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Judy Asks: Should the Coronavirus Accelerate European Integration?

Written by The Frontier Post

JUDY DEMPSEY

Recent European integration efforts are littered with high-flown concepts. Senior politicians have been boasting for years of a political or fiscal union and, more recently, of strategic or digital sovereignty. What these starry-eyed ideas all have in common is imprecision and utter impracticality. Rather than accelerating integration yet again, the EU would do better to address just a few pressing problems.

China threatens to subjugate some European countries as tributary dependencies. With the professed neutrality championed by some EU members, this could become a reality sooner than many expect. The EU would be wise to take a page out of the policies of Australia, Canada, India, Japan, South Korea, Taiwan, and the UK—to name just a few countries that are closing ranks with the United States to work out policies to push back against Beijing.

Then, Europe is being slowly eclipsed by rising tech powers in developing new technologies. A look across the Atlantic might help here, too. America’s challenges in environmental protection, fair trade, and security largely match those of Europe. The Americans are practically screaming at the Europeans to unite and meet these challenges together.

The EU would do well to advance its integration by devising a coordinated approach to tackling global challenges jointly with the United States.

The coronavirus has certainly caused an exogenous shock to the EU, testing member states’ solidarity and the overall resilience of the European integration process. Yet, contrary to popular belief, the pandemic has not pushed the EU to the verge of an existential crisis. Rather, it is an opportunity for renewed momentum in EU-level governance building, especially in the areas of security and defense. EU leaders’ commitment to strategic autonomy, coupled with recent efforts to build technological sovereignty, remains steadfast.

The funding allocated in the EU’s long-term budget to defense research and development underwent considerable cuts. Experts also expressed fears that investment in civilian and cutting-edge military capabilities will be less of a priority given the socioeconomic ramifications of the ongoing pandemic.

However, amid a fast-deteriorating geostrategic landscape, the EU and its member states are now even harder pressed to move forward on defense technological and industrial cooperation and develop a common strategic culture.

For this to happen, the coronavirus is not enough to drive EU member states to overcome the political and strategic hurdles that have plagued the EU’s Common Security and Defense Policy. But the pandemic might well be the much-needed nudge to encourage a higher level of political buy-in from member states into the EU as a stronger and more credible security and defense actor.

It should, but it won’t. The EU’s post-coronavirus recovery fund has broken taboos and could be a channel for progress in the future, provided it is seen as a success in a couple of years. But in the short term, dark clouds are gathering.

It’s a typical EU cycle: First, the European Commission comes up with an innovative scheme to support pharmaceutical companies in return for future deliveries. It works, and a coronavirus vaccine is available in a matter of months instead of years.

Then, pharmaceutical companies have production problems, and the wind turns. The EU’s vaccination strategy is declared a failure. But it is member states that are in charge of vaccinations, in part because they have always refused to give the union any power in public health. Still, no national government takes political responsibility.

Finally, Brussels is left struggling with a communications disaster—the innocent behaving like the guilty. This is fertile ground for solidarity to crumble and for some EU countries to start dealings with Russia, China, or Israel.

Will all this accelerate integration? No. Even if member states agree to give Brussels more power in health matters, they would do so in such a way that it would be unworkable anyway: giving with one hand while withholding with the other. Progress would be for national politicians to take responsibility and practice plain talk and honesty. That’s a long shot.

The coronavirus vaccination rollout has been a challenge in itself for the EU. But the most daunting task ahead will be the post-pandemic economic recovery. This will require further European integration, especially of member states’ fiscal policies. The economic recovery package on which the EU agreed in 2020 was an important first step, but it will not be enough to lead Europeans out of the crisis.

Fiscal integration is the missing piece in the architecture of the EU’s economic and monetary union. At the same time, many wealthier member states resist a loosening of EU fiscal rules and a further deepening of the debt union that was agreed on in 2020, out of concern for being held responsible for the weak economic performance of their neighbors. The alternative, however, is even less appealing, as Southern member states argue. Economic disparities in the EU—especially between North and South—would increase, which, in turn, could provide fertile ground for populists.

The EU must maintain its appeal as a convergence machine, particularly in times of crisis. Otherwise, it will lose legitimacy in the eyes of European citizens. If the historic coronavirus crisis does not accelerate European integration, especially in the fiscal realm, what else can?

It already has. The Next Generation EU fund, aimed at boosting the union’s post-pandemic recovery, is a major step for European integration. Of course, it is not undisputed, particularly among frugal member states, but the EU has crossed a Rubicon.

