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Europe under quarantine

Javier López 20th March 2020

The coronavirus crisis has exposed the shared vulnerability of Europe’s interdependence. Time to turn that into a strength.

Europe's interdependence
Javier López

Europe is facing a new stress test. And, this time, it is not only the health of its institutions that is at stake but also that of its citizens, its economy, its role in the world and its credibility and usefulness in the eyes of Europeans. The Covid-19 crisis has arrived like a tsunami in a fragile European Union still battered after a long list of crises, which have left noticeable scars.

Up to now, the union has shown a lack of co-ordination. It appears Brussels has been able neither to digest nor anticipate the consequences of a pandemic with a huge impact. Unilateralism has prevailed in border management and together with it have come ad hoc public-health interventions—and the shameful image of foreign aid delivered to Italy in the face of the passivity of its European partners.

We must remember, though, that the EU lacks real competences in health. The union probably did not have another option but to encourage the slow yet ruthless awakening of the Leviathan of the old nation-states, recalling the stubborn exercise of their machinery of power.

This week’s developments suggest that their forceful actions must now be aligned, so that we have the ability in the Schengen area to get back to normal as soon as possible. A state of normality which, it must be said, will not however operate under its prior parameters.

Gambling with the future

Europe is gambling its credibility and future in the economic response to the dire consequences of a continent under quarantine. Gross domestic product will plummet this quarter—an indicator of economic flows (rather than stocks) very sensitive to such standstills.

The response of the administrations and financial institutions will determine whether we are facing only a slump followed by recovery or a blow which debilitates our productive system and labour market and ends up bringing to light, once again, the institutional imbalances and shortcomings of the euro area.

In this context, the response of the Eurogroup this week was particularly disheartening. Their conclusion: let everyone spend what they can, but without a Europeanisation of the stimulus.

Now is precisely the time to use innovative and ambitious tools which fire a co-ordinated European fiscal cannon: the European Stability Mechanism and the European Investment Bank are at our disposal. This should be done while the European Central Bank continues injecting stability and unlimited liquidity into the financial system.

That is to say, we should take note of, and apply, the lessons learned from the Great Recession, in order not to make the same mistakes again. We cannot afford to. 

War economy

The counterpoint: the national governments have taken note and are ready to mobilise resources as if this were a war economy, because this is exactly what it is. The Spanish government is getting ready to activate up to 20 per cent of GDP in the form of guarantees, expenditure and investments, to safeguard its economy and protect the most vulnerable. France and Italy are initiating similar programmes.

We need the union, however—its imagination, ambition and solidarity—because the coronavirus is reminding us, like a slap in the face, of our deep interdependence. If that be in the form of our shared vulnerability, let’s deploy it as our strength—it’s what the European Union is there for.

This article was originally published (in Spanish) by eldiario.es and edited by Social Europe

Javi Lopez
Javier López

Javier López has been a Spanish member of the European Parliament since 2014. He is chair of its delegation to the Euro-Latin American Parliamentary Assembly and a member of the Committee on Environment, Public Health and Food Safety.

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