Covid 19 is an opportunity for the Commission to implicate the “Citizen” in future of the Union.
The European Commission, under President Ursula von der Leyen, is determined to extract the process of European integration from the rut in which it has been stuck since the signing of the Lisbon treaty. The conclusion of the Brexit Agreement opens the way to focus its efforts on its new priorities. In addition to the environment and digitalization, circumstances have led it to embrace vigorously its involvement in healthcare, a domain previously reserved to Member States. Its dealing with the pandemic has considerably reinforced the pertinence of its interventions, be it in relation to the economic crises (Recovery Plan), its flexible interpretation of its budgetary surveillance mandate (Stability and Growth Pact/ European Semester) or the need to strengthen the coordination with the ECB’s monetary policy (purchases of MS’s sovereign debt).
In addition, the Commission has found itself playing a major part in the field of mobility to avoid that the MS’s prerogatives concerning the policing of national borders undermine the smooth functioning of the Single Market by intensifying the crisis provoked by the pandemic. This aspect is all the more important that one can suspect sovereigntist motives underpinning anti-European agendas lurking behind sanitary arguments promoted by the nationalists.
The crisis has revealed to public opinion the considerable role that the Commission is playing, beyond its responsibility as the “Guardian of the Treaties”, as the single focal point capable of organizing and maintaining the coherence of the measures taken in the various sectors affected by the pandemic and whose control is beyond the capacities of individual MS.
It is perfectly understandable that the initiatives of the Commission have been so far mainly “reactive”, considering its competencies, the unpredictable nature of the pandemic and the previously unknown characteristics of the virus; from now on, it becomes necessary to anticipate future developments and manage politically the interactions between the various sanitary, economic, social, legal and ethical imperatives.
Winning the trust of public opinion, which has often been mishandled by decisions made by the relevant
authorities considered alternatively as arbitrary, contradictory, unjust, discriminatory, anti-constitutional, etc., must become a priority for the Commission. It already enjoys a favorable opinion for its management of the Covid and particularly of matters related to the vaccine, in the face of polemics between experts (real or self-proclaimed) broadcast on TV as well as fake or inaccurate news spread throughout social media. It is therefor hardly surprising that, when one considers the particular interests of Member States, of economic sectors, of social classes, of communities, of political parties, etc., a rational management of the pandemic becomes a particularly arduous challenge.
This situation offers, however, the EU a unique opportunity to unite public opinion around two subjects (among others) which affect a great majority of the population, providing thereby an initial identifiable content to the concept of a “European demos”. They are the “freedom of movement” on the one hand and “savings” on the other.
The consequences of impediments to the freedom of movement of people and goods were visually illustrated by the recent closure of the border between the UK and most other countries, following the resurgence of a particularly contagious strain of the Covid 19 virus. The pictures of thousands of stranded lorries and abandoned drivers on Christmas Eve are a stark reminder of the interdependence of our societies and the relativity of concepts such as sovereignty. This unplanned foretaste of Brexit (even after reaching an agreement) should give pause for thought.
Though it is highly likely that for the foreseeable future international travel will be subject to offering proof of a recent negative Covid test, the production of a certificate of vaccination should, over time, become the norm. Only time will inform on the duration of the validity of the vaccine and/or the necessity to adapt it as a result of mutations (as for the common flu). The test should continue in use in parallel, as long as the vaccine has not become freely available, probably around the end of 2021.
It is likely that similar regulations will be introduced by most countries throughout the world so that imposing them at the EU/Schengen borders appears reasonable in terms of protecting the European population and reciprocity. It would avoid making vaccination formally mandatory, without hindering the freedom of movement within the EU.
Within the next year, it should be possible for the Commission to rally all 27 MS + Schengen participants to the scheme and, in parallel with the recently launched vaccination campaign, organize a vast information program which would specify the measures facing those who would choose to abstain from the vaccination. Proof of the absence of undesirable side effects, prior to activating the new rules, coupled with the spectre of restrictions, should ensure a sufficient coverage to reach herd immunity and permit resuming a way of life compatible with the lessons drawn from the pandemic.
Applying health monitoring at EU level should have limited personal inconveniences, avoid interfering with the recovery of entire economic sectors such as tourism of business travel, as well as limiting controls to the external borders of the EU. These advantages should enhance the citizen’s perception of the positive contribution made by the EU to their daily lives.