The coronavirus has also illustrated the need for greater European coordination to deal with health emergencies. It is clear that after the crisis, the EU institutions will play larger roles in preparing for future pandemics. Despite the difficulties the European Commission has confronted—and lessons will need to be learned here—it was correct for the commission to procure vaccines on behalf of the member states. If it hadn’t, it would have sparked a bidding war in the EU’s internal market, which would inevitably have resulted in tremendous friction among the member states.

Another outcome of the pandemic will be a new economic balance of power in the union between those that could keep their economies afloat and those that could not. Economic imbalances after the coronavirus—and the fact that most competitive sectors will have benefited from subsidies or state aid in some form—will create fresh problems for the EU’s internal market and require stronger oversight.

And then there is China. Beijing will emerge from the pandemic as a stronger geopolitical force. Only a more coherent and capable EU will be able to answer that challenge.

In EU member states such as Poland and Hungary, the coronavirus has accelerated the process of democratic backsliding, which started well before the current crisis.

In the case of Poland, the pandemic has allowed the ruling authoritarian populists to tinker with the country’s electoral law—and constitution—under the cover of extraordinary anti-coronavirus legislation. The ruling coalition has indulged in shameless pro-government propaganda, using generously funded public and pro-government private media while trying to starve—or buy out—the remaining independent media.

The populists in power have attacked sexual minorities and passed a near-total ban on abortion to rally their electoral base and divide the opposition, again using pandemic legislation to break up protests with excessive police force and curtailing civil rights.

Last but not least, the pandemic has served as an excuse to circumvent procurement regulations and waste public resources for the self-enrichment of the ruling elite. The EU has not been able to react to such developments and defend democracy, the rule of law, and other core values.

The so-called rule-of-law mechanism attached to the EU’s new long-term budget and post-coronavirus recovery fund is a step in the right direction. But the Polish and Hungarian authoritarians managed to water it down by threatening to veto the arrangement, which would have starved their struggling economies of a necessary cash injection.

Accelerating European integration by creating effective instruments to ensure cohesion on basic EU values is needed but unlikely under the current circumstances.

The old idea that the EU always emerges from crises strengthened is pious nonsense. But Jean Monnet, one of the union’s founding fathers, was right that sometimes it takes the experience of a common threat to convince member states to move toward deeper integration. The coronavirus could be such a case, but this is not clear yet because the most plausible and best-intentioned plans for doing more together first have to pass the brutal test of practical experience.

Currently, the EU seems to be failing this test when it comes to European Commission President Ursula von der Leyen’s grand project of a health union. Massive delays in the EU’s coronavirus vaccination rollout have prompted some countries to resort to national procurement. Austria and Denmark are even envisaging a vaccine alliance with Israel. If the EU program gathers momentum over the coming weeks, these setbacks can still be reversed. Otherwise, the dream of a more united health policy appears doomed.

In the implementation of its post-pandemic recovery fund, the EU faces an even bigger test. This project could be the beginning of a common debt instrument that would enhance solidarity among member states and consolidate the EU’s monetary union—a genuine breakthrough. But that will happen only if the funds are used to enable green and digital transitions and modernize economies. If the money is used to shore up national budgets or even ends up in the wrong hands, this would lead to a massive backlash and bury the prospect of a fiscal union for the foreseeable future.

Yes, but it won’t. Health has always been an exclusively national responsibility in the EU, as each member state’s health priorities and healthcare financing are deeply rooted in national cultures and histories. The European Commission cannot make life-and-death decisions, nor should it seek to.

The European commissioner for health is not strong. Member states went their own ways in dealing with the coronavirus pandemic. Sweden experimented with herd immunity. Mediterranean countries wanted to keep tourism open for the sake of their economies. France still remembers the infected blood scandal in the 1980s, when hemophiliacs were given blood products contaminated with HIV.

The EU had no common policy on coronavirus vaccinations and has made some really bad errors, for example when French President Emmanuel Macron denounced the AstraZeneca vaccine as “quasi-ineffective” for older people. Nor was there a common EU policy on testing and tracing, airport controls, or the suspension of the Schengen Area of free movement. Greece called for vaccination passports; France opposed them.

The pandemic has proved yet again that the EU has difficulty in sharing power, even temporarily. The response to the coronavirus got mixed up with Brexit and unease that the UK, with its centralized and state-funded National Health Service, could order vaccines and vaccinate tens of millions of people in a way that sixteen regional health ministries in Germany could not.

