Kevin Allison is a Senior Editor for Signal. Based in Washington DC, he looks at how technology is reshaping global affairs. Kevin is also a Director in the Geo-Technology practice at Eurasia Group. Kevin holds degrees from the University of Missouri and from Harvard's Kennedy School of Government. He was also a Fulbright Scholar in Vienna, Austria and a 2015 Miller Journalism Fellow at the Santa Fe Institute. Prior to GZERO Media and Eurasia Group, Kevin was a journalist at Reuters and the Financial Times. He has lived in eight US states and has been an expat four times.
Over the past decade or so, the European Union has weathered the global financial crisis, a migrant crisis, and the rise of populist nationalism. Sure, it's taken its fair share of bumps and bruises along the way, but the idea of a largely borderless Europe united by common democratic values has survived more or less intact.
Then came the coronavirus. The global pandemic, in which Europe is now one of the two main epicentres, is a still-spiralling nightmare that could make those previous crises look benign by comparison. Here are a few different ways that COVID-19 is severely testing the 27-member bloc:
The economic crisis: Lockdowns intended to stop the virus' spread have brought economic activity to a screeching halt, and national governments are going to need to spend a lot of money to offset the impact. But some EU members can borrow those funds more easily than others. Huge debt loads and deficits in southern European countries like Italy and Spain, which have been hardest hit by the outbreak so far, make it costlier for them to borrow than more fiscally conservative Germany and other northern member states. In the aftermath of the global financial crisis, this imbalance nearly led the bloc's common currency, the Euro, to unravel.
Today, Europe has already unleashed some serious financial firepower to fight the current crisis, mainly through its central bank. But some of the other steps that may be necessary to prevent an economic collapse, like an EU bailout fund or crisis bonds, have reignited long-standing disagreements between North and South. A meeting of Eurozone finance ministers next Tuesday will be an important sign of whether Europe can pull together on the financial front.
The border crisis: In a bid to stop the spread of the virus, countries across the union have imposed border controls, some banning all entry to non-nationals. Although measures like this are technically allowed during emergencies like pandemics, they've caused huge traffic jams and disruptions to the flow of important goods. Relatedly, some member states have restricted shipping critical medical supplies with fellow EU-members, for fear that they will be needed at home.
When and under what circumstances these borders are relaxed again will be a very thorny political question, which raises concerns about whether one of the EU's great achievements — the vaunted Schengen area allowing unhindered, passport-free travel across the EU – will survive the crisis intact.
A crisis of democracy: Hungary's lurch towards "illiberal democracy" was the subject of serious hand wringing in Brussels well before the pandemic hit, but member states never took sufficient action to deter it. Now that the strongman Prime Minister Viktor Orban has used the crisis to grab nearly unlimited executive powers, Hungary has become an existential test of the EU's commitment to democracy and the rule of law. Other illiberal forces in Europe and beyond will be watching to see how Brussels and the other member states respond.
Bottom line: For now, the EU is holding together amid the biggest crisis in the continent's post-war history. But it's still early days. As the death toll and economic destruction mount, tougher tests of the EU's ability to function as a bloc, rather than a collection of states with competing interests, may be yet to come.
As governments around the world scramble to manage the coronavirus outbreak, the location data tracked by your mobile phone has become a highly sought-after commodity. Authorities in China, Israel, Russia, the US, and even the uber-privacy-conscious European Union have either secured access to mobile phone location data that they can use to identify people at risk of infection, or they are trying to get their hands on it.
But is this really a good idea? Here are the arguments for and against:
This is an emergency, track everyone: If there were ever a time to set concerns about privacy aside, this is it. Giving public health authorities access to everyone's location data gives them a better chance of tracking down people who have been in contact with confirmed cases – and helps ensure that those who are already sick stay in quarantine. Right now, governments need all the help they can get. Give them the data. Debates about the privacy implications can wait.
China is in this camp. So are other countries in Asia, like South Korea and Taiwan, that have had better success containing the epidemic – although it's still too early to say whether access to mobile phone location data was the deciding factor.
