A new coronavirus variant may derail pandemic-control efforts

More transmissible than other strains, it may require stricter lockdowns

VIRUSES ARE the fashionistas of the microbe world. They change their appearance constantly but such changes are usually small, transient and of little practical significance for how they spread or how deadly they are. 

SARS-CoV-2, the covid-19 virus, has so far been no exception. But a new variant of it that is spreading rapidly in Britain appears to buck the trend. According to researchers advising the British government, it may be 40-70% more transmissible than the other variants in circulation. 

Britain has alerted the World Health Organisation about this variant, provisionally called VUI 202012/01 (short for the first “variant under investigation” in December 2020).

The authorities are rushing to limit its spread. Swathes of Britain where VUI 202012/01 is most prevalent, including London, went into lockdown in the early hours of December 20th. By the evening, Belgium, France, Germany, the Netherlands and Italy had banned flights from Britain. 

Other countries are sure to follow suit. The port of Dover was closed to outbound lorries and ferry passengers after France closed its border for 48 hours on the evening of the 20th.

VUI 202012/01 was first found in Britain in September. By mid-December, genomic sequencing had detected more than 1,500 infections involving it in the country (about 10% of those in Britain who test positive have their viruses so sequenced). A few cases of the variant have been reported by Belgium, Denmark and the Netherlands. 

But most European countries sequence a much smaller proportion of their samples than Britain does, so more widespread circulation of this variant outside Britain cannot be ruled out, says Pasi Penttinen of the European Centre for Disease Prevention and Control.

It is not yet clear whether VUI 202012/01 causes symptoms that are different or of different severity from those induced by its cousins. Studies to answer that question are under way in Britain. 

Researchers are also looking for additional evidence that this variant is more contagious—and what biological mechanisms may be at play. 

Two factors suggest greater contagiousness. 

First, it has spread much faster than other variants in parts of Britain where infections have been rising unusually rapidly. It accounted for 62% of new infections in London in the week ending December 9th, up from 28% in early November. 

The second red flag is the particular combination of mutations and other tweaks in its genome—23, which experts say is an unusually large number given how the virus has changed so far. More worrying, laboratory and animal studies have found that several of these changes make the virus better at infecting cells, at making more copies of itself once it enters those cells, and at evading antibodies made by the immune system during infection with other variants.

Several of the changes in VUI 202012/01 are in “spike”, a protein found on its surface, and which it uses to enter cells. Spike protein is the target of the first covid-19 vaccines. But these vaccines stimulate immune reaction to parts of the protein not affected by those mutations. And if further mutations should change that state of affairs, then some of the vaccines are of a type that is much easier to adjust to get around the problem than are conventional medicines.


The big worry for now is whether VUI 202012/01 is, indeed, a lot more contagious than other variants. If the current estimates from Britain’s preliminary data are confirmed, it can increase by 0.4 or more the virus’s reproductive number (known as R), which is the average number of people who catch the virus from an infected individual. 

This will mean that far stricter measures would be needed to slow down the spread of covid-19 wherever this variant lands. The urgent attempts to contain its spread are therefore warranted. 

How much it can be slowed down until vaccines start to make a difference is an open question.

A New Covid-19 Strain Is Shutting Down Europe. What You Need to Know.

By Jack Denton



The presence of a more infectious strain of the virus that causes Covid-19 is shutting down Europe, causing a wave of lockdowns and travel restrictions, prompting a logistics crisis in the U.K., and hammering stock markets across the continent.

The U.K. government said on Saturday that a coronavirus strain that is 70% more infectious is spreading in the U.K., which reported its highest-ever daily rise in infections on Sunday with 35,928 cases.

Experts believe that this mutated version of coronavirus, first detected in September, isn’t more deadly than the typical variety that causes Covid-19, and say there is no proof that it should impact the efficacy of vaccines.

The variant found in the U.K., which is quickly replacing other versions of the virus, is believed to be linked to cases discovered in Italy, Denmark, the Netherlands, and Australia.

U.K. Prime Minister Boris Johnson announced the threat of the more infectious version of the virus on Saturday, when he canceled plans to ease social restrictions over the Christmas period.

The move meant around 18 million people in southeast England were plunged into a new lockdown, and thousands fled London in the hours before the restrictions took effect.

