National politics sink hopes of an EU response to Coronavirus crisis
The Coronavirus has exposed how brittle Europe is and the national protectionisms and politics of ‘sauve qui peut’ may last long after the medical threat has receded, writes Denis MacShane.
It was President Obama who famously said “Never let a crisis go to waste.”
Today the number one question in Europe is whether its leaders can rise to the economic and social challenge as well as the health menace of the Coronavirus crisis.
The last four decades of what might be called the era of Davosman has come to an abrupt end. The focus on orthodox ultra-liberal individual accumulationist ideology, in which all that matters is the bottom line, and in Margaret Thatcher’s words “There is no such things as society”, have left European nations almost defenceless when faced with the Coronavirus attack.
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Many have warned over the last three decades that the fusion of communism and capitalism in China with no rule of law, no media freedom, no possibility to protest and organise politically to insist on basic health care and food hygiene would lead to disaster.
But such were the profits to be made as Europe (and North America) off-shored production to a China where human and workers’ rights were non-existent no-one ever required Beijing to meet the normal standards of its new partners in the G20 or G7.
Europe has forged ahead with its open border single market based on the four freedoms of movement of capital, goods, services and people, and introduced the Euro as the essential prerequisite for the single market to function.
“National views of what needs to be done prevail over common European responses to creating common EU-wide instruments to deal with the crisis”
But once back home in national capitals, national political leaders have not been willing to initiate reforms to do away with national restrictive practices that stopped the creation of necessary tools to make the Euro work.
The Coronavirus has exposed how brittle Europe is. Suddenly and unilaterally, national governments closed frontiers, stopped intra-European travel, banned exports of medical equipment, or failed to coordinate measures such as lockdowns.
On March 3, the UK Prime Minister Boris Johnson was telling reporters that he shook hands with everyone he met on a hospital visit and what was wrong with that?
Last Friday France’s President Macron said he would cut all links with Britain if the UK government continued on its policy of refusing to do what the rest of Europe was doing - namely to dramatically enforce no contact or as little as possible between people.
Boris Johnson got the message and has now followed the rest of Europe but two or three weeks later. We will soon find out the cost.
Meanwhile national views of what needs to be done prevail over common European responses to creating common EU-wide instruments to deal with the crisis.
Instead of printing and pouring money directly into the pockets of the millions of workers now facing penury by the lay-offs as so much business shuts down on government orders, the best that is on offer is more support for the banks through ECB in the style of Mario Draghi’s intervention in 2012.
That helped shore up banks, calmed markets and saved the Euro from collapse as a result of default but at the price of Brussels imposing harsh adjustment measures on countries like Spain, Portugal, Italy or Greece.
“Governments will have got used to breaking all the rules of the Eurozone, borrowing and spending from the magic money tree, and see no need to strengthen EU institutions to provide a truly European response to the assault on the physical and economic health of Europeans”
The damage to the economy, the monstrous rise in youth unemployment, and the anger across southern Europe and the political forces that follow a Yanis Varoufakis on the left or a Marine le Pen on the right unleashed a wave of populism and nationalist identity politics that threatened the very cohesion of the EU.
There is general agreement in the UK, for example, that the politics of austerity, which was denounced by both the left and the right as being the wrong European-style solution, helped forment the Brexit vote of 2016.
A left populist government was elected in Greece, the classic social democratic and socialist parties were punished for their ministerial support for austerity, and single issue green populists displaced Christian democratic and liberal parties which also lost support to the nationalist populist right.
In other words, while Draghi saved the banks and the single currency, the fiscal policies adopted came close to sinking the EU.
Now the worry is that if the same old Ordoliberalismus rules apply and German, Dutch, Finnish and other fiscal conservative finance ministers veto new thinking, then the Coronavirus economic shock will lead to enduring mass unemployment, the closure of many firms, and inevitably a hunt for scapegoats like any foreign workers from Asia or just any foreigner of any sort.
Governments will have got used to breaking all the rules of the Eurozone, borrowing and spending from the magic money tree, and see no need to strengthen EU institutions to provide a truly European response to the assault on the physical and economic health of Europeans.
The national protectionisms and politics of ‘sauve qui peut’ that are emerging may last long after the medical threat of the virus has receded.
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