In our ongoing series exploring the impact of the COVID-19 crisis in the CSEE region, Camille Dobler explores how the COVID-19 pandemic has marked the end of the post-Euro-crisis balance of power, and considers its impact on recovery and further European integration.
Germany took over the rotating EU Council Presidency on 1st July. The German motto sets the tone – “Together for Europe’s recovery” – and at least six months of presidency will be needed to make it true. For about ten years now, the European Union has not been inspiring much optimism, let alone togetherness. The COVID-19 pandemic almost turned general pessimism into resignation. However, as always in European affairs, the adage ‘integration through crises’ turns into a self-fulfilling prophecy. This time, it came with a generous proposal of 750 billion euros and a long-awaited promise of debt mutualisation. As luck would have it, nobody but German Chancellor Angela Merkel has the political stature to bring the 27 member states to agree on the European Commission‘s Covid-19 Recovery Plan, let alone to do so before summer ends. If this is a solid enough basis on which to strike a deal for Europe’s recovery, might it also be sufficient to bring Europeans back together? Indeed, not only has the COVID-19 crisis opened up old wounds from the Euro-crisis, but it also created new ones. Looking back at Europe’s response to the COVID-19 crisis from a new intergovernmental perspective, I argue here that despite appearances of intensified integration and new opportunities, the old disequilibrium between EU leaders and the European citizenry calls for caution in institutional decision-making.
Another crisis, another roller coaster
Looking back at March and April 2020, it is astonishing how scattered the EU response to the crisis initially was. In modern European memory, it is challenging to recall a similar degree of variety in national responses to a crisis. Not even at the peak of the migration crisis in 2012 did we witness such a sudden return of national egoisms. It was in Central Europe that borders first closed, only one day after the World Health Organisation declared the situation to be a pandemic. On March 12th, Slovakia and the Czech Republic re-established border-crossing restrictions. The next day, Poland, Lithuania, Latvia, Cyprus and Denmark did the same, and were soon followed by Germany and Spain on 16th March. Those sudden, unilateral and in some cases discriminatory new border regimes led to some apocalyptically challenging situations. At the German-Polish border, thousands of Lithuanian, Latvian and Estonian citizens got stuck in cars and buses without the right to transit across Poland to return to their homes. Similarly, restrictions and measures for the containment of the virus varied from one member state to another: mandatory facemasks in CEE countries, nominal movement certificates in Italy and France, a semi-lockdown in Germany, no lockdown at all in Sweden.
Looking back, the first observation to be made is of a generalised exhilaration of national sovereignties. The COVID-19 pandemic served as a pretext to feed the fallacious belief that reverting to national borders could better protect the health and security of citizens. The European Commission largely failed to rise to the challenge of this tendency. Of course, responsibilities are shared; health is not a European competence. Nevertheless, European citizens were entitled to clear communication, transparency and the coordination of national responses from European institutions. Instead, the latter were remarkable in their lack of leadership.
Since May, however, the situation has turned around radically with the announcement by the European Commission of the Recovery Plan. The sum, announced as 750 billion euro, is astronomical by EU standards and adds to a colossal rescue package and purchase programme announced by the European Central Bank. However, the shift is less a change of scale than of paradigm. Indeed, something is astonishing, almost unreal, in moving so abruptly from the sovereign debt crisis episode and a decade of austerity to the massive indebtedness of member states and billions spent in just three months. The Recovery Plan proposal acknowledges that the so-called EU ‘Golden Rules’ – limits of 3% and 60% of GDP for the deficit and public debt respectively – are political choices that can be adapted depending on circumstances and not scientific thresholds.
From intergovernmental disequilibrium to supranational renewal?
The German Presidency takes over a European integration process caught between these two opposite trends. They are not new, but the COVID-19 episode has proved how increasingly polarised they are. On the one hand there is the comeback of the nation-state and the appealing return to national sovereignty, encouraged by growing Euroscepticism on a mass scale amongst the public. On the other is a tendency to break with a certain number of the neoliberal economic dogmas which had accompanied European integration for decades, and the decision to press ahead with integration, with lasting transfers of power to supranational institutions. Towards which tendency the scales are going to tip remains uncertain, with new tensions magnifying an integration process in disequilibrium.
New intergovernmentalism holds that European integration has been in a constant state of disequilibrium since 1992 for two related reasons. The first one is because of member states pressing ahead with integration, but without supranationalism, i.e. lasting power transfers to European institutions. As long as their socio-economic ambitions converged around similar priorities – market freedom over state intervention, and price stability – consensus-building, bilateral and multilateral consultations between member-states rather than treaty changes were the way to go in the face of crises. The European Stability Mechanism, set up during the sovereign debt crisis, is a good example. The second issue is that of member states pressing ahead with integration despite growing Euroscepticism amongst the public in various countries. By doing so, they at best redirect, and at worst worsen the problems of legitimacy facing the EU, feeding the antagonism between European institutions and the European citizenry.
The suggested COVID-19 Recovery Plan could be the political proposal to correct the imbalance on both sides. The European Commission proposes to carry debts on behalf of the 27 member states and, since loans come with repayments, the Commission also proposes new financial resources of its own. This revolution towards a more federal Europe – rapidly referred to by many commentators as Hamiltonian – would turn the COVID-19 pandemic into a European revival, with clear transfers of power to the European Commission and the European Parliament. However, the 27 are still to agree, and for this to happen the Recovery Plan first needs to overcome the erosion of the convergence of views between EU governments.
