The dirty little secret no politician will admit: There is no way to ‘go for growth’

Investment professionals and politicians who spurned Liz Truss’s “go for growth” strategy for the British economy are slowly waking up to an uncomfortable truth.

The former U.K. Prime Minister’s plan, which relied on unfunded tax cuts that were perceived to be inflationary, may have been the only growth plan for Europe’s economies to escape over-indebtedness and low productivity without having to turn to austerity or greater state control of the economy. Not that any of them are prepared to admit it.

Britain’s Institute of Fiscal Studies on Monday described parties’ reluctance to admit as much on Monday as “a conspiracy of silence” arguing Labour’s pledge to rule out tax hikes was a “mistake.” “We wish Labour had not made those tax locks and it will be difficult [politically] to break,” IFS director Paul Johnson said about the party currently leading the polls.

But it’s not just British politicians who are refusing to face up to reality. In France, where an impending snap parliamentary election threatens to empower extremists on both sides of the political spectrum — to the cost of President Emmanuel Macron’s centrist Renaissance party — there is a similar reluctance to admit there are only bad options on the table.

French Finance Minister Bruno Le Maire highlighted last week, after French bonds began to wobble, that anything short of centrism risks placing France under the supervision of Brussels and the International Monetary Fund.

What he failed to point out is that even supposedly sensible centrists face having to do the unthinkable in the longer run.

“They have to go to financial repression because high growth as a strategy out of over-indebtedness is not going to be funded by the bond market,” Russell Napier, an influential investment advisor who authors the Solid Ground newsletter, told POLITICO. “I think it doesn’t matter who you vote for, you end up with roughly the same thing. So the market’s not maybe saying ‘we’re very sanguine about Labour [in the U.K.].’ They’re just saying: ‘It doesn’t really matter who you vote for. We are heading toward this route.’”

Incoming financial repression

That route, in Napier’s opinion, means it’s time for financial repression: putting a lid on the free movement of capital and having the government and other technocratic institutions increasingly determine which sectors benefit from public sector funding, and even more critically, from private sector funding too.

The pathway takes Europe much closer to the dirigiste policies that dominated the continent in the post-war period and away from the market-based liberalism that investors have become used to over the past four decades.

Truss’s risky tax cuts had hoped to avoid a push towards state-guided credit rationing by unleashing the power of the private sector and the financial industry to stimulate such a high rate of growth that the accompanying inflation just wouldn’t matter — especially if the Bank of England’s interest rate policy acted in support.

But the dilemma facing France, one of the EU’s largest economies, encapsulates three further political complexities: Paris does not control its own monetary policy, its public sector spending capacity is restricted by fiscal rules created in Brussels — which it is now officially in breach of — and any move to direct private sector financing domestically could clash with the bloc’s greater efforts to create a single capital markets and banking union.

That doesn’t leave much wiggle room for any incoming French government to experiment with a “dash for growth”, either of the free-market Truss variety, or — which is more relevant for France — the free-spending government interventionist one.

Politicization of the ECB

For Macron, the stakes are abundantly clear. In a speech to the Sorbonne University in April, he said: “We must be clear on the fact that our Europe, today, is mortal. It can die. It can die, and that depends entirely on our choices. But these choices must be made now.”

But in the same speech he, too, advocated a wholesale reordering of Europe’s economic framework largely because he — like the populists on either side of him — can’t afford everything he wants.

The current economic model, he said, is no longer sustainable “because we legitimately want to have everything, but it doesn’t hold together.”

Like all of the French presidents of the last 25 years, Macron has faced this constraint on domestic policymaking by trying to co-opt the one institution that has no formal constraints on creating money out of thin air — the European Central Bank. In his Sorbonne speech, he stressed that “you cannot have a monetary policy whose sole objective is to address inflation.”

The ECB’s mandate can only be updated by changing the whole EU treaty, something for which Europe’s leaders have no appetite. But even within its current legal straitjacket, the ECB has found plenty of ways to support national governments when it can, with a sequence of tools and programs that have allowed it to buy their bonds and keep their borrowing costs below where they would naturally have been.

