Missing in action: Where is the EU in the war against COVID-19?

As the epicentre of the coronavirus moved from China to Europe in the first weeks of March, the European Union found itself missing in action, with panicked governments stockpiling medical supplies with little regard for their neighbours.

When Italy appealed to fellow member states for medical equipment, not a single country volunteered this assistance, each government keen to hoard its supplies for when the virus came for its own citizens. As supplies were unloaded from a Chinese plane in Italy, Italian Foreign Minister Luigi Di Maio noted that the aid demonstrated that “we are not alone