Reflecting on the EU's COVID-19 vaccine troubles

I have been thinking about the COVID-19 vaccination issues in the EU and guess that we can distill them to three crucial points: EU competences, procurement and lack of understanding of the real problem (production).

First, there's the issue of EU competences which, in the area of health, are simply supporting competences, due to the reluctance of Member States in pooling sovereignty in this area. This is the main reason behind some of the slowness and complexity of the solutions adopted for the vaccine programme. It is no surprise then that the contracts with vaccine makers look so complex since they were negotiated by the European Commission *on behalf* of each Member State and not *for* the European Union. Anyone who has worked on large transactions can immediately understand that this added layer increases the complexity of the process manifold. This detachment between who is doing the buying process and the beneficiaries of the contract outcomes would come back to haunt the Commission and the Member States.

The first problem mentioned above leads us directly to the second one: procurement, or better said, looking to the situation as a procurement problem. For me this is the crucial error of the whole process.

With the Commission on a straitjacket imposed by the limited competences in this area, its emphasis was (naturally) on the procurement process that it was conducting *on behalf* of the Member States. Its internal (and external) incentives are around cost and thus getting a good price for what it is buying. Can you imagine the optics for the Commission if the price per dose was higher to that of the UK for example? It is unsurprising to me that in the summer 2020 the focus was on getting the best price possible for the vaccines.

In addition, and as I've said many times over the years to students, all the regulatory emphasis on procurement is on the buying process and not on what is being bought or the actual contract performance (which is what matters in this case).

The final issue again flows naturally from looking into the vaccination programme from a procurement lens. In a 'normal' situation, the procurement lens is perfectly fine. You have a demand, show it to the market and the market responds. In normal times this works reasonably well. But these are not normal times and whereas the USA and the UK understood that the problem was not one of procurement but of *production* instead, neither the Commission or the Member States did so.

From a procurement angle, the Commission did what it could do with the limited tools available to it, apart from being oblivious to the production issues. It was definitely not its job to bash heads together to get actual production going and throw money to scale up production (different from development). This is tantamount to industrial strategy for which the Commission does not have the mandate or skillset in house to do so.

Industrial strategy is an area Member States keep harping about often how they want to do more of, mostly for nationalistic reasons. Therefore, this was a job for the Member States and one they washed their hands from. Funny how some are now looking into buying Chinese and Russian vaccines instead of pumping that money into local (ie, European) production.

In conclusion, the split in competences between Union and Member States, as well as their different incentives, could only lead to the situation where the EU finds itself now.