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May 04, 2020

What is and isn't true about the Wuhan lab conspiracies

We would normally treat a non-EU intelligence report on a Chinese research lab as outside our reservation. But this one matters for Europeans because the issue has the potential to worsen geopolitical tensions, impair the economic recovery, and lead to divisions among EU member states.

The Australian Sunday Telegraph has a long story on the so-called Five Eyes report, drawn up by five intelligence agencies from the US, UK, Canada, Australia and New Zealand. It cites evidence that the Covid-19 virus might have originated from a Wuhan lab, but dismisses the theory that the virus is man-made or genetically modified. Last week's statement from Richard Grenell, the acting US national intelligence coordinator, was based on that report. So was Donald Trump's comment that he had seen evidence that the virus came from the lab. Mike Pompeo yesterday doubled down on that point.

Interestingly, the Australian government comes to a different assessment. Its base-case scenario is that the virus originated from the market, while it attaches a distinct, but low, probability to the hypothesis that it might have come from the lab. The report provides corroborating evidence that the lab might have played a role in the dissemination, but falls short of providing hard proof.

Our interest in this specific aspect of the story is the potential it has to drive a wedge in EU-US relations, and among EU member states themselves. It does not help that EU intelligence agencies were not involved in a report of five anglophone intelligence agencies. We expect Italy in particular to be inclined to allow China strategic access to the EU's single market from locations in north-eastern Italy, one of the hotspots of Chinese investments in Europe. We see parallels to the situation after the 9/11 terror attacks, when EU member states were divided in their response to George W. Bush's war against Iraq.

The main focus of the 15-page report is on the less controversial aspect of the Chinese's government's obfuscation and lack of transparency. At the very least, it mounts a strong case of negligence. This includes what the report calls a deadly denial of human-to-human transmissions, along with China's refusal to provide samples to scientists from abroad.

The report quotes the head of the Wuhan laboratory, Dr Shi Zhengli. One of the estimated 50 virus samples in Dr Shi's lab had a 96% genetic match with Covid-19. Dr Shi said she herself had sleepless nights when she heard about the outbreak of a viral pneumonia in Wuhan.

The intelligence report cites only one scientific paper according to which the virus may have been created in the lab. Researchers from South China University of Technology in Guangzhou concluded that the virus had probably originated from the lab, and recommended that safety levels would need to be reinforced in high-risk biohazard laboratories. It is not surprising to hear that the paper was subsequently withdrawn, with the author himself claiming that the evidence was not based on facts. The fact is that the paper's finding have been neither refuted nor confirmed.

The stock markets reacted strongly to Trump's hostile tone on China. We, too, see that this issue might have a direct impact on post-Covid-19 economic growth. The whole EU strategy, or rather lack of it, is premised on the hope of a V-shaped recovery. As geopolitical tensions mount, this is becoming less likely. Western companies will seek to diversify their global supply chains away from China. Especially the naively optimistic forecasts in Germany are dependent on a perfect reversal to the status quo ante in Chinese-EU relations, a prospect we find hard to square with the emerging facts. 

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May 04, 2020

Towards a new government in Ireland

Ireland is one step closer to a government. The Greens’ parliamentary party voted yesterday by a two-thirds majority to enter formal coalition talks with Fianna Fáil and Fine Gael. This is not a done deal yet. The leaders have to work out a coalition programme. That will be put to a party membership vote, which could still go wrong if the tide turns against the party's leadership. There is a gap to be bridged between what the Greens want and what the other two parties are ready to concede. This goes beyond climate-change issues. 

Still, these are unprecedented times. A coalition between Fianna Fáil and Fine Gael would not have been considered possible last year, and now the Greens are coming to crown this new political adventure. The three party leaders made their bets and put their political futures behind it. They have an interest in bringing this to a conclusion despite suspicion at the base of their parties. Whether or not this will be a successful government is another matter, writes the Irish Times, but a new government is now more likely than new elections. 

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