TheChek News Flow

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Macro :

- New York Fed’s GDP Model Sees 2Q U.S. GDP at -31.22%

- Conte Says EU Aid Is Insufficient, European Recovery Fund Needed

- Don’t Look to Stock Market to Tell You When Virus Crisis Is Over

- Morgan Stanley Considers Return to NYC Offices Starting in June

- Euro Area Agrees on $260 Billion Credit Lines to Stem Virus Blow

- OMX, CAC 40 Futures Roll Rich Before Expiration

Keep an eye on :

- AIXA GY : Aixtron to Appoint CFO, Grawert to Take Over as Sole CEO

- ALM SM : Almirall First Quarter Ebitda EU88.3 Mln, +10% Y/y

- ALV GY : Pimco Has Raised $5.5b for Private Credit Funds: Bus. Insider

- MT NA ; ArcelorMittal Cut to Junk by Moody’s With Steel Demand Crushed

- AFX GY : Carl Zeiss Meditec First Half Ebit EU102.5 Mln, -7.2% Y/y

- AM FP : Dassault Aviation CEO Sees Decline in Falcon Market This Year

- DBK GY : Deutsche Bank Eyes Savings on Travel, Offices, Leukert Tells FAS

- HLDX SS : Haldex to Raise Around SK157.2M in Directed New Share Issue

- HEN GY : Henkel 1Q Sales EU4.93b, Est. EU 4.95b; No FY Outlook

- HYQ GY : Hypoport SE First Quarter Ebit EU10.5 Mln, +31% Y/y

- INTRUM SS : Europe’s Top Debt Collector Sparks Worry Over Buyback, Debt Goal

- SHBA SS : Handelsbanken Blocks Some Countries to Avoid Laundering, DI Says

- LHN SW : LafargeHolcim Ends Pact to Sell Philippine Unit to San Miguel

- LEG GY : LEG Immobilien Maintains FY FFO I EU370 Mln to EU380 Mln

- LHA GY : Lufthansa Investors At Odds With Terms of Looming State Bailout

- LHA GY : Lufthansa Swiss Unit Burning Through $3 Million a Day, NZZ Says

- NOVN SW : Coronavirus Test of Trump-Touted Malaria Drug May Report in July

- SAS SS : SAS Shareholder Wallenberg Wants Norway to Do More, DN Reports

- SOFF NO : Solstad Offshore Signs Restructuring Implementation Agreement

- SNBN SW : SNB’s U.S. Stock Hoard Slips to $94 Billion Amid Market Rout

- SNBN SW : SNB Stepped Up Interventions and Can Lower Rates, Jordan Says

- SNBN SW : SNB Can Function With Negative Equity: Jordan in Matin Dimanche

- TEF SM : *BANKS SET TO AGREE EU4.5B LOAN TO TELEFONICA: EXPANSION

- TSLA US : Tesla Threatens to Pull Out of California Over County’s Shutdown

- TSLA US : Tesla Has 4 Billion Yuan Working Capital Loan for Shanghai Plant

- TSLA US : Tesla Gets Rejected; Ford, GM Green Light

- UN01 GY : Fortum Increases Ownership in Uniper to 73.4%

- WDI GY : Wirecard Expands Management Team in Bid to Revive Investor Trust

Hedge fund boss backs agriculture company penalised for environmental damage

Hedge fund manager Crispin Odey has come out in defence of a Brazilian agriculture company that has been fined for breaching rules about exploring and damaging tropical savannah, saying the penalties amount to “a parking fine”.

On Wednesday, the Financial Times reported that London-based Odey Asset Management had invested $170m in SLC Agricola, which has been fined close to $2.5m for violations such as planting soy in embargoed areas and “exploring” native forest, based on a report by campaign group Global Witness.

However, Mr Odey said in an interview with the FT that the Logemann family, whose members hold the positions of chairman and vice-chairman, were the “most trustworthy” of partners and that the fines, imposed over a 12-year period, were very small in comparison with SLC’s overall business.

“These people are not in the game of converting jungle into cotton farms,” said Mr Odey, one of Britain’s best-known hedge fund managers.

“This is not like BP getting done in the Gulf of Mexico,” he said, referring to the 2010 Deepwater Horizon disaster, which ultimately cost BP more than $60bn. Mr Odey added: “$2m is neither here nor there . . . It truly is a parking fine.” A similar picture would be found “if we looked at any company and found out what fines they had ever paid”, he said.

