Gloves are off

Follow Us Get the newsletter By fair means or foul, leaders terrified by the political and economic risks from further waves of the coronavirus are desperate to get their hands on a vaccine. Allegations yesterday that Russia hacked pharmaceutical companies and research centers from the U.K., the U.S. and Canada show how intense the struggle has become. Vaccine nationalism is rising as countries seek to secure access to doses of future shots, James Paton and John Lauerman report. The Kremlin denied Russian involvement. Still, the stakes are so high it would be surprising if President Vladimir Putin, an ex-KGB agent, wasn't demanding information from his spies. Many countries are probably putting their intelligence services to work in seeking an edge. The geopolitical prize is enormous. As the virus rages in the U.S., President Donald Trump's re-election prospects in November may hang on whether he can show he's on top of the epidemic. What would be the appetite for keeping sanctions against Russia if Putin holds up a vaccine on TV and offers it to his "partners" in the U.S. and Europe? What price the U.S. trade war with China if President Xi Jinping does the same? A U.K. breakthrough would let Boris Johnson show that post-Brexit "Global Britain" was more than a slogan. Equally, leaders fear being at the mercy of a strategic rival for vaccine supplies. While the pandemic is global, the Covid-19 race risks becoming another facet in the new Great Power contest for dominance. — Anthony Halpin Britain's National Cyber Security Centre said vaccine and therapeutic sectors in multiple countries have been targeted by a group known as APT29, which it said is "almost certainly" part of Russian state intelligence. Photographer: SOPA Images/LightRocket Click here for Bloomberg's most compelling political images from the past week and tell us how we're doing or what we're missing at balancepower@bloomberg.net. Global Headlines No return | A win by Joe Biden in November's presidential election would likely be celebrated by leaders exasperated by the Trump administration, especially as Biden has pledged to recommit to several global accords. Still, as Marc Champion explains, returning the U.S. and its alliances to a time before Trump is unlikely, and not just because the U.S. has changed so much since his January 2017 inauguration — the rest of the world changed, too. Looming deadlines | America's leaders face urgent decisions on whether to extend the $2 trillion in extra spending measures to shield the economy from the coronavirus or let them lapse. Some targeted aid for the unemployed and small business. Others reached every corner of the economy. With the programs due to run out in the coming weeks and months, Ben Holland and Laura Davison outline the deadlines and the numbers involved. Mask battle | The governor of Georgia sued the mayor of the U.S. state's capital to stop her from enforcing a city mandate that people wear masks in public following a spike in virus cases. Brian Kemp, a Republican, said he filed the lawsuit to prevent Atlanta and at least 14 other local governments requiring face coverings, underscoring the partisan divide in communities struggling with rising death tolls. Lonely power | When President Recep Tayyip Erdogan reopens Istanbul's Hagia Sophia for prayers next week, it will be the crowning symbol of his mission to reshape Turkey into a Muslim force on the global stage. After nearly two decades in charge, he has arguably created a regional power with the most international clout since the nation's founding as a secular Westward-facing state in 1923. Yet as Selcan Hacaoglu reports, Turkey has rarely seemed more alone. People hold a banner depicting Erdogan and Ottoman Sultan Mehmet II outside the Hagia Sophia on July 10. Photographer: Burak Kara/Getty Images Europe Poles apart | The Australian government is putting strategic concerns over economic imperatives in its fraying relationship with China, and now ministers in Beijing are responding in kind, refusing to answer calls from their Canberra counterparts. As Jason Scott and James Mayger write, Australia is prepared to harden its stance against Beijing on a number of fronts: China's handling of the pandemic, its crackdown on Hong Kong, and the further militarization of the South China Sea. What to Watch: The world witnessed two grim Covid-19 milestones: Brazil surpassed 2 million confirmed cases and India topped 1 million. European leaders start a two-day summit today as they continue to haggle over a deal on a giant stimulus package to rebuild the economy after the pandemic. Indonesia's ruling party nominated President Joko Widodo's eldest son as its mayoral candidate in an upcoming election in Central Java, marking the businessman's formal entry into politics. Pop quiz, readers (no cheating!). Which country this week for the first time said China's territorial claims in the South China Sea were unlawful? Send your answers to balancepower@bloomberg.net. And finally ... British Airways, the world's biggest operator of Boeing 747-400s, is retiring its entire fleet because of Covid-19's devastating impact on air travel. Airlines are grounding aircraft and assessing which ones will work best when the market recovers to pre-virus levels, something that's not expected until at least 2023. "It is unlikely our magnificent 'queen of the skies' will ever operate commercial services for British Airways again," the airline said. A British Airways Boeing 747 aircraft at Heathrow Airport. 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