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Four reasons why EU is staring down the barrel of a second lost decade

If insanity is doing the same thing over and over and expecting different results, what does that say about the EU?

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Rolling the dix. Imelda, CC BY-SA

The eurozone’s latest economic growth figures are a little better than expected. This group of 19 EU nations grew 2.2% in the second quarter of 2021 compared to the first quarter, partly thanks to decent performances from Spain and Italy.

But while the US and Chinese economies are both now bigger than their 2019 peaks, the eurozone is 3% off that achievement. And when you look more broadly at the state of the eurozone, this turns out to be only the tip of the iceberg.

COVID-19 still overshadows everything around the world, but countries are likely to recover at different speeds once we get back to some sort of normality. This will depend on the structure of their economies, the effectiveness of their recovery policies, and how they deal with high sovereign debts and a foreseeable mix of weakish growth and inflation. But for several reasons, the eurozone particularly worries me.

Ghosts of the past

The first is the eurozone’s bleak performance since the global financial crisis of 2007-09. It took six years to regain its 2008 GDP level, and some members did even worse: Spain and Portugal took almost a decade, and Italy and Greece have yet to get there.

When COVID broke out, the eurozone growth rate remained well below its long-term trajectory. It was behind the US and UK, both of whom were hit harder by the global financial crisis, and even worse compared to the leading emerging economies. Neither was this a one-off. Looking at the past five recessions, the eurozone nations have been successively slower to recover from each one.

GDP by nation since 2008

Based on GDP (constant 2010 US$): Source: Authors’ calculations using World Bank data. Muhammad Ali Nasir

Since 2008, the ECB has tried numerous measures to improve growth. Like most major powers, it has done a lot of quantitative easing (QE), which involves creating money to buy sovereign bonds and other financial assets. It has sought to prop up its retail banks in various ways, while also pioneering negative interest rates and giving the markets more forward guidance about monetary policy.

Famously in 2012, then ECB president Mario Draghi said he would do “whatever it takes” to save the euro. This forward guidance kept the euro stable, but the same cannot be said of growth.

Poor policy and low ammunition

Policy errors are partly to blame for this. With the benefit of hindsight, the eurozone went into the global financial crisis with lending rates on the low side, so had less room to cut than other regions. It was also more reluctant than central banks like the Bank of England and US Federal Reserve to start QE, preferring to focus on curbing inflation and making the euro “stabil wie die mark” (stable like the German mark). The ECB did not unveil a QE programme until 2015.

Countries with the capacity to spend to stimulate their economies, such as Germany, France and the Netherlands, also did too little. Spain’s stimulus was poorly designed, while Italy was more interested in balancing its books at the time. Too soon after the crisis struck, austerity then became the priority for the whole eurozone.

A related problem has been public and private investment. In middle-income EU regions, investment rates fell by about 14% between 2002 and 2018. In thrifty Germany, public and private fixed investments declined as a percentage of GDP for decades, despite a huge surplus in public spending.

Before COVID hit, EU infrastructure investment was at a 15-year low, with the greatest declines in regions that were already lagging. Initiatives intended to help, such as the European Economic Recovery Plan of 2008 and the European Commission Investment Plan in 2014, were too little.

The overall result was that weakness: Germany and the eurozone as a whole were showing 0% growth at the time of the COVID outbreak, while Austria, France and Italy were all contracting slightly. In response, the ECB had cut its main interest rate by 0.1 percentage points to -0.5% in September 2019, and restarted monthly QE to the tune of €20 billion (£17 billion) from November 1 of that year – the date Christine Lagarde became ECB president.

The eurozone economy was therefore needing life support even before the pandemic – indeed, many of the ECB’s other unconventional support measures were in place throughout. Tellingly, the ECB’s only new measure during the pandemic has been a new form of cheaper refinancing for banks. It raises the prospect of the ECB running out of the ammunition needed to keep stimulating the eurozone’s sickly economy.

Discipline über alles

Finally, some eurozone members are obsessed with the EU’s fiscal rules around low national debt and low deficits. The Financial Times may have reported in March 2020 that “Germany tears up fiscal rule book to counter coronavirus pandemic”, but there are already calls by influential figures such as Bundestag president Wolfgang Schäuble to return to fiscal discipline.

A rush to austerity 2.0 is a luxury that the EU cannot afford. To quote something often attributed to Albert Einstein, insanity is doing the same thing over and over again and expecting different results.

