Vaccine battle heats up with EU ready to halt U.K. shipments

The EU will likely reject authorizations to export AstraZeneca's coronavirus vaccines and their ingredients to the U.K. until the drugmaker fulfills its delivery obligations to the 27-nation bloc, according to a senior EU official.

The conflict between the EU and the U.K. has been growing since Astra informed Brussels it wouldn't deliver the number of shots it had promised for the first quarter. Both sides have blamed each other for export curbs and nationalism, posing a risk to the fragile post-Brexit trade relationship agreed on in December. Astra has been at the center of the EU's vaccination problems since production issues emerged in January. Most recently, its shot was temporarily suspended in much of Europe over blood-clot fears.

While the EU drug regulator backed the vaccine last week, and U.S. trial results published Monday said there were no safety concerns, public trust in the shot has plummeted in Europe. The majority of people in Germany, France, Italy and Spain now see the vaccine as unsafe, a survey by YouGov published by The Telegraph on Monday shows.

The EU, which has pledged to immunize 70% of adults by the end of September, is struggling to overcome a slow start to its inoculation campaign. The bloc has administered 12 doses per 100 people, less than a third of what the U.K. has managed, according to Bloomberg's Coronavirus Vaccine Tracker. The U.K. vaccinated more than 1.5 million people on Friday and Saturday, setting daily records on successive days.

The European Commission said last week that it would restrict exports of vaccines to countries that don't reciprocate or that already have high vaccination rates. The U.K. is the largest recipient of doses made in the EU, receiving 10 million of 42 million shots from the bloc so far.

U.K. Prime Minister Boris Johnson and Commission President Ursula von der Leyen spoke last week and a new round of high-level diplomacy is expected among leaders ahead of a summit in Brussels.

"Vaccine nationalism, this kind of breathless speculation about limiting supply doesn't do anybody any good," Helen Whately, a junior U.K. health minister, told Sky News on Monday. Von der Leyen "made a commitment to the prime minister that the EU wouldn't block companies from fulfilling their contractual obligations to supply vaccinations," she said, urging the EU to "actively stand by that commitment."

According to the EU official, the bloc has contracts with Astra that aren't being respected, and any vaccines and their ingredients produced in European factories will be reserved for local deliveries. The official asked not to be named because the decisions are under consideration and haven't been made public.

EU leaders meeting this week will discuss the plan. Countries including Italy and France said they were open to exploring the export ban while others, such as Ireland, Belgium and the Netherlands, urged caution and warned about the impact on European companies, according to a diplomatic note seen by Bloomberg.

AstraZeneca -- one of four approved in the bloc -- is now expected to deliver 30 million shots to the EU by the end of this month, less than half of what it initially committed to.

Johnson has called EU leaders about the dispute in recent days, including Dutch premier Mark Rutte and Belgium's Alexander De Croo, and is prepared for more conversations before this week's summit, a person familiar with the matter said.

Pfizer warned that the free movement of supplies between the U.K. and the EU is critical to the production of its vaccine. Manufacturing of lipids -- the fatty substance used to deliver the genetic material at the heart of the vaccine Pfizer makes with its German partner BioNTech -- takes place at a secret location in the U.K. before shipping to the EU where the shots are completed.

The EU official added that there are no outstanding requests for U.K. exports from Astra's production facility in the Netherlands, but should such a request be made, it will likely be rejected. A production plant in the Netherlands and one in Belgium produce ingredients for the Astra shot.

"The Netherlands in principle allows exports to continue until told otherwise by the European Commission," the Dutch government said Sunday. "It is of paramount importance that Brussels, London and AstraZeneca reach a deal promptly on the vaccines produced by the company in facilities falling under both contracts."

The EU isn't alone in having supply issues. The U.K. is facing a "significant" four-week cut to the supply of Covid-19 vaccines from late March. A delayed shipment of the Astra vaccine from India and a batch requiring re-testing are behind the disruption.

U.K. Defense Secretary Ben Wallace told Sky News on Sunday that the EU should allow Astra to keep supplying Britain and warned the bloc would pay a heavy price if it tried to interfere with those shipments.

"The commission knows deep down that this would be counterproductive," he said. "They're under tremendous political pressure at the European Commission. It would damage the EU's relations globally." A spokesperson for Johnson's office declined to comment and referred back to Wallace's remarks.