Global Witness estimated Odey received more than $2m in dividends in 2018, after building a 14 per cent stake in SLC. Odey has since cut back its investment to just under 10 per cent.

According to Mr Odey, SLC wrote to Global Witness to explain its actions after the campaign group contacted the hedge fund about its investment. Mr Odey said Global Witness is “not interested in the truth. They’re interested in basically chaining themselves to a railing, and the railing they’re chaining themselves to is your [the FT’s] railing.”

A spokesperson for Global Witness said it “stands by its reporting 100 per cent”, adding: “SLC Agricola’s track record of deforestation is undisputed and the environmental fines speak for themselves.

“Our report raised legitimate concerns about a UK investor pumping money into an environmentally damaging company at a time when the world faces a climate emergency.”

The fines were issued by Ibama, the Brazilian Institute of the Environment and Renewable Natural Resources. A former senior employee at Ibama said that some of the actions for which SLC Agricola had been penalised demonstrated a lack of regard for the work carried out by environmental agencies.

“There are some companies linked to the soy production chain with higher fines [than SLC Agricola] but it is not correct to simply disregard all of the judgments made by the agency,” the employee added.

SLC has overturned one of the fines and has appealed against the others, according to Ibama. SLC said last week that “it carries out administrative and judicial actions whenever its practices are questioned without plausive justification”, adding that it complies with all Brazilian laws and regulations.

Twin shocks threaten Saudi crown prince’s grand reform plans

Effects of coronavirus and oil collapse could halt some of kingdom’s biggest projects

When Crown Prince Mohammed bin Salman unveiled his bold economic reform plan, 2020 was supposed to be the year when a first round of key targets were to be met, including reducing unemployment, increasing non-oil revenue and creating private sector jobs.

Now it threatens to be the year that slams the brakes on his ambitions as the twin shocks of coronavirus and collapsing oil prices force the government to radically reconsider its priorities.

Riyadh has already dipped into its foreign reserves and the finance ministry, which previously announced a 5 per cent cut in government spending, warned this month that the kingdom was facing an “extreme crisis” and would need to take “strict and extreme” measures.

With the spectre of deeper spending cuts looming, some of Prince Mohammed’s flagship Vision 2030 projects to reduce the kingdom’s dependency on oil — such as a $500bn futuristic city called Neom, a high-end Red Sea tourism development and a vast entertainment and sports complex — risk becoming victims of the belt-tightening.

“The final numbers have not been agreed, but they [the megaprojects] are being looked at. It’s a question of spreading the investment out over a longer period,” said one Saudi analyst familiar with the leadership’s thinking. “Capital expenditure will go down dramatically.”

Mohammed al-Jadaan, finance minister, told Saudi television network Al Arabiya last week that the government was considering delaying “some projects” that are part of the 2030 plan.

His warnings about the severity of the crisis represented a marked shift in tone. One businessman, who has already furloughed staff and is finding it tougher to secure payments from state-affiliated entities, said it “sent shivers down a lot of people’s spines”.

Two days later, the Public Investment Fund, the sovereign wealth fund charged with spearheading the megaprojects, including Neom, suggested work on its plans would continue.

“PIF’s three gigaprojects symbolise the holistic shift taking place. Each will become a focal point for investment in the region and serve to support future growth,” the fund said on Twitter.

The episode was indicative of the delicate balance facing policymakers as they seek to protect foreign reserves and ease the economic pain on Saudi businesses and workers.

One person familiar with policymakers’ conversations in Riyadh said there were two camps: one that felt there needed to be swingeing cuts to keep the ballooning fiscal deficit in check and preserve foreign reserves, and another that believes the belt-tightening should be accompanied by some countercyclical spending to offer a lifeline to the private sector.

A government adviser said ministries were considering spending cuts that range from capital expenditure, consultancy contracts and employee benefits. The public sector is the main employer for Saudis and the state’s wage bill accounts for about half the budget, while capital expenditure accounts for 17 per cent. But any reductions to salary packages would be politically sensitive — three years ago the government reversed cuts to civil servant benefits after a backlash.

“They are working on different scenarios and projections at the moment,” the adviser said. “The debate rages on those fronts.”

