European countries now face the need to restart the economy. This comes after health authorities were unprepared for a pandemic, even though they had almost six weeks of warnings from China, South Korea, Taiwan and Italy. The restart needs to take the form of a smart and sustainable strategy, which can also withstand the risk of a second or a third wave. Europe can ill-afford too early and too aggressive a restart, which would have to be reversed shortly after. [Read also the Insightview article, A necessary but risky restart of Europe's economy has begun: Denmark opts for a peculiar restart strategy or has the 'curve' simply turned too flat?]       

The problem is that not only were European health authorities unprepared, but they still have no clue about the extent of the current coronavirus outbreak. We do not yet know how many are infected? How large is the "dark number"? The costs of the national health authorities' first failure have been huge, as European governments are now forced to run substantial fiscal deficits to prevent a "Second Great Depression". In the next part of the coronavirus story, European countries cannot afford to make decisions based on guesses - particularly not when many European virus experts talk about the need for creating herd immunity.

The future choices have to be founded on qualified estimates as a minimum. In Denmark, the health authorities talk about a "dark number" of 30-80 times the size of the official number. The fact is, however, that they do not know. It is not even a qualified guess, they admit. This again raises the question of why European countries do not launch random testing, which could provide a qualified estimate of the "actual" number of currently infected persons. Also, we need to have a qualified estimate of the number of people who have been infected in the past, although the latter could, admittedly, prove a complicated task because of the coronavirus' unpredictable properties. 

In Denmark, this could, for instance, be the random testing of 5,000 people without focusing on whether they have symptoms or not. What if the real number of persons, who have been infected, is less than 3%? This would mean there is still a long way to herd immunity, which in turn means, potentially, more pressure on the healthcare system's capacity. Alternatively, one could also argue that such a result suggests that the "safest bet" is to continue pursuing a strategy of "containment". The consequence could be that the borders need to be closed for a foreseeable future.  

‌All available information is needed

Indeed, the above shows that we need to know more about where we are. All information needs to be available to the virus experts, politicians, hospital staff, households, companies and, not least, people who will be "sent to the front". At present, the virus experts' models are no better than "garbage in, garbage out". Admittedly, these models would seem to be similar to analyses made in the financial market.

In January, European countries' health authorities "believed" they knew more about the properties of the coronavirus than they know today. This has proved to be an arrogant approach. A few days ago, a leading employee of the Serum Institute [the Danish CDC] admitted in an interview with the Danish newspaper, Berlingske, that the health authorities learned in early February that the coronavirus was far more infectious than their first assessment. [Read the Berlingske article, In February, a new study on Covid19 made several experts nervous: "The report completely changed things".] Interestingly, this information was, apparently, not passed on to the Danish government. [or was it?] More importantly, hospital workers were not told, which means that they took unnecessary risks when interacting with patients.

Ironically, the "new information" was available on this website's daily Morning Briefing emails on January 25 when China's health minister gave information about the risk to the rest of the world, according to an article in the South China Morning Post. [Read the article, Doctors warn China coronavirus carriers may show no symptoms of illness.] The same information was also available on the BBC's website on January 26. [Read the article, China coronavirus 'spreads before symptoms show'.] Furthermore, The Lancet reported a few days earlier about a family of seven admitted to the University of Hong Kong-Shenzhen Hospital between January 10-15. However, this website is aware that European health authorities do not attach too much importance to evidence from Asian health authorities.

The above-mentioned "mistakes" are, admittedly, history. Mistakes are made. It is, however, an even bigger mistake to continue to disregard anecdotal evidence from Asia, arguing this is "not supported by any Scandinavian studies". The question is, however, whether European arrogance will continue? In the last two months, there have been many examples of recovered patients, who are, apparently, being infected a second time. [Read the article, South Korea reports recovered coronavirus patients testing positive again, April 11.] Several Scandinavian national health experts have ruled out the possibility by claiming that the South Koreans are probably doing the tests in the wrong way. This website is not in a position to conclude whether this is true or not. That said, Insightview has noticed that the World Health Organisation is no longer ignoring this anecdotal evidence from Asia. [Read also Monday's CNBC article, WHO officials say it's unclear whether recovered coronavirus patients are immune to second infection.]

The fact that, for instance, Danish national virus experts talk with less conviction today about the coronavirus than they did in January should give rise to at least some humility. The fact is that "virus experts" around the world have no common, current view on how the virus should be treated. This should make alarm bells ring for elected policymakers. In the context of European virus experts' "know-all attitude", so far, it is no surprise that the consensus has aimed for "herd immunity". This is, however, a view contradicted by virus experts in Asia, in particular, as they "observe" the coronavirus and "conclude", so far, less. [Read also the SCMP article, Coronavirus could attack the immune system like HIV by targeting protective cells, warn scientists.] In Asia, it seems virus experts, to a large extent, aim for "containment" until they know more. [Read also the Insightview article, Why are national health authorities not listening to anecdotal evidence from Asia? Credibility is needed if a 'second wave' were to emerge.]  

