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New crisis, same old problems for the EU

Posted By on May 18, 2020 @ 13:00

The European Union has no shortage of experience in responding to crises. But, as the number of coronavirus cases in Europe and the UK [1] surpasses 1.3 million and deaths exceed 155,000, we’re seeing the bloc encounter the same problems it has faced in the past: severely delayed action due to the divergent views of member states.

While Europe’s problems may seem to have little relevance for Australia, a cohesive EU that can exert a credible presence and influence on the world stage is definitely in our interest. The Covid-19 pandemic is testing the union, so it’s important to understand where the EU is going wrong.

Although we’ve since seen more cooperative [2] and collective [3] action in providing unified advice on community measures, increasing production of personal protective equipment and repatriating EU citizens, it’s clear the EU got off on the wrong foot at the beginning of the pandemic when members’ unilateral responses trumped EU solidarity.

Nowhere was that more evident than in mid-March when not one EU member state [4] had sent Italy much-needed medical supplies despite its huge and rising numbers of infections and deaths. Germany [5] faced a backlash when it banned the export of protective medical equipment, and France continues to ignore calls [5] from the EU to lift its export bans on drugs that could help treat coronavirus patients.

The tardy and limited assistance from the EU’s leading member states to others hardest hit by the virus has exposed two key issues: first, the negative consequences of a limited EU presence in health policy, and second, an all-too-familiar EU problem of individual members’ interests hindering a unified response.

Why doesn’t the EU have greater health capabilities? The answer is that member states have delegated exclusive competences [6] to EU institutions only in certain policy areas. Public health is a shared competence [7] between the member states and the EU—meaning that consensus must be built between member states and institutions on EU-level action. Understandably, that takes time. Yet, in the face of crises, member states have repeatedly shown a reluctance to look beyond their own interests, delaying collective EU action.

Such delays have long limited the perceived effectiveness of the EU and created resentment and Euroscepticism among members. During the 2015 refugee crisis, member states that weren’t immediately affected were reluctant to leap to the assistance of others. We saw a similar reluctance in the initially self-interested responses of member states to Covid-19, and we’re seeing it again now in the EU’s attempt to find a response to the economic situation wrought by the pandemic.

Some measures to assist ailing European economies have already been agreed upon [8]; however, more will need to be done to support the EU’s longer term economic recovery. EU finance ministers met on 23 April [9], but were unable to agree on where the money for economic recovery will come from, highlighting Europe’s enduring north–south divide.

Italy, France, Spain and seven other eurozone countries had called for the mutualisation of debt or ‘shared European debt [10]’ through the issuing of so-called coronabonds. But in the face of firm opposition from Germany, the Netherlands, Austria and Finland, ‘southern’ states are now pushing for grants funded by ‘perpetual’ (non-maturing) bonds [11] to finance economic recovery.

‘Northern’ states favour loans, not grants, from the EU budget and use of the European Stability Mechanism [12] to support spending and economic rescue packages. They’re unwilling to have their taxpayers foot the bill for economic transfers to countries that have previously been unable to manage their budgets [13].

That line is similar to the one taken by northern states in response to the eurozone crisis beginning in 2009. Such an approach stands to exacerbate existing inequalities within the EU, leaving the bloc weaker. Southern states were in a worse economic position before the crisis and have been harder hit by the pandemic than northern ones. Southern states are therefore questioning [14] why they should be saddled with potentially unsustainable levels of debt in order to respond to the health and economic consequences of a pandemic that is not their fault.

Germany often makes reference to its commitment to European solidarity [15]. However, risking the economic vitality of the bloc by not being willing to share the burden of economic recovery poses a serious threat to the future of the union.

This crisis, like many before it, invites a joint response. Naturally, that response cannot be achieved as quickly collectively as when single states act alone. But the impression that cooperation can be achieved only during ‘peacetime’ or on issues that are uncontentious and easy, and not during crises when member states need it most, continues to limit the effectiveness of the EU, which in turn fans anti-EU sentiment and diminishes support for the broader European project.

Recurring problems of collective action in the face of dominant members’ interests haven’t broken the union yet, but the Covid-19 pandemic is proving to be a real test of the EU’s fitness and value. If the bloc is to endure, more political buy-in will be needed to drive outcomes that showcase the strengths and benefits of the EU, rather than just its weaknesses and deficiencies.

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URLs in this post:

[1] coronavirus cases in Europe and the UK: https://www.ecdc.europa.eu/en/cases-2019-ncov-eueea

[2] cooperative: https://www.auswaertiges-amt.de/en/aussenpolitik/europa/maas-corona-europe/2328352

[3] collective: https://ec.europa.eu/info/live-work-travel-eu/health/coronavirus-response/overview-commissions-response_en

[4] not one EU member state: https://foreignpolicy.com/2020/03/14/coronavirus-eu-abandoning-italy-china-aid/

[5] Germany: https://www.bloomberg.com/news/articles/2020-03-09/germany-faces-backlash-from-neighbors-over-mask-export-ban

[6] exclusive competences: https://eur-lex.europa.eu/legal-content/EN/TXT/?uri=LEGISSUM%3Aai0020

[7] shared competence: https://europa.eu/european-union/topics/health_en

[8] agreed upon: https://www.consilium.europa.eu/en/press/press-releases/2020/03/23/statement-of-eu-ministers-of-finance-on-the-stability-and-growth-pact-in-light-of-the-covid-19-crisis/

[9] met on 23 April: https://www.npr.org/sections/coronavirus-live-updates/2020/04/23/843351315/eu-leaders-fail-to-agree-on-coronavirus-economic-recovery-program

[10] shared European debt: https://theconversation.com/coronavirus-what-is-the-european-union-doing-to-manage-the-crisis-135097

[11] grants funded by ‘perpetual’ (non-maturing) bonds: https://www.theguardian.com/world/2020/apr/23/clashes-predicted-over-trillion-euro-covid-19-aid-as-eu-meets-online

[12] European Stability Mechanism: https://www.dw.com/en/esm-coronabonds-or-marshall-plan-how-the-eu-could-manage-the-coronavirus-fallout/a-53047576

[13] unable to manage their budgets: https://www.forbes.com/sites/daviddawkins/2020/04/07/what-are-coronabonds-and-why-is-nazi-war-debt-back-on-the-eurozones-table/#596171594c6a

[14] Southern states are therefore questioning: https://www.wsj.com/articles/europe-seeks-to-bridge-divisions-as-it-debates-recovery-fund-11587640270?mod=e2tw

[15] solidarity: https://www.euractiv.com/section/economy-jobs/news/merkel-open-to-bigger-eu-budget-bonds-to-finance-post-crisis-recovery/

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