Economy

Vaccine news vindicates State’s decision to spend big

Cantillon: State support measures during Level 5 restrictions cost up to €250m a week

A patient being given a dose of a coronavirus vaccine produced by BioNTech. Photograph: BioNTech SE 2020/PA Wire

Tue Nov 10 2020 - 05:05

The news from Pfizer that the coronavirus vaccine it is developing with BioNTech has been more than 90 per cent effective in late stage trials lit a fire yesterday under stock markets, which were already buoyed by Joe Biden's US election victory.

Market analysts described it as a potential “game changer” that dangles the possibility that the pandemic could be tamed sometime next year. The results could lead to emergency use authorisation in the US for the two-shot vaccine in coming months, with the potential for European approval soon after.

Pfizer on Monday trumpeted its vaccine, which was developed at high speed using new technology, as the most important medical advancement in 100 years. However, despite more than 1 million deaths worldwide so far, it is probably fair to say that the vaccine’s impact will be mostly measured in the economic sphere.

There are still many hurdles to scale before the results are validated, regulatory authorisation is approved and manufacturing is sufficiently scaled up to make enough doses to stem the tide in the worst-hit regions. The logistical problems also won’t end there. For example, the vaccine needs to be stored at minus 80 degrees Celsius, which presents obvious challenges with distribution.

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But the news will provide a much-needed fillip to European governments, including Ireland’s, that have spent heavily to prop up their economies during the pandemic. The support measures deployed by the State during the ongoing Level 5 restrictions, for example, are costing up to €250 million per week.

Public spending of that quantum is clearly unsustainable in the medium-term. If, as the vaccine news suggests, an end date for the requirement for such support may now be in sight, then the Government’s decision to spend big will have been vindicated. Its resolve also will be bolstered to deploy whatever resources are necessary to save businesses until the vaccine is ready.

That will be a welcome comfort to retailers and hospitality businesses, in particular, whose case for taxpayer support would otherwise have gotten weaker the longer the pandemic persisted.

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