BRUSSELS (Reuters) - The European Union has excluded the United States from its initial “safe list” of countries from which the bloc will allow non-essential travel from Wednesday. The 27-member bloc gave approval on Tuesday to leisure or business travel from 14 countries beyond its borders, the Council of the EU, which represents EU governments, said in a statement. The countries are Algeria, Australia, Canada, Georgia, Japan, Montenegro, Morocco, New Zealand, Rwanda, Serbia, South Korea, Thailand, Tunisia and Uruguay. China has also been provisionally approved, although travel would only open up if Chinese authorities also allowed in EU visitors. Reciprocity is a condition of being on the list.
Russia, Brazil and Turkey, along with the United States, are among countries whose containment of the virus is considered worse than the EU average, and so will have to wait at least two weeks for approval. The bloc will carry out fortnightly reviews.
The move is aimed at supporting the EU travel industry and tourist destinations, particularly countries in southern Europe hardest hit by the COVID-19 pandemic.
The list needed a “qualified majority” of EU countries to be passed, meaning 15 EU countries representing 65% of the population.
It acts as a recommendation to EU members, meaning they could potentially set restrictions on those entering from the 14 nations and will almost certainly not allow access to travellers from other countries.
Within hours of the EU announcement, Italy, which has one of the highest COVID death tolls in the world, said it would opt out and keep quarantine restrictions in place for all nations that were not part of the free-travel Schengen area.
“The global situation remains very complex. We must prevent the sacrifices made by the Italians in recent months have been in vain,” Italy Health Minister Roberto Speranza said.
The EU’s efforts to reopen internal borders, particularly within the 26-nation Schengen area which normally has no frontier checks, have been patchy as various countries have restricted access for certain visitors.
Reporting by Philip Blenkinsop; Additional reporting by Angelo Amante in Rome; Editing by Philippa Fletcher and Jan Harvey
Image copyrightIAN MCILGORM/THE MAIL ON SUNDAYImage captionBoris Johnson outlined plans to help the economy "bounce back" in an interview with the Mail on Sunday
The prime minister has pledged his government will "not go back to the austerity of 10 years ago" ahead of a speech on Tuesday.
In an interview with the Mail on Sunday, Boris Johnson set out his plans for a post-lockdown economic recovery.
They will include a new taskforce which will look at speeding up the building of hospitals, schools and roads.
But Labour has accused the government of "pulling the rug from under" many parts of the economy.
The economy shrank by 20.4% in April - the largest monthly fall on record.
Amid continued criticism of the way his government has handled the pandemic, the PM told the paper that ministers will be "doubling down on levelling up" - spending on infrastructure in order to "build our way back to health".
"If Covid was a lightning flash, we're about to have the thunderclap of the economic consequences," he said.
"We're going to make sure that we have plans to help people whose old jobs are not there any more to get the opportunities they need."
Image copyrightIAN MCILGORM/THE MAIL ON SUNDAYImage captionBoris Johnson did press-ups as he spoke about his own - and the economy's - recovery from coronavirus
In the Mail on Sunday article, the PM said the country would "bounce back" from the pandemic. He reinforced his message by doing press-ups to show he is "fit as a butcher's dog", following intensive care treatment for the virus in April.
Meanwhile the UK's coronavirus death toll rose by 36 on Sunday to 43,550.
An Infrastructure Delivery Taskforce, led by Chancellor Rishi Sunak, aims to help to remove "bottlenecks" faced by major projects.
No 10 hopes a building boom will boost jobs and improve connectivity for cities, towns and villages.
'Thatcher levels of unemployment'
Paul Johnson, director of the Institute for Fiscal Studies, said "really good" infrastructure projects could give some immediate "payback" by increasing the number of people in work and the "amount of demand" in the economy in the short term.
But he told the BBC that the "risks" could include spending money in the "wrong way" and doing things too quickly - which could result in "low-quality infrastructure projects which don't pay for themselves".
He said over the next year, a lack of jobs will be the "most important" challenge, and called on the government to consider supporting people through training and job subsidy schemes.
He warned there was a danger the UK could return to "levels of unemployment we haven't actually seen for decades".
