Euro-Optimism is no Longer Desirable, But Imperative
by Sam Gibson
April 7, 2020
If there was ever a time for pessimism in Europe, a pandemic ravaging the continent, imperiling its economies, and humbling its governments, is certainly one. Europe has become the global epicenter of the novel coronavirus with over half a million confirmed cases of the disease. The virus has ravaged Spain and Italy in particular, which recently surpassed the grim benchmark of 10,000 deaths.
Fear of “contagion” is not new to Europe. Neither is pessimism. Not very long ago, a financial contagion that first took root in Greece quickly endangered the entire continent by plunging it into a sovereign debt crisis. The contagion resulted in deep misunderstandings and distrust, between the fiscally responsible “North,” and the free-loading, untrustworthy “South.” Leftover resentment from that crisis continues to engender pessimism and inflame passions, hanging over Brussels like a dark cloud.
But a much deadlier contagion now threatens the Union. The coronavirus epidemic follows a series of other crises: the 2008 recession, the Eurozone meltdown, and the 2015 migrant crisis — all of which threatened to derail the European project permanently. Europe emerged from each of these crises battered but largely intact. European leaders must now battle twin contagions: the deadly COVID-19 and the pessimism that has long paralyzed the Union.
The threats of the virus extend beyond its obvious lethality and contagiousness. Pandemics are ripe for exploitation by populist leaders, nationalists, xenophobes, and opportunists. The temptation to turn inward, shut borders, and focus on nationalistic solutions is high. Leaders like Italy’s leading populist Matteo Salvini have used the virus as a cudgel with which to bash Brussels. Border closures across the continent are testing the EU’s cardinal ‘freedom of movement.’ The Dutch and Germans, in a callback to previous crises, have largely balked at solidarity measures to support debt-stricken neighbors. However, in a sign of the times, the Dutch have recently indicated some leeway on the issue. Portuguese Prime Minister Costa summarized the pessimism plaguing the bloc, when he told reporters after a contentious EU summit: “Either the EU does what it has to do or it will end.”
There is reason for optimism, though. Some EU leaders seem to have taken the hard-learned lessons from the sovereign debt and Eurozone crises to heart. Commission President Ursula von der Leyen temporarily lifted the infamous deficit ceilings for the Eurozone countries. The European Central Bank, under the leadership of Christine Lagarde, has already launched a €750 billion debt purchase program to counter the economic effects of the virus. Lagarde also rallied investor confidence when she pledged that there are “no limits” to the ECB’s commitment to the euro. The EU has also launched a joint-procurement plan for badly needed medical supplies, namely ventilators and Personal Protective Equipment (PPE). Donations of PPE to Italy from Germany, France, and the rest of Europe have also far outpaced any similar such gifts from other countries, such as China.
The crisis has also reignited talk of the fabled Eurobond (in the form of a “corona-bond”) that could bring sorely needed fiscal harmonization to the bloc, a lesson harshly learned during the last debt crisis. Dutch and German leaders, who routinely dismiss such ideas, have indicated that this time may be different. The hard, scientific reality of the pandemic may also throw some cold water on the populism that has spread across the continent and the world. Anxious voters, fearful of the virus and disillusioned by the hollow rhetoric and conspiracy theories propagated by leaders like Trump and Salvini, may flock to the sort of capable, “technocratic,” leadership that EU bureaucrats and their supporters can offer.
The dangers are real. The virus continues to run rampant. Former Commission president and titan of European politics, Jacques Delors, briefly emerged from retirement to warn of this “germ of division,” that now poses a “mortal danger” to the European project. The EU cannot rely on the United States, or China for that matter, who will turn inward and seek dangerous strategic investments, respectively. They also cannot rely on simple, nationalistic solutions. Border closures, while advisable for the time being to blunt the spread, may sow ominous seeds for the future of the Schengen Area. Euro-optimism is not merely desirable if the bloc is going to weather this crisis. It is imperative. If the EU can inoculate itself against pessimism and work in tandem to battle the coronavirus, it may emerge stronger than it was before.
Sam Gibson is an M.A. Candidate in German and European Studies at Georgetown University School of Foreign Service.
