EU made an enemy of everyone by deciding to restrict vaccine export

The move to usher in temporary export vaccine controls by the EU Commission president has done real damage to the EU and its self-image as a champion of open markets and the rule of law.

EU flags seen in Brussels, Belgium | Photo: Geert Vanden Wijngaert | Bloomberg File Photo

Berlin: As soon as the plan was published, senior officials in Brussels could see that their boss had made a terrible mistake.

They understood the rationale for vaccine restrictions on shots shipped from the European Union, but they could hardly believe that Ursula von der Leyen had missed the bigger picture and how the proposals would land in Ireland.

The European Commission president had been among those insisting through four years of Brexit negotiations that Irish border checks could jeopardize the island’s peace settlement. Less than a month after the trade deal with the U.K. went into effect, the EU was now the one threatening to put up barriers and unilaterally trigger emergency clauses in its accord with the U.K.

As opprobrium rained down, officials who’d painstakingly negotiated those agreements and were barely consulted on von der Leyen’s decision sensed the EU’s moral authority being shredded. The proposals swiftly united in condemnation natural enemies across the sectarian divide in Northern Ireland as well as the World Health Organization and the pharmaceutical industry.

The events leading up to the decision to control exports show von der Leyen’s team buckling under the immense pressure to fix its vaccination program. Beginning the week under fire for moving too slowly, they ended up possibly making things much, much worse by moving too fast.

On top of the faltering vaccine program, which is likely to cost thousands of lives and billions in lost output, von der Leyen and her team have done real damage to the EU and its self-image as a champion of open markets and the rule of law.

Question of competence

Several officials lamented that her predecessor, Jean-Claude Juncker, would never have let events run out of control in such a way and wondered whether von der Leyen would be forced to bring back some of his advisers to steady the ship. One speculated that EU Health Commissioner Stella Kyriakides is likely to be made the scapegoat.

Even those close to von der Leyen acknowledge mistakes were made. In a sign of the lack of foresight at play, officials in Dublin only found out about the move on social media. Some worry the furor may have done permanent damage to the complex arrangements designed to prevent the return of a hard Irish border by handing a free hit to critics of the Brexit agreement and the EU.

One official in Brussels said this is what happens when policy making is done too quickly.

Von der Leyen’s spokesman, Eric Mamer, said it’s an institutional reality that all decisions go through the president’s cabinet and the college of commissioners. No decisions are taken without college consensus, he added.

As von der Leyen and her team fought to contain the crisis, their thinking was shaped by a burning sense of injustice at how AstraZeneca Plc has handled its vaccine contract worth an initial 336 million euros ($408 million). Bloomberg spoke to officials across the EU bureaucracy and national governments, most of whom expressed frustration, anger and sadness at the way the commission has handled the situation. But they all signaled a strong conviction that Astra Chief Executive Officer Pascal Soriot had done them wrong, with some even suggesting Astra had breached its contract with the bloc.

An exercise that began life as an expedition to bring transparency and gather evidence against the company has quickly spiraled into chaotic mud-slinging that some fear could lead to a trade conflict in the middle of a pandemic.

‘Vaccine Hijacking’

Astra triggered the crisis just over a week ago when it revealed it was cutting back planned vaccine supply to the EU by a reported 60% to 31 million doses following disruption at a plant in Belgium. At the same time, deliveries in the U.K. have mostly met expectations, helping the British vaccination program race ahead of the continent.

The most recent data show that the EU has administered 2.6 doses per 100 people, compared to the U.K.’s 12.5 doses and the US’s 8.8. News of the delays sent a jolt of fear and outrage across the continent.

“Vaccine diplomacy has turned into vaccine hijacking,” said Croatian Premier Andrej Plenkovic.

Astra has indeed used its EU supply chain to fulfill the U.K. contract. The U.K. vaccines task force said in December that some of Britain’s initial supply would be coming from Germany and the Netherlands, while German MEP Peter Liese said that even in recent days, vaccine going to the U.K. was being bottled in Germany.

The EU is determined to take a closer look at those movements.

The Commission’s health services told ambassadors from member states this week that millions of vaccines had been shipped out of the EU in recent months to countries including the U.K., China, Israel and Canada, according to a diplomatic cable of the meeting seen by Bloomberg.

Some EU officials suspect that Astra was responsible for a portion of those shipments and should have kept back doses for European buyers. But they don’t have the evidence to prove it because the data aren’t broken down by manufacturer.