Analysis commissioned by the Labour Party suggests that unemployment levels could soar to levels not seen since the 1980s - tipping past the peak of 3.3 million seen in 1984 under Margaret Thatcher, the Observer reports.
Shadow business secretary Ed Miliband warned of such "Thatcher levels of unemployment" if sectors, such as hospitality, cannot fully reopen.
Image captionIn 1981, demonstrators marched from Liverpool to London in protest of unemployment rates under Margaret Thatcher's government
Mr Miliband told the BBC's Andrew Marr Show there needed to be a bridge between the end of the furlough scheme and a job creation programme.
He also criticised the government for not announcing a summer Budget this year when the UK is facing potentially the worst recession in 300 years.
Addressing reports that the PM wants to help areas previously affected by austerity, Mr Miliband replied: "There's a grand canyon between his rhetoric and the reality."
Boris Johnson has faced serious criticism for the way his government has handled the coronavirus outbreak - and questions are likely to continue as ministers look to ease the lockdown in England.
But evidently keen to try and get his wider political agenda back on track, the prime minister is returning to the phrase that was so frequently used in last year's general election campaign - "levelling up".
It means spending on infrastructure - schools, transport and the NHS.
So, how will these big projects be paid for?
With billions already spent to support the economy during this pandemic, borrowing, big time, seems on the cards.
The number of workers on UK payrolls dived by more than 600,000 between March and May, official figures suggest, with economists warning the full effect on employment will not be felt until wage support schemes end.
Almost nine million workers who are unable to do their job because of the pandemic have had their wages paid by the government under its furlough scheme.
In a major easing of England's lockdown to help to reopen the economy, the PM announced on Tuesday that pubs, restaurants, hotels and many other businesses would be allowed to welcome back customers from 4 July.
Image copyrightAFPImage captionPubs in England have so far only been allowed to reopen for takeaways
But the announcement was criticised by some businesses - such as indoor gyms - that were not included on the list.
And Sir Jeremy Farrar, a member of the government's Scientific Advisory Group for Emergencies (Sage), warned there could be a "very nasty rebound" of coronavirus in the winter if the country does not use the next few months "sensibly".
First Minister of Wales Mark Drakeford criticised the government's messaging around the easing of lockdown restrictions in England. He accused the PM of suggesting that coronavirus was "all over" and normal life can resume.
The Federal Reserve has warned that America's biggest banks could be hit by losses of up to $700bn (£563.6bn) in a severe downturn due to the pandemic.
The US central bank said it would require firms to keep money on hand to guard against the risks.
The Fed said it was barring share repurchases and limiting dividend payments until at least October.
Although banks have been a source of "strength" so far, officials warned of a "high degree of uncertainty".
"Today's actions...to preserve the high levels of capital in the US banking system are an acknowledgment of both the strength of our largest banks, as well as the high degree of uncertainty we face," said Randal Quarles, the Fed's vice chair for supervision of the Federal Reserve's Board of Governors.
The announcement accompanied the results of the Federal Reserve's latest annual stress tests, which were instituted after the financial crisis. The stress tests are designed to suss out potential weakness in the financial system.
This year, the Fed added an additional analysis based on the current downturn, which was set off when authorities instituted lockdowns to try to slow the spread of coronavirus.
Using a scenario where the pandemic severely impacted the US economy, the Fed looked at how the country's 33 biggest banks would fare if unemployment rates were to climb to 19.5%.
Image copyrightAFPImage captionFederal Reserve Governor Lael Brainard thinks the Fed has not gone far enough in protecting US banks
That is higher than the record 14.7% unemployment rate the US reported in April - but about the level the Labor Department said was likely if it adjusted for discrepancies in survey data.
The Fed did not say how individual banks fared under the virus scenario, but warned that aggregate losses could reach $700bn.
"The Board is taking action...to require the largest banks to adopt prudent measures to preserve capital in coming months," said Mr Quarles.
Not far enough?
Federal Reserve Governor Lael Brainard thinks that the Fed should have announced further measures given the potential losses at stake, by barring dividend payments altogether, as well as other distributions of capital.
The current shock is already more severe than anything the Fed had anticipated in its stress tests, despite past criticism that the central bank was being unrealistically gloomy, she noted.