Said al-Shaikh, an economist and member of the Shura Council, an advisory body that serves as a quasi-parliament, said he expected another SR100bn ($26bn) in cuts, which would mean the overall decline in spending would represent about 15 per cent of the planned 2020 budget. He also said cuts would probably include some Vision 2030 programmes and mega-projects.

“This will be either through extending the execution period time and thus lessening annual allocations or by reprioritising, as such delaying the commencement of the less priority projects,” Mr Shaikh said.

Prince Mohammed, the country’s de facto leader, has not spoken publicly about the crisis. In 2017 he said he would take austerity measures if oil prices went below $30 a barrel, claiming his reforms would make the kingdom more resilient to shocks.

But government spending fuelled by petrodollars remains the prime driver of economic activity. New sectors Riyadh was betting on, including entertainment and tourism, have been frozen as domestic and global travel have been curtailed.

Farouk Soussa, chief Middle East economist at Goldman Sachs, estimated that Riyadh would need to rein in spending by about 15 per cent of gross domestic product to manage the crisis and preserve its reserves if oil prices remain at current levels indefinitely.

When the finance ministry launched a $32bn rescue package to support businesses in March, Mr Jadaan said the government had raised its debt ceiling from 30 per cent of GDP to 50 per cent and would borrow rather than tap the reserves. Then last month, he said the government would need to borrow again — an additional $26bn — and could draw down up to $32bn of its reserves.

Economists predict the Saudi riyal’s peg to the dollar would face pressure if foreign reserves dropped to about $300bn, the point where it falls below the level needed to cover the kingdom’s outstanding riyal obligations. After the last oil slump in 2015, the kingdom’s reserves plummeted from $726bn to about $500bn. In March, they fell $24bn to about $470bn, the largest monthly decline on record.

“If we start seeing reserves drop very rapidly towards $300bn then it starts to become a problem. In a world where oil prices go to $40 then $65 a barrel next year then we are not going to go near the $300bn threshold,” Mr Soussa said. “If oil prices stay at $30 then you could get to that threshold in the next year.”

Riyadh insists it will maintain the peg. Mr Shaikh estimated that with additional borrowing and spending cuts, the kingdom’s foreign exchange reserves would be kept at about $400bn. 

Some Saudi businessmen say that while they are bracing themselves for a recession, they are still hopeful of a recovery in 2021. “This year will be difficult, but next year should be better with the oil price hopefully going towards $40-$60,” said a Saudi executive.

However, the crown prince faces “one mammoth challenge around the unsustainability of the current economic model”, said Ayham Kamel, head of the Middle East research group at the risk consultancy, Eurasia Group.

“Prince Mohammed has been able to mobilise an effective campaign to contain the impact of Covid-19 and there is probably a short-term popularity boost associated with that,” Mr Kamel said. “However, a sharp rise in unemployment presents risks to the entire project of building new opportunities for citizens that has attracted support from most Saudis.”

Twin shocks threaten Saudi crown prince’s grand reform plans

Effects of coronavirus and oil collapse could halt some of kingdom’s biggest projects

When Crown Prince Mohammed bin Salman unveiled his bold economic reform plan, 2020 was supposed to be the year when a first round of key targets were to be met, including reducing unemployment, increasing non-oil revenue and creating private sector jobs.

Now it threatens to be the year that slams the brakes on his ambitions as the twin shocks of coronavirus and collapsing oil prices force the government to radically reconsider its priorities.

Riyadh has already dipped into its foreign reserves and the finance ministry, which previously announced a 5 per cent cut in government spending, warned this month that the kingdom was facing an “extreme crisis” and would need to take “strict and extreme” measures.

With the spectre of deeper spending cuts looming, some of Prince Mohammed’s flagship Vision 2030 projects to reduce the kingdom’s dependency on oil — such as a $500bn futuristic city called Neom, a high-end Red Sea tourism development and a vast entertainment and sports complex — risk becoming victims of the belt-tightening.

“The final numbers have not been agreed, but they [the megaprojects] are being looked at. It’s a question of spreading the investment out over a longer period,” said one Saudi analyst familiar with the leadership’s thinking. “Capital expenditure will go down dramatically.”

Mohammed al-Jadaan, finance minister, told Saudi television network Al Arabiya last week that the government was considering delaying “some projects” that are part of the 2030 plan.

