Governments cannot face this crisis alone

THE latest data about the spread of COVID-19 makes for both encouraging and inauspicious interpretations.

On the plus side, imported infections (which accounted for all local cases until March 16) appear to have stopped altogether since the beginning of April: a fact which illustrates the importance of having stopped global flights to Malta (though it also raises the question of whether this decision should have been taken sooner).

However, there is a flipside. The same data also suggests that local transmissions are now picking up in earnest: shooting up from 100 cases on 1 April, to over 250 last Friday.

More worryingly still, it turns out that on Friday, 80% of the newly-detected 13 cases were all either health workers or carers, or patients in hospitals or institutions.

This can only once again reinforce the message that Malta needs stronger lines of action where self-isolation and quarantine are concerned: especially to ensure protection of the most vulnerable, and the over-65 bracket.

The government should therefore start a targeted campaign to protect people who, for various reasons (not all related to COVID-19), find themselves trapped in enclosed environments. These include residents of the open centre for migrants (now under lockdown), as well as residents of retirement homes, patients in hospitals, and inmates at the Corradino Correctional Facilities. But as Health Minister Chris Fearne rightly pointed out on TVM’s Xtra last Thursday: “Both our health facilities, and our country’s other facilities, have their limits.” As such, the private sector also has a role to play in the national effort against COVID-19.

Hotels, for instance – which are now in disuse anyway – could help by offering up their establishments for all health workers and carers at very heavily discounted prices. But while some private enterprises have distinguished themselves by proactively working towards the common good… others have done the opposite. It is distressing to note that some shops and businesses have increased their prices – sometimes even of essential commodities – in view of the heightened demand. This may well be standard in times of normality; but in times of crisis such as today – with the prospect of mass-lay-offs, or drastic salary-cuts across the board - it is tantamount to profiteering; and as such, it should be considered a criminal offence.

Was it the right decision?

This week, EU finance ministers agreed on a €500 billion package to cushion the economic blow caused by the coronavirus pandemic.

The major stumbling-block during negotiations was whether member states like Italy, already struggling with enormous external and domestic debt, should be given more liquidity through a Eurobond: where all member states would share liability for the debt, thus guaranteeing its repayment to investors and banks which buy that debt.

Italy, France and Spain pushed strongly for sharing the financing the debt, which has been a red line for Germany, the Netherlands, Finland, and Austria. 

Instead the money will come from the EU’s rescue fund, the European Stability Mechanism (ESM), strictly for corona-related costs. Member states can draw on a credit line of €240 billion at low interest rates, but only if it is spent on “direct and indirect” health care, cure and prevention costs related to the pandemic. Italy and the Netherlands clashed over this conditionality, which was originally designed to help finance countries that have difficulties accessing the markets and came with tough austerity measures.

An additional €260bn should be made available for “temporary, targeted and commensurate with the extraordinary costs of the current crisis”, which however come with conditions. What will make this work is to have the member states agree on the measures before Easter. Workers and companies cannot wait much longer than that.

Would the Eurobond have worked? What is certain is that a Eurobond would have Europeanised a substantial part of the debt of member states: sending out an unequivocal message of true European solidarity for the economic impact of the coronavirus.

However, it is clear that, insofar as economic measures are concerned, the lack of trust between northern and southern states is alive and kicking. Arguably this emanates from the less than disciplined fiscal behaviours of certain Mediterranean economies. But of course, the question to the governments like those of the Netherlands, is whether they truly believe in the political union that the EU is supposed to be.

The Netherlands takes pride in carving a global role for itself, notably through its human rights emissaries, its financing of local NGOs, and its active interest in member states’ governance. Does it believe in the Union enough to also back the mutualisation of debts?

Clearly, the answer remains ‘no, not really’… and the same goes for various other member states whose affinity with ‘the rest’ always stops at the table of the finance ministers.