Shambolic Solidarity: Every man for himself?
In recent weeks, the health crisis caused by COVID-19 has become the stage for foreign influence games and interstate dissonance. This has resulted in unilateral announcements of border closures, and small-scale gestures of solidarity.
For several days now, newspapers and social networks have praised the dynamism of European cooperation. Masks and materials have been sent to countries in difficulty, and Germany has been receiving French and Italian patients. As well as being a beacon of hope, these interventions show a bilateral management of the crisis between countries, basde solely on the goodwill of each member state, without systematic European management.
However, true European solidarity would lie in the systematic distribution of patients from the most affected regions to the least affected regions during this first wave of the virus. This should be happening less on a voluntary basis and more on a joint management of European medical and civil protection capacities. This could take the form of building air and rail bridges between the different European countries, like the ones regions in France are already connected by, for example. This would also be the case when managing medical equipment.
Ultimately, these bilateral arrangements highlight the glaring inequality between European states when it comes to their hospital capacity and their fiscal health. Even though the Commission has lifted the strict European budgetary rules so countries can deal with the crisis, these measures seem overdue. In Spain and Italy, the number of intensive care beds with respiratory assistance seems extremely low compared to the hospital capacity of other countries, such as Germany. This then prompts Europeans to ask: isn’t the smooth functioning of hospital systems a common European interest? If so, why did we allow financial crises and austerity measures to decimate these systems all in the name of making savings? We are now paying very highly for this. On top of this, the risk of Northern and Southern Europe dividing resurfaces, as it did during the crisis of 2008.
What is Europe doing?
In its bulletin, the European Commission has prided itself on its coordination of “the common European response to the pandemic” and taking “firm measures to strengthen the public health sectors and mitigate its socio-economic effects”. What does this mean exactly?
The Union began by closing its external borders for 30 days, subject to renewal. The Commission has implemented several measures, which take the form of concerted and voluntary action. These include establishing a team of scientific experts, clinical trials and strategic reserve of medical equipment “rescEU”. The EU’s lack of competence with regard to health matters, however, gives it little room for maneuver.
The Commission has also taken action through new fiscal measures such as lifting Member States’ public deficit constraints (suspension of the Stability Pact and of budgetary constraints) and setting up a mechanism to support investment. This aims to mobilise the liquidity available through European structural funds, as well as make the State aid regime more flexible. It also gives states the right to rescue their troubled businesses.
For its part, the Central Bank announced the implementation of a “Pandemic Emergency Purchase Program” (PEPP), which includes €750 billion’s worth of bond buybacks in addition to other liquidity and equity measures to mitigate the social and economic costs of this health crisis.
In other words, the Union is making its rules more flexible, to give States more room to maneuver. The Union is also tinkering with their structural funds and the few tools that they have at their disposal. These measures are far from enough to give any hope that the European economy can be successfully salvaged.
Finally, the Commission announces that “the crisis has only just begun”. It says that it is “ready to do more as the situation evolves”. It is certainly time to give the Union the means to do more ... unless the Member States disagree.
The European Council: The “remake” of a bad Greek tragedy
On Thursday March 26, the European Council held a crisis summit via video conference. But just as in the past, at the time of the sovereign debt crisis and the challenging Greece case, it once again demonstrated its inability to respond to a major emergency. Solutions were drowned out by a concert of obscene national self-interest.
As a matter of fact, the Heads of State and Government finally validated only one declaration that endorsed a few measures: establishing an emergency medical stockpile for the future and suspending budgetary rules on deficit. There was nothing on any common economic recovery at the European level, nor a major health action plan.
However, the were some proposals on the table. In a letter to the President of the European Council, nine states called for the creation of Eurobonds to borrow cheaply on markets. In their opinion, these would support the European economy, especially the regions in greatest difficulty. On the front lines, the Italian and Spanish leaders called for the creation of “Eurobonds” (“recovery bonds”), and joint obligations to release a European recovery budget.
The Netherlands and Germany flatly rejected this proposal. As a countermeasure, they propose the use of the European Stability Mechanism (ESM), despite their initial reluctance to do so. This fund, endowed with 410 billion euros and created after bitter negotiations in the midst of the Greek crisis, where States had already taken the risk of imploding the euro zone, could come to the aid of countries in difficulty.
Giuseppe Conte, the Italian Prime Minister, does not agree. He said: “This is not what we need now. [...] The ESM is an instrument that was developed to assist Member States facing financial stress due to asymmetric shocks. The coronavirus, on the contrary, is causing a symmetrical shock, with the effect of plunging our [...] economic and social systems into depression.”
In the end, the Council decided not to decide. It has given the Eurogroup, the informal body of eurozone finance ministers without institutional legitimacy, two weeks to find common ground.
This clash rekindles the deep divisions of a European Council that can only agree on basic agreements. But in this crisis, a minimalist response will not be enough. The inability of the European Council to take decisions and the powerlessness of the Community institutions, whose actions are suspended from any national leader’s decision, once again demonstrate the structural weakness of the Union.
In this situation, it is ultimately the Europeans who will pay the price. If bilateral emergency health cooperation saves the day today, we will have to learn from Europe’s failure to manage this pandemic as we emerge from this crisis. A fundamental change in the way the Union operates, giving priority to the common interest of Europeans through its Community institutions, is essential. The cost of non-Europe is now measured in human lives.
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