that in January you will see definitely Moderna, perhaps AstraZeneca also approved and rolling out. These are companies which have got the plans in place with the member states. The member states and the companies are working together collectively to make this work.
Even a small country like Cyprus, for example-- I was talking to the guys in Cyprus the other day. They have 38 vaccination centers on what is a pretty small island. They have their refrigeration for the most sensitive vaccines. They're ready to roll.
ANJALEE KHEMLANI: Robert, I know that your focus has largely been the EU, but I just wonder globally. There's a conversation that I've been having with many experts about, you know, once Europe is vaccinated, once the US is vaccinated, a lot of people see that as a sign of a return to normal, but we forget that there are a lot of other countries that still need to be vaccinated and are still suffering economically because of the virus. So once we do get Europe and the US largely vaccinated, what do you think the impact is going to be global-economy-wise?
ROBERT MADELIN: So I think this-- you asked about successes and failures. I think one of the big successes of the global response in this case is there is a global plan for vaccine rollout.
The second thing is that if you take, for example, the AstraZeneca vaccine, which you think of as the Oxford vaccine, it's going to be produced in India as well as in other places around the globe, and so it's not going to be produced only in, for example, Oxford, England. And I think therefore we'll see that the distribution of vaccine will not start only in Western Europe and North America and then trickle down. It's going to be getting out to many places very quickly. I saw that the Chinese, for example, have plans to vaccinate the first 50 million before the middle of February for their new year.
So everybody is going to be trying to get the vaccine out. The real question is when you get it out in that quantity, do we create herd immunity? Does the immunity last three months or six months or nine months? And I think those will be very interesting questions for epidemiologists to watch.
BRIAN CHEUNG: Many questions there that will need answering, in which case we'll have you back again. But Robert Madelin, the FIPRA chairman, thank you so much for joining us in addition to Anjalee Khemlani.
ROBERT MADELIN: My pleasure. Thank you both.