German flag on top of the Reinchstag at dusk
Germans don’t do inflation. Christian Lue, CC BY-SA

For different results, the ECB should stand its ground on monetary easing and, like the Fed, avoid giving in to inflationary pressures that are likely to be short term by raising rates or paring back QE.

Meanwhile, the fiscal rules need loosening to correspond to economic realities. The temptation must be avoided to throw the nations in the peripheries under the austerity bus again, one of the main causes of the eurozone crisis of the early 2010s.

Surplus nations, particularly Germany, should revive spending in infrastructure, education and technology. The EU’s €750 billion Next Generation EU investment plan will belatedly kick in later this year, but just like the two previous EU recovery packages, will probably not be enough on its own.

With an unimpressive track record on recovery, inherently weak economies, an obsession with fiscal rules and the prospect of the ECB running out of ammunition, the alternative could be a second lost decade. What that could do to the eurozone and the EU, it would be better not to find out.

Muhammad Ali Nasir does not work for, consult, own shares in or receive funding from any company or organisation that would benefit from this article, and has disclosed no relevant affiliations beyond their academic appointment.

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Economics

Researchers explain how nanomaterial aids antibody response, study it as antibody factory

AMES, Iowa – The researchers’ original task was to figure out how certain polymer nanomaterials provided for a low-inflammatory immune response and yet were able to boost antibody production as part of a single dose of vaccine. Credit: Nanovaccine…

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AMES, Iowa – The researchers’ original task was to figure out how certain polymer nanomaterials provided for a low-inflammatory immune response and yet were able to boost antibody production as part of a single dose of vaccine.

Credit: Nanovaccine Institute

AMES, Iowa – The researchers’ original task was to figure out how certain polymer nanomaterials provided for a low-inflammatory immune response and yet were able to boost antibody production as part of a single dose of vaccine.

Once they learned how these nanomaterials just 20 to 30 billionths of a meter in size acted as vaccine-aiding adjuvants, they decided to take the next scientific step.

Could these same tiny adjuvants carry real-world antigens to the immune system’s B cells and turn them into antibody-secreting factories? In addition, could this be an alternative way to produce laboratory antibodies for diagnostic and therapeutic applications?

The answers were yes. Cell-culture experiments with the technique produced antibodies against key antigens from the coronavirus that causes COVID-19 and the bacterium that causes pneumonic plague.

The initial observation and subsequent discovery show how researchers affiliated with the Nanovaccine Institute based at Iowa State University look at their research from many perspectives:

“This is a great example of the healthy tug of war between a basic research finding about the mechanism of antibody production and a translational benefit that we may have invented a new antibody-production platform,” said Balaji Narasimhan, the director of the Nanovaccine Institute, an Iowa State Anson Marston Distinguished Professor in Engineering and the Vlasta Klima Balloun Faculty Chair. “The Nanovaccine Institute is burning both sides of that candle.”

The journal Science Advances recently published the researchers’ findings. First author is Sujata Senapati, a former Iowa State doctoral student in chemical and biological engineering. Corresponding authors are Narasimhan and Surya Mallapragada, an Iowa State Anson Marston Distinguished Professor in Engineering, an associate vice president for research and the Carol Vohs Johnson Chair in Chemical and Biological Engineering. (See sidebar for the full research team.)

Grants from the National Institute of Allergy and Infectious Diseases, a part of the National Institutes of Health, supported the researchers’ work.

It’s like a ladder

It was clear to the researchers that these nanomaterials – “pentablock copolymer micelles,” according to the researchers’ paper – helped B cells initiate antibody production. (Micelles are structures that self-assemble in water or oils as their molecules align because of their water-loving or water-hating properties.)

“From our studies, we understood very early on that these self-assembling micelles are different from the other types of adjuvants out there,” Senapati said. “What we didn’t know was the reason behind this unique type of immune response generated by them and that to me was the most intriguing part of this project.”

Mallapragada said the researchers were able to tailor the chemistry of the nanomaterials, creating “micelles with added functionality.”

One of those functions is the ability of positively charged micelles to associate with multiple antigens and directly interact with receptors on B cells, according to the paper. This cross-linking of the B cell receptors led to better antibody production and an enhanced immune response to a vaccine.