The risks to privacy are too great. Plus, there's no guarantee this will work: Anybody expecting governments and citizens to engage in level-headed debate about the potential trade-offs between public health and personal privacy during a raging crisis is probably smoking something. Governments will be looking to grab as much power as they can and history shows that they rarely give special powers back even after crises subside. Plus, all the data in the world isn't much use without a plan to put it to work. By the time governments figure it out, the pandemic may already be too widespread for digital tools like this to make a big difference.
Of course, politics is rarely so black and white. Europe, for example, is trying to carve out a middle way – it's asking mobile phone companies to share anonymized location data to help stem the spread of the virus in a way that still adheres to the bloc's tough data protection laws, while also issuing guidance to those member states who do want to pass emergency legislation that would allow for more detailed tracking.
Who's got it right? Is there another approach here that we are missing? Let us know your thoughts here.
23: At least 23 inmates were killed when a prison in Bogota, Colombia, erupted in violence over overcrowding and poor health conditions amid coronavirus fears.
33%: About a third of people living in the US are now under government orders to sharply restrict movement outside their homes, as states and local governments step up measures to contain the COVID-19 outbreak.
40%: Italian authorities, analyzing citizens' mobile phone data, said that about 40 percent of people in the hard-hit northern region of Lombardy were still moving around "too much." Perhaps they need to hear from these local mayors who are ready to send "flamethrowers" at them.
17: Rwanda reported its 17th case of coronavirus on Sunday as it became the first country in Africa to lockdown its population to fight the spread of the disease.
What's next for the Democrats? Joe Biden swept primaries in Florida, Illinois and Arizona on Tuesday night, racking up a wide margin of victory against Senator Bernie Sanders, his main opponent in the race for the Democratic nomination for president. Sanders would now need to win about 6 in 10 of all remaining delegates to gain the party's nod. That's improbable given Biden's strong support, particularly among older voters, who turned out despite coronavirus fears. Sanders will now be under intense pressure to exit the race, to allow the Democratic party's presumptive nominee to focus his time and resources on defeating Donald Trump at a time when traditional political rallies have become impossible and daily life for millions of Americans is being turned rapidly upside-down. We're watching to see what Bernie decides to do.
Russia-Saudi oil price war: Last week, Saudi Arabia and Russia got into an oil price war, after a longstanding agreement between the two world's largest exporters to keep a lid on crude output fell apart. Taken together with the coronavirus' economic effects, the resulting collapse in oil prices is hammering stock markets, where energy companies have a big presence. Despite early hopes that Moscow and Riyadh would smooth things over after some crude chest-puffing, it looks like they are both digging in. Far from being fazed by Saudi Arabia's decision to slash prices and boost production, Russia, which has about $150 billion in a rainy-day fund, has announced fresh measures to stabilize its economy. This could go on for a while, and the strong personalities of Russia's President Putin and Saudi Crown Prince Mohammad bin Salman may push this fight further than is good for either of their oil-dependent economies.
As governments around the world put their countries on lockdown to slow the spread of the coronavirus, there is a growing fear that the global economy and financial system could soon experience another kind of contagion. This week, as the scope of the outbreak became clearer, dire economic data from China and forecasts of a looming global recession started rolling in. Some experts are even starting to use the dreaded D-word, drawing comparisons with the 1929 financial and economic crash that led to the Great Depression.
Coronavirus, and the responses to it, pose two major risks to the economy and financial system. The first is the hit to companies' sales and profits, and workers' wages and jobs. The worse the outbreak, and the harsher the social and economic clampdown needed to manage it, the worse the economic hit will be. Airlines are already warning they may face bankruptcy by May without government assistance. Carmakers and other large manufacturers are closing assembly lines. Millions of restaurant and other service industry workers that are forced into lockdowns may soon be out of jobs and unable to pay bills, student loans, and make rent or mortgage payments. That's one reason stocks have been hammered this week, despite attempts by the US Fed and other central banks to stem the bleeding and shore up confidence.
