Coronavirus recovery package could be the EU’s finest hour
After more than a decade on the back foot, the European Union is back to doing what it does best for its citizens, says
THE post-coronavirus recovery package agreed at last month’s EU Summit has garnered headlines for its financial heftiness.
By allowing the European Commission to borrow on financial markets with EU-backed bonds, the package provides €390bn in grants and €360bn in low-interest loans to member states hardest hit by the virus-induced depression. Agreed to alongside a €1.07 trillion, seven-year budget, it constitutes the single most ambitious spending plan the EU has yet produced.
Nonetheless, three weeks on from the agreement, there is reason to think its most lasting impact may not be the relief it will soon provide but rather the precedent it has set for a new, more vibrant kind of European politics. This can be brought out simply by comparing our current recession with the one 12 years ago.
Despite similarly unsure beginnings, this time around the EU-27 has taken to crisis management far more swiftly and decisively, producing a deal that avoids the divisive net-contributor/beneficiary row of the late 2000s and moves toward a greater fiscal union.
While billed as a one-off effort in an institution where precedent is king, the shift could presage a decade of European integration.
A leap of this magnitude seemed politically impossible only a few months ago when the spread of the virus to Europe pushed EU member states to begin closing their borders, undermining a yearlong Commission effort to promote closer integration through environmental policy.
Italian and Spanish pleas for crisis relief were stonewalled in March and then, in early May, a German court ruling cast doubt over the legality of the ECB’s bond market purchases, threatening to scupper the moderate stabilisation measures it had managed to push ahead with.
It took a wholesale renewal of the Franco-German alliance to advance the recovery conversation after that point.
France’s Emmanuel Macron, who campaigned on delivering a deeper fiscal union, deserves credit for pressing the issue in the face of German resistance, even leaning on allies in the German finance ministry to exert pressure within Angela Merkel’s government.
Merkel deserves commendation for being willing, after nearly 15 years in government, to turn her accrued political capital toward genuine innovation, shifting the European balance of power away from the entrenched northern bloc.
A more complacent leader would have coasted to retirement and a more short-sighted one would have made private hay of Germany’s relative good fortune in handling the virus.
Even with France and Germany on the same page, the ultimate swiftness of what they brought about belies an unusually fractious road to agreement.
The longest EU summit in 20 years, it featured unprecedented public infighting between northern member states looking to reduce spending and southern member states looking to increase it.
Some have argued that the newfound willingness of Europe’s leaders to air their grievances openly is indicative of cracks in the EU’s foundation, but in my view the opposite is true.
Probably the best book written on European affairs last year was Commission insider Luuk Van Middelaar’s Alarums and Excursions.
He argues that the EU, in dealing with crises over the past decade, has been strongest when it wears its heart on its sleeve, confronts its own internal power struggles head on, and allows a too-often-apathetic European public to see how their political meal is made.
The commitment of all major players involved in last month’s negotiations — outside of avowed black sheep like Viktor Orban in Hungary — to reaching some form of agreement was never truly in doubt in spite of all the bickering.
The summit’s historic noisiness is better read as a sign of the EU’s growing maturity and robustness.
It is no longer enough to try to cordon off the political from the administrative where European integration is concerned, paying lip service to notions of unity while attempting to hammer out genuine conflicts of interest behind closed doors.
That formula might have worked once but today it only lends intuitive credibility to populist arguments about EU dishonesty.
This year’s summit has shown the way forward. Everybody has come away reasonably satisfied with the recovery agreement.
Although Europe’s self-described ‘frugal four’ member states have achieved meaningful concessions for themselves, it is noteworthy just how close the final agreement came to the Franco-German proposal initially tabled by the Commission.
This is testament to Commission president Ursula von der Leyen’s skill in handling her first major crisis, but it also shows the usefulness of freeing all parties to lay their cards on the table without having to pretend toward neutrality.
The agreement will now make its way to the European Parliament where a push will seemingly be made to redress some of the agreement’s inadequacies surrounding legal and environmental issues.
If Parliament’s early support for stabilisation measures is anything to go by, we may even see efforts to increase the spending limits the agreement outlines.
It is possible I’m getting ahead of myself where recovery is concerned. We are far yet from confronting the worst this recession has in store for us, and, as historian Adam Tooze recently argued, to allow victory to lead to complacency would “be a betrayal of the realism that makes the deal so remarkable”.
However, after more than a decade spent on its back foot, the EU once again feels as though it is at the forefront of political innovation.
Such a return to form, I think, can suffer some degree of celebration.
‘The EU is at its strongest when it wears its heart on its sleeve and tackles problems’