How coronavirus is reshaping Europe in dangerous
ways
From green backlash to reimposition of border
controls, pandemic is accelerating tensions that could unravel the EU
Charles
Grant
Thu 14 May
2020 10.00 BSTLast modified on Thu 14 May 2020 10.01 BST
We are
still in the early chapters of the Covid-19 story and it’s too soon to judge
the full impact of the pandemic. But one can tentatively discern six negative
trends for Europe. These had all emerged before the virus struck but are now
accelerating. In various ways they are all likely to help the cause of anti-EU
populists: greater economic autarky, stronger borders and more hostility to
green policies.
Deglobalisation
Covid-19
has given extra ammunition to those arguing for greater national or European
self-sufficiency. Long before it arrived, there was talk of “deglobalisation”
and “reshoring” of supply chains. This stemmed in part from politics: Donald
Trump’s protectionist policies threatened international supply chains, as did
the UK’s pursuit of a hard Brexit.
Economics
is also important: wage differentials between emerging economies such as China
and rich countries are narrowing, reducing the advantages of off-shoring
production.
Now
concerns about the security of the supply of drugs, medical equipment and even
key components for the car industry, alongside greater suspicion of Chinese
companies, have boosted the case for more national or European autonomy of
supply chains.
Nation-first politics
National
capitals are gaining more clout vis-a-vis the EU’s institutions. For decades
these institutions have been losing ground to the member states, which resent
the powers that Brussels has accumulated.
The key
capitals assert their authority in hard times. They did it a decade ago during
the financial and eurozone crises, when they had to provide the bailout money.
Now they
have done so again. The European commission has struggled to keep the 27
together and to coordinate their responses to Covid-19 – not only because most
of the key powers on health, fiscal policy and frontiers reside at national
level, but also because many people look to national leaders to navigate the
difficulties.
Tighter borders
The EU has
been strengthening the Schengen zone’s external border since 2015, when numbers
of people seeking refuge in Europe first surged in significant numbers. Some
governments also introduced checks on borders within the Schengen area.
The health
emergency has increased suspicion of foreigners and in March the EU’s
Schengen-area countries closed their external border to non-essential
travellers. More obstacles to movement within the Schengen area have also
sprouted. At some point governments will have got the virus largely under
control, but they will then be very wary of softening the Schengen border.
Visitors from parts of the world where the disease may still be rampant will
not be welcome. Many politicians will want to make life as difficult as
possible for irregular migrants.
The
pandemic is likely to strengthen opposition to policies that are designed to
moderate the climate crisis and make us live greener lives. Before the virus
arrived, populists such as the Sweden Democrats, the AfD in Germany, Nigel
Farage in the UK and the gilets jaunes (yellow vests) in France were using
hostility to green policies as a means of drumming up support.
Many voters
whose standards of living are dropping dramatically will not want to take a
further hit to jobs and incomes from measures designed to tackle the climate
emergency. Europe’s leaders insist that their plans for curbing carbon
emissions are sacrosanct. But as the recession bites, the pressures on them to
moderate their green agenda, including from industry, will strengthen.
East-west tension
For several
years an east-west division has left Hungary, Poland and sometimes other
central European states at odds with the rest of the EU. They have rowed over
the distribution of irregular immigrants, with some eastern countries refusing
to take any; targets for reducing carbon emissions, with the easterners tending
to depend on coal; and the rule of law, with Poland and Hungary disregarding
the independence of the judiciary and media pluralism.
Covid-19
has widened the rift. Central Europeans fear that they will lose money from the
EU budget to the southern countries most afflicted by the virus. Meanwhile
Hungary’s Viktor Orbán has used the pandemic as a justification for introducing
rule by decree, exacerbating fears that he is creating a de facto dictatorship.
North-south tension
The virus
is widening the north-south fissure which emerged in the eurozone crisis 10
years ago. Germany, the Netherlands and their northern allies were reluctant to
give substantial help to the southern countries in difficulty.
Now the
coronavirus has struck the EU asymmetrically. The southern countries,
particularly Italy and Spain, have suffered more coronavirus deaths than most
others, started the crisis with higher levels of debt and depend on industries
such as tourism that are badly affected. They want solidarity from the north,
ideally in the form of some sort of “eurobond”: the EU as a whole would borrow
money and then disburse grants to the worst-affected countries.
EU leaders
have agreed to set up a recovery fund to support the worst-affected regions.
But this seems likely to provide more in the way of loans than grants, because
the northern governments remain opposed to large-scale transfers to the south –
although the southerners already have excessive levels of debt.
This
stinginess is rooted in northern voters’ hostility to transfers. But it
delights populists such as Matteo Salvini, in Italy, who is skilled at
exploiting every perceived slight from the EU. One recent opinion poll found
that 49% of Italians wanted to leave the EU.
None of
these changes is to be welcomed. If Europe pushes self-sufficiency too far, it
will impair the benefits that trade delivers to all continents. Closing
frontiers within the Schengen zone or on its borders, once Covid-19 is under
control, would achieve very little. And when the EU is faced with transnational
challenges such as economic depression, a pandemic or climate change, it needs
strong central institutions.
EU leaders
should not slacken in their efforts to tackle climate change. The east-west
rift is alarming and cannot be resolved by tolerating disrespect for the rule
of law. As for the north-south divide, the ECB may be able to do enough to keep
Italy and other southern member-states in the eurozone. But the politics of an
unresolved rift may turn very nasty, increasing anti-EU sentiment across the
bloc – and could even trigger a country leaving the EU or the euro.
Charles
Grant is the director of the Centre for European Reform
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