Matt Hancock, the U.K. health secretary, told the media on Sunday that everyone living in the new “tier 4” areas of England—under lockdown—need to behave as if they have the virus.

European countries followed suit in cracking down on the spread of the mutant virus, with new bans on entry from the U.K. now in place, and the European Union set to announce a coordinated response on Monday after a meeting of its crisis-response committee.




More than 30 countries—including India, Germany, Canada, Turkey, and Saudi Arabia—and the special administrative region of Hong Kong have now banned all arrivals from the U.K.

After France closed its border for 48 hours from midnight on Sunday, the U.K. faces a logistics crisis in the busy run-up to Christmas, with the key trade route between the country and continental Europe cut off.

France halted all travel from the U.K., including inbound trade between the key ports of Calais and Dover and through the Eurotunnel. The Strait of Dover between England and France is one of the busiest maritime routes in the world, with up to 10,000 trucks shuttled across this passage of the English Channel each day.

Shortages of critical goods imported from Europe, like food and medicine, could happen if French drivers stop traveling to the U.K. because they are unable to return.

There are now thousands of trucks on each side of the English Channel, as Paris is calling for a strict new testing regime before opening the blockade on Wednesday morning.

A statement shared on Twitter by the French embassy in the U.K., attributed to the French minister of transport, said that “in the next few hours, at European level, we’re going to establish a solid health protocol to ensure that movement from the U.K. can resume.”

Sainsbury’ s, the third-largest grocery store in the U.K., warned that there could be “gaps” on supermarket shelves if the blockade goes on longer than 48 hours.

“If nothing changes, we will start to see gaps over the coming days on lettuce, some salad leaves, cauliflowers, broccoli and citrus fruit—all of which are imported from the Continent at this time of year,” the company said.

Stock markets across Europe have been hammered with pessimism over this latest Covid-10 development, with the pan-European Stoxx 600 and London’s FTSE 100 both down near 3%. France’s CAC 40 and Germany’s DAX are both down more than 3%.

Dow futures were pointing down near 500 points for a poor open, after closing at 30,179 on Friday.

‘Rough Times’ Ahead: What You Should Know as the World Waits for a Vaccine

As promising as the Covid vaccines seem to be, it’s not a simple solution

By ELIZABETH YUKO

A pedestrian wearing a mask walks past a sign advising that COVID-19 vaccines are not available yet at a Walgreen's pharmacy store during the coronavirus outbreak in San Francisco, Wednesday, Dec. 2, 2020. / Jeff Chiu/AP Images


As soon as it became apparent this spring that the Covid-19 outbreak was a serious threat, talk of the necessity of a vaccine began immediately. But coming up with a new vaccine for a virus never-before-seen in humans in a real-time attempt to slow and eventually stop a pandemic — all while the death toll rises by tens of thousands each month — had never been attempted in a public health emergency of this scale. 

Remarkably, less than a year later, there are now two vaccines with efficacy rates higher than 90 percent that have been submitted to the Food and Drug Administration (FDA) for authorization, with more likely to follow.  

And the Covid vaccine rollout — which could begin as early as December 15th — cannot come soon enough. Already-surging infection rates are expected to get worse thanks to the staggering number of people flouting public health measures like mask-wearing, and ignoring recommendations not to travel for the holidays. 

On December 2nd, President-Elect Joe Biden expressed his concern over this behavior at an economic roundtable on the pandemic, issuing a warning to the country: “I don’t want to scare anybody here but understand the facts: we’re likely to lose another 250,000 people, dead, between now and January, because people aren’t paying attention.” 

This came a few hours after Centers for Disease Control Director Dr. Robert Redfield told NBC News: “The reality is December and January and February are going to be rough times. I actually believe they’re going to be the most difficult time in the public health history of this nation.”

As promising as the Covid vaccines are, they’re neither a silver bullet, nor an excuse for people to let their guard down. Here’s what to keep in mind about the vaccination process as it goes from a hypothetical to a reality.

When can I (a member of the general public) get a vaccine?

For now, the CDC has determined that health care workers and residents of long-term care facilities will be the first to receive the Covid-19 vaccines once they are available. 