The second big risk is harder to pin down – that's the risk of financial contagion. Companies going bankrupt and firing workers is bad enough, but it can become an even worse problem if it creates a domino effect where companies can no longer pay back loans, generating losses that could shake confidence in banks and the broader financial system.
Offsetting the coming economic shock would reduce the risk of wider financial contagion, but will require governments around the world to unleash huge resources: both fiscal stimulus to help workers and companies (Italy has already suspended mortgage payments and declared a holiday on household bills, while President Trump has promised support for the airline industry and is now considering sending cash directly to Americans) – and possibly other measures to ensure the smooth operation of the financial system that go beyond what central banks have done to date.
The catch: Decisions about whom to bail out and whom not to will be every bit as politically fraught as they were in 2008-09, when governments around the world were forced to intervene to prevent a much worse collapse – and during a US election campaign, to boot. This time, though, the political wrangling will also take place during an ongoing pandemic that is already stretching many governments around the world to their limits.
As anxiety about the coronavirus outbreak continues to mount, it's worth taking a step back and looking at how different countries have handled this global health emergency. Here's a quick roundup:
Chinabungled its early response to the new and deadly virus when it first emerged in the city of Wuhan in December. It's only just now starting to get things back under control after a severe crackdown that imposed huge economic and social costs on its 1.4 billion-strong population. Contrast China's aggressive and apparently effective measures with those of Iran, where an authoritarian government exacerbated its early mistakes by refusing to cordon off infected areas and – allegedly – covering up the true number of cases, resulting in a sharply climbing death toll.
Asian democracies with strong central governments and competent, technocratic bureaucracies have fared relatively well during the outbreak. To date, Taiwan has managed to keep the outbreak to a few dozen cases by steadily expanding tests, travel restrictions, and quarantines as the scope of the emergency became clearer in January and February. Singapore has managed a similarly effective response – a necessity given its proximity and economic ties with the Chinese mainland. South Korea was hit hard early on, but appears to have avoided the need for a China-style crackdown by rapidly expanding testing and mobilizing its strong pandemic preparedness resources. Other countries are now looking to replicate these efforts.
Italy was caught off-guard by how quickly the virus spread across its northern industrial heartland. A few weeks ago, it had just a handful of cases. Now it has the highest reported death toll of any country outside of China. This week, the government launched the most aggressive crackdown so far of any Western democracy, including sharp restrictions on travel and banning public gatherings. (Still, that falls short of the "wartime" conditions imposed in Wuhan, where residents were subject to door-to-door health checks and sick people were herded into quarantine camps). Meanwhile, cases in France, Spain, and Germany are growing fast. More aggressive measures to slow the spread of the disease in these countries may also become increasingly likely in coming days.
Then there's the US. Although the Trump administration imposed restrictions on travel to and from China and Iran by early February, the broader US response has been hampered by a lack of access to testing kits (which the administration initially refused to accept from the WHO) and muddled (to put it kindly) messaging from the White House. On Monday, a former national security official who used to head pandemic preparedness at the White House before his position was cut in 2018 warned that time was running out for authorities to get the outbreak under control.
Bottom line: Governments that missed their initial chance to contain the threat can still make up lost ground – but at a heavy cost. In both cases, competent authorities and solid public health strategies are only part of the solution. The other big variable is whether citizens themselves support governments and work with them – as seems to be the case in many of the Asian countries – or disregard and distrust them. With the virus bearing down on a widening swathe of Europe and the United States, we will soon find out a lot more about how well the Western democracies cope with this challenge.
As the new coronavirus, known as COVID-19, continues to spread, it's exposing some uncomfortable truths about our increasingly interconnected and globalized world.