“These micelles act like a scaffold to cross-link two receptors,” said Michael Wannemuehler, an associate director of the Nanovaccine Institute and an Iowa State professor of veterinary microbiology and preventive medicine.

He said the cross-link is strong and stable, like a ladder hooked at both ends, and is effective at stimulating antibody production by the B cells.

That cellular activation came without the inflammatory response that accompanies other vaccine adjuvants, potentially producing a “‘just right’ immune response” that could be “critical in the rational design of vaccines for older adults” who often suffer from chronic inflammation, according to the paper.

Making lab antibodies

Now that the researchers understood the “behind-the-scenes” mechanism of the micelles’ antibody boost, Senapati said they wanted to see what else they could find.

“The next obvious step then was to test our hypothesis with antigens from some real-world pathogens and see if these micelles could be potentially used to produce antibodies against them,” she said.

They used the micelle scaffolds to present antigens for SARS-CoV-2, the virus that causes COVID-19, and Yersinia pestis, the bacterium that causes pneumonic plague, to B cells in culture.

Those cells began generating “laboratory-scale quantities of therapeutic antibodies” against the two antigens, “further expanding the value of these nanomaterials to rapidly develop countermeasures against infectious diseases,” according to the paper.

Those antibodies could potentially be used for diagnostic test kits or for treatments such as the monoclonal antibodies that have been developed to treat COVID-19, Wannemuehler said.

“There are different ways to produce antibodies,” Narasimhan said. “The method we found is an alternative that could be quite powerful if it’s generalized to other diseases. It could be a plug-and-play platform.”

Because it’s an effective vaccine adjuvant and antibody producer, the paper says the nanomaterial platform developed by the study team is “a highly versatile tool in the development of multiple countermeasures against emerging and reemerging infectious diseases.”

– 30 –

The research team

In addition to Balaji Narasimhan, Sujata Senapati, Surya Mallapragada and Michael Wannemuehler, the research team includes Ross Darling, a former Iowa State doctoral student in veterinary microbiology and preventive medicine; and Kathleen Ross, the core facility manager for the Nanovaccine Institute.

Read the paper

“Self-assembling synthetic nanoadjuvant scaffolds cross-link B cell receptors and represent new platform technology for therapeutic antibody production,” Science Advances, Aug. 4, 2021; Volume 7, Issue 32

 


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Spread & Containment

Long COVID: double vaccination halves risk of developing long-lasting symptoms

Want to avoid long COVID? Get vaccinated.

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Studio Romantic/Shutterstock

In unvaccinated people, around one in 20 who get symptomatic COVID-19 experience symptoms for at least eight weeks. Around one in 50 have symptoms that drag out for three months or more.

We wanted to know whether COVID-19 vaccines might protect against developing long-lasting symptoms. To find out, we looked at data provided by more than a million regular contributors to the COVID Symptom Study, a project in which members of the public log their symptoms via an app to help with research.

Our latest analysis of the study’s data, covering around 2 million vaccine doses, shows that vaccines significantly reduce the risk of catching COVID-19, with only 0.2% of those fully vaccinated later testing positive for the virus.

Even if you’re unlucky enough to catch the virus after being vaccinated, your chances of falling seriously ill or dying are slashed. Double-vaccinated people are 31% less likely to experience acute COVID-19 symptoms and 73% less likely to be hospitalised – a result that’s borne out in the relatively low hospitalisation and death rates we’re seeing now even as tens of thousands of people are still testing positive every day in the UK.

Reassuringly, for those who did fall ill with COVID-19 after being vaccinated, only around 5% went on to have symptoms that lasted for more than four weeks, meaning their chances of developing long COVID were cut by half. One of the best ways to reduce your risk of getting long COVID is to get fully vaccinated as soon as possible.

However, we did notice that frail older people and those living in more socially deprived areas were more likely to be infected and fall ill with COVID-19 after being vaccinated, especially if they had only had one vaccine dose. This suggests that we should prioritise further vaccination efforts and public health measures such as masking and social distancing among these groups, especially where infection rates are high and people are mixing and moving around.

Vaccines and long COVID

As the UK vaccination programme rolled out, we also started to notice anecdotal reports from people living with long COVID that their symptoms seemed to improve after being vaccinated.