Decisions regarding who will be included in the remaining three phases of the vaccine rollout will likely come after the December 10th FDA meeting on Pfizer’s application for emergency use authorization (EUA). 

The United Kingdom reached this milestone on December 2nd, making it the first Western country to approve mass inoculations against the novel coronavirus.

Here’s what we know so far: On November 30th, Dr. Anthony Fauci, the director of the National Institute of Allergy and Infectious Diseases, said that Americans who would like to get vaccinated should be able to do so by April or May 2021. 

By June, “100 percent of Americans that want the vaccine” should be able to get it, Lt. Gen. Paul Ostrowski, director of supply, production and distribution for Operation Warp Speed told CNN. (New York Governor Andrew Cuomo announced that the state would receive 170,000 vaccine doses on December 15th if federal regulators authorize Pfizer’s vaccine for emergency use, and that the most vulnerable — including healthcare workers and nursing home residents — would receive the vaccines first.) 

What percentage of a population has to be vaccinated before we reach herd immunity? 

It is estimated that around 70 percent of a population will have to achieve individual immunity, either through a vaccine (which is far preferable), or natural transmission to reach the point of herd immunity. At that stage, unvaccinated people living in the area are protected from an outbreak. 

They can still get infected, but because of the community-level immunity, the virus wouldn’t continue to spread, the way it is now. Once a vaccine is available, the next hurdle will be generating public buy-in and trust — a particular challenge given that American’s already-high rates of vaccine hesitancy continue to increase.

Once I’ve gotten my shot, am I immediately protected? 

Nope: Covid vaccination is a process, and the full timeline for two-dose vaccines from manufacturers like Pfizer and Moderna is about a month and a half. After the first dose of the vaccine, the second dose comes three weeks later for Pfizer, and four weeks later for Moderna. 

Then, it takes around two weeks for the vaccine to kick in. “There may be incomplete immunity — little or maybe no significant protection — after just the first dose or even within the first week after the second dose,” says Dr. Wilbur Chen, the chief of the adult clinical studies section within the Center for Vaccine Development and Global Health at the University of Maryland School of Medicine.

So once a person is fully vaccinated and it’s now two weeks after their final dose, are they completely protected from contracting and/or transmitting the coronavirus? Not quite. 

According to Chen, at that point, a person would be protected against Covid-19 infection — including severe illness that could cause hospitalization or death. However, if they’re exposed to and infected with SARS-CoV-2, they may not get sick, but still shed the virus, potentially transmitting the infection to others. 

For this reason, Chen says that it’s important for everyone — even those who have been fully vaccinated — to continue to wear face masks and practice physical distancing, at least until there is high-level uptake in their community. 

And does that mean it would be safe(r) to fly on an airplane? In theory, yes: A fully vaccinated person can start to travel again with some confidence that they are now at a lower risk of getting sick with Covid. 

But Chen stresses that the decreased risk doesn’t mean there is no risk at all. “The vaccines’ efficacy were not demonstrated to be 100 percent,” Chen tells Rolling Stone. “So, this is another reason for us to try and achieve the high-level population-wide immunity through vaccination.”

How concerned should I be about the side effects of the vaccine?

This one’s complicated. 

Like any other inoculation, the Covid vaccines come with the possibility of some side effects. The most common for the Pfizer and Moderna vaccines are fatigue, muscle pain, headaches, chills, and/or a slight fever. 

And though these sound similar to the symptoms of mild cases of Covid-19, unlike the viral infection, the vaccines’ side effects tend to stick around for 24 to 48 hours (sometimes less) and are typically alleviated with over-the-counter pain relievers. 

Dr. Florian Krammer, a vaccinologist at the Icahn School of Medicine at Mount Sinai who participated in the Pfizer trial referred to the vaccine’s side effects as “unpleasant but not dangerous.” Additionally, Pfizer and Moderna both reported that there were no serious safety concerns associated with the vaccines. 

When deciding whether to receive the Covid vaccine — or any other medical intervention, really — it’s important to weigh the risks and benefits. In this case, the benefits of avoiding Covid-19 — especially when you consider the potential long-term effects of the virus and more than 270,000 deaths from the virus in the U.S. — significantly outweigh the risk of enduring a few days of discomfort. 

