Coronavirus: EU’s national leaders must seize the moment

Can Europe’s political leaders rise to the challenges of a hostile, post COVID-19 world, asks Friends of Europe's Giles Merritt.

Photo credit: European PA Images

By Giles Merritt

05 May 2020

Our vaunted civilisation has become unimaginably vulnerable. So far, commentators’ chief currency has been generalisation and exhortation, but now it’s high time to get down to detail. What should the EU be doing both in global and intra-European terms to confront post-Coronavirus conditions?

America is in full retreat from multilateralism and China is ill-suited to it, so the Coronavirus crisis is a make or break moment for the EU. Once the world’s 200 or so national governments begin to search for a new modus vivendi, global recovery will largely depend on the leadership role Europe takes.

Europe’s policymakers don’t need to wait for infections to slow and lockdowns to end; we know we are in for a deep, deep depression that will upend longstanding international business practices and geopolitical relationships. It’s up to the EU’s national leaders to seize the moment; how they respond will determine not just the EU’s future but that of the global political economy.


The choices open to EU countries as they emerge from lockdowns may at first appear common-sense and comparatively uncontroversial. In fact, they will lead to dramatic change.

EU governments must consider strategic shifts spanning potentially explosive issues. Top of the list will be some form of EU fiscal union to help fund member states’ present and future costs, and that will lead to a degree of political union that has long seemed unthinkable.

There will inevitably be popular insistence on more equitable social and economic levelling. Changes associated with this may well include moves toward ‘virtual’ government and thus the advent of EU-wide parties, along with a European industrial recovery plan that involves more assertive international trade policies.

All these daunting issues will be exacerbated by growing demographic imbalances, irresistible migration pressures and, because Coronavirus will devastate much of Africa, revolutionary changes to boost the EU’s economic development and aid policies.

Is the EU up to the task? Its immediate response to Covid-19 hasn’t been as poor as it looks. Healthcare and the other domestic instruments involved were necessarily national and quite far removed from the mainstream of intra-EU decision-making mechanisms. Slowly, however, the European Commission is marshalling member states’ civil services and introducing greater coherence.

"The Coronavirus crisis is a make or break moment for the EU. Once the world’s 200 or so national governments begin to search for a new modus vivendi, global recovery will largely depend on the leadership role Europe takes"

Economic policies are also taking shape to soften the immediate impact of the lockdowns and pave the way for a hard-fought recovery in the years – not months – ahead. It is these policies that will eventually restructure an EU that has long resisted genuine reform.

No one can say how deep the coming depression will be, nor how long it will last. The guesstimates from organisations like the IMF and the OECD suggest trillions rather than billions in governments’ borrowings to subsidise employment. A small crumb of comfort is that this indebtedness is to be so universal we will be spared currency wars.

But we must brace for conditions that will test every sinew of liberal democratic societies. In the US, analysts are speaking of 30 per cent of the workforce becoming unemployed, far more than the quarter in the grim years following the Wall Street crash of 1929. In Europe, welfare and social benefits will soften the blow, yet the spectre of civil disobedience and inner-city violence looms large.

National governments are finding it hard to shake off electoral considerations and recognise that a collapse of European solidarity would condemn them all to a new epoch of chaos in which there can be no winners. The North-South wrangling over Coronabonds and various forms of debt mutualisation to aid Italy and others is an unedifying re-run of the Greek sovereign debt crisis a decade ago.

The signs are that the overwhelming need in the eurozone to protect the common currency will prevail, and that there will be EU-level debt financing. Less certain is that European political leaders will rise to the challenges of a hostile new global environment by re-thinking and strengthening their increasingly inadequate union.

This article first appeared on the Friends of Europe website

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