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The coronavirus crisis has exposed the truth
about the EU: it's not a real union
Simon
Jenkins
The arguing over a financial rescue package for
hard-hit states shows that even member states don’t trust Europe
Fri 10 Apr
2020 13.47 BSTLast modified on Fri 10 Apr 2020 16.21 BST
The
European Union has scraped through its latest crisis by the skin of its teeth.
The past week has been a disgrace. When ministerial talks collapsed on Thursday
over the plan for a “coronabond”, the reaction seemed terminal. Germans and
Dutch insulted Italians and Spaniards. Italy’s prime minister, Giuseppe Conte,
said his country faced an “economic and social emergency”, and the EU appeared
not to care. The Danes spoke of “a financial crisis on steroids”. The European
commission’s vice-president, Frans Timmermans, predicted “the EU as we know it
will not survive this”.
Finally a
last-minute package was agreed, for €500bn of emergency loan finance. This was
little more than an extension of the existing European stability mechanism,
designed to help individual countries in short-term emergencies. Even then, it
was a mere third of what the European Central Bank had said was needed, €1.5tn
euros. What was specifically not agreed was any sharing of the economic burden
of the pandemic across European treasuries in general. It was mostly more
loans.
The reason
was glaringly obvious, and as old as the EU itself. The northern European
nations within the eurozone still do not trust the hard-pressed southern ones
to spend money wisely and pay back their debts. It was the same reticence that
governed the slow reaction to the 2008 financial crisis. In other words, the EU
is not a true political union, like the United States or Russia or even the
United Kingdom. When one EU country hits trouble, as Greece and Italy have done
over Mediterranean migrants since 2015, the EU itself is silent. It turns its
back and hopes trouble will go away.
Political
unions are specific things – a marriage of regions, provinces, states in one
national unit – based on a sufficiency of shared identity and shared
responsibility. When the US was created, it agreed to joint liability for
federal bonds. When New Orleans flooded in 2005, Washington did not tell
Louisiana it was on its own. Nor did Britain say that to Northern Ireland when
the province collapsed into bloodshed in the 1970s. It has been pouring in
money ever since.
The
Maastricht treaty of 1992 was based on an ambition to drive Europe towards just
such a goal. That, and the subsequent Lisbon treaty of 2007, produced much
bureaucratic infrastructure, ever wider “competences”, an executive presidency
and an enhanced parliament – which, it was hoped, would convey consent to
central authority. Crises like the present one are precisely what such a body
should be able to handle.
Yet as
Britain showed at the time of Maastricht and since, Europe lacks that shared
identity. It lacks accountable leadership to make consent effective. In 2008,
Europe dragged itself behind emergency actions taken by Barack Obama in
Washington and Gordon Brown in London. When the European Central Bank was
galvanised into action, it did indeed “print money” through quantitative
easing; but the easing was directly chiefly at underpinning German bank loans
to Greece and others. It was banks that were rescued.
This week
it has been abundantly clear that many European governments simply do not trust
the Italians and the Spanish to find a way out of the pandemic crisis
responsibly. Italy is certainly in economic meltdown. Its system for getting
cash into the pockets of poor Italians appears to have broken down. For the
first time in 75 years, large numbers of Europeans are simply unable to buy
food. Their erstwhile employers face bankruptcy, and their banks face collapse.
Britain,
outside the eurozone, can print money and hand it to employers – apparently
£40bn if need be. That is classical monetarism, I assume to be tested to near
destruction. It is sensible, and there is little likelihood of the cash
dissipating into inflation. That option is not open to Italy. It has delegated
it under treaty to the EU and its bank. It can only borrow, and Italy is
already crippled with debt.
Over the
next fortnight, any hope of a truly concerted European response to coronavirus
is implausible. The EU has so far been inert. Nation states have been forced
back on their own science, and their own health resources. Borders have closed
and suppressions varied, from total lockdown to none at all. An exasperated EU
research council voted no confidence in its chief scientist, Mauro Ferrari, who
resigned in a huff.
It is clear
that one country after another will soon be liberating its citizens from
lockdown, even at some cost in extra deaths. As other Europeans see Germans and
Scandinavians working, shopping and enjoying spring, the pressure on their governments
to end the lockdown will be intense. Pressure will devolve on to health
services, while wider economies will struggle to recover.
The head of
the International Monetary Fund says the world is facing “the worst economic
crisis since the Great Depression of the 1930s”. This surely is a time for the
EU to show a capacity for leadership. It should use the opportunity to show its
electorates, Europe-wide, that it can rise to the occasion and share
responsibility across the board. Did not the founder of the EU, Jean Monnet,
say that a new Europe “will be forged in crises”?
Daily
reports indicate that citizens across Europe are showing a collective concern
and care for each other. The pandemic has revived a faith in local community,
and in a shared sense of nationhood. Yet the reaction of key European
governments to this financial emergency has been like that of the British
people in 2016. They don’t trust the EU with their money. What you don’t trust
with your money is not a union.
• Simon
Jenkins is a Guardian columnist
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