At the same time, health care practitioners need to be transparent about the possibility of side effects, rather than trying to downplay them in an attempt to put patients at ease. This way the patient can mentally and physically prepare for the potential symptoms, and the person administering the vaccine can reassure them that any pain is treatable and temporary.

But the skepticism and fears are, naturally, intense: It’s one of the reasons why former Presidents Barack Obama, George W. Bush, and Bill Clinton have publicly supported the vaccine and said they would receive the vaccine on camera, to help alleviate some people’s concerns and promote confidence among the general public. 

In an interview with SiriusXM host Joe Madison (scheduled to air Thursday), Obama said that if Dr. Fauci said a coronavirus vaccine is safe, he believes him. “People like Anthony Fauci, who I know, and I’ve worked with, I trust completely,” Obama said. 

“So, if Anthony Fauci tells me this vaccine is safe, and can vaccinate, you know, immunize you from getting Covid, absolutely, I’m going to take it.”

Will we still have to wear face masks and socially distance after people start getting vaccines? 

Yes — at least initially. As Fauci has said repeatedly since April, “It’s not going to be a light switch” where one day the pandemic is suddenly over and everything is back to normal. Part of that is because while the high efficacy of the Pfizer and Moderna vaccines is promising, Dr. Brandon Dionne, assistant clinical professor at Northeastern University’s School of Pharmacy and an infectious disease specialist, says that there are still plenty of unanswered questions. 

These include how long the immunity lasts, how much asymptomatic transmission by vaccinated people will occur, and how many people are willing to receive the vaccine. 

“Over time, as the vaccine becomes more readily available, we learn more about the durability of immunity and real-world effectiveness provided by the vaccine, and, hopefully, uptake reaches a critical threshold where we can achieve herd immunity, we should be able to scale back on the other preventive measures, but it’s not clear exactly when that will be,” he tells Rolling Stone. 

Some experts are predicting that will happen by the third or fourth quarter of 2021, but Dionne says that could change depending on some of the unknowns. 

Should I try to get one vaccine over another? 

Both the Pfizer and Moderna vaccines have been submitted to the FDA for authorization, while the candidates from Johnson & Johnson, AstraZeneca and several other manufacturers are in the final phases of clinical trials. 

This means that in all likelihood, there will be at least two vaccine options. So does this mean there will be one vaccine that’s “better” than the rest? 

Chen frames it in a different way. “We’re not thinking in terms of one of these vaccines being technically better than the other. As long as a vaccine is successful — meaning that the vaccine has properly been reviewed and approved through the FDA — it’s in play, and I would love to have more of them be successful,” Chen tells Rolling Stone. 

When Covid vaccines are eventually offered to the general public, Chen does have some advice: “The first opportunity to get vaccinated — whichever vaccine that’s being provided — take it. 

From the perspective of a person who’s trying to deploy vaccines and the perspective of the person who’s receiving vaccines, I think we should consider them all equal.” 

Chen also notes that those receiving two-dose vaccines, like the ones from Pfizer and Moderna, should make sure to complete the series with the same vaccination they received first. 

“We don’t want people to be receiving one dose of the Pfizer followed by one dose with Moderna, because we don’t know if that will confer the full potential protection of a proper two-dose vaccine,” he explains.

When will children be able to get a Covid vaccine? 

That depends on when data from clinical trials involving children becomes available. 

Right now, Pfizer is testing the vaccine on children as young as 12, but is the only major pharmaceutical manufacturer to do so at this stage. 

In an appearance on Meet the Press on Sunday, Fauci estimated that we’re likely months away from the vaccination of school-age children. 

“Before you put [the Covid-19 vaccine] into the children, you’re going to want to make sure you have a degree of efficacy and safety that is established in an adult population,” he explained. 

But, the research will continue to move quickly: Fauci said that the research process will start “very likely in January, to get it to the children sooner rather than later.”

When a vaccine is shown to be safe and effective in adults, it usually is in children as well — but not universally, according to Dr. Amy Edwards, a pediatric infectious disease specialist at University Hospitals Rainbow Babies & Children’s Hospital in Cleveland, Ohio. 

“Children’s immune systems are very different than adults’, as evidenced by their vastly different reaction to being challenged with a novel virus,” she tells Rolling Stone. 

