If central banks and treasuries cannot stave off financial chaos, a longer, U-shaped recession becomes likely. The best-case scenario is a V-shaped recession, with GDP back to its pre-crisis levels only in late 2021. And these projections are being made before we know the extent of any secondary financial aftershocks. And as investors scramble for short-dated government debt, as a cash equivalent, even the market for government bonds has been in turmoil.Īccording to the ratings agency Fitch, it is likely that global gross domestic product will fall by 1.9 per cent for the whole of 2020, with the UK and the eurozone seeing year-on-year declines of 3.3 and 4.2 per cent respectively. In response there is capital flight from two key sectors: emerging markets and developed-country commercial paper. Numerous ‘sudden stops’ are under way, both on the demand and supply sides of the real economy. Yet a glance at the realities of the world economy show that it is unsustainable. Though the ‘herd immunity’ strategy has been abandoned, so far Johnson is sticking to the threat of a no-deal Brexit. He feared-rightly as it turns out-that Covid-19 would be yet another nail in the coffin of trade and financial globalisation, and thus the negation of the premise of his Brexit project. While other European countries imposed legal population lockdowns, testing tens of thousands a day, Johnson’s initial aim was to ‘ take it on the chin’-allowing 80 per cent of the population to catch the disease. Thank you very much for your support! Become a Social Europe Member Become a Social Europe member for less than 5 Euro per month and help us produce more articles, podcasts and videos. For this model to be sustainable, however, we depend on the solidarity of our readers. Social Europe is an independent publisher and we believe in freely available content. And, in the name of avoiding ‘unnecessary economic damage’, Johnson then subjected the entire British population to an experimental public health strategy which-until it was corrected on the advice of Imperial College researchers-might have killed a quarter of a million people. ‘When there is a risk that new diseases such as coronavirus will trigger a panic and a desire for market segregation that go beyond what is medically rational to the point of doing real and unnecessary economic damage,’ Johnson said, ‘humanity needs some government somewhere that is willing at least to make the case powerfully for … the right of the populations of the earth to buy and sell freely among each other.’ Most people missed it at the time, but the entire narrative was framed around a response to the coronoavirus. And if the EU didn’t like it, preparations for a no-deal Brexit would begin as early as June.įar from mirroring and matching the regulations of its closest trading bloc, the UK would now become a country single-handedly committed to breaking up all trading blocs, aggressively reordering world trade-just as during its naval sway in the days of Robert Clive and Horatio Nelson. London would not honour its commitments to a ‘level playing field’, on social, environmental and employment regulations, and would not accept any form of joint jurisdiction, Johnson indicated. Please check your inbox and click on the link in the confirmation email to complete your newsletter subscription. In a florid speech, set amid the splendour of Britain’s 18th-century naval college in Greenwich, he announced the UK would effectively break the terms of the Political Declaration co-signed with the European Union in October 2019. Though Downing Street made no official announcement on the coronavirus until March 3rd, it was on Johnson’s mind as a threat to Brexit exactly a month earlier. The entire month of February was wasted to save his ‘Brexit’ project. But it’s even simpler and more cruel than that.
Some people have assumed that-as with the US president, Donald Trump, at the same stage-Johnson was prepared to sacrifice lives on a large scale to save the economy. The reasons are shrouded in obfuscation: the prime minister, Boris Johnson, first claimed the United Kingdom was going it alone ‘because it has left the EU’, but later he blamed an administrative error.īy then, the UK was two weeks into its disastrous ‘herd immunity’ strategy, whereby it refused to impose movement restrictions and-as we now know-spurned the mass testing advocated by the World Health Organization. On March 19th, even as its health service came under growing pressure from the coronavirus, the British government flatly refused to take part in a European Union joint-procurement scheme for vitally needed ventilators.
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