His warnings about the severity of the crisis represented a marked shift in tone. One businessman, who has already furloughed staff and is finding it tougher to secure payments from state-affiliated entities, said it “sent shivers down a lot of people’s spines”.

Two days later, the Public Investment Fund, the sovereign wealth fund charged with spearheading the megaprojects, including Neom, suggested work on its plans would continue.

“PIF’s three gigaprojects symbolise the holistic shift taking place. Each will become a focal point for investment in the region and serve to support future growth,” the fund said on Twitter.

The episode was indicative of the delicate balance facing policymakers as they seek to protect foreign reserves and ease the economic pain on Saudi businesses and workers.

One person familiar with policymakers’ conversations in Riyadh said there were two camps: one that felt there needed to be swingeing cuts to keep the ballooning fiscal deficit in check and preserve foreign reserves, and another that believes the belt-tightening should be accompanied by some countercyclical spending to offer a lifeline to the private sector.

A government adviser said ministries were considering spending cuts that range from capital expenditure, consultancy contracts and employee benefits. The public sector is the main employer for Saudis and the state’s wage bill accounts for about half the budget, while capital expenditure accounts for 17 per cent. But any reductions to salary packages would be politically sensitive — three years ago the government reversed cuts to civil servant benefits after a backlash.

“They are working on different scenarios and projections at the moment,” the adviser said. “The debate rages on those fronts.”

Said al-Shaikh, an economist and member of the Shura Council, an advisory body that serves as a quasi-parliament, said he expected another SR100bn ($26bn) in cuts, which would mean the overall decline in spending would represent about 15 per cent of the planned 2020 budget. He also said cuts would probably include some Vision 2030 programmes and mega-projects.

“This will be either through extending the execution period time and thus lessening annual allocations or by reprioritising, as such delaying the commencement of the less priority projects,” Mr Shaikh said.

Prince Mohammed, the country’s de facto leader, has not spoken publicly about the crisis. In 2017 he said he would take austerity measures if oil prices went below $30 a barrel, claiming his reforms would make the kingdom more resilient to shocks.

But government spending fuelled by petrodollars remains the prime driver of economic activity. New sectors Riyadh was betting on, including entertainment and tourism, have been frozen as domestic and global travel have been curtailed.

Farouk Soussa, chief Middle East economist at Goldman Sachs, estimated that Riyadh would need to rein in spending by about 15 per cent of gross domestic product to manage the crisis and preserve its reserves if oil prices remain at current levels indefinitely.

When the finance ministry launched a $32bn rescue package to support businesses in March, Mr Jadaan said the government had raised its debt ceiling from 30 per cent of GDP to 50 per cent and would borrow rather than tap the reserves. Then last month, he said the government would need to borrow again — an additional $26bn — and could draw down up to $32bn of its reserves.

Economists predict the Saudi riyal’s peg to the dollar would face pressure if foreign reserves dropped to about $300bn, the point where it falls below the level needed to cover the kingdom’s outstanding riyal obligations. After the last oil slump in 2015, the kingdom’s reserves plummeted from $726bn to about $500bn. In March, they fell $24bn to about $470bn, the largest monthly decline on record.

“If we start seeing reserves drop very rapidly towards $300bn then it starts to become a problem. In a world where oil prices go to $40 then $65 a barrel next year then we are not going to go near the $300bn threshold,” Mr Soussa said. “If oil prices stay at $30 then you could get to that threshold in the next year.”

Riyadh insists it will maintain the peg. Mr Shaikh estimated that with additional borrowing and spending cuts, the kingdom’s foreign exchange reserves would be kept at about $400bn. 

Some Saudi businessmen say that while they are bracing themselves for a recession, they are still hopeful of a recovery in 2021. “This year will be difficult, but next year should be better with the oil price hopefully going towards $40-$60,” said a Saudi executive.

However, the crown prince faces “one mammoth challenge around the unsustainability of the current economic model”, said Ayham Kamel, head of the Middle East research group at the risk consultancy, Eurasia Group.

“Prince Mohammed has been able to mobilise an effective campaign to contain the impact of Covid-19 and there is probably a short-term popularity boost associated with that,” Mr Kamel said. “However, a sharp rise in unemployment presents risks to the entire project of building new opportunities for citizens that has attracted support from most Saudis.”