“A vaccine that is effective in adults may or may not work as well in children.” 

Why central banks will double down on lending schemes 

Policymakers experiment to refresh parts of parts of economy quantitative easing cannot reach

Huw van Steenis

The headquarters of the European Central Bank which is gearing up to inject more monetary stimulus into the eurozone’s flagging economy © Reuters


Of all the innovations in central banking this year, few are as intriguing as Bank of Japan’s special bonus interest rate to regional banks that cut costs, merge or lend for sustainable development.

The underlying issue is one that worries all central banks. Will banks will be strong enough to fund the recovery, particularly for small and midsized businesses, when government guaranteed loans expire? 

How policymakers answer this question has major implications for bank dividends, financial regulation and the shape of quantitative easing programmes. This makes the next salvo of measures from the European Central Bank all the more interesting.

Last month, the Japanese central bank took the unprecedented step of paying Japan’s smaller regional banks an extra 0.1 per cent of interest “to enhance the resilience of the regional financial system”. It warned that if profitability were to keep falling, financial intermediation could stop functioning smoothly.

Guaranteed lending has represented almost all small business loans this year across the eurozone, UK and US. Little wonder central banks are being creative to try to improve monetary policy transmission to refresh parts of the economy that other QE programmes cannot reach. 

New Zealand just introduced a funding-for-lending scheme to help banks lend to small business. And this week the Federal Reserve extended the scheme helping banks fund loans under the payment-protection programme.

So far in the pandemic crisis, banks have been the dog that did not bark. In the main, they have been resilient, not amplified risks across the system, and worked with policymakers to disburse emergency lending or offer forbearance.

But zero and negative interest rates have hit their profitability hard by squeezing profit margins. The longer these are in place, the greater the side-effects. A recent study by the San Francisco Fed persuasively demonstrated this.

Japanese regional banks were already the least profitable globally, on return on assets. 

Now, an increasing number of small to midsized banks around the world are starting to struggle to cover their fixed costs, especially if you exclude the gains on sovereign bond holdings.

There is a new dimension. The pandemic has accelerated banks’ need for technology investment by three to five years, according to Mohit Joshi, president of Infosys. This requires far greater investment and bigger firms can cover their costs better and invest more in innovation. 

Simply put, the winner-takes-most dynamic we see in most digital markets is coming to banking — and fast.

This means an uphill battle for subscale regional banks. Hence the prompt by the Japanese central bank to merge or take out costs. In Europe, Andrea Enria, chair of the ECB’s supervisory arm, has also been leading the calls for mergers.

An alternative is for banks to piggy back on another's scale through far greater use of utilities or outsourcing their entire back end to a cloud provider, as I argued in the Future of Finance report for the Bank of England. This can take years, so schemes would be needed as bridges.

The market implications of central bank policy shifts are fourfold. Any changes that shield banks more effectively from the corrosive impact of negative rates are net positive for bank securities and, in turn, financial stability. 

Eurozone bank earnings could benefit more than 5 per cent on UBS estimates, should the ECB extend their scheme or improve its terms. But the spread of winners and losers is likely to widen over time as the winner-takes-most dynamic plays out. 

Second, the more the special lending schemes, such as the ECB’s targeted long-term refinancing operations (or TLTROs), are extended, the greater will be the pressure to make them support the transition to a lower carbon economy.

Third, expanded special lending schemes will have spillovers into sovereign bond markets. Given that the ECB’s TLTROs are disproportionately taken by southern European banks, this will keep bids on peripheral eurozone bonds strong.

Fourth, the more workarounds there are for banks, the longer policy rates could stay at zero or negative rates. The pressure on pension funds and insurers to optimise their asset allocation in the face of ultra low rates will be intense.

Milton Friedman used to say nothing was as permanent as a temporary government programme. Funding-for-lending schemes look likely to follow his maxim.


The writer is chair of the sustainable finance committee at UBS

The Financial Sector’s Gain Must Not Be Biodiversity’s Loss

When it comes to biodiversity and natural capital more broadly, most investors still behave as if these assets were unlimited and the services they provide were free. But change – and financial opportunity – is coming.

Robin Smale



LONDON – You would expect financial institutions to understand investing in assets that deliver outsize returns. But when it comes to biodiversity and the broader category of natural capital, most investors still behave as if these assets were unlimited, even as they are being depleted or destroyed. 

