EU plots travel restart, saying ‘Europe needs a break’

People surf in Barcelona, Spain, which reopened beaches for sporting activities after lockdown measures imposed due to coronavirus, were relaxed. (● Tourism, travel, hospitality business hit the hardest by virus. ● EU to unveil plan on Wednesday for gradual reopening. ● Brussels eyes state guarantees for canceled travel.AP)
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Updated 10 May 2020

EU plots travel restart, saying ‘Europe needs a break’

  • Continent’s flailing tourism sector, worth as much as ten percent of economic output, at heart of plans to kickstart revival

BRUSSELS: EU states should guarantee vouchers for travel canceled during the coronavirus pandemic and start lifting internal border restrictions in a bid to salvage some of the summer tourism season, the bloc’s executive will say next week.

Tourism, which under normal circumstances contributes almost a tenth of the EU’s economic output, is among the sectors hardest hit by the global outbreak that has grounded nearly all domestic and international travel.

Germany and other member states have urged a suspension of EU rules that force cash-drained airlines and the hospitality industry to offer full refunds for canceled flights and trips instead of vouchers for future travel.

In response, the European Commission will tell member states to guarantee vouchers to make them more attractive to customers, according to a strategy document seen by Reuters ahead of official publication due on Wednesday.

“To provide incentives for passengers and travelers to accept vouchers instead of reimbursement, vouchers should be protected against insolvency of the issuer and remain refundable by the end of their validity if not redeemed,” the draft document said.

“Insolvency protection needs to be assured at the national level and secured vouchers need to be accessible to all passengers and travelers,” it added.

The EU executive will also tell the bloc’s 27 member countries to gradually lift internal border restrictions and restart some travel to help the ailing tourism sector.

Tourism normally brings in some €150 billion every season from June through to August, with some 360 million international arrivals, according to the commission.

HIGHLIGHTS

  • Tourism, travel, hospitality business hit the hardest by virus.
  • EU to unveil plan on Wednesday for gradual reopening.
  • Brussels eyes state guarantees for canceled travel.

But Europe’s external borders are now bound to be shut for any non-essential travel until at least mid-June, an emergency measure to limit the spread of the virus.

“Our tourism industry is in grave trouble,” the commission is due to say, warning that 6.4 million jobs could be lost in the sector that has reported falls in revenue ranging from up to 50 percent for hotels and restaurants, to around 90 percent for cruises and airlines.

The pandemic set the EU on a path toward its worst-ever economic downturn and bitterly tested unity between member states fighting over medical equipment, export bans on drugs, chaotic border curbs and money to salvage their single market.

Titled “Europe needs a break” the commission’s tourism strategy will call for targeted restrictions to replace a general ban on travel and seek a gradual lifting of internal border checks where the health situation has improved.

With Europeans most likely to stay at home or travel shorter distances this summer, peripheral EU regions and islands are likely to be shunned and will take longer to bounce back.

“Until a vaccine or treatment is available, the needs and benefits of travel and tourism need to be weighed against the risks of again facilitating the spread of the virus ... possibly leading to a reintroduction of confinement measures,” the draft plan said. 


Oil world tries to read Chinese post-pandemic demand

Updated 25 October 2020

Oil world tries to read Chinese post-pandemic demand

  • The economic outlook for Asia will help decide some pretty pressing short-term policy issues
  • China’s refineries are getting back in top gear, and are looking to increase crude purchases in anticipation of economic recovery

DUBAI: While all eyes are on the US presidential election, the energy sector is keeping a watchful scrutiny on what is happening on the other side of the world, in China and the rest of Asia. Who the Americans choose will of course have enormous influence on energy policy for years to come, not least because Donald Trump versus Joe Biden is, in many ways, a runoff between the traditional oil and gas industry and the alternative renewable future.

But policymakers in the Middle East and in the broader OPEC+ alliance led by Saudi Arabia and Russia are looking eastward to determine more immediate priorities. The economic outlook for Asia, and of China in particular, will help decide some pretty pressing short-term policy issues.

At what official selling price should big producers such as Saudi Aramco and Adnoc mark their exports to China in the coming weeks? What stance should OPEC+ take toward compliance and compensation for the rest of this year? And, crucially, should it press ahead with plans to put an extra 2 million barrels per day (bpd) of oil on global markets in January, as the historic April cuts deal envisaged?

An added variable has been thrown into the works with higher-than-expected output from Libya, which has resumed production and exports from its war-torn facilities and could, according to some energy experts, be producing another 1 million barrels by the end of the year.

That is hardly a deluge of crude by global standards, in a world that consumes above 90 million bpd, though it is enough to complicate the already-delicate calculations of OPEC+ analysts.

But the big imponderable is China. The country blew hot and cold on oil imports since the April crisis, snapping up cheap oil one month and easing back on imports the next. It was hard to read the signals coming out of China.

Were the pauses in imports due to a slower rate of recovery from the pandemic economic lockdowns? Or was China simply chock-full of crude, to the extent that it had filled its strategic reserve and had nowhere else to store it?

Evidence of the latter came in the form of the flotilla of crude tankers waiting to unload off the coast of the Shandong oil terminal. At one stage, there were as many as 60 million barrels afloat awaiting discharge off China’s coast.

The people who make a living from tracking these things say that there has recently been evidence of a slow unloading from these ships, but that there is still an awful lot of crude afloat, waiting to come onshore.

There have also been signs that China’s refineries are getting back in top gear, and are looking to increase crude purchases in anticipation of economic recovery. One of the biggest, Rongsheng Petrochemical, recently snapped up 7 million barrels through Singapore, in a move taken by some to be the starting gun on an aggressive Chinese buying spree.

The economic logic suggests that if that is going to happen, it will take place pretty soon. According to the International Monetary Fund’s latest review, China — the only major economy forecast to grow in 2020, with 1.9 percent growth — will soar to 8.2 percent expansion next year. The country’s early and rigorous lockdown, and high levels of economic stimulus since then, are clearly paying off.

Whether the Chinese lift-off comes in time to affect OPEC+ calculations over the planned January increase remains to be seen. From where oil policymakers are looking at it at the moment, it looks like a good bet that China, at least, will need plenty of crude next year to fuel its post-pandemic recovery.