Here are two:
Fragile supply chains: Decades of fine-tuning global manufacturing have given billions of people access to quality consumer goods at affordable prices. That's the upside of globalization. But the same trend has concentrated production of important items in certain countries, creating new vulnerabilities. For example, regions of China and broader Asia that produce most of the world's smartphones have been forced to idle or cut manufacturing because of the outbreak. The decline in Chinese factory activity has been so pronounced, it's actually visible from space. And US officials recently warned of drug shortages due to the shuttering of factories in China that make essential ingredients for some important medicines.
Fragile safety nets: Well before the new virus emerged in China, an annual report by the World Health Organization warned that the chances of a global outbreak were rising and that the world was "not prepared for a fast-moving, virulent respiratory pathogen pandemic." It cited the usual problems – a lack of funding for public health monitoring and prevention, bureaucratic hurdles, and weak medical infrastructure, especially in poor and middle-income countries. But it also warned of "a breakdown in public trust…exacerbated by misinformation that can hinder disease control communicated quickly and widely via social media." In the US, the safety net is further weakened by a lack of mandatory paid sick leave, which some people fear will compel sick people to show up at work, where they can infect colleagues and customers.
It's no big mystery why the world works this way: Money doesn't grow on trees. Taxpayers worry about their wallets, companies worry about the bottom line, and politicians worry about voters or special interests. In normal times, no one has much appetite to fund big investments in public health or other preventive measures. No one wants to build extra factories in far-flung places, "just in case." What's more, reorienting our economic and political systems to be more resilient is a massive and long-term undertaking. As crises recede, it becomes hard to convince people or governments to make sacrifices for the long-run good. In a sense, the efficiency of our 21st century economies in normal times comes at the cost of resiliency in extreme circumstances.
Still, something's got to give. Coronavirus won't be the last global pandemic. And it's part of a bigger trend of looming cross-border challenges like climate change and cyberattacks that will also stress systems designed for simpler times, as severe weather and threats to critical infrastructure grow more frequent. Finding the political will and the money to build stronger, more resilient systems won't be easy, but what will it take to convince a critical mass of voters and leaders that it's essential?
The risk of a major technology blow-up between the US and Europe is growing. A few weeks ago, we wrote about how the European Union wanted to boost its "technological sovereignty" by tightening its oversight of Big Tech and promoting its own alternatives to big US and Chinese firms in areas like cloud computing and artificial intelligence.
Last week, European Commission President Ursula von der Leyen and her top digital officials unveiled their first concrete proposals for regulating AI, and pledged to invest billions of euros to turn Europe into a data superpower.
It's an ambitious plan and Washington is going to hate it. Here's a quick summary of the emerging fault lines that could turn old Cold War allies into digital adversaries:
Data: Brussels wants to cut big US tech companies down to size and promote European competitors, and data (the lifeblood of today's tech firms) is the focus. The EU wants to invest 6 billion euros to create "European data spaces" that can help local companies compete against Silicon Valley and Chinese tech giants that have access to mountains of data. The EU might also force some companies that have a lot of data to share more of it with competitors. What Brussels views as clever industrial policy, Washington is likely to view as protectionism.
Artificial intelligence: The EU also outlined plans to regulate artificial intelligence, focusing on uses of AI that could lead to serious harm if something goes wrong (think driverless cars going haywire, or an HR app that turns out to be racist). It wants to require companies working on so-called "high-risk" AI to submit their algorithms to mandatory tests and checks. But defining what is "high-risk" and deciding what hoops companies will have to jump through will be contentious. The US has already warned Europe against adopting "heavy handed innovation-killing" AI regulation.
Other attempts to rein in Big Tech: The EU is also pushing for new rules for internet companies to remove violent or other harmful content from their websites. And it's investigating the possibility of tightening competition rules to better deal with big internet platforms.
Of course, none of this is happening in a vacuum. The potential for a big transatlantic digital spat is growing as both sides are grappling with the implications of digital disruption for jobs and democracy and trying to come to grips with China's rise as a technology power. The US and Europe would be stronger confronting these challenges together. But at a time when the transatlantic relationship is already strained by trade spats and doubts about America's commitment to NATO, technology looks like one more wedge driving the two sides apart.