Commission considers infringement procedure over Germany’s constitutional court ruling. But there are pros and cons

How should Brussels respond to Germany’s constitutional court issuing a “declaration of war” on the EU’s legal order? Less than a week after the explosive Karlsruhe ruling, the options are coming into view.

Out of all of them, the European Commission’s “nuclear” option is an infringement procedure against Germany, where Berlin’s government would be taken to court (yes, the European Court of Justice). Ursula von der Leyen, commission president, on Sunday said Brussels "will look into possible next steps, which may include the option of infringement proceedings" in response to pressure for the commission to defend the sanctity of the EU’s legal order against upstart national judges.

Franz Mayer, an influential German jurist, makes the powerful case for the nuclear option in Verfassungsblog. He argues that Karlsruhe’s challenge to the ECJ’s supremacy is a blatant breach of EU law. If it continues, Brussels has little option but to embark on a “calm and civilised” infringement process as laid out under EU law, he says.

There is legal precedent for a member state to be reprimanded over the actions of its courts. In 2018, France was the subject of an infringement over the failings of its Conseil d’État. But the Karlsruhe moment is of a different order of magnitude altogether — both for Germany and the EU. The decision on an infringement will ultimately boil down to politics and not the law.

First, the case for those in favour. By keeping the infringement option alive, Ms Von der Leyen wants to fend off criticism that Brussels is quick to launch legal action against recalcitrant governments in Poland and Hungary, but shies away from the same against its “core” member states. As a German, Ms Von der Leyen is more exposed to that charge than most.

For Mr Mayer, if the commission does not defend the EU’s rule of law, the system risks descending to a “judicial rule of thumb” where the interpretation of the strongest national judges wins. “This will be based on the parameters of size, power, political influence and economic weight of the respective member state,” he warns. For this reason, expect Ms Von der Leyen to keep repeating Brussels’ willingness to take action — including at a hearing with MEPs later this week.

In general, supporters of legal action want the commission to use the full force of its legal armoury to bring Germany’s unruly red-robed judges to heel and set an example for others. They think the threat to the ECJ’s hegemony and the independence of the ECB is so acute that the commission cannot merely stand by and watch. Plenty in Brussels sympathise.

But is legal action the best tool for that job? In practice, it will mean the commission suing the German government for the actions of its independent court in a case where Berlin is not the offender. During the Karlsruhe hearing the government defended the ECB’s bond-buying against the litigants, and last week Olaf Scholz was trying to reassure his fellow finance ministers that a way would be found to keep the Bundesbank involved in bond-buying.

A case would create an invidious situation where Angela Merkel's government is thrown on the defensive and pose fresh legal difficulties about the separation of powers — another EU fundamental right — in Germany. Berlin would not be in a position to issue instructions to Karlsruhe following the infringement given the court’s independence. The result, said one EU expert, would be an "absurd situation" legally.

Commission infringements are also notoriously laborious and can take years to resolve. At their most severe, they result in financial sanctions against said governments. Although they serve a useful purpose in standard violations of EU law, the Karlsruhe judgment poses such profound constitutional questions for the EU, that they won’t be answered by suing Germany. At its essence, the issue is about “who governs the governors?” writes Katharina Pistor.

Still, supporters would argue that even a symbolic legal process is better than nothing. The absurdities of the situation, they argue, should precipitate a serious debate about the relationship between national and supranational courts under EU law. Ultimately supporters want that question resolved not with another legal fudge but a fundamental change to the EU’s treaties to decide the matter once and for all.

The factors that made the city one of the hardest hit on the planet — its density, mass transit and tourism — complicate a return to normalcy.

Nearly 190,000 people were tested for the coronavirus in New York City over the past two weeks, a record number. The increase in testing, crucial for curbing the outbreak, came as Mayor Bill de Blasio announced plans to hire a small army of 1,000 disease detectives to track down the contacts of every infected New Yorker.

The city is also paying for hotels to house people who cannot quarantine in their cramped apartments, and it may use the USTA Billie Jean King National Tennis Center in Queens for the same purpose.

From the State Capitol, Gov. Andrew M. Cuomo has established a framework for reopening the state, based on seven concrete, health-related milestones, and he has asked Bill Gates, the restaurateur Danny Meyer, the New York Knicks owner James L. Dolan and dozens of other outside advisers from the upper echelons of New York’s business world to help guide him on how best to restart the economy and, possibly, reimagine public education.