A second domain in which the EU can bring a significant added value is the protection of savings. The Covid 19 induced economic crisis has severely impacted this sector in which published statistics, often referring to “averages”, have significantly obfuscated the realities faced by different segments of the population. Thus statistics point to only a marginal impact on overall purchasing power (despite a record fall in economic activity) explained by massive governmental temporary support programs financed by debt. This has consolidated the financial position of the well to do population (owners of real-estate and shares) or of protected groups (civil servants, pensioners) allowing them to increase the level of their precautionary savings. Simultaneously, more vulnerable segments of the population have had to dip into their savings or have fallen into poverty. In terms of numbers, the losers far exceed the winners, exacerbating the inequalities that had already reached an unsustainable level prior to the crisis.
In such an environment, one should fear that the economic crisis ahead could degenerate into violent social confrontations on which populist parties will surf to disseminate their poisonous destructive agendas. Here, once again, the EU is called upon to play a key role in instilling confidence of the population in its currency – the Euro. I have several times underscored the vital importance of extending the Eurozone to all 27 MS in order to underpin the stability and sustainability of the single currency; in this instance, I wish to focus on the danger to small savers of believing the voices who promote the “cancellation of the Covid related debt” as being the panacea to clear the excess indebtedness incurred.
In all the arguments put forward, each more irrational than the next, its promotors conveniently forget that there would necessarily be a corresponding increase in the ECB’s share capital to compensate for the abyssal loss incurred. The increase in the MS’s debt required to subscribe would cancel the initial purpose of such a manoeuvre.
Furthermore, the reasoning omits to recognize that the ECB is a multilateral institution and that no single shareholder can impose on it to buy its debt with no limits, without undermining global trust in the single currency. Only a unilateral default on a MS’s sovereign debt is theoretically conceivable but would lead to its inability to (re)finance itself, to its exclusion from the Eurozone and, more than likely, to the collapse of the € and the EU itself.
The catastrophe for the small saver resulting from a forced return to a “national currency”, subject to exchange controls and to wild fluctuations of its internal and external purchasing power should be avoided at all costs. The broad endorsement given by a large majority of the Eurozone’s population to the Single Currency explains their reflex and their visceral fear against abandoning the €.
By adopting the Recovery Plan the Union has taken a first step in addressing the problem of the excessive indebtedness of some of its MS. By agreeing to mobilize its own – hardly used – financing capacity in favour of its Members, the EU could progressively assume responsibility in replacing national budgets in the fields of defence, environment, immigration and border control, foreign affairs, digitalization, etc., allowing restoration of their equilibrium. The European budget should be made to rely increasingly on its “own resources” (EU taxes and duties) to finance its expenditures, including debt servicing, to the detriment of national contributions.
The creation of a (federal) Executive body acting as a credible interlocutor of the ECB is indispensable to end the institutional disequilibrium which weakens considerably the resilience of the €, the power of the Union and the population’s ultimate trust in its currency. Only then will it become appropriate to compare economic and monetary policies of the EU/ECB with those of other sovereign currency issuers and put pay to some of the absurd solutions being bandied about, which fail to take into account the unresolved constraints resulting from the still incomplete Single Currency project.
Freedom of movement and monetary stability are two fundamental values that only the EU is capable of delivering. Putting their sustainability into question, within the current volatile geopolitical context, could jeopardize both democracy and the precious exercise of human rights that the Union is still able to guarantee to its citizens. Under the leadership of a triumvirate of exceptional women, Angela Merkel, Christine Lagarde and Ursula von der Leyen, the EU has the possibility to make further significant progress in European integration, due to the unique circumstances created by the pandemic. It is crucial not to waste this opportunity to convince European citizens of the Union’s considerable added value, of its capacity to guarantee the daily exercise of their freedoms and, over time, to provide them with both independence and security.
2021 will face Europe with a radical choice between: its inevitable breakup resulting from the vain pursuit of a chimeric dream of national independence (as illustrated by the UK’s ambition to “take back control” of its destiny), or the determined and accelerated drive towards deeper integration under the umbrella of a real but shared sovereignty, capable of preserving the interests and aspirations of its “demos” at home and on the world stage.