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UK economy hangs in balance amid EU vaccine row

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Saleha Riaz
·4-min read
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The AstraZeneca vaccine has not been approved yet in the EU. But the bloc signed a deal in August for 300 million doses, with an option for 100 million more. Photo: Getty Images
The AstraZeneca vaccine has not been approved yet in the EU. But the bloc signed a deal in August for 300 million doses. Photo: Getty Images

The EU has said companies producing COVID-19 vaccines in the bloc will have to provide more information when they export their products, which could potentially hit vaccine supplies to the UK.

Vaccines are believed to be crucial to getting economies back on track, as countries around the world continue to be hampered by virus-related lockdowns.

The EU’s statement came after AstraZeneca (AZN.L) delivered a blow to the EU on Friday (22 January), announcing it plans to cut deliveries of the COVID-19 vaccine.

The reduction will see deliveries to the EU cut by 60% to 31 million doses in the first quarter of the year. It blamed production problems, meaning the number of initial available doses would be lower than expected.

The Swedish-British firm was expected to deliver around 80 million doses to the 27 EU nations by the end of March.

READ MORE: DAVOS 2021: Santander CEO says vaccines are the most effective economic policy

President of the EU Commission Ursula von der Leyen tweeted on Tuesday that the EU will “set up a vaccine export transparency mechanism.”

She said Europe “invested billions to help develop the world‘s first COVID-19 vaccines and create a global common good. Now the companies must deliver and honour their obligations.”

Watch: COVID-19 - Boris Johnson warns EU against restrictions on coronavirus vaccine supplies

A day earlier, speaking of the expected cut to deliveries, European commissioner for health and food safety, Stella Kyriakides, had said: “The EU has pre-financed the development of the vaccine and the production and wants to see the return and wants to know exactly which doses have been produced by AstraZeneca and where exactly so far and if or to whom they have been delivered.”

She also said: “All companies producing vaccines against COVID-19 in the EU will have to provide early notification whenever they want to export vaccines to third countries.

READ MORE: COVID-19 vaccine supply issues could force EU to rethink inoculation strategy

“We want clarity on transactions and full transparency concerning the export of vaccines from the EU.”

The AstraZeneca vaccine has not been approved yet in the EU. But the bloc signed a deal in August for 300 million doses, with an option for 100 million more.

The row could impact supplies to the UK of the Pfizer (PFE)/BioNTech (BNTX) vaccine, which has been developed by the US and Germany. Pfizer's Belgian plant supplies the UK. Earlier Pfizer had also said that it would be temporarily slowing distribution to the EU and retooling a site in Belgium to boost output.

Pfizer told Yahoo Finance in a statement: “We understand the EU proposed notification process is aimed at increasing transparency and does not intend to restrict global supply to patients, but it is critical that governments do not impose export restrictions or other trade barriers that risk creating uncertainty and disrupting supply of vaccine to patients around the world.

“We look forward to receiving further details on the EU proposal and assessing its impact on patients.”

Meanwhile, AstraZeneca’s vaccine for Europe is mainly produced in the UK, but some sites on the continent are involved in manufacturing. AstraZeneca also has a large operation in India.

UK’s minister for COVID-19 vaccine deployment Nadhim Zahawi said on Tuesday he was confident both AstraZeneca and Pfizer would honour their COVID-19 vaccine supply agreements with the UK.

Zahawi told Sky News: “I’m confident that they will both deliver for us the quantities that we need to meet our mid-February target and of course beyond that.”

Yahoo Finance reached out to AstraZeneca for comment but hadn’t heard back at the time of writing.

Speaking at a panel event at the annual World Economic Forum, Ana Botin, the head of Banco Santander (BNC.L) said on Tuesday that vaccinations against coronavirus are “the most effective 2021 economic policy.”

She suggested mass vaccination programmes could prove more important for European economies than interventions by governments and central banks.

Earlier in the week health secretary Matt Hancock noted vaccine “supply is right” but did not comment on this further.

READ MORE: DAVOS 2021: AstraZeneca CEO criticises 'me first' approach to COVID

He said in the last week the UK has seen 37,258 cases of coronavirus, on average each day. The NHS is “still under intense pressure” across all parts of the country with 37,899 people in UK hospitals with COVID-19 – and that includes 4,076 on ventilators.

On a positive note, he said the UK vaccinated 78.7% of all over 80s, or “almost four in five” of everyone aged over 80.

WATCH: Vaccine nationalism could cost global economy $9 trillion, ICC report says