"It is clear that recent changes in financial markets and the macroeconomic outlook could have a material impact on banks' risk profiles and financial conditions," she said.
"This action creates a significant risk that banks will need to raise capital or curtail credit at a challenging time."
NEW YORK (Reuters) - As the number of new coronavirus cases surged in many areas of the United States, New York, New Jersey and Connecticut - once at the epicenter of the outbreak - will require visitors from states with high infection rates to quarantine on arrival.
The announcement on Wednesday came a day after the country recorded the second-largest increase in novel coronavirus cases since the health crisis began in early March. There were nearly 36,000 new infections nationwide on Tuesday, according to a Reuters tally.
States subject to the 14-day quarantine are Alabama, Arkansas, Arizona, Florida, North Carolina, South Carolina, Texas, Washington and Utah, New York Governor Andrew Cuomo said at a briefing.
“This is a smart thing to do,” New Jersey Governor Phil Murphy said via video at a joint news conference in New York City. “We have taken our people, the three of us from these three states, through hell and back, and the last thing we need to do right now is subject our folks to another round.”
While the United States appeared to have curbed the outbreak in May, leading many states to lift restrictions on social and economic activity, the virus is moving into rural areas and other places that it had not initially penetrated deeply.
The virus is also renewing its surge in states that opened up early to ease the devastating effect of the restrictions on local economies.
The New York-New Jersey-Connecticut tri-state area was able to lower its infection rate after locking down much of its economy and moving slowly to reopen.
With little federal guidance and decisions largely left to local officials and businesses, however, the pace of reopening in the rest of the country continues to look like a patchwork.
Florida, one of the first states to reopen, on Wednesday experienced a record increase of more than 5,500 new cases. Oklahoma, which never ordered a statewide lockdown, on Wednesday posted record new cases for the sixth time this month.
On Tuesday, Arizona, California, Mississippi and Nevada had record rises. Texas set an all-time high on Monday.
The surge in cases nationwide on Tuesday was the highest since a record of 36,426 new infections on April 24.
QUARANTINE
The new quarantine order also applies to tri-state residents returning from the targeted states, to be determined by the number of new cases per 100,000 people or the percent testing positive, Cuomo said.
Visitors found violating the order, which takes effect from midnight, could face fines of $1,000 for a first violation and $5,000 for repeat offenses, he said.
Such quarantines are not unprecedented. Hawaii requires visitors from the U.S. mainland to self-quarantine for two weeks. Florida and Texas at one point required people coming in from New York area airports to quarantine for two weeks.
The U.S. Department of Justice has filed its support for a lawsuit challenging Hawaii’s quarantine, saying visitors are being denied rights granted to most island residents.
While some of the increased numbers of cases can be attributed to more testing, the numbers do not correlate.
The average number of tests has risen 7.6% over the last seven days, according to data from The COVID Tracking Project, while the average number of new cases rose 30%.
The percentage of positive tests is also rising.
At least four states are averaging double-digit rates of positive tests for the virus, such as Arizona at 20%. By contrast, New York has been reporting positive test rates of around 1%.
The European Union hopes to reopen borders from July but will review individual nations’ COVID-19 situation fortnightly, according to diplomats and a document laying out criteria that could keep Americans and Russians out.
(Open tmsnrt.rs/2WTOZDR in an external browser for a Reuters interactive)
Reporting by Jonathan Allen and Peter Szekely in New York; Additional reporting by Susan Heavey in Washington; Writing by Sonya Hepinstall; Editing by Lisa Shumaker
Former chancellor Sajid Javid has warned against a return to austerity as the UK economy struggles with the effects of the coronavirus crisis.
In a report by the Centre for Policy Studies, he also called for low taxes on business to aid the UK's recovery.
The conservative think tank, which was co-founded by Margaret Thatcher, said this should be based on "a dynamic private sector and low taxes".
Prime Minister Boris Johnson has said there will be no return to "austerity".
However, Labour has said the government should have offered more generous support during the crisis.
The report by the Centre for Policy Studies said that a quick economic bounce back from the coronavirus crisis is is unlikely.
