Coronavirus: Black September
Philip Ammerman
Investment advisor, tech consultant & angel investor. Site visits to Greece in the week of 11 November for a new project we are setting up.
The second wave of coronavirus infections is now fully pronounced in certain countries. This has been accompanied by a range of measures, with different countries implementing different measures based on their own national policy and their appreciation of the severity and risks involved. As predicted in our Second Wave article of August 3rd it appears increasingly likely that enhanced restrictive measures will be necessary, including additional public support for families and enterprises.
Part 1: About the Coronavirus
According to scientific research by the University of Bologna, 6 strains of the Coronavirus COV-2 have been identified. The original one is the L strain that appeared in Wuhan in December 2019. The first mutation was the S strain, followed by V and G. Strain G mutated into strains GR and GH in February 2020. This is based on a study of 48,635 coronavirus genomes from laboratories all over the world. The research is published in Frontiers of Microbiology. The good news is that with only 6 mutations to date, there is hope that a vaccine could be effective.
The Dutch National Institute of Public Health and the Environment reports on the progress of developing a vaccine against COVID-19. This is a useful look at both the 3 phases of research and clinical trials needed, as well as the types of vaccines used. Based on this, we understand that a vaccine developed in a full clinical trial process will probably not be available before November 2020, and not available in significant volumes before 2021.
The European Commission has concluded negotiations with Astra Zeneca to purchase 300 million COVID-19 vaccines, with an option to purchase a further 100 million. These purchases are on behalf of the EU Member States and will be distributed based on population in each Member State. The Commission is also in exploratory talks with Sanofi-GSK, Johnson & Johnson, CureVac and Moderna
Part 2: Coronavirus New Cases
All data presented below is from the Worldometers Coronavirus page, accessed on Thursday, 3 September 2020.
Cyprus
After a resurgence of cases in August, the government of Cyprus has introduced stricter new measures, including wearing facemasks in public areas; enhanced inspections of locations such as restaurants and nightclubs; preventing large gatherings; and fines. This approach, together with the caution employed by the Cypriot population, has worked.
Greece
Since August 5th, Greece has been seeing over 100 new cases per day, with over 200 cases per day on 14 days. Contrary to expectations, the number of imported cases due to tourism has been low, based on COVID-19 testing at airports and land crossings. Most cases are due to younger people socialising and not observing protective measures. Greece has announced partial lockdowns or enhanced restrictive measures on islands and other locations with a high number of cases. Greece has also cut flights from Barcelona, while the flight ban to Turkey was also extended.
Russia
To our surprise, Russia has remain closed to most countries in August. The country announced that flights to the UK, Turkey and Tanzania could start in August, and is currently lifting restrictions to Poland and other countries. However, flights have not resumed, and visa services prior to departure remain limited. This has caused a major blow to tourism industries and business in Greece, Cyprus and other countries. The number of new infections is currently around 5,000 per day, but has declined from over 10,000 cases per day in May.
France
In France, the second wave is now clearly apparent. On six separate days, the number of new cases recorded breached 5,000, compared with only three days in March/April at the height of the crisis. France has introduced new measures, including wearing face masks in public, including while walking alone on city streets, in some areas. We believe there will be an increase in cases as people return from vacations, and as schools re-start.
Spain
In Spain, the number of coronavirus new infections has been rising steadily since July. The government has imposed a series of new measures. Countries such as the United Kingdom and Greece have taken measures against passengers arriving from Spain, including flight bans (Greece) and mandatory self-quarantine (UK).
Italy
As per our August report, Italian new cases show the first indications of a second wave, with the infection rate having increased significantly between late July and late August. Luckily, the new cases per day are well below 2000, and nowhere near the 6000 per day at the height of the crisis.
Hungary
Hungary has made it onto this report because of the dramatically higher number of infections in the second wave. In contrast to the first wave, which had a single day with just over 200 infections in one day, that number has been breached twice in late August and September. Hungary has taken the decision to close its borders to foreigners from September 1st. This marks the first complete lockdown in the Second Wave in Europe.
Part 3: Expectation
We expect a volatile autumn and winter, as the coronavirus new cases increase as a result of a return of densely-populated urban areas and schools, and once the autumn and winter begins. This volatility will be expressed by:
- Rising numbers of new cases, with dense urban areas, mass urban transport, households and schooling identified as vectors of the disease.
- Increasing lockdown measures, applied to neighbourhoods or cities, or regions. Country lockdowns such as Hungary will remain rare. However, countries that have implemented an average case number of 16/100,000 population will, in effect, be locking themselves down if they prevent flights or insist on intrusive self-isolation measures.
- A necessary increase of public support measures for furloughs, unemployment and other citizen and enterprise support. This is in turn linked to rising public debt.
- It is not impossible that in-person schooling and education will be cancelled. Increasing numbers of schools and universities will likely close and education shifted online.
- We now see the average economic downturn in most countries to exceed 7-10% in the best case. Any offsets to this will be the result of public spending. Further research will be published in September and October on the public debt situation.
Please take all measures necessary to maintain your health, your families and your business operations. If you have not done so already, we suggest running a second budget scenario for September – December, and then a 2021 forecast showing a drastic business contraction, possibly similar in scale to 2020.
If we can be of any assistance, please contact us at the information below.
Philip Ammerman
Sources & Related Reading
The Six Strains of Coronavirus-COV-2
Science Daily: 3 August 20
RIVM: 24 August 2020
Coronavirus: the Commission signs first contract with AstraZeneca
European Commission: 27 August 2020
Accessed on 3 September 2020
Wizz Air to cut flights as Hungary closes its borders to foreigners
Reuters: 30 August 2020
First Indications of the Coronavirus Second Wave
Navigator Consulting: 3 August 2020
Are you Second Wave-Ready in Cyprus?
Navigator Consulting: 8 July 2020
Emerging from Lockdown: The Art of Risk
Navigator Consulting: 29 May 2020