It’s the newest of these tools that is likely to play a key role in the next few weeks. The ECB has stopped net purchases of bonds as part of its broader policy to bring inflation down, but it has one tool — so far untested — that it can use to alleviate any market stress after the elections: the so-called Transmission Protection Instrument.

The TPI allows the ECB to buy the bonds of individual governments whose borrowing costs it considers out of step with macroeconomic fundamentals. The idea is to ensure that its single monetary policy applies reasonably equally across the whole euro area. But it creates substantial scope for the ECB to exercise financial repression on behalf of those it considers aligned with its own mission.

It implies that the ECB knows better than markets what the value of a government promise to pay is. And in not setting any ex ante limits to the scale of its interventions, it has bestowed upon itself enormous power to take on the markets if it disagrees with them strongly enough.

It’s this power that Macron may want to harness if he is still able to present a budget he can call his own after July. But by the same token, he will want to ensure that the ECB denies that support to his opponents if they emerge victorious, just as it did to Italy’s Silvio Berlusconi and Greece’s Alexis Tsipras a decade ago.

According to Napier, whether the ECB ultimately decides to use the TPI or not, the decision will have political implications, not least because it will change the parameters of what the central bank is really prepared to do save the euro, and on whose behalf.

“If you think Macron is an ally of the [European] project, then you don’t use it until after there’s some type of chaos,” Napier said.

Many things could still change between now and July 7. The far right National Rally’s Jordan Bardella, for example, has already walked back some of the party’s spendiest plans, aiming to reassure markets that conflict with the EU over its fiscal rules can be avoided.

But in an interview with the FT published on Thursday, Bardella upset the bond markets again by saying he’d campaign for a big rebate from the EU budget, only hours after his ally and mentor Marine Le Pen signaled that a National Rally government would try to wrest away Macron’s powers as commander-in-chief.

In other words, the threat of major market instability in July remains alive and well. And, as Napier put it: “If bond yields blow up in France they can blow up anywhere.”

(Additional reporting by Geoffrey Smith)

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Transforming HIV prevention in Europe

This article is part of POLITICO Telescope: The New AIDS Epidemic, an ongoing exploration of the disease today.

The world’s battle to end the HIV epidemic is being fought on two fronts. The first involves getting as many people as possible who are living with the virus diagnosed and rapidly onto antiretroviral medication. This reduces the virus inside their bodies to such a low level that it is undetectable and therefore cannot be passed to others. The approach is known as “undetectable = untransmittable” or “U=U*.”

The second front is focused on protecting people from contracting the virus in the first place, even if they have been exposed to it — an approach known as pre-exposure prophylaxis, or PrEP. Taken as prescribed, PrEP makes a person’s body almost entirely resistant to HIV infection.

There is a critical need to bring forward new PrEP options that are informed by and designed for the communities that could benefit from PrEP in Europe.

Jared Baeten MD, PhD, vice president for HIV clinical development at Gilead Sciences

PrEP comprises antiretroviral drugs that can be taken intermittently, around the time someone expects to be sexually active. They protect against the virus in two ways: by increasing the production of antibodies in the cells in the rectal or vaginal lining, making them less receptive to HIV in the first place, and by interfering with the ability of HIV to replicate in the body.

Nearly 5 million people around the world have taken PrEP at least once — including about 2.8 million in Europe — and it has been shown to reduce the incidence of HIV infection during sex by 99 percent. In the European Union, new HIV infections have fallen by about 45 percent since PrEP was licensed in 2016, although this decline is also partly due to U=U.

PrEP as part of combination prevention strategies

Missing doses or running out of PrEP can mean becoming susceptible to HIV again. I via Shutterstock

Today, PrEP comes primarily in the form of an oral tablet, which has the advantage of being cheap to produce and easy to store. But it is not a universal solution. Because it needs to be taken regularly while someone is sexually active, missing doses or running out can mean becoming susceptible to HIV again. What’s more, in the same way that some bacteria are developing resistance to antibiotics, the HIV that does enter the bodies of people who have paused or discontinued their use of PrEP has a greater chance of being resistant to subsequent antiretroviral medications they may then need.

