Will the European Union be one of the casualties of COVID-19?
The worldwide pandemic has dealt a dramatic and obvious blow to the liberal ideas of free trade and freedom of movement that inspired and were inspired by the EU. The openness that made it possible to travel and do business seamlessly across a continent has provided the virus with a cornucopia of vectors for transmission. If the refugee crisis of the mid-2010s put strengthened borders back on the continent's political agenda, the pandemic has made the case for hunkering down nationally as well as individually hard to dispute.
But the EU could survive a change to its freedom of movement rules. In fact, the only practical way to address problems like chaos at the Austria-Hungary border as EU citizens try to get home is through coordinated action at the EU level. The same is true of other efforts to fight the virus, like tracking the infected and providing emergency medical assistance. The goal of effectively containing and eradicating the virus no more militates against the need for Europe-wide policymaking than it does against the need for coordinated national action in the United States. "Europe" may be based on certain ideals, but it is embodied in institutions, and it is the effectiveness of those institutions in meeting novel challenges that matters to its survival far more than perfect fidelity to those ideals.
And that's the problem. The threat to the EU's future stems from the fundamental weakness of its central institutions. And what may finally tear it apart are the economic divides that have dominated in prior crises.
The EU is already divided over the coronavirus, and along the same axes as obtained in the wake of the financial crisis and in the subsequent sovereign debt crises: the southern countries are getting hit much harder. As of this writing, Italy and Spain between them account for nearly 60 percent of the cases of COVID-19 within the Eurozone (EU members that use the Euro as their currency), and over 80 percent of fatalities. The death rate in Italy and Spain together is 9 percent; in the rest of the Eurozone, it's 2.5 percent.
Those numbers may well change as the virus spreads — but they also reflect different demographic and organizational realities. Germany did far more effective testing and tracking in the early phases of the epidemic, for example, and the virus was initially brought into the country by young people who did not spread it to the older population as quickly as took place in Italy. But even if Germany looks like Italy in four weeks' time, Italy looks like Italy right now. And the nature of membership in the Eurozone puts real limits on Italy's ability to respond effectively to the economic challenge before it.
Before the crisis, Italy's debt-to-GDP ratio was well above the limits all Eurozone members are supposed to maintain, and its economy had been lagging for years. Now, its economy is at an enforced standstill in an effort to break the back of the epidemic. But its troubles won't end when the virus has run its course. Given the prominence of tourism in the Italian economy (13 percent of Italy's GDP versus 8.6 percent of Germany's), the country faces a much harder long-term headwind to return to prosperity than many other EU states.
These would be daunting problems for a country with sovereign control of its currency. But Italy, as a Eurozone member, does not have any such control. The Italian state cannot print money to sustain its citizenry while the economy is in lockdown. It has to beg Brussels for permission to spend — and Europe's finance ministers are bickering about the terms under which such spending would be permitted in much the same manner that America's senators have been.
Even if a solution is found to cushion the Italian economy in the short term, what about the recovery? If the 2008 financial crisis and the debt crises of the 2010s are any guide, Brussels will labor mightily to force states like Italy and Spain to bring their budgets back into line, no matter the cost to those countries' citizens. Italy, with Spain right behind it, could face the worst physical suffering within Europe due to the pandemic, and could then be required to suffer disproportionate economic harm in the aftermath, while priority goes to facilitating recovery in the northern European states.
All this could perhaps be tolerated if European institutions had greatly benefited Italy during the crisis. But that is not the case. Italy received far more help from China than it received from its fellow Europeans, who (reasonably enough) preferred to prepare their own countries for the onslaught of the virus. But the Italians have noticed this dereliction, to the point where, in a recent poll, 88 percent of Italians thought the EU was of no help during the crisis, and only 21 percent thought EU membership was beneficial overall. If those kinds of numbers persist, how can the EU expect to survive?
A country is built on a felt sense of solidarity between its far-flung citizens. In a crisis, that solidarity is tested; where that feeling comes to the fore, and dominates decision-making, the country gets stronger, however much it might suffer materially. The European Union is not a country, and its founders have never quite agreed whether it ought to evolve into one over time or not. The current pandemic may finally and conclusively demonstrate that, if it isn't a country, it ought not have the powers normally reserved for a sovereign nation.
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