If there is an actor that has definitely disappeared from the “radars” since the beginning of the sanitary crisis, it is, undoubtedly, the European Union. Speaking recently to a friend from North Macedonia, when the EU lifted on March 25 the blockage on the opening of accession negotiations for her country (and for Albania), she replied: “The information went completely unnoticed with us. We don’t care, since we saw that faced with the virus, the European Union was non-existent. The EU completely gave up on Italy …” The last time that European heads of state and government saw each other “in the flesh” was on February 20 and 21, in Brussels. The Twenty-Seven were gathered to talk about the European budget for the period 2021-2027, which more or less represents 1% of their national wealth. They had failed to reach an agreement between the “lovers” of austerity and those who want to reinforce public spending. The coronavirus, the very first cases of which had been detected in Europe at the end of January, had not been discussed. The last press conference of the President of the European Commission, Ursula Von der Leyen, on March 9 in Brussels to celebrate these “hundred days of taking office” seemed completely out of touch and outside the real world. Especially since she said that “her first hundred days had been useful for European citizens”. In any case, they didn’t notice it, especially since the incantations on the “European green deal” have nothing concrete. She barely mentioned -the originating from China- virus and continued to praise globalization, free trade and competition.
Does the European Union have been conspicuously absent?
It would be unfair to say that the European Union has done nothing. But it is true to say that the EU acted within the strict framework of its prerogatives, nothing more than just arranging few meetings, some essentially budgetary and financial measures and finally some considerably delayed emergency aid. To this must be added Brussel’s permanent obsession with maintaining the free movement of goods at the borders between and outside of the European Union countries, which also does not seem to be in conformity with the grave situation. A first informal meeting of a Health Council at the end of January was simply for exchanging information and the meetings that followed did not provide concrete answers.
On March 10, though video conference, the Twenty-Seven for the first time raised the possibility of suspending the Stability and Growth Pact of the Maastricht Treaty. Of course, European leaders have not discussed about the economy while the coronavirus crisis has revived isolationist temptations across Europe. We have seen borders close, countries like France and Germany banning the export of these masks, which Italian hospitals were so in need of. But, as was hammered from Ursula von der Leyen, we must “We will use all the tools at our disposal to make sure the European economy weathers this storm.”. Apparently, the priority for Brussels remained unchanged—even in times like these—, the economy before everything!
On the budgetary and financial level, in a few days since mid-March, there has been a real acceleration, which is rather spectacular. Following Germany, which presented the largest budget stimulus in its history and renounced budgetary balance, yet written in stone, the Stability and Growth Pact, that governs the sacrosanct budgetary discipline of the countries in the euro area, has been suspended; The European Commission has put tens of billions on the table, the European Central Bank (ECB) has announced the injection of 1 trillion euros. Nevertheless, there were, indeed, real hesitations, as it is shown by the disappointment caused by the President of the European Central Bank, Christine Lagarde’s first and rather inadequate measures on March 12, which meant that Frankfurt would do nothing to save Italy. The effect has been disastrous. The spectre of a eurozone dislocation has resurfaced. In addition to the health and economic emergency, there was the possibility of a new crisis of the single currency. On the night of March 18 to 19, the ECB tried to set things right and announced its willingness to buy an additional 750 billion euros in securities, and thus, bringing to 1,050 billion what it is ready to spend by the end of 2020. The latter constitutes what Ms. Lagarde’s predecessor ,Mario Draghi, had done during the 2012-2015 crisis. The next morning, and after the ECB’s announcements, the markets opened higher. Bond rates have eased. The ECB had succeeded. The bank has done its job as a banker, but where are the politics?
Monday March 23, the finance ministers of the Twenty-Seven approved on the sine die suspension of the Stability and Growth Pact, without even discussing it. For the time being, no state is required to respect the limits of 3% of GDP for the deficit and 60% of national wealth for the debt. Another emblem that has fallen: The Commission has considerably relaxed the state aid regime, to allow the 27 to rescue their businesses without being accused of violating internal market rules. The Commission also made available 37 billion euros of structural funds, unused credits to member states, to fight against the virus.
A European Council of March 26 for nothing …
The ball was now in the court of politicians, the Twenty-Seven heads of state and government held a video conference on Thursday, March 26 which ended without spectacular results. The path proposed by Italy and Spain of a pooling of eurozone borrowings in order to finance the ravages of the Covid-19, and thus alleviate the financial burden on countries, which markets would tend to charge more, was rejected by the Netherlands and Germany. The virus has not overcome the traditional dividing lines between the North and the South of the Old Continent, as evidenced by this statement of the German Minister for the Economy, Peter Altmaier, at the start of the week: “I recommend caution, when seemingly new concepts are presented, which are really just recycling old ideas that have long been rejected.”, he launched, after having qualified the discussion on the Eurobonds of a “phantom debate”. ” We can breathe”, said Olaf Scholz, social democratic finance minister and vice chancellor since 2017, as the Bundestag voted urgently on Wednesday 25 March to lift the constitutional requirement to present public accounts balance and endorsed the bigger plan to support the economy in its history. A message that sounds like a reproach to countries that -like Italy, Spain or France to a lesser extent- have not tackled this crisis with such healthy public finances. “The moral hazard” which everyone says does not exist in this order, since the pandemic affects everyone, regardless of the maintenance of its public accounts, is not so far. Like what, all the taboos have not fallen…
The EU 27 just agreed on Thursday, under pressure from Italy, which threatened to refuse the joint declaration, to examine within two weeks stronger measures to deal with the recession announced as the use of the Mechanism European Solidarity (access of the statements to the financial markets). The European Stability Mechanism (ESM) is an emergency fund of the euro area that allows a precautionary credit line to be granted to a country, a group of countries or even to all countries in the euro area that request it. Italy, whose debt is the second highest in the euro zone after Greece, expected the EU to have greater financial solidarity.
