The European Commission’s response to the coronavirus faces at least five fundamental challenges – all of which create significant opportunities for Europe.
When I joined the European Commission, the first rule I learnt related to the mantra “the country I know best”. When one serves in the European Union’s institutions, it is imperative to believe that what matters most is the interest of the union as a whole – and to act accordingly. Political action stands upon the firm belief that national interests should be incorporated in the common European good. This applies in all circumstances, including the second phase of the crisis Europe faces because of the pandemic. Northern Europe cannot exit the crisis as a victor if the south is wounded.
This is, therefore, the key dilemma that President Ursula von der Leyen and members of her Commission need to resolve. Will they act like politicians who hail from separate countries or as European statespersons who reaffirm unity, solidarity, and coordination among member states? There are at least five fundamental challenges that they must deal with.
Firstly, the crisis is universal. And so should be the response. There is a broad consensus in Europe that the crisis has been neither caused by a single actor nor dealt with by another alone – that it involves no guilty parties and no judges. The crisis has been triggered by external factors rather than structural problems or mismanagement by individual EU member states. The covid-19 pandemic has demonstrated international organisations’ importance to the management of international issues.
Secondly, Europe should provide whatever funding is required to tackle the crisis – and to do so in any way necessary. European policymakers agree that large amounts of money should be poured into Europe’s economies to tackle the pandemic and stabilise the situation. However, from the first moment, they have disagreed on the form in which they should deploy this money. The argument centres on whether the funds should be disbursed through loans or through subsidies. The recent Franco-German initiative on a recovery fund – as well as the Commission’s proposal for a €750 billion package, which mainly takes the form of grants funded through joint debt issuance – respond to the dilemma and make for an agreement of historic importance. These measures break taboos about the EU increasing its budget without a parallel rise in national contributions, and on it guaranteeing certain types of debts.
The crisis is universal. And so should be the response.
Thirdly, there has been a much-needed institutional leap forward. The German Constitutional Court’s ruling on the European Central Bank (ECB) in early May posed a complex conundrum for the EU. However, it is important that major German political figures such as Chancellor Angela Merkel and Finance Minister Olaf Scholz favoured the continuation of ECB’s policies, as well as its role as the monetary umbrella for Europe when a hard rain falls. At the same time, the court’s decision signalled the need for policymakers to take a clear stand on the future of the European project. National governments need to decide whether the EU should pursue multidimensional integration policies or resign itself to continuous legal and political friction. The first choice may result in a strong, prosperous union; the second in a union that is doomed to remain static and to lag behind the rest of the world.
Fourthly, strategic autonomy is key. The first phase of the pandemic showed that Europe needs to protect its internal market. This means that the EU must act against aggressive acquisitions and market distortions from Asian corporations that receive state aid. These phenomena are detrimental to European industries and may result in a further transfer of industrial activity to Asia. They also threaten to make Europe more dependent on other markets, even for necessities such as drugs or medical and protective equipment. Europe should, therefore, take its industrial policy seriously by creating a framework of public rules and limitations that protect European industries, helping it become self-reliant or, at least, less reliant on China.
Finally, Europe needs to prepare a robust foreign policy for the uncharted day after. The United States is in geopolitical retreat, while China is on the attack. The pandemic is likely to bring about significant geopolitical shifts in many regions, including the Middle East and North Africa. For instance, it could lead to a new migration crisis. Accordingly, the EU should prepare itself for this possibility as it updates and unifies its foreign, defence, and migration policy. European leaders need to not only implement short-term measures in response to the virus but to draft a coherent plan for creating a powerful and globally engaged EU – one that will play a leading role in world politics in the post-coronavirus era.
All this will require a new convention on an EU fit for the twenty-first century – one that is institutionally, socially, and economically robust, as well as strategically autonomous. Participation in this endeavour is not about achieving member states’ national goals. It is about implementing a vision. As such, it should be limited to those who are not only capable but also willing to engage with the challenge.
Anna Diamantopoulou is an ECFR Council Member; President of DIKTIO – Network for Reform in Greece and Europe, a leading Athens-based think-tank; and a former European Commissioner.
The European Council on Foreign Relations does not take collective positions. This commentary, like all publications of the European Council on Foreign Relations, represents only the views of its authors.