PrEP taken in tablet form is also an issue for people who need to keep their use of PrEP private, perhaps from family members or partners. Having to take a pill once a day or two or three times a week is something that may be hard to hide from others. And some people, such as migrants, who may not be fully integrated with a country’s health care system, may find it hard to access regular supplies of daily medication. Limitations such as these have prompted the development of alternative, innovative ways for people to protect themselves that are more tailored to their needs and life situations. These include longer-acting drugs that can be injected.

Like existing oral medications, injectable PrEP works by preventing HIV from replicating in a person’s body, but its effect lasts much longer. In September, the EU approved the use of the first intramuscular injectable that can be given every two months. Gilead is, until 2027, running trials of another injectable option, which, once the required efficacy and safety have been demonstrated, could be administered subcutaneously just once every six months. This would be more convenient for many people and more adapted to the circumstances of certain populations, such as migrants, and may therefore lead to better adherence and health outcomes.

HIV continues to be a public health threat across Europe, where in 2022 more than 100,000 people were newly diagnosed with HIV.

Jared Baeten MD, PhD, vice president for HIV Clinical Development at Gilead Sciences

Further ahead — but still in the early stages of development and testing — are patches and implants, which would provide a continuous supply of antiretroviral drugs, and immunotherapies. Immunotherapies would comprise a broad spectrum of naturally produced or manufactured antibodies against HIV, which, in theory, would pre-arm their bodies to resist infection.

As more types of PrEP become available, we will see a greater awareness of its benefits, as more people are able to find the version of PrEP that best suits their living conditions and personal requirements. This is a fundamental principle of “combination prevention,” or innovative interventions that reflect the specific needs of the people they are trying to reach.

Preparing for the future

Despite clear scientific evidence of the benefits of PrEP, there are still some hurdles we need to overcome to make it a powerful tool to end HIV altogether. These include investments and funding in prevention and availability, and programs to combat stigma.

Although the EU licensed PrEP in 2016, availability varies across the bloc. In France, the U.K., Spain, Germany and, more recently, Italy, oral PrEP is available at no cost to those who would benefit from it. In Romania, although PrEP is included in the country’s new HIV National Strategy, it is not yet funded, and it is only available via non-governmental organizations that rely on external funding sources. And in Poland, Hungary and Bulgaria, PrEP is not state funded and there are no current plans to make it so. In many member states, even though PrEP is technically licensed, in practice it can be hard to get hold of, in particular for specific communities, such as women, migrants or trans people. Potential users may find it hard, for example, to access testing or even doctors who are willing to prescribe it.

Jared Baeten MD, PhD, vice president for HIV clinical development at Gilead Sciences

Another key challenge that health systems and providers face is communicating the importance of PrEP to those who would most benefit, and thereby increase uptake. Many respondents in multiple studies have indicated that they don’t feel HIV is something that affects them, or they have indicated that there is a general stigma in their communities associated with sexual health matters. And some groups that are already discriminated against, such as sex workers, people who inject drugs, and migrants, may be hesitant to engage with health care systems for fear of reprisals. Again, injectable PrEP could help reach such key populations as it will offer a more discreet way of accessing the preventive treatment.

“There is a critical need to bring forward new PrEP options that are informed by and designed for the communities that could benefit from PrEP in Europe,” says Jared Baeten MD, PhD, vice president for HIV clinical development at Gilead Sciences. “At Gilead, we are excited to engage with communities and broader stakeholders to inform our trials efforts and partner with them in our goal to develop person-centered innovations that can help end the HIV epidemic in Europe.”