The crisis may lead to a new common approach, but memories of power grabs, poor coordination, and still unacceptably low rates of vaccination mean the last twelve months have not been the EU’s finest hour.

There’s a parallel between the ways in which Brussels has reacted to its two most recent crises: Brexit and the coronavirus pandemic.

The European Commission took over the reins of the Brexit negotiations with London. Today, it is leading on the joint procurement and rollout of vaccines. In principle, unity in negotiations—either on Brexit or with pharmaceutical companies—guarantees a stronger EU position and avoids free riding and rifts between member states. But whereas the commission negotiated a trade deal after Brexit fully in line with its exclusive powers, it has overstretched itself in coping with the health crisis, for which it lacks experience and full responsibility.

As a result, some will say that the union has further integrated by stealth or that if member states had taken the reins, the vaccine rollout would not have been as slow as it has. Others will say that if the EU is to have a stronger role in future pandemics, it must be given the powers to do so.

Further integration cannot happen by accident or default. It must be a conscious choice by member states aware of broader geopolitical dynamics and Europe’s declining relative power. Integration must also fulfill the democratic needs of a more politicized European public.

Above all, further integration must go hand in hand with a refurbishment of the EU’s current institutional architecture and policymaking. The question is not only whether the coronavirus should accelerate European integration but also whether European states and citizens are willing to take the necessary political steps to make that happen.

Since the German daily Bild wrote on February 23, “Liebe Briten, we beneiden you!” (Dear Brits, we envy you!), a question needs answering: Why was the UK faster at procuring and rolling out coronavirus vaccines than the EU? Brexit fans might think it was because Britain had left the EU. This is not the case: the UK could have done the same as an EU member.

But the EU could learn from the British experience. The UK benefits from a strong relationship among scientific expertise, business awareness, and entrepreneurial prowess. Oxford University, in cooperation with the Swedish-British company AstraZeneca, got a fast offer from the UK government and took a risk to serve the public purpose and help stop the pandemic. UK Prime Minister Boris Johnson seemed to have taken a lesson from economist Mariana Mazzucato and her recent book Mission Economy: A Moonshot Guide to Changing Capitalism.

The EU should do the same. While the union has done well not to let vaccine nationalism take over, the European Commission needs to move faster next time. Procurement could be left to member states, with the EU acting in solidarity with all members in distributing vaccines. European integration would accelerate because solidarity combined with efficiency creates trust. Pandemics cannot and should not be fought on a national basis alone.

Europe’s responses to the coronavirus pandemic show that EU integration can’t stand still in the face of cross-border crises that hit the bloc symmetrically or asymmetrically. Either the EU moves forward together or each country goes its own way, unraveling the existing level of integration.

When the coronavirus pandemic struck, national measures to control borders, restrict exports of key supplies, and hand out emergency aid to businesses without coordination threatened to tear apart the EU’s single market, Schengen open-travel zone, and single currency.

The collective response of a recovery fund backed by joint borrowing and joint procurement of vaccines through the European Commission was a turning point. It would be foolish to revert to a beggar-thy-neighbor scramble for vaccines now.

If the spending is timely and well managed, the recovery fund will demonstrate the benefits of closer EU fiscal integration. The logical next step should be to raise new forms of common revenue to reimburse the joint coronavirus debt and create a permanent European debt stock serviced by those revenues. That would give financial markets a euro safe asset and provide the eurozone with a fiscal stabilizer.

The coronavirus is generally considered to have accelerated negative trends. Could it be different for Europe?

At first glance, the pandemic could be seen as having stirred a more upbeat Europe. Despite a poor start and, more recently, heavy criticism of the European Commission’s mishandling of vaccine purchases, the EU has performed well on tackling the challenges stemming from the virus crisis.

Several achievements make for unprecedented progress by the EU: a new capacity to raise money on the financial markets and the prospect of increased EU resources to fund a significant recovery plan; flexible budget norms that were unthinkable only a year ago; and a comprehensive public health policy in the making that was not even foreseen in the Lisbon Treaty, the union’s last major institutional upgrade.

But will the EU go the distance? Some of the union’s recent financial progress could well end up as a one-shot policy when the economic recession ebbs and ordoliberal orthodoxy reintroduces all traditional parameters on the euro.

As for the geopolitical front, European diplomacy has so far shown no signs of being beefed up by the pandemic, and EU strategic autonomy is still to materialize. Both will require more than a virus to live up to expectations.

Courtesy: (carnegieeurope.eu)

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