Still, despite all the plans and initiatives, the reopening of New York City remains a long way off.

The factors that made the city the U.S. epicenter of the pandemic — its density, tourism and dependence on mass transit — complicate a return to any semblance of normalcy. The city is still far from meeting the public health metrics necessary to reopen, from available critical-care beds to new hospital admissions for the virus.

While states like Colorado, Georgia and Texas have let the stay-at-home orders lapse and businesses like nail salons and retail stores reopen, New York State is moving cautiously, anticipating a partial reopening later this month, mostly in rural areas.

How long might it take to restart New York City’s economy?

“Nobody can tell you,” Mr. Cuomo said last week.

The virus has killed more than 19,000 people in New York City, a death toll that exceeds those in all but a small number of countries, or in California, Illinois, Massachusetts, Michigan and Texas combined. While the outbreak is receding in the city, more than 1,000 new positive cases were reported on at least three days last week, for a total that now tops 181,000.

The key to reopening is containing the virus, and that will take a vast infrastructure of testing and contact tracing unlike anything the United States has ever seen, public health experts say.

Even when the new public health apparatus is fully staffed and running, it will merely lay a foundation for businesses and residents to feel safe returning to work and play. Many may choose to stay home.

The decision about when to reopen involves a balancing act: The longer New York is shut down, the more the pandemic will abate, reducing the need for testing and contact tracing while allowing officials more time to expand those efforts. But the economic damage to the city and the state will continue to grow.

More than 830,000 people have filed for unemployment in New York City alone since mid-March, when the shutdown began, according to state data.

Mr. Cuomo said his metrics, in line with recommendations from the federal Centers for Disease Control and Prevention, would guide the state’s reopening, region by region, with the city almost certainly among the last to return.

A true reopening of the city, Mr. de Blasio said this month, remained “a few months away at minimum.”

Plans for how to get there are still being created. A task force convened by the mayor held its first session via conference call late last month and it was a sobering “dose of realism,” according to Jennifer Jones Austin of the Federation of Protestant Welfare Agencies, who was on the call.

Exactly two hotels are being used exclusively for isolation so far, though the city has said it could expand to as many as 11,000 beds. The 1,000 new contact tracers that are to be part of the effort will not be hired for weeks, and 1,500 more will be needed to meet Mr. Cuomo’s milestones. Testing capacity will not reach 50,000 a day until August at least, officials said. That number still may not be sufficient.

On Wednesday, when Mr. Cuomo’s panel of outside advisers held its first video meeting, it included no chief executives, little in the way of advice and no talk of how New York City would get back on its feet.

Mr. de Blasio works from a mostly empty City Hall in Lower Manhattan with a skeleton staff, speaking to top officials in an endless series of teleconferences and secure video chats. Each day, the mayor has an early call on small decisions — how long to extend a moratorium on alternate-side-of-the-street parking rules, for example — and, later, one or two big discussions about the city’s future.

But some of the most urgent questions, such as how to handle the normal load of nearly six million daily subway riders, or how 1.1 million school children might actually return to classrooms, have yet to be answered by either the city or the state.

Schools have been canceled for the rest of the academic year, and the city’s powerful teachers’ union, the United Federation of Teachers, has already said it would expect a system of widely available testing, contact tracing and cleaning to be ready and working before it would support reopening. The union has proposed experimenting with having school in split shifts, morning and afternoon.

“Until the schools are open, a good subset of working New Yorkers cannot leave their homes,” said Alison Hirsh, a top adviser to Mr. de Blasio and one of several city officials, including deputy mayors Dean Fuleihan and Vicki Been, coordinating the reopening plans.

“There’s an argument to be made that one of the reasons to keep the schools closed is to continue to force anyone who can work from home to continue to work from home,” Ms. Hirsh said. “That’s one way that you can slow down the reopening and help maintain a flatter curve.”

Mr. de Blasio has said he is planning to reopen schools in September.

Schools were included as part of the governor’s fourth and final phase of any region’s reopening, after restaurants and hotels.

Restaurants are an easier problem to solve than schools because the state can rely on occupancy limits, said Jim Malatras, an adviser to the governor on the virus response. Whether restaurants can survive with those limits is an open question.