Old challenges and new opportunities in Europe’s Hamiltonian moment
During the sovereign debt crisis, a consensus to ‘do whatever it takes’ to save the single currency won-out over political differences. By 2014, under the stimulus of the refugee crisis, the convergence of views crumbled, leaving the European Union fragmented into regional blocks holding different views on integration. It is therefore to be expected that an agreement on the Recovery Plan will not be found easily, but will generate a huge amount of bargaining between the member states. The ‘Frugals’ – Austria, Netherlands, Denmark and Sweden – will not give up on budget orthodoxy without serious guarantees. Southern European countries – those most affected by the Euro-crisis, the refugee crisis and the COVID-19 pandemic – will brandish the threat of populism. CEE members will make sure not to lose funds to the benefit of Southern Europe, and that no conditionality clause on the Rule of law is added to the Plan.
There are, however, new points of contention within the regional blocks themselves. Amongst the ‘Cohesion Friends’ – Poland, Czech Republic, Slovakia and Hungary – Warsaw would most benefit from the Commission’s proposal, while Hungary and the Czech Republic have made it clear they would not settle for the present breakdown of subventions. The complete German reversal on the issue of debt mutualisation has left the Frugals – whose bargaining position has already been eroded by the United Kingdom leaving the Union – in a difficult situation. Without Germany on their side, the frugal four are already less adamant on debt mutualisation than they once were, with discussions revolving around the amounts involved, rather than the issue itself. With shifting balances of political forces crippling new intergovernmental decision-making, the post-COVID-19 EU tilts towards supranationalism.
This makes the issue of citizens’ scepticism towards European integration all the more pressing. The EU’s initial response to the health crisis, and competition between member-states in purchasing medical supplies from China, did not help European citizens to recover their trust in supranational politics. A new pan-European survey conducted by the European Council for Foreign Relations found that 63 per cent of Italian citizens believe the EU did not live up to its responsibilities, as do 61 per cent in France and 40 per cent in Germany. Countries on the EU periphery, on the contrary and interestingly enough, are much more generous towards the EU and its management of the crisis.
Despite this grim picture, there seems to be no consensus in European public opinion in favour of a return to more national sovereignty. While political trust in the capacity of national governments to tackle global threats plunged as result of the COVID-19 pandemic, two-thirds of Europeans are in favour of greater unified EU action. This finding applies across all member states, including in those countries, such as Poland, whose governments have been praised for their early containment of the virus.
Rather than going back to the borders of the nation-state, or jumping towards a federal Europe, a popular demand for political pragmatism is arising at the level of the European citizenry as result of the COVID-19 pandemic. Renewed popular hopes and expectations might mark a new political momentum for European integration.
Moving Forward Together
It is the succession of different political power-balances that shapes European integration. There is no doubt that the COVID-19 pandemic has marked the end of the balance of power inherited from the Euro-crisis. The similar views of Poles to those of Southern Europeans reflect, at the level of national opinions, the changes in political views on integration and financial solidarity at the elite-level. The COVID-19 crisis has shaken the disequilibrium of decades of new intergovernmentalist policy-making, leaving two opposite trends unleashed, and Europe at a crossroads.
There is never any foregone conclusion to EU negotiations, and it remains uncertain whether or not – or how – the Recovery Plan put forward by the European Commission will be adopted. If confirmed, it would be the first step towards a European sovereignty and effective European solidarity. If not, the disequilibrium will only be magnified, with the additional alienation of European citizens. Were Germany to succeed in bringing the 27 together in favour of debt mutualisation and the power to raise taxes for the European Commission, this would invariably increase the democratic prerogatives of the European Parliament to the detriment of its co-legislator. The stakes for the EU council are high. The difficulty of the member states to agree on a common position on the Conference on the Future of Europe, in particular on the issue of reform of the institutional set-up of the EU, proves that the member states are well aware that they are swimming against the tide. On both the Conference and the Recovery Plan, Angela Merkel is determined to find an agreement before September. And let’s not forget the Multiannual Financial Framework (MFF). It is going to be a hot summer in Brussels.
Camille Dobler is a PhD candidate at the Jagiellonian University in Kraków and a Marie Skłodowska-Curie Fellow in the Innovative Training Network ‘PLATO’, which investigates the legitimacy of the EU’s responses to the financial crisis. Her principal area of expertise include citizens’ attitudes to European integration, European identity, the politicisation of the EU and the role of emotions in politics. As a visiting researcher in Sciences Po Paris during the Yellow Vest movement’s protests in France, and later as a visiting researcher at Democracy International in Cologne, Germany, she developed a keen interest in democratic innovations for citizens’ participation in politics. She is currently working on her PhD Dissertation in Political Science, entitled ‘Questioning indifference after the financial crisis: a mixed-method account of the role of emotions in citizens’ attitudes towards European integration’. She also holds an MSC in European Studies from LSE.
All views expressed in this article are the views of the authors and not necessarily those of the Ratiu Forum or LSE IDEAS.