‌There are no easy answers. In fact, there are many more questions than answers. Prime Minister Boris Johnson's personal experience with the disease might make him think twice about herd immunity, although this still remains to be seen. A strategy of herd immunity will not hit commentators, politicians and economists, who, located at "safe places" close to the beach, "enrich" us with their knowledge about the coronavirus. Hospital staff and workers are at the frontline. They deserve decisions based on all available information.

The world has changed: Adapt and don't count on government support in 2021

Policymakers, companies and households need to accept that the world has changed after the coronavirus outbreak, unless the world finds a vaccine that could be available already in 2020. The latter seems highly unlikely, although we will see a potential "new vaccine" emerge every week in the coming months. [Read the Bloomberg article, WHO Says 70 Vaccines in the Works, With Three Leading Candidates.]

This means that companies need to adjust rather than wait for government support. "Safety" will turn out to be the most important parameter for consumers and workers. This is in sharp contrast to the proposal from a former Danish minister, Brian Mikkelsen, who argues tax relief for buying cinema-tickets or tickets to the entertainment industry. The experience from China shows, however, that these measures could be seen as "tickets to the hospital". Instead, consumers want strict safety measures implemented. 
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‌In this context, Denmark's restart of allowing primary schools to open is somewhat strange. Small private companies such as, for example, hairstylists know that consumers will stay away unless they focus on safety by using protective gear. The same applies to dentists and other services. In Europe, the private sector is already adapting because this is a recipe for economic survival.

Unfortunately, there will also be businesses which will have a hard time to survive, not least if the coronavirus turns into a seasonal event. In that case, the government cannot afford to support these businesses in the long run, as all European governments now face permanent huge fiscal deficits, which will not be sustainable.

Productivity is on the decline in the short run

The most important lesson from the coronavirus outbreak is that the trend towards de-globalisation will intensify whether we like it or not. This will lead to a comeback for old industries at the national level because "strategic importance" will play a much more significant role. More interestingly, de-globalisation will increasingly be sponsored by national governments and Brussels. [Read also the FT article, Vestager urges stakebuilding to block Chinese takeovers.] Such an outcome will hit China, in particular, but this could also make life more difficult for European companies in China. For Europe, however, less EU would be bad news, as we need the "single market" more than ever before.

In the "new normal", productivity will take a significant beating, at least in the short run. This is the case as long as many European countries pursue a stupid strategy of wearing no face masks. Ironically, a Danish hospital has started a study, which will conclude whether it makes sense for you to wear face masks. This underscores again that Danish "experts" do not listen to experts in Asia, who have said many times that the primary idea of wearing face masks is to protect your surroundings, not least if the person wearing a face mask is infected without symptoms. The secondary reason is, of course, to protect yourself, although the effect is, admittedly, smaller. [Read also the Nature Medicine article, Respiratory virus shedding in exhaled breath and efficacy of face masks - Nature Medicine.]

Perversely, Scandinavian politicians talk about using face masks as "something not belonging to our culture". That said, the coronavirus "is also not part of our normal life". The "new normal" has changed, and therefore we have to change as well. The use of face masks could, therefore, become an important factor in the restart of Europe, although this will be a far cry from guaranteeing success. [Read also the LBC article, Senior WHO figure says wearing masks will become 'new reality'.]

The corporate sector will not wait for politicians to act. Instead, they will reinforce the use of technology, which will restore productivity gains, despite social distancing rules. Unfortunately, this will come too late to change Insightview's storyboard of significant economic headwinds in 2020 and 2021. This will also put a significant drag on the stock market after the latest "dead cat bounce" and plenty of fiscal and monetary easing long before "safety" has been implemented. [Click here to see where we are on the storyboard, which is, admittedly, attached significant uncertainties.] 
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‌8. April 2020 - VIDEO: China's restart - Households are increasingly acting as they did before the coronavirus outbreak
7. April 2020 - A necessary but risky restart of Europe's economy has begun: Denmark opts for a peculiar restart strategy or has the 'curve' simply turned too flat?
‌‌6. April 2020 - Why are national health authorities not listening to anecdotal evidence from Asia? Credibility is needed if a 'second wave' were to emerge
‌27. January 2020 - A short note on the Coronavirus outbreak: Beijing's efficient response to the outbreak poses, ironically, a significant risk to short-term growth. The next surprise might emerge outside China
‌23. January 2020 - A short note on the risk of a pandemic caused by a new strain of coronavirus in China - The difference from the Sars-outbreak in 2003
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