When it comes to schools, Mr. Malatras said, the state had not “figured it out yet.”

“This is a potential source of infection,” he said, citing the City University of New York as an example. “How do you do a lecture hall in CUNY? You can’t.”

At the State Capitol in Albany, Mr. Cuomo still holds his coronavirus meetings in person with a small group of close advisers, including Mr. Malatras, the president of SUNY Empire State College; Melissa DeRosa, the governor’s top aide; and the budget director, Robert Mujica.

Much of Mr. Cuomo’s reopening planning for New York City has been led by two former top aides: Steven M. Cohen, general counsel at the investment firm MacAndrews & Forbes and William Mulrow, who now works at the private equity firm Blackstone.

Mr. Cohen and Mr. Mulrow have had dozens of one-on-one calls with business and real estate leaders, and they have been particularly interested in hearing from companies with operations in Asia, to learn how operations restarted there, according to two people who requested anonymity to discuss private conversations.

City and state officials speak frequently, but Mr. Cuomo appears interested in maintaining an upper hand, according to three people with knowledge of the communications. Most recently, his office did not alert City Hall about Mr. Cuomo’s reopening metrics before he detailed them publicly, though the benchmarks could determine the city’s near future.

The metrics, which included keeping new hospital admissions for virus infections under two per 100,000 residents on average over three days, do not bode well for New York City in the short term. As of early May, the city had more than twice that number.

The city has achieved its own stated milestone for hospital admissions, seeing fewer than 200 new admissions for illness resembling Covid-19, the disease caused by the virus, for 10 straight days. But other goals, including reducing the number of patients in critical care and the percentage of positive coronavirus tests, have remained out of reach.

“I can’t help but feel the challenge is more intense here than anywhere else in the United States,” said Dr. James Crawford, the senior vice president for laboratory services at Northwell Health, New York’s largest hospital system, who has led discussions about state efforts to vastly expand testing for virus antibodies.

Far from reopening, the virus is still closing parts of New York as the summer months arrive. Pools. Beaches. Block parties. Concerts.

Mr. de Blasio is working to close up 100 miles of city streets to make it easier for residents to practice social distancing. Mr. Cuomo ordered that city subways cease round-the-clock service, a practical change to clean cars and remove those sleeping in them, but one that struck at the very heart of New York’s up-all-night identity.

Top state and city officials are already contemplating the need for radically different routines, including transit systems with limits on occupancy for trains and buses. That could require staggered shifts for millions of workers.

“I don’t know that it’s going to be possible to have rush hours,” said Rick Cotton, the executive director of the Port Authority of New York and New Jersey, which operates commuter trains to and from Manhattan.

Three Million Tests a Year

To reopen New York City in the months and, possibly, years before a vaccine is available will require monitoring and stamping out the virus wherever it appears.

The approach itself is not overly complicated, and it has long been used for diseases like tuberculosis and H.I.V. The city has, for example, done similar work to contain the few thousand cases of H.I.V. that now emerge every year.

But to rein in the virus and reopen, even partially, the city may need to handle thousands of new cases a day once it expands the criteria for who can be tested.

The Harvard Global Health Institute conducted an analysis for The New York Times that assumed all symptomatic people would be tested and that each positive result would lead to tests of 10 contacts.

Under such a scenario, Harvard considered one model that projected 4,180 new cases a day in New York City on June 1; that number of cases would call for 35,415 New Yorkers to be tested daily, more than twice as many as are now being tested.

Under a more favorable model that projected the city having 2,233 new daily cases by June 1, New York would still need about 19,352 tests a day, according to the Harvard analysis. That is 26 percent more than were tested on one recent day.

Mr. Malatras said that the city was already meeting the state’s testing metric of roughly 8,300 a day, a threshold he said was based on federal guidance.

But the models assume that social distancing will continue. When people begin to return to work, the numbers could be far higher.

“Ideally you would take the test every day,” said Dr. Melissa Cushing, the director of the clinical laboratories at NewYork-Presbyterian/Weill Cornell Medicine. “That really answers the question: Should you be going out in society today?”

By slowing the virus’s spread, the shutdown in New York City has freed up some testing capacity, and some private hospitals have begun to test a broader range of people, not just health care workers with symptoms but also some without, and some emergency services workers.

Much more is needed.