But it said coronavirus emergency spending measures should be stopped, if possible, by April 2021.
It said that polls suggest the UK is "not ready" to return to austerity measures introduced by former chancellor George Osborne, "necessary though they were".
Instead, the report calls for tax to shift away from profits and incomes and towards reformed property tax and tightening tax reliefs "which unduly favour the wealthy".
National insurance should be given a "significant temporary" reduction to make it cheaper for employers to take on staff.
'Optimistic' hopes
Mr Javid, who resigned from the Treasury in February, said "early hopes of a V-shaped recovery" had "proved optimistic".
He predicted that "some long-term damage to the economy" had become "unavoidable", with as many as 2.5 million people out of work due to the Covid-19 lockdown.
But to speed up the rate of people re-entering employment, Mr Javid argued in the After The Virus report, published on Tuesday, that ministers must make it easier for businesses to hire workers.
"If we want to support and stimulate employment, then axiomatically the best option is to cut the payroll tax - employer's National Insurance," Mr Javid said.
"Tax employment less, and all other things being equal you will end up with more of it."
Other recommendations made in the report include temporarily cutting VAT and bringing forward "shovel ready" infrastructure projects, with Mr Javid arguing that the "only way out of this crisis is growth".
He joins fellow former chancellor Alistair Darling in calling for an emergency VAT cut to boost consumer spending, a move undertaken by the Labour peer after the 2008 financial crisis.
Mr Javid said: "If we want to secure the strongest possible recovery, it's essential that no stone is left unturned."
The Labour Party, in a report in March on the economic effects of coronavirus, criticised the government for acting too slowly and said it should underwrite a bigger proportion of wages for those who lose their jobs.
The deepening cold war between the US and China will be a bigger worry for the world than coronavirus, according to influential economist Jeffrey Sachs.
The world is headed for a period of "massive disruption without any leadership" in the aftermath of the pandemic, he told the BBC.
The divide between the two superpowers will exacerbate this, he warned.
The Columbia University professor blamed the US administration for the hostilities between the two countries.
"The US is a force for division, not for cooperation," he told me in an interview with BBC's Asia Business Report.
"It's a force for trying to create a new cold war with China. If this takes hold - if that kind of approach is used, then we won't go back to normal, indeed we will spiral into greater controversy and greater danger in fact."
Tensions grow
Mr Sachs's comments come as tensions between the US and China are continuing to grow on several fronts - not just trade.
This week President Trump signed legislation authorising US sanctions against Chinese officials responsible for the repression of Muslims in Xinjiang province.
And in an interview with the Wall Street Journal President Trump said he believed China might have encouraged the international spread of the virus as a way to destabilise competing economies.
Image copyrightREUTERSImage captionThe US has banned Huawei from using US chip technologies but is allowing American firms to work with the firm on 5G standards
The Trump administration has also targeted Chinese companies, in particular Chinese telecoms giant Huawei, which Washington says is being used to help Beijing spy on its customers. China denies this, as does Huawei.
Professor Sachs agrees that targeting Huawei was never simply a security concern.
"The US lost its step on 5G, which is a critical part of the new digital economy. And Huawei was taking a greater and greater share of global markets.
"The US concocted in my opinion, the view that Huawei is a global threat. And has leaned very hard on US allies... to try to break the relations with Huawei," he said.
Tensions flare
The US is not the only country that China has been locked in conflict with.
This week tensions have flared at the India-China border, with at least 20 Indian soldiers killed in some of the worst violence the two sides have seen in almost fifty years.
Meanwhile, China has been actively funding economic projects in Pakistan, Myanmar, Sri Lanka and Nepal - India's closest neighbours - which have rankled fears in Delhi that Beijing is trying to cut off its influence in the region.
Mr Sachs admitted that China's rise is of concern to its neighbours in Asia - especially if it doesn't do more to assuage fears that it is trying to grow in a peaceful and cooperative way.
"Do I believe that China could do more to ease fears which are very real? I do," he told me.
"The big choice frankly is in China's hands. If China is cooperative, if it engages in diplomacy, regional cooperation and multilateralism, in other words - soft power - because it is a very powerful country…. then I think that Asia has an incredibly bright future."