Europe is leading the world’s efforts toward ending HIV, but, even in the bloc, PrEP usage and availability varies from country to country and demographic to demographic. If the region is to become the first to end the HIV epidemic entirely, the European Commission, the European Parliament and the governments of member states will need to lead the way in fighting stigma, promoting and prioritizing HIV prevention in all its aspects including innovation in therapeutics strengthening the financing and funding of healthcare systems, and establishing effective pathways to zero transmission to end HIV entirely.

“HIV continues to be a public health threat across Europe, where in 2022 more than 100,000 people were newly diagnosed with HIV,” says Baeten. “HIV prevention is critical and has the potential to change the trajectory of the epidemic, but stigma and other barriers limit the impact that PrEP medications can have on reducing HIV infections in Europe. We all have a responsibility to collaboratively partner to make this work.”

*U=U is true on two premises: taking HIV medicines as prescribed and getting to and staying undetectable for at least six months prevents transmitting HIV to partners through sex. Undetectable means that the virus cannot be measured by a viral load test (viral load <200 copies/mL)



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It’s time to hang up on the old telecoms rulebook

Joakim Reiter | via Vodafone

Around 120 years ago, Guglielmo Marconi planted the seeds of a communications revolution, sending the first message via a wireless link over open water. “Are you ready? Can you hear me?”, he said. Now, the telecommunications industry in Europe needs policymakers to heed that call, to realize the vision set by its 19th-century pioneers.

Next-generation telecommunications are catalyzing a transformation on par with the industrial revolution. Mobile networks are becoming programmable platforms — supercomputers that will fundamentally underpin European industrial productivity, growth and competitiveness. Combined with cloud, AI and the internet of things, the era of industrial internet will transform our economy and way of life, bringing smarter cities, energy grids and health care, as well as autonomous transport systems, factories and more to the real world.

5G is already connecting smarter, autonomous factory technologies | via Vodafone

Europe should be at the center of this revolution, just as it was in the early days of modern communications.

Next-generation telecommunications are catalyzing a transformation on par with the industrial revolution.

Even without looking at future applications, the benefits of a healthy telecoms industry for society are clear to see. Mobile technologies and services generated 5 percent of global GDP, equivalent to €4.3 trillion, in 2021. More than five billion people around the world are connected to mobile services — more people today have access to mobile communications than they do to safely-managed sanitation services. And with the combination of satellite solutions, the prospect of ensuring every person on the planet is connected may soon be within reach.

Satellite solutions, combined with mobile communications, could eliminate coverage gaps | via Vodafone

In our recent past, when COVID-19 spread across the world and societies went into lockdown, connectivity became critical for people to work from home, and for enabling schools and hospitals to offer services online.  And with Russia’s invasion of Ukraine, when millions were forced to flee the safety of their homes, European network operators provided heavily discounted roaming and calling to ensure refugees stayed connected with loved ones.

A perfect storm of rising investment costs, inflationary pressures, interest rate hikes and intensifying competition from adjacent industries is bearing down on telecoms businesses across Europe.

These are all outcomes and opportunities, depending on the continuous investment of telecoms’ private companies.

And yet, a perfect storm of rising investment costs, inflationary pressures, interest rate hikes and intensifying competition from adjacent industries is bearing down on telecoms businesses across Europe. The war on our continent triggered a 15-fold increase in wholesale energy prices and rapid inflation. EU telecoms operators have been under pressure ever since to keep consumer prices low during a cost-of-living crisis, while confronting rapidly growing operational costs as a result. At the same time, operators also face the threat of billions of euros of extra, unforeseen costs as governments change their operating requirements in light of growing geopolitical concerns.

Telecoms operators may be resilient. But they are not invincible.

The odds are dangerously stacked against the long-term sustainability of our industry and, as a result, Europe’s own digital ambitions. Telecoms operators may be resilient. But they are not invincible.

The signs of Europe’s decline are obvious for those willing to take a closer look. European countries are lagging behind in 5G mobile connectivity, while other parts of the world — including Thailand, India and the Philippines — race ahead. Independent research by OpenSignal shows that mobile users in South Korea have an active 5G connection three times more often than those in Germany, and more than 10 times their counterparts in Belgium.