“Testing doesn’t control the spread of the virus,” said Dr. Joshua M. Sharfstein, a vice dean for public health practice and community engagement at the Johns Hopkins Bloomberg School of Public Health. “It is testing and then the action that testing makes possible that really matters.”

To move to the next phase, which involves tracing every contact, the number of new positive cases would need to come down sharply.

In New York City, that could mean as few as 100 to 300 new cases a day, said Dr. Thomas Frieden, a former director of the C.D.C. and onetime New York City health commissioner. City data shows that while new cases have come down, they still range from 600 to 1,200 a day.

At the start of the outbreak, the city had 50 people to do the work known as contact tracing. Now it has 200. The city is hiring at least 1,000 people for its tracing program, and on Friday Mr. de Blasio added a new complication, moving the work from the Health Department, which has long done it, to the city’s public hospital system.

The need could be many times greater. Mr. Cuomo’s metrics called for more than 2,500 tracers for New York City. Mr. de Blasio vowed to reach that threshold in June.

Officials acknowledged that many more than that could be needed. In Wuhan, China, the first city brought down by the virus, officials eventually deployed an army of 9,000 contact tracers.

The contacts being traced under a state-run program would not include people such as strangers on the subway, only those with whom an infected person spent 30 minutes or more within 48 hours of the onset of illness.

“You have to prioritize, at least at the beginning,” said Dr. Kelly Henning, an epidemiologist who leads the public health program at Bloomberg Philanthropies, which is helping the state to hire contact tracers.

The job is challenging, in part, because it can mean asking someone not to go out for two weeks, and, if they can’t isolate at home, to do so in a hotel or, even a sports complex set up for that purpose.

Mr. de Blasio has said that the tennis center in Queens, when it is no longer needed as an emergency hospital, would become an isolation facility, in the way stadiums in China served that role.

Officials said that New York was not contemplating potentially invasive measures employed elsewhere, such as so-called proximity tracing using cellphone data, something South Korea has tried.

But to be truly effective at containing the virus, experts said, asymptomatic contacts would also need to be tested, because they can pass on the virus. That testing strategy has been seen as effective in South Korea, Taiwan and Singapore.

New York officials have not yet proposed taking that step.

Working Together, Six Feet Apart

Businesses large and small will have to figure out new ways of working in a world where the virus may still lurk in every human interaction. Where do people do their jobs and how do they work together? When do they work? Who goes into the office and who stays at home? Can people be made to go to work if schools do not open first?

The first answers may emerge when restrictions begin to ease in some parts of New York State for two industries — construction and manufacturing — that have remained partially open through the shutdown. The experiences of those businesses provide a useful, if incomplete, road map for the challenges ahead.

Three shifts instead of one. Temperature checks. No large meetings. Shields and face guards between employees working near each other. Salt and pepper shakers removed from cafeterias. Reusable water bottles banned. Stern words for co-workers who stand too close when they talk.

At Gear Motions, a manufacturer based in Syracuse that was deemed essential and has stayed open through the shutdown, managers found that they had to deal with a very human concern: fear.

“That’s what we learned early on,” Dean Burrows, the company’s president, said. “Everyone is scared.”

To combat the fear, Mr. Burrows said his company had been sharing information about the virus broadly and quickly, creating a system for sending text messages to every employee. So far, no one at Gear Motions’ factories had tested positive, he said.

Other companies have been exploring the use of wearable devices for employees that buzz as a reminder to maintain social distancing, and track employees’ locations to help with contact tracing should anyone become infected.

At La Guardia Airport, where a huge rebuilding effort has continued amid the outbreak, roughly 20 workers tested positive for the virus in the last half of March, said Gary LaBarbera, the president of the Building and Construction Trades Council of Greater New York. That prompted the Port Authority, which runs the site, the developer and labor groups to come up with a new safety plan.

Now face masks are required at all times on the site; turnstiles were removed in favor of contact-free entry points. And if a person tests positive for the virus, construction stops in the area where he or she was working, the area is disinfected, and those working with that person must stay home for 14 days.

Since the new system was adopted, the number of positive tests at the site has dropped to “the low single digits” each week, said Mr. Cotton, the Port Authority leader.

“It’s very difficult to require self-quarantine,” Mr. LaBarbera said. “But to my knowledge the workers are taking it very seriously and are following the guidance.”