Macro: Sandcastle economics
Invest wisely in Q3 2024: Discover SaxoStrats' insights on navigating a stable yet fragile global economy.
Head of Macroeconomic Research
Summary: France is ranked last in Bloomberg's worldwide Covid vaccine tracker with only 516 people vaccinated since the campaign vaccination started on 27 December, 2020. Confronted with harsh criticism over its strategy, the French government has recently announced its intent to accelerate the process, but it is unlikely that it will be able to reach its target of around 23-25 million people vaccinated in June - which would imply an average of 140,000 people vaccinated on a daily basis seven days a week. With France already lagging behind in distributing the vaccine and prospect of supply hurdles and logistics failures, the risk is increasing that the country will have no other choice but to enact tougher restrictions for longer that will weight on the recovery.
What is wrong with France’s vaccine strategy?
France vs Israel: Two opposing strategies
| France | Israel |
Total number of vaccination doses administered | 516 | 1.22 MILLION |
Procurement | EU VACCINE PURCHASE LATE PURCHASE (AUGUST)
| NATIONAL EARLY PURCHASE (JUNE, MODERNA) |
Organizational structure and decision-making | CENTRALIZED Defense Council (President, Prime Minister and Minister of Health) | DECENTRALIZED Koupot Holim (health organization of workers, composed of four different schemes) |
The role of the leader | NOT VACCINATED YET | SETTING EXAMPLE AS FIRST ISRAELI GETTING VACCINATION |
Distribution | GP MODEL (mostly) Digital experience close to zero | VACCINODROME MODEL Digital patient experience: appointment confirmation SMS message, online medical follow-up after vaccination etc. |
What should be done ?
Strangely, France’s vaccination strategy has mostly consisted in pandering to anti-vax. There is undeniably a strong distrust in vaccination in France, which reflects a broader problem of confidence in the health system after a series of scandals that have left a lasting stain on its reputation over the past thirty years. A study from IPSOS released in October showed the extend of the problem: only 54% of the population is willing to get vaccinated against Covid versus 87% in India and 67% in Germany. To get around this problem, the government opted for a slow protocol that will be costly economically and that is unlikely to increase public confidence in the vaccine. In fact, it is even the opposite that is currently happening. The slow rollout of the vaccine reinforces the idea, among anti-vax, vaccine-skeptics and conspirators, that there is something to hide or at least that the authorities are afraid of potential unexpected side-effects of the virus. Economically, this strategy, that is unique among developed countries, will be very costly. Assuming that France manages to reach its June vaccination target, which is not enough to achieve herd immunity, its means that some forms of restrictions will probably prevail at least until September/October this year. This is the optimistic scenario. The pessimistic scenario is that France may need to resort to tougher lockdown or to extend overnight curfew if the new mutations recently discovered in the United Kingdom and in South Africa spread further in the country, reviving the specter of a new recession. The sad reality is that there is no time to waste. The longer we wait for herd immunity (which might be around 70%-75% of the total population with the new mutations according to recent studies versus prior 60%), the higher the probability for a non-segmented RNA virus evolving and rendering the vaccine ineffective. France has already lost precious weeks in the covid battle and it will certainly takes time to deal with the supply hurdles that are emerging. But by speeding up the vaccination process, via the adoption of the “vaccinodrome” model (like in Israel), and opting for a more coercive strategy, which could consists in linking the access to social benefits/tax loopholes to the vaccination (following the example of Latin America for child vaccination), France could certainly escape faster from the pandemic mess and at lower economic cost than with the current inadequate strategy.
Disclaimer
The Saxo Bank Group entities each provide execution-only service and access to Analysis permitting a person to view and/or use content available on or via the website. This content is not intended to and does not change or expand on the execution-only service. Such access and use are at all times subject to (i) The Terms of Use; (ii) Full Disclaimer; (iii) The Risk Warning; (iv) the Rules of Engagement and (v) Notices applying to Saxo News & Research and/or its content in addition (where relevant) to the terms governing the use of hyperlinks on the website of a member of the Saxo Bank Group by which access to Saxo News & Research is gained. Such content is therefore provided as no more than information. In particular no advice is intended to be provided or to be relied on as provided nor endorsed by any Saxo Bank Group entity; nor is it to be construed as solicitation or an incentive provided to subscribe for or sell or purchase any financial instrument. All trading or investments you make must be pursuant to your own unprompted and informed self-directed decision. As such no Saxo Bank Group entity will have or be liable for any losses that you may sustain as a result of any investment decision made in reliance on information which is available on Saxo News & Research or as a result of the use of the Saxo News & Research. Orders given and trades effected are deemed intended to be given or effected for the account of the customer with the Saxo Bank Group entity operating in the jurisdiction in which the customer resides and/or with whom the customer opened and maintains his/her trading account. Saxo News & Research does not contain (and should not be construed as containing) financial, investment, tax or trading advice or advice of any sort offered, recommended or endorsed by Saxo Bank Group and should not be construed as a record of our trading prices, or as an offer, incentive or solicitation for the subscription, sale or purchase in any financial instrument. To the extent that any content is construed as investment research, you must note and accept that the content was not intended to and has not been prepared in accordance with legal requirements designed to promote the independence of investment research and as such, would be considered as a marketing communication under relevant laws.
Please read our disclaimers:
- Notification on Non-Independent Investment Research (https://www.home.saxo/legal/niird/notification)
- Full disclaimer (https://www.home.saxo/en-gb/legal/disclaimer/saxo-disclaimer)