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As economies stagger, pressures grow to ease coronavirus

In Europe, where over 132,000 people with the virus have died so far, fears about new infection spikes were tempering hopes that economies now on government-funded life support will regain their vigor as workers return to factories, shops and offices.

April 30, 2020 / 06:46 PM IST

The world's economic pain was on full display Thursday as Europe and the United States were releasing more evidence of the devastation wrought on jobs and economies by coronavirus lockdown measures.

In Europe, where over 132,000 people with the virus have died so far, fears about new infection spikes were tempering hopes that economies now on government-funded life support will regain their vigor as workers return to factories, shops and offices.

New unemployment figures Thursday covering the 19 European countries that use the shared euro currency underscored how massive job-protection programs are temporarily keeping millions of Europeans on payrolls, sparing them the record-setting flood of layoffs battering tens of millions of Americans.

The European economy shrank a record 3.8 percent in the first quarter as hotels, restaurants, construction sites and manufacturing were frozen by coronavirus shutdowns. It was the biggest drop in the eurozone since statistics began in 1995 and compares to a 4.8 percent contraction in the United States.

COVID-19 Vaccine

Frequently Asked Questions

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How does a vaccine work?

A vaccine works by mimicking a natural infection. A vaccine not only induces immune response to protect people from any future COVID-19 infection, but also helps quickly build herd immunity to put an end to the pandemic. Herd immunity occurs when a sufficient percentage of a population becomes immune to a disease, making the spread of disease from person to person unlikely. The good news is that SARS-CoV-2 virus has been fairly stable, which increases the viability of a vaccine.

How many types of vaccines are there?

There are broadly four types of vaccine — one, a vaccine based on the whole virus (this could be either inactivated, or an attenuated [weakened] virus vaccine); two, a non-replicating viral vector vaccine that uses a benign virus as vector that carries the antigen of SARS-CoV; three, nucleic-acid vaccines that have genetic material like DNA and RNA of antigens like spike protein given to a person, helping human cells decode genetic material and produce the vaccine; and four, protein subunit vaccine wherein the recombinant proteins of SARS-COV-2 along with an adjuvant (booster) is given as a vaccine.

What does it take to develop a vaccine of this kind?

Vaccine development is a long, complex process. Unlike drugs that are given to people with a diseased, vaccines are given to healthy people and also vulnerable sections such as children, pregnant women and the elderly. So rigorous tests are compulsory. History says that the fastest time it took to develop a vaccine is five years, but it usually takes double or sometimes triple that time.

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Lockdowns that turned major European cities into ghost towns are plunging nations into recession. France's economy shrank an eye-popping 5.8 percent in the first quarter, the biggest quarterly drop since 1949, and the Spanish economy shrunk 5.2 percent in the same period.

Italy's government debt rating was cut this week to just above junk bond status, with the Fitch ratings agency expecting the Italian economy to shrink 8 percent this year.

Germany, the eurozone's biggest economy, is projecting a 6.3 percent drop in GDP this year.

No region in the world is being spared. A new report from the Paris-based International Energy Agency projected an unprecedented plunge in the global demand for energy this year that will be equivalent to losing the entire energy demand of India, the world's third-largest energy consumer.

The pain of coronavirus lockdowns has piled huge pressures on governments to ease them. The World Health Organisation said nearly half of the 44 countries in Europe that put partial or full restrictions on movement have started easing them and 11 more will do so in the coming days.

But as economies splutter back to life and workers adapt to the strangeness of new barriers designed to keep them apart, governments are watching infection rates and public behaviour like hawks, wary of a second wave of deaths. German Health Minister Jens Spahn said his government wants to take “small steps, rather than risk a big step back.”

California's governor planned to close all beaches and state parks starting Friday after people thronged the seashore during a sweltering weekend, ignoring social distancing orders.

Nevada's governor was extending his directive asking people to stay at home until May 15 but on Friday eased restrictions on some outdoor activities and businesses.

In Sweden, authorities spread stinky chicken manure on a city park in Lund to discourage people from celebrating there on Thursday, a traditionally festive day.

The promise of an effective treatment against the coronavirus “an experimental drug that can speed the recovery of COVID-19 patients” raised hopes Thursday for faster progress in battling the pandemic and restoring wrecked economies and livelihoods.

The US government and others are working to make the medication available to patients as quickly as possible. News of the medical advance lifted world markets, outshining gloomy economic data showing the US economy contracted nearly 5 percent in January-March in the worst downturn since the Great Recession.

Follow our full coverage of the coronavirus pandemic here.

first published: Apr 30, 2020 06:46 pm