They continue to assume that the services these assets provide are free, even as the COVID-19 pandemic shows the almost limitless cost of ignoring human encroachment on the natural world.

Human-induced decline in the natural environment is a fact, and it is happening fast. 

The World Wildlife Fund’s recent Living Planet report showed an average decrease of 68% in wildlife population sizes between 1970 and 2016. Inevitably, where populations crash, extinction follows. 

According to the Intergovernmental Science-Policy Platform on Biodiversity and Ecosystem Services, around one million species – or about a quarter of all assessed animal and plant groups – are threatened with extinction within decades, unless action is taken to mitigate the drivers of biodiversity loss.

Aware of such wildlife population declines and projections of extinction, politicians often call for action but stop short of implementing the necessary measures. And yet, as is clear from the response to climate change, if citizens engage and apply pressure on their leaders, inaction becomes too politically costly. 

European policymakers decided to embrace bold action on climate change – through measures ranging from binding renewable-energy targets to carbon pricing – because they knew that it was their responsibility to avoid the massive disruption that awaited a world which had heated up by several degrees.

Fortunately, the future of biodiversity will soon benefit from similar decisions – and the opportunities they imply. Politics and science are now rapidly converging on loss of biodiversity and natural capital broadly. 

Both the existence and the causes of the problem are now recognized in politics. Given dramatically weakened budgets, however, governments will not be able to pay for the next stage, in which the issue is actually addressed.

Regulators are prodding financial institutions toward the reporting and disclosure standards that will make green investments more transparent and attract much-needed private capital. 

Markets see and are responding to this change: total assets under management in funds emphasizing environmental, social, and governance factors rose to $1.1 trillion in the second quarter of this year.

Civil society is also making its voice heard and calling for faster change. Last month, Portfolio Earth released its Bankrolling Extinction report, in which it calculated the exposure of 50 of the world’s biggest banks to particular “biodiversity impact” sectors, including agriculture, forestry, mining, fisheries, infrastructure, and transport. 

The exposure of the top three banks – Bank of America, Citigroup, and JPMorgan – alone exceeded $550 billion in 2019, and loans and underwriting in these sectors by all 50 surpassed $2.6 trillion.

Very few of the banks assessed had introduced reporting systems to measure the impact of their loans and underwriting on biodiversity, a first step towards reducing adverse effects. And, aside from a few leading European banks, very few blocked the financing of companies causing the most harm.

The Bankrolling Extinction report highlights the financial system’s weaknesses, and suggests that banks’ balance sheets are at risk. That risk reflects both biodiversity damage, which threatens to reduce output (for example, food output, owing to shrinking fisheries) and the prospect of new regulations, which could devalue commercial investments such as forestry and mining concessions. As the report shows, financial institutions’ reputations are also at risk.

At Finance for Biodiversity, we believe that radical systemic change is needed to reform rules, rights, and norms. Last month, we made several recommendations that we hope can guide leaders in the field.

Financial institutions might implement many of these changes themselves, which could create an early-mover advantage, or do so once regulators make them mandatory. These include measuring and disclosing their activities’ impact on biodiversity and stress-testing expected risks. 

By making such risk data available, lenders can help companies, citizens, regulators, and governments join the dots between biodiversity loss and the real economy, thereby identifying risks and opportunities and heading off a biodiversity-related financial crisis. 

We recommend that policymakers step up in three ways. First, they should assess the impact of their own actions on biodiversity, for example, through corporate bond purchases via so-called quantitative easing by central banks. 

Second, financial regulators should sharpen their prudential role in scrutinizing domestically domiciled institutions’ biodiversity exposure and impacts. And, third, policymakers can use the conditions and rules for licensing financial firms to change industry norms.

Governments should reform legal systems to remove financial institutions’ shield and extend companies’ liability for biodiversity loss to their bankers and other creditors. Holding financial institutions legally responsible for damage caused by the use of their capital is hardly unprecedented. 

Authorities investigating crime and human-rights offenses routinely impose financial sanctions when local or international laws are unfit for purpose.