Europe needs a joined-up regulatory, policy and investment approach that restores the failing investment climate and puts the telecoms sector back to stable footing.

Average 5G connectivity in Brazil is more than three times faster than in Czechia or Poland. A recent report from the European Commission — State of the Digital Decade (europa.eu) shows just how far Europe needs to go to reach the EU’s connectivity targets for 2030.

To arrest this decline, and successfully meet EU’s digital ambitions, something has got to give. Europe needs a joined-up regulatory, policy and investment approach that restores the failing investment climate and puts the telecoms sector back to stable footing.

Competition, innovation and efficient investment are the driving forces for the telecoms sector today. It’s time to unleash these powers — not blindly perpetuate old rules. We agree with Commissioner Breton’s recent assessment: Europe needs to redefine the DNA of its telecoms regulation. It needs a new rulebook that encourages innovation and investment, and embraces the logic of a true single market. It must reduce barriers to growth and scale in the sector and ensure spectrum — the lifeblood of our industry — is managed more efficiently. And it must find faster, futureproofed ways to level the playing field for all business operating in the wider digital sector.  

But Europe is already behind, and we are running out of time. It is critical that the EU finds a balance between urgent, short-term measures and longer-term reforms. It cannot wait until 2025 to implement change.

Europeans deserve better communications technology | via Vodafone

When Marconi sent that message back in 1897, the answer to his question was, “loud and clear”. As Europe’s telecoms ministers convene this month in León, Spain, their message must be loud and clear too. European citizens and businesses deserve better communications. They deserve a telecoms rulebook that ensures networks can deliver the next revolution in digital connectivity and services.



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Why we need to improve heart health in Europe

Cardiovascular diseases (CVDs) are the number one killer in Europe. They cost the EU an estimated €282 billion in 2021, larger than the entire EU budget itself.[1] Sixty million people live with CVDs in the EU, while 13 million new cases are diagnosed annually.[2]

Behind this data are individual stories of suffering and loss, of lives limited and horizons lowered by, for example, heart attack and stroke. These diseases directly affect every community in every country. And they strain our health services which must respond to cardiac emergencies as well as the ongoing care needs of chronic CVD patients.

Sixty million people live with CVDs in the EU, while 13 million new cases are diagnosed annually.

Cardiovascular health is a priority not just because of the scale of its impact, but because of the scope we see for significant advances in outcomes for patients. We should take inspiration from the past: between 2000 and 2012, the death rate from CVDs fell by 37 percent in the five largest western European countries (France, Germany, the U.K., Spain and Italy).[2] This progress was achieved through a combination of medical innovations, and supported by a mix of health care policies and guidelines that propelled progress and improved patients’ lives.

New treatments can now help prevent strokes or treat pulmonary embolisms. Others can delay kidney disease progression, while at the same time preventing cardiovascular events.

Despite progress, this downward trend has reversed and we are seeing an increase in the CVD burden across all major European countries.

And the research continues. Precision medicines are in development for inherited CVD-risk factors like elevated lipoprotein(a), which affects up to 20 percent of the population.[3] A new class of anti-thrombotics promises to bring better treatments for the prevention of clotting, without increasing the risk of bleeding. New precision cardiology approaches, such as gene therapy in congestive heart failure, are being investigated as potential cures.

Despite progress, this downward trend has reversed and we are seeing an increase in the CVD burden across all major European countries.[4]

Getting the definitions right

This year’s World Heart Day, spearheaded by the World Heart Federation, comes amid the revision of the EU pharmaceutical legislation. The European Commission’s proposal of a narrow definition of unmet medical need, which could hamper innovation is causing deep concern across stakeholders.

Instead, a patient-centered definition of unmet medical need taking the full spectrum of patient needs into consideration, would incentivize more avenues of research addressing the needs of people living with chronic conditions. It would provide a basis for drafting the next chapter in the history of cardiovascular medicines — one that we hope will be written in Europe and benefit people in the EU and beyond. Not only would this inspire advances that help people to live longer, but it would also improve quality of life for those at risk of, and affected by, cardiovascular events.

