Europe fails the virus test
The European Union has long been hailed as the guarantor of stability and peace in Europe; even its fiercest critics admit that the dissolution of the Warsaw Pact would not have been so smooth, had it not been for the EU’s support and largesse.
However, COVID-19 has magnified cracks in the EU’s cohesion. The question now is whether it emerges from the pandemic stronger or weaker — or whether it will even implode.
The Schengen Zone was built on the free movement of people across borders, but as the virus spread, the barriers went up.
Many workers in border regions are employed in neighboring countries, some in medical and care professions, which heightens the care crisis. Confining hundreds of thousands of Eastern European agricultural laborers to their homes endangers the harvest of early vegetable crops, which may have ramifications for overall food security. Giant trucks carrying essential goods are still allowed to cross borders, but their drivers’ access to food and hygiene is precarious; without them, supermarket shelves would remain empty and Europeans would go hungry.
EU member states also showed a woeful lack of solidarity when it came to protective equipment such as masks, gloves and gowns; Germany and other countries have banned their export.
Pictures of Chinese and Russian aircraft delivering desperately needed medical equipment to
Italy will be ingrained in this generation’s collective memory. They will ask themselves, where was European solidarity when we needed it most?
So what should be done now?
Some advocate “corona bonds,” guaranteed jointly and severally by all European countries. This would be particularly important for
Italy, which has been ravaged by COVID-19. The country is already highly indebted, and some economists expect its debt-to-GDP ratio to reach 150 percent.
The northern states prefer the European Stability Mechanism, which has a debt capacity of 410 billion euros and allows countries to borrow on their books. Germany and the Netherlands have proposed an aid package of up to 20 billion euros, which would be a drop in the ocean. French Finance Minister Bruno Le Maire suggested a rescue bond of limited duration, 5 to 10 years, and wants urgent action: “We should not be obsessed by the word ‘corona bonds’ or eurobonds. We should be obsessed by the necessity of having a very strong instrument to provide us with economic recovery after the crisis.”
This pandemic may be the making or unmaking of the EU. If the 27 member states cannot stand together in the face of such adversity, they risk becoming no more than a fair-weather union. As Portugal’s Finance Minister Mario Centeno put it: “The way Europe deals with the financial strains left behind by the virus will determine the shape and the extent of the recovery, and, ultimately, the cohesion of the euro area.”
European Commission President Ursula von der Leyen hit the German TV stations on Friday night vouching for European solidarity. Some may struggle to take her fine words at face value.
Cornelia Meyer is a business consultant, macro-economist and energy expert. Twitter: @MeyerResources