The patient-led LongCovidSOS group chose to investigate this by surveying over 800 long COVID patients early in 2021. More than half of those surveyed noticed an overall improvement in their symptoms after vaccination, which then appeared to be sustained in about half of this group. Around a quarter of the overall respondents reported no difference and one-fifth said their symptoms had got worse. These findings have been released as a preprint, so haven’t yet been reviewed by other scientists, but they’ve been backed up by data from the COVID Symptom Study, which we’ll be publishing soon.

However, while there does seem to be some kind of link between receiving a COVID-19 vaccine and improvements in long COVID, it’s not clear exactly how the two are connected. It could be that the immune response triggered by the vaccine has a direct impact on symptoms.

Alternatively, it could just be that time has continued to pass since these people were originally infected and they’re experiencing a natural recovery from the virus. Or it could be a bit of both. Either way, more research is needed to tease out what’s going on.

A woman with long COVID lying on a bed, covering her face
There isn’t a definitive answer yet on whether vaccines can relieve people’s long COVID symptoms. True Touch Lifestyle/Shutterstock

What we can say is that COVID-19 vaccines certainly aren’t harmful for people with long COVID. What’s more, because we know that it’s possible to be reinfected with the virus, there’s a risk that catching it a second time could exacerbate symptoms for people living with long COVID and set them back even further. It’s therefore vital that we encourage anyone with long COVID who has not been vaccinated to do so as soon as possible, to help protect themselves and those around them.

A serious threat

Although the chances of developing long COVID after being vaccinated are small, this is a numbers game and a small percentage of a big number can still be substantial. As long as we are seeing tens of thousands of cases every day, we can still expect to see a substantial number of people living with lingering symptoms over the coming months.

This is particularly important for younger people, who may be less worried about hospitalisation or death, yet who can still be susceptible to the debilitating long-term effects of the virus. A lot can happen in a few months when you’re young, and long COVID can mean that people miss out on life-changing opportunities, like sitting an exam or taking up a new job, as well as the social activities that bring joy and wellbeing to life.

It’s likely that we’ll all be living with COVID-19 for some time to come. But with a combination of vaccination and public health measures where necessary, we can help to make sure that as few people as possible have to directly live with its life-limiting long-term effects.

Claire Steves consults for ZOE Ltd which is the company which developed the COVID Symptom Study together with King's College London. She receives funding from the Medical Research Council, the National Institute for Health Research, the Wellcome Trust and Chronic Disease Research Foundation.

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Government

Stock Market News For Today September 22, 2021

Investors await Fed’s monetary policy update and new economic projections in the stock market today.
The post Stock Market News For Today September 22, 2021 appeared first on Stock Market News, Quotes, Charts and Financial Information | StockMarket…

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Stock Market Futures Edge Higher As Evergrande Bankruptcy Fears Ease

Stock market futures are on the rise early on Wednesday morning. This came after China’s Evergrande said it would make its interest payment on schedule, offering some relief to the jittery markets. Some investors are also expecting the Chinese government to step in to mitigate potential spillover effects that could weigh on global economic recovery. For example, the short-term cash injection from China’s central bank has helped soothe the nerves of the stock market. While there has been speculation that this could be China’s ‘Lehman moment’, many experts believe the comparison is unjustified.

There’s been a fair bit of concern about the possibility of contagion,” analysts at New York-based Bespoke wrote in a research note on Tuesday. “But so far that concern isn’t showing up in parts of the credit markets that have served well as red flags for broader credit crunches in the past.

Investors are also awaiting an update to the Fed’s monetary policy and economic projections. Jerome Powell is expected to speak to the media at 2.30 p.m. ET today. Investors could expect the Fed to lay the groundwork for a near-term announcement and when the tapering would take place. Recall that Powell previously said it could begin as soon as this year. But some investors are now speculating that it won’t happen this soon. As of 6:45 a.m. ET, the Dow, S&P 500, and Nasdaq are up by 0.64%, 0.58%, and 0.34% respectively.

[Read More] What Stocks To Buy Today? 5 Tech Stocks To Watch

Marin Software (MRIN) Stock Surges On New Google Agreement 

Marin Software (NASDAQ: MRIN) stock is spiking higher in pre-market trading today. This came after the announcement that the company entered into a revenue share agreement with Alphabet (NASDAQ: GOOGL) to develop its enterprise tech platform and software products. The revenue share agreement will take effect on October 1. For some context, the company provides marketing software to advertising agencies. Its MarinOne product is an e-commerce advertising platform, and its Marin Search is for managing advertising campaigns.

top tech stocks (MRIN stock)

Last month, the company revealed that its system is now integrated into Criteo’s Commerce Media Platform. Essentially, that opens up the option of wider use of the company’s MarinOne platform.

