The havoc the coronavirus pandemic has wreaked on European Union (EU) and the economies of many of its member countries has echoes of the debt crisis of the last decade, as also the refugee crisis of 2015. The north-south fractures – poorer south and richer, frugal north – have often undermined the continent’s aspirations for peace and economic and political unity for much of its history. Europe has also fallen prey to disputes and wars over religion, politics and ideology. In the early part of the decade gone by, the Eurozone debt crisis and contrasting economic fortunes had severely impacted the ideal of integration of EU as an economic and political entity.
In 2015 and 2016, the EU experienced an unprecedented influx of refugees and migrants, most of them fleeing from war and terror in Syria, Afghanistan, Iraq and other countries. More than a million refugees crossed into Europe, sparking a crisis as countries struggled to cope with the influx, and creating divisions in the EU over how best to deal with resettling people. This led to tensions in the EU because of the disproportionate burden faced by some countries. In a large part of Europe – called the Schengen area – people move freely without internal border controls, but the flow of migrants caused some EU countries like Hungary, Poland and Italy to reintroduce temporary checks at their borders with other Schengen states. Though the migration crisis was resolved through a range of measures, it left many countries dissatisfied with how the EU handled the migration crisis.
The ripples from the migrant crisis continue even today with its dual shock to EU’s unity and domestic politics. While it triggered a wave of populism and nationalism in many EU member countries, the UK’s withdrawal from the EU is said to be an outcome of the migrant crisis as also Germany’s political fragmentation. However, though containing the coronavirus pandemic is much different business than managing waves of migrants and refugees, the common factor between the two issues is how effectively the EU’s response will shape public attitude about the EU’s institutional relevance, responsiveness and effectiveness at this crucial juncture. According to experts, the impact of coronavirus on Europe’s future has the potential to be even more significant than the debt crunch or the migrant crisis, given that it has unfolded in the midst of other malaises and discontent that plague Europe.
These include, according to European experts, economic slowdown, anaemic growth, possible recession made more likely by coronavirus crisis, rise of populism and nationalism, decline of the socialist and centrist political establishment, internecine fights over the European budget and social upheavals. In Europe, coronavirus pandemic began as a northern Italian phenomenon in January but soon reached Spain, France, UK, Germany, the Netherlands, Austria, Norway, Belgium, Denmark and Switzerland. Though individual European member countries set their own health policies, the EU is responsible for coordinating a pan-continent response to the disease. In a borderless EU, crisis response becomes the responsibility and a test of the institution itself, which represents a unique union of 27 member nations with combined population of about 445 million people and a GDP of $16 trillion.
As of April 27, more than a million coronavirus cases have been recorded across Europe, which is about half of the world’s confirmed cases. Italy, Spain, France and UK have the highest number of fatalities. While each country has taken a different approach to fight the pandemic, they all have confronted similar challenges. Their measures of success or failure reflect a lasting disparity in resources, evident in the budget allocated for health. For instance, Italy and Spain, according to reports, spend about $3,000 per capita, which is roughly half of Germany’s spending. Such disparities will become more evident in the months to come, as EU’s member countries grapple with soaring debts, massive unemployment and devastated economies. Obviously, like in the past, national interests will take precedence over the principle of solidarity.
As soon as the coronavirus arrived in Europe, countries began to turn inward, putting their own citizen’s interests first and ignoring pleas for help from their neighbours. The biggest rift between countries opened up during recent negotiations over an economic rescue package, pitting rich countries against the poorer ones, just like it happened during the Eurozone debt crisis. Therefore, the ongoing pandemic is testing the concept of European solidarity more than ever and has led to questions about the EU’s future. While the full extent of the fallout is yet to be seen, many observers are of the view that the pandemic could possibly upend more than seven decades of European integration. This however, does not mean it will be an end to EU but, as Stephen Lehne, a visiting scholar at Carnegie Europe think tank has said, it might end up weaker.
According to London-based research firm Capital Economics, the virus disease could result in a record-breaking 15 per cent quarterly drop of Eurozone GDP in the second quarter; the previous record was 3.2 per cent in the first quarter of 2009. Earlier this month, the European Central Bank (ECB) reportedly warned Eurozone finance ministers that financial stimulus measures of 1.5 trillion Euros ($1.6 trillion) may be required to counter the economic crisis caused by the coronavirus. The ECB also estimated that the bloc’s economy could contract by 10 per cent this year. These dire predictions came after the ECB launched a temporary $750 billion debt-buying program in March to keep borrowing costs low.
Even though the Eurozone debt crisis and the economic downturn caused by coronavirus crisis are not the same, it’s again the Europe’s southern nations that are bearing the brunt of it. Moreover, closed borders, travel restrictions and shutting down of shops, restaurants, bars and clubs throughout most of Europe will have a severe impact across its southern nations, where tourism accounts for a higher share of the countries’ GDP. For weeks, EU members have struggled to present a united front in the face of the pandemic, squabbling over money, medical equipment, trade restrictions and border curbs amid fraught talks over bailout package, thus laying bare their bitter divisions.
In early April, Italian Prime Minister Giuseppe Conte warned that the EU’s very existence would be under threat if it could not come together to combat the pandemic. While on April 9, EU finance ministers agreed on half-a-trillion Euros worth of support for their coronavirus battered economies, they left open the question of how to finance recovery in the bloc headed for a steep recession. This means many more tense discussions on the matter are still ahead before the EU’s 27 national leaders agree to bail out the indebted southern nations, which have been hit hardest by the pandemic. Europe is facing another economic crisis due to the pandemic, after the last one less than a decade ago nearly tore the European Union apart. After Brexit, the EU cannot afford a break in the Eurozone or even some member nations being forced out because of this crisis.