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May 09, 2020
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On today’s 70th anniversary of the European Union’s beginnings with the Schuman Declaration, the project that was launched to end centuries of war is in an existential struggle with a pathogen that knows no borders.

COVID-19 has won the opening rounds – challenging the economic solidarity, the political common cause and public confidence on which the EU’s future relies. Some consider this week’s landmark decision by Germany’s Constitutional Court, casting doubt on the European Central Bank’s authority for its public sector bond buying, as just another nail in that supranational coffin following the United Kingdom’s departure.

As always in EU matters, however, the truth is more complicated. The European Union remains a heavyweight economic force with 22% of global GDP in 2018, which falls to some 18.5 % after Brexit. It maintains its uncontested role as the world’s regulatory superpower. Beyond that, EU countries through a host of government-supported schemes have kept their pandemic-era unemployment at the far lower rate of 6.6% in March than in the United States, where it is 14.7% and rising. The real Covid-19 threat to the European Union isn’t one of its impending collapse but rather one of its perceived irrelevance as a public defender and global actor. The danger is that the coronavirus period could so seriously dent public confidence in the EU’s value and so damage its international ability to act cohesively that its relevance to its own citizens and the world could suffer a stunning blow.

What is not well enough understood even by Europeans, let alone by Americans, are the global perils in a weaker and more vulnerable European Union. With a major power competition heating up between the United States and China, alongside a systemic struggle between authoritarian and democratic forms of government, how the European Union emerges from its Covid-19 challenges could be of decisive significance for world democracies.

While the coronavirus reach is global, nowhere is a common cause more crucial than among European countries. Their coming together after World War II ended conflict, expanded democracy, and contributed to Soviet Communism’s collapse. The EU’s enlargement after the Cold War sealed its position as one of history’s great democratizing forces – and as well as one of the United States’ greatest foreign policy accomplishments.

The timing of this historic test could not be more auspicious.

Today marks the 70th anniversary of the Schuman Declaration of May 9, 1950, when French Foreign Minister Robert Schuman proposed to place French and West German production of coal and steel under a common High Authority, open to participation of other West European countries.

“Europe will not be made all at once, or according to a single plan,” said the declaration with its modest language and extraordinary ambition to pacify a continent that had produced two world wars. “It will be built through concrete achievements which first create a de facto solidarity. The coming together of the nations of Europe requires the elimination of the age-old opposition of France and Germany.”

It was a cruel irony that in this anniversary week the German Constitutional Court would conjure up a new, fundamental challenge to the European Union. The judges put the European Central Bank on notice, arguing that the ECB had failed to conduct a “proportionality assessment” of bond buying to ensure “economic and fiscal effects” didn’t exceed the bank’s mandate and outweigh other policy objectives.

The ticking time bomb is that the court told the Bundesbank, by far the most significant central bank for eurozone monetary operations, to stop buying any more bonds within three months if the ECB didn’t comply.

ECB President Christine Lagarde, a lawyer herself, didn’t flinch from the challenge. “We are an independent institution, answerable to the European Parliament, and driven by our mandate,” she told Bloomberg in a webinar. “We will continue to do whatever is needed, whatever is necessary, to deliver on that mandate. Undeterred.”

However, the specifics of the German court’s ruling aren’t as significant as the signal they send to other European countries looking to challenge the authority of EU institutions. The decision comes against the current European background music, heard particularly in Italy and Spain, where European solidarity has been lacking in the virus fight.

The economic numbers don’t help.

The European Commission said this week in its spring forecast that the pandemic-triggered economic slump “could ultimately threaten the stability of the economic and monetary union.”

It pointed to “severe distortions within the single market and to entrenched economic, financial and social divergences between euro area member states” as primary risks.

Those, in term, could feed growth gaps among the European states that could exacerbate tensions. It forecasts more than 9% GDP declines in 2020 for Greece, Italy and Spain. Germany would suffer less, with a 6.5% fall in growth.

Although the European Union has been slow to move, this week brought encouraging news of new momentum, including what The Economist called the welcome emergence of a “genuinely European debate.”

The EU confirmed a $3.3 billion commitment to help countries of the Western Balkans fight the pandemic, at a time when concerns were growing several countries were more closely aligning themselves with Russia and an increasingly assertive and generous China.

The move came after a virtual EU-Western Balkans summit, where the 27 leaders of EU member states said “this support and cooperation goes far beyond what any other partner has provided to the region and deserves public acknowledgment.”

What China can’t offer states in the Western Balkans is the prospect of EU membership, and that’s what Brussels did in March for Albania and North Macedonia. Accession talks could start within a year. But the road ahead will be a long one for them and four other aspiring countries of the Western Balkans, all of which “belong in the European Union,” said European Commission President Ursula von der Leyen.

Last Monday, the EU-led fundraising campaign for Covid-19 vaccines, treatments, and diagnostics reached some $7.5 billion euros, including 1.4 billion from the EU. French President Emmanuel Macron, who has warned that the EU faces “a moment of truth” for its political project, kicked in 500 million euros.

It’s not too late for the EU to demonstrate its resilience and relevance at this time of crisis. On this 70th anniversary, it’s also worth remembering the common global and transatlantic interest in European stability and success.

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