Biodiversity can be made more important in financial decisions only by adopting systemic changes that recognize the interconnectedness of our society, economy, and planet. Only such changes can reduce pressure on biodiversity and reveal the financial opportunities to be gained from preserving our natural resources.


Robin Smale, Director and Co-Founder of Vivid Economics, is a Leadership Group member of the Finance for Biodiversity Initiative.

Buttonwood

Should you buy European shares?

The meat of the pitch is that things are not as bad as you probably think


Two men are sitting in adjacent restaurant booths. One is talking at length—about train journeys, women, morality, taking chances, living one day at a time. The other is captivated. 

“When you die, you’re going to regret the things you don’t do,” says the speaker. 

After more of this, he sighs, pauses and offers his new friend a drink. 

He then takes out a map. 

“This is a piece of land,” he says. 

“Listen to what I’m going to tell you now.”

This is how Richard Roma, the alpha salesman in “Glengarry Glen Ross”, a play by David Mamet, seduces a stranger into buying a tract of undeveloped land. The scene comes to mind when considering the investment case for euro-zone stocks. 

The phrase “time to buy European equities” can elicit the same sort of alarmed response as an invitation to buy Florida swampland. 

An oblique sales pitch is generally advisable—even though now might be a better time than usual to make it.

How would a stockbroking Ricky Roma sell the euro-zone story? 

The main thing would be not to oversell it: Europe is hardly transformed. The meat of it is that things are not as bad as you probably think. 

The euro-zone’s weaknesses have not gone away, but are much less crippling. It is likely to do quite well in the early stages of economic recovery. That might just be enough to close the deal.

One sure-thing trade that the euro zone has spawned is in books and articles about how it is a half-finished project. It is a monetary union, but not a political one. The single market is fragmented in services and banking. 

Tax and spending decisions are made at the national level. But things have changed quite a bit. The European Central Bank looks a lot more like its peers than it did in, say, 2010. Like them, it is more or less committed to reflation. 

The hawkish German influence on its apparatus has waned. And the pandemic is curing hang-ups around fiscal stimulus. The European Union’s recovery fund is a step towards a shared fiscal policy. It is not huge. But it is not nothing either.

The euro zone’s equity market has suffered from a weakness in its make-up: too few of the digital companies of the future; too many of the industrial companies of the past. 

But time has whittled away at this, too. After years of under-performance, Europe’s banks and energy companies had dwindled to a 10% share of market capitalisation by the late summer, as Graham Secker of Morgan Stanley, a bank, noted at the time. 

Technology had become the largest single sector in the Euro Stoxx 50 benchmark index, at 14%. The public-equity market is still a more cyclical play than that in America. 

But it is no longer true to say that Europe is a technology desert. Venture capitalists talk excitedly about the strength of the pipeline of software startups across continental Europe.

In any event, it is its old-economy cyclical stocks that are piquing interest. If Europe has been the big loser from the pandemic, it ought to be a big beneficiary of reopening, goes one argument. 

The forecast for earnings-per-share growth next year is as high as 50% for the Euro Stoxx, according to Mislav Matejka of JPMorgan. A one-off bounce might not impress much. 

But there is a decent case that euro-zone equities might sustain interest beyond 2021—that the “runway is longer”, as Mr Secker puts it. The stimulative effect of the EU’s recovery fund will probably not be felt until 2022. 

As global economic recovery takes a stronger hold, investors will start to worry more about higher inflation. That might favour a more longer-lasting tilt towards cyclical stocks.

Why not simply buy emerging-market stocks instead? You still get exposure to companies that benefit from economic recovery; you also get plenty of tech stocks; and on top of all this you benefit from a weaker dollar, which is generally helpful for financing costs in developing economies. 

Yes, the dollar is expected by many to lose further ground. 

But what if it doesn’t? 

And what if Treasury yields start to rise quickly? 

That would be a tricky combination for emerging markets. 

Europe would be the sounder bet. (A stockbroking Ricky Roma might say that you don’t have to choose. Buy a bit of both.)

ABC—always be closing—is the mantra of Roma and his fellow salesmen. It is trickier to seal the deal when the story is not “things are great” but rather “things are a lot better than they were". 

Still, this counts as a more-than-decent pitch as far as the euro zone goes, even if it is an odd one to close on. 

After all, it is mostly about reopening