At the start of the summit, the President of the European Parliament, the Italian David Sassoli also called for “extraordinary measures to respond” to the crisis. German Chancellor Angela Merkel however loudly proclaimed at the end of the summit her opposition to what are known as “corona bonds”. “It is not the intention of all the member states” to issue these common European loans, she said.
No real European solidarity
While the pandemic has already claimed nearly 20,000 lives in the EU, mainly in Italy, Spain and France, the containment of the population has serious economic and social consequences. From the outset of the crisis, European states have favoured national responses, regarding health, social and economic issues, without any coordination. We have even seen aberrations with neighbouring countries applying totally opposing doctrines, which made confinement with open borders illusory (Netherlands and Belgium). States have announced major spending plans without seeking coordination at European level.
An inaudible European Union, locked in its old demons: European actions, which remain within the strict framework of the EU’s limited competences are certainly real but have remained inaudible, offset and far too late:
– They go no further than loosening very unpopular European constraints and, in any case, insufficient, in the event of crises
– Aid (Structural Funds, possibility of using loans from the European Stability Mechanism-ESM – for states which would no longer be able to finance themselves on the markets) require long delays and complicated procedures.
– EU emergency aid to the most affected countries in Europe was modest (reallocation to Italy of packages originally intended for China) and without the publicity that surrounded the delivery of aid from China, Russia, Venezuela and Cuba, causing a disastrous effect on public opinion.
– The suggestion of a joint invitation to offer protection and care equipment (masks, tests, ventilators, etc.) was proposed late, a good idea from Brussels but which comes far too late to have an effect at the height of the crisis.
– The European Commission’s obsession with keeping the internal borders open, makes the EC insist on safeguarding the free movement of goods within the Union despite the current closure and restrictions, and to continue to advocate international trade. In January, Brussels sided with China, which threatened retaliation from all those who wanted to end air relations with China, such as the Italian Prime Minister. The latter finally gave in, kept the liaisons going and we saw the result …
In fact, true to its image, the EU’s action proved bureaucratic, displaced and without the necessary voluntarism that would have made the difference. Brussels a cold monster? A simple financial institution like the International Monetary Fund or the World Bank. Even the United Nations with its World Health Organization seemed more active and in its role !? What is the EU for? Moreover, the European Commission by being obsessed with the ideology and the benefits of open borders, spends time in insisting on the free movement of goods within the Union, even at the height of the crisis, while continues to advocate for international trade. The future plans of the Commission contain a revision of the budgetary proposals in favor of credits and aid for economic recovery. However, this also means that the “vague green deal” will also be indirectly “putted in the fridge”! And yet our economic model is not being questioned: growth and free trade remain the watchword of the Brussels doctrine.
Is another European Strategy possible?
European bureaucrats will respond that everything is done within the framework agreed by the Treaties that provide no direct competence to the EU in a health crisis and health policy. That’s right. Should the reflection, that should have started this summer, on the future of Europe take into account the weakness of the European response and consider extending European competences in this area? Maybe, but what for? In fact, what is striking in this crisis (as in others like the migration crisis, the financial crisis or the climate crisis) is the lack of political response from the EU which remains divided between states which play their national part and bureaucratic machinery that is unwilling to take up any risks. The European Parliament, without having real power, is only paying attention to the utilities. Strengthening the political role of citizens through strengthening the powers of the European Parliament (and citizens’ initiatives) would be the only way in the future to strengthen this political dimension of the EU. But is this feasible when the EU has lost so much credibility? Nevertheless, in the meantime, one has to wonder about why the current leadership of the EU Commission and European Council, have remained so timid, bound hand and foot by the limits of the European Treaties?
Let’s try to imagine what a Jean Monnet or a Jacques Delors would have done? No one knows, but we can be sure that they would have taken an initiative without waiting for the green light from Paris, Berlin, Madrid, Rome …!
The leniency towards China, which hid for weeks the start of the epidemic (whistleblowers put in prison …) would it have been in order? Could we not have taken immediate measures to avoid the arrival of the virus in Europe instead of maintaining links with China (which Italy tried to do but gave up following threats from Beijing)?
Should not the Commission have had the intuition and the courage, right from January, to propose a common European Union action plan (protective equipment to be made and shared, sharing of hospitals available, external border control measures, economic support, etc.)? Even if this plan would not have had the time to please the major capitals, it would at least have made a lasting impression and raised awareness. Does the European Commission have the capacity to present initiatives on the table? Why did not the Commission do it?
To choose leaders without legitimacy, and whose main quality sought is submission to the capitals of the big states, we leave the EU adrift in the hands of a technocracy whose main concern is to stay within the strict framework of its missions, moreover here confined in its liberal bias on the benefits of free trade and the opening of borders at any cost. We have a bureaucratic Europe, should we be surprised that it reacts like a bureaucrat?
Only a political Europe would react differently! It is not only the question of Treaties and Institutions; it is the choice of Women and Men who are in charge that can make the difference.
Another strategy would have been possible, is still possible. But it can only be achieved through a radical change in the dogmas and priorities of today’s Europe. We are in need of responsible women and men who will stand up from our respectful countries to rebuild the European project on other bases. New bases that will turn their backs on the last thirty years.
Henri Malosse – Santa Maria di Lota March 30, 2020