Export controls

Getting that information was the goal on Monday when the commission’s trade service began drafting plans for a system that would have obliged companies to simply flag their exports. It would also require firms to provide data for exports carried out since December, clearing up just how many doses Astra has already exported.

“We’re not planning to impose an export ban or export restrictions,” EU Trade Commissioner Valdis Dombrovskis told reporters on Tuesday. “It’s a matter of transparency.”

That was also the moment the Astra CEO chose to go on the offensive with an extensive interview to European newspapers including La Repubblica in Italy. He said the delays were partly due to the EU signing its supply contracts after the U.K. and rejected accusations of profiteering.

“I’m European, I have Europe at heart,” he said. “So we want to treat Europe as best we can. You know, we do this at no profit, remember?”

By Tuesday evening, pressure began to mount from Germany, first, and then France, for a more stringent approach.

By Wednesday morning the tensions between the two sides were so bad that they couldn’t even agree if a phone call scheduled for that evening was going ahead.

Soriot’s interview enraged officials and member states. Ambassadors were told at a briefing that day that the claims made by the Astra CEO were shocking and not in line with contractual obligations, a diplomatic note seen by Bloomberg says.

At a press conference later, health commissioner Stella Kyriakides rejected the drugmaker’s first come, first served arguments. “That may work at the neighborhood butchers, but not in contracts,” she said.

At that point, von der Leyen decided that the commission needed to flex its muscle and the focus shifted to a tougher regime that would oblige companies with contracts to supply the EU not just to notify, but to obtain permission before exporting doses outside the bloc.

Series of blunders

Still, EU commissioners, who normally take decisions collectively, were deeply divided on whether to adopt it. Ultimately, the decision to go for a stronger approach was taken by von der Leyen and her cabinet.

And so began a mad rush to draft a plan ahead of a self-imposed Friday deadline. The haste and pressure to deliver led to a chain of blunders.

Reporters were invited to a technical briefing on Thursday before a proposal was even finalized, something the Commission almost never does.

On Friday morning, the EU published its contract with Astra, with confidential sections clumsily redacted in a way that meant the information was easily uncovered by amateur sleuths online. Dombrovskis and Kyriakides were wheeled out to present the new regulations before several elements, including its decision-making clauses, were properly fully firmed up.

While the crucial sections on Northern Ireland were a late addition to the document, all relevant senior officials had been involved and had sight of the plan before it went live. Final signoff was the responsibility of von der Leyen’s office.

Michel Barnier, who led Brexit negotiations, was not involved in the decision, a person familiar with the process said. Another said that other members of the Brexit task force only were called in at the end of the process and asked about how to notify the U.K. on a measure that had already been agreed.

When the mechanism finally hit the internet, Irish Taoiseach Micheal Martin and U.K. Prime Minister Boris Johnson were both outraged by the decision to usher in temporary export vaccine controls between the EU and Northern Ireland and voiced grave concerns.

Von der Leyen quickly spoke to both Martin and Johnson over the phone to try to clear things up. The EU removed the regulation from its website and was forced to backtrack in a statement just before midnight. Von der Leyen followed up with a series of late night tweets.

But the whole episode was red meat to the hard-line Brexit supporters in the U.K. Tom Tugendhat, a moderate MP from Johnson’s Conservative Party, said it had laid bare EU attitudes and shown how little goodwill there is.

Whatever your view on Brexit it is now completely clear how we’re seen by the EU – we’re out and for Art 16 to have even been considered, the goodwill is sparing.

We need a policy that recognises that, puts it together with other areas of interest and rebuilds relationships.

— Tom Tugendhat (@TomTugendhat) January 30, 2021

While the EU’s executive arm won’t trigger the controversial clause, it didn’t entirely remove the threat, warning in its follow-up statement that it will consider using “all instruments” if the vaccine export bans are circumvented.

An updated version of the plan published on Saturday morning doesn’t include the sections on Northern Ireland, but does still hint at suspicions that Astra could exploit the Irish border as a back door to ship Covid-19 shots from the EU into the U.K.

Manufacturers will have to provide information on all vaccine doses distributed since Dec. 1, including those sent to Northern Ireland.

And von der Leyen is left to pick up the pieces after one of the most difficult episodes of her tenure.

Lucinda Creighton, a former minister for European affairs in Dublin, offered a succinct assessment of the week’s events.

“Disaster,” she said in a Twitter post.- Bloomberg