Unmet medical need criteria currently included in the draft Pharmaceutical Legislation would do a disservice to patients by downplaying the chronic nature of many CVDs, and the importance of patient-reported outcomes and experience.[5] And many of the advances seen in recent decades would fall short of the narrow definition under consideration. This limited approach disregards incremental innovation, which might otherwise reduce pain, slow disease progression, or improve treatment adherence by taking account of patient preferences for how therapies are administered.

Much of the illness and death caused by CVD is preventable — in fact, 9 out of 10 heart attacks can be avoided.

At this moment it is unclear how the unmet medical need criteria in the legislation will apply to these and other situations. Policymakers should create a multistakeholder platform with the space to discuss patients’ needs, getting expert views from medical societies, patients and industry to better understand the innovation environment. The European Alliance for Cardiovascular Health (EACH), a multistakeholder network comprised of 17 organizations in the CVD space in Europe, stands ready to inform policymakers about the CVD burden and the pressing needs of patients. [6] EACH not only supports the EU´s endeavor to develop more policies on CVD, it also supports and promotes the idea of an EU Cardiovascular Health Plan to work towards better patients’ health care across the EU and more equal health standards. So far, structured discussions with such stakeholders do not sufficiently take place, and we risk missing those opportunities, and lose in both patient access as well as R&D attractiveness of the EU.

Primary and secondary prevention

As well as driving future innovation, Europe must also make the best possible use of the tools we have now. We must do what works — everywhere.

At the heart of this approach is prevention. Much of the illness and death caused by CVD is preventable — in fact, 9 out of 10 heart attacks can be avoided.[7] Primary prevention can dramatically reduce rates of heart attack, stroke and other CVDs. Secondary prevention, which includes screening and disease management, such as simple blood tests and urine tests, as well as blood pressure and BMI monitoring, has a key role to play in containing the burden of disease. [8]

Joint cardiovascular and diabetes health checks at primary care level, taking an evidence-based approach, would help diagnose and treat CVD before the onset of acute symptoms.[9] By following current treatment guidelines and protocols, health care professionals across Europe can help to prevent complications, improve health outcomes for patients and save health care costs. Also here, a multistakeholder approach is key. Policymakers should not miss out on listening to the CVD multistakeholder alliances that have already formed — at EU and at EU member countries level, as for example EACH. These partnerships are great ways for policymakers to better understand the needs of patients and to get the experts’ views.

Research-driven companies exist to meet the needs of patients in Europe and around the world. We need to create an environment that enables companies to embark on complex and unpredictable trials. That means having the rights incentives and clarity on the regulatory pathway for future treatments.


[1] https://www.escardio.org/The-ESC/Press-Office/Press-releases/Price-tag-on-cardiovascular-disease-in-Europe-higher-than-entire-EU-budget

[2] https://iris.unibocconi.it/retrieve/handle/11565/4023471/115818/Torbica%20EHJ%202019.pdf

[3] https://www.acc.org/Latest-in-Cardiology/Articles/2019/07/02/08/05/Lipoproteina-in-Clinical-Practice

[4] https://www.efpia.eu/about-medicines/use-of-medicines/disease-specific-groups/transforming-the-lives-of-people-living-with-cardiovascular-diseases/cvd-dashboards

[5] https://health.ec.europa.eu/medicinal-products/pharmaceutical-strategy-europe/reform-eu-pharmaceutical-legislation_en

[6] https://www.cardiovascular-alliance.eu/

[7] https://www.ahajournals.org/doi/10.1161/STROKEAHA.119.024154

[8] https://www.ncbi.nlm.nih.gov/pmc/articles/PMC5331469/

[9] https://www.efpia.eu/news-events/the-efpia-view/statements-press-releases/because-we-can-t-afford-not-to-let-s-make-a-joint-health-check-for-cardiovascular-disease-cvd-and-diabetes-happen/



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