Europe has been jolted yet again this month, becoming — for the second time — the center of the global coronavirus disease pandemic. While most attention is focused on the new health care emergency, a serious, sustained second wave of infections could also seriously impact the EU’s economic and political prospects in 2021 and beyond.
The new crisis comes as the continent is still reeling from the effects of the first wave of the pandemic. The initial coronavirus outbreak from February to the summer wreaked havoc across much of the continent. In the spring, more than 65 percent of known worldwide deaths attributable to the disease were in Europe.
This month, the health care crisis has again worsened and the continent has taken over the mantle as the center of the pandemic from the Americas. About a third of new infections are now in Europe (more than other “hot spots” such as India, the US and Brazil combined) and the continent this week passed the grim milestone of 250,000 coronavirus deaths. The four worst-hit countries in Europe — all major regional states — make up more than half of the continent’s official deaths. They are the UK with 44,000 fatalities, Italy with 36,000, Spain with 34,000, and France with more than 33,000.
Only Germany from the top-tier of Western European states has emerged relatively unscathed, but even their cases have been spiralling this month. Aside from the health care aspect, the second wave’s impact on political and economic stability may also be critical. Not only is the continent’s economy sputtering, but the pandemic has also affected its political and social solidarity, with support for Brussels in some southern nations, such as Italy and Spain, slipping away given a perceived lack of EU support at the beginning of the crisis.
Since the pandemic began, there have been significant divisions on display between the more indebted south, which has been hit hard by the pandemic, and the wealthier, thriftier north, including the Netherlands, Austria, Sweden and Denmark. These more fiscally conservative nations, sometimes known as the “frugal four,” were sceptical about providing significant support for the south. Ultimately, the scale of the economic and political trauma that hit the continent spurred the 27 EU leaders to secure a breakthrough agreement on an approximately €1 trillion ($1.18 trillion) long-term budget and a €750 billion coronavirus recovery fund. This represented a major political milestone in the postwar history of Europe as, for the first time, EU leaders committed in the recovery package element to the principle of mutualized debt as a funding tool. This potentially paves the way for greater future EU supranational powers of taxation and a more politically federalized continent. So, as Europe heads into its second health care crisis of 2020, the EU stands at a genuine crossroads that could see it emerge from the crisis stronger and more unified than ever before.
If this turns out to be true, it would be another affirmation of a central tenet of one of the founders of the European integration project, Jean Monnet, that the union would be “forged in crises.” It is increasingly clear that the coronavirus crisis could catalyze a debate that has been brewing about the EU’s future, especially as the continent goes into a deep recession. Issues in play include eurozone reform, where ideas on the table include a common budget and an expanded role for the European Stability Mechanism. Previous European Commission President Jean-Claude Juncker had a clear preference for greater integration among member states.
This included the creation of a European Defense Union — a scheme that is also backed by his successor, Ursula von der Leyen. However, there are still a multitude of views on the future across the bloc and, while Monnet’s maxim has sometimes proven accurate in the past, this does not necessarily mean it provides an accurate guide to Europe in the 2020s. Future scenarios range from a new spurt of much greater integration, as the federalists’ favour, to the worst-case for Brussels of the EU imploding. With the future in the balance, many of the continent’s leaders recognize that, despite their divisions, it is now vital for Europe to pull together again in the face of the worst economic and political shock for decades. What the EU now needs to do to navigate the current political tumult is not just get on top of the new health care emergency, but also build on the political momentum of the summer’s major economic deal.
Such progress could come from securing a post-Brexit UK-EU trade agreement or by delivering on the wider manifesto for sustained recovery that is proposed by Brussels, including through the “European Green Deal,” which has the potential to help renew the EU’s longer-term political and economic viability in the face of a gathering storm of challenges. Hammond, is an Associate at LSE IDEAS at the London School of Economics.
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