Chris Lien, CEO of Marin Software, is also highly optimistic about the news. In his own words, “Commerce media is one of the most exciting and fastest-growing areas of digital marketing. With this integration, we can tap into Criteo’s commerce data and intelligence to further our mission of providing advertisers with seamless access to customers across their customer journey, from the top of the funnel to the point of purchase.

[Read More] Best Lithium Battery Stocks To Buy Now? 4 To Know

Adobe (ADBE) Stock Falls As Recurring Revenue Barely Top Estimates

Adobe’s (NASDAQ: ADBE) fiscal third-quarter earnings and sales beat expectations, but the results weren’t enough to lift ADBE stock in the extended trading. From its quarterly report, revenue came in 22% higher year-over-year to $3.94 billion. In fact, it was a quarterly sales record for Adobe, topping Wall Street’s consensus estimate of $3.89 billion, according to FactSet. 

top software stocks to buy (ADBE stock)

On top of that, Chief Executive Officer Shantanu Narayen also pitched new creative software tools to continue Adobe’s steady 20% revenue growth. As part of that effort, Adobe said last month it would acquire Frame.io, a startup that makes video collaboration software, for $1.3 billion. By and large, the current tailwinds behind Adobe’s core offerings persist along with the pandemic. With all this in mind, the real question is whether or not Adobe can maintain its current momentum.

On Monday, Wells Fargo (NYSE: WFC) reiterated its Overweight rating on ADBE stock ahead of its earnings call. The firm even hailed Adobe as “one of the crown jewels of software”, citing solid core positioning and industry tailwinds as major growth factors. Wells Fargo recommends Adobe “as a long-term core holding in any large-cap tech portfolio“. Last week, the company also announced a partnership with PayPal (NASDAQ: PYPL). This partnership aims to add more payment services to its e-commerce platform. Thus, merchants will be able to accept credit cards and other ways of paying. Considering all these, would the current dip in ADBE stock present an opportunity for bargain hunters?

[Read More] Top Stocks To Buy Now? 4 Renewable Energy Stocks For Your Watchlist

BlackBerry Set To Report Earnings After The Stock Market Closes Today

Gone were the days when BlackBerry (NYSE: BB) tops the global smartphone market. But that doesn’t keep investors away from investing in this well-respected software security company. The company is set to report its earnings after the stock market closes today. Naturally, a lot of the attention will be on BlackBerry stock today. Many investors and analysts are highly bullish on the company’s untapped potential in the cybersecurity space. If you have been following Reddit’s chatter, you would also know that’s a meme stock that gets speculated on by investors.

communication stocks to buy now (BB stock)

The company provides intelligent security software and services to enterprises and governments around the world. As you may be aware, Microsoft (NASDAQ: MSFT) participated in a meeting at the White House last month regarding the need to address cybersecurity threats as a country. With BlackBerry as a partner, a lot of focus will be on BB stock moving forward. 

Other positive catalysts include the increased proliferation of BlackBerry’s systems in China’s automotive space. On August 26, the company announced that Chinese carmaker Great Wall Motors would use an advanced digital cockpit controller platform developed by BlackBerry and its partner Nobo. If anything, it shows that BlackBerry and its partner continue to be making progress in the huge Chinese auto market. With all that in mind, is BB stock a buy ahead of its earnings report?

Other Notable Earnings On Tap Today

Not to mention, several other major companies are looking to report their earnings today. For those looking to jump on some pre-market earnings action, we have General Mills (NYSE: GIS) and Gaotu Techedu (NYSE: GOTU) on tap.

Alternatively, in case you are keener on earnings after the closing bell, there is a good mix of names to consider as well. Namely, Blackberry, KB Home (NYSE: KBH), and H.B. Fuller (NYSE: FUL) among others would be in focus. Whether you are anticipating the Fed’s announcement or keeping up with earnings, one thing remains. There is no shortage of exciting news to note in the stock market now.

The post Stock Market News For Today September 22, 2021 appeared first on Stock Market News, Quotes, Charts and Financial Information | StockMarket.com.

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