Muddling through: Towards an EU federal response to the crisis
20 March 2020
The European Union is not disintegrating. Some might be tempted to think so given the chaotic European response to COVID-19, the initial lack of coordination and the rapid introduction of border controls between member states. But in cases of national emergency national leaders rightfully tend to the needs of their citizens. This was to be expected as it mirrors our own individual reactions confronted with a sudden shock – irrational behaviour, potential panic and hoarding of supplies. All in all, the situation reflects the true nature of the European Union – a unique international organisation with federalist features but ultimately driven by national capitals and national interest. Many people expect decisive unilateral federal action but they won’t get one, especially in the short term. We will instead see a retreat to national lines, the adoption of drastic measures and then a decisive ‘make or break’ moment for a collective European response. This may be painful to say, but we will have a textbook EU crisis response.
The European Union does not have exclusive competences to deal with healthcare matters and its role is mostly to coordinate health policies among its members. Additionally, it relies on national capitals for a coherent response in times of emergencies or natural disasters. The EU Civil Protection Mechanism might be pan-European in name but any type of assistance needs to be provided by the individual countries after a national decision. Regrettably, this is why Italy didn’t receive support in the immediate days after the situation got out of hand – the rest of the countries were chaotically wondering how to organise their own limited resources and equipment.
What the European institutions can do in the short-term is to quickly mobilise available resources at their direct disposal and also facilitate the smooth functioning of the single market. In the last several days the European Commission took a number of important steps to achieve these goals by proposing a reshuffle of billions of euros from the European structural funds in order to provide relief to public budgets. Coherent measures were also announced on relaxing state aid rules and also providing liquidity to small businesses across the continent.
No man is an island, and no European member state can cope with such a crisis on its own.
Most importantly, the Commission started untangling the protectionist knots which several countries started (somewhat understandably) tying due to the emergency in their countries. After the European Commission successfully intervened, medical equipment will not be limited nationally but will be exported throughout the Union. In times of border checks and travel restrictions, the Commission must be on its guard to ensure the free flow of goods and especially the smooth functioning of supply chains which will be vital for citizens, business and industry. Parliament and Council must be on standby to quickly authorise certain acts by the Commission or update relevant legislation where needed. The European Parliament, especially, has a key role in providing due democratic oversight and ensuring the proper communication of the adopted measures with European citizens.
So far, so good. The Commission will try to be the honest broker between member states which on their side will slowly exhaust their budgets on national measures to contain the virus and also in the attempt to soften the blow for employers, workers and industry. In parallel, emergency or redirected European funding will also prove inefficient if the crisis lasts throughout Spring. The Martens Centre already outlined the major political economy implications of the coronavirus for Europe and the need for flexibility without limits when it comes to ensuring liquidity and adequate fiscal response.
What comes next? The member states will rightfully focus on preventing contagion and saving lives. However, which European country can individually handle such a shock? China, where the virus started and spread worldwide, registered thousands of deaths, an unprecedented decline of industrial production and a dramatic collapse in car sales, domestic flights, retail and many other economic sectors. The Asian hegemon pumped and redirected a huge chunk of its national resources in order to tackle the crisis. If this terrible outbreak continues throughout the next several months, Europe will be confronted with an economic earthquake which could eventually threaten the Eurozone and the future of the common currency. Some member states will be reluctant to talk about bailouts and mobilising emergency funds but this might prove inevitable.
No man is an island, and no European member state can cope with such a crisis on its own. We have seen it all and will see it again. European summits will grow long; patience will wear thin. Vows will be broken and new ones will be spoken until the EU muddles through. Successfully.
The whole European industry will need to readjust and member states will be forced to collectively rethink the functioning of major parts of their economies. Ultimately, this continent will need to find a way to redistribute vast resources quickly and efficiently.
The European Union will not come out of this crisis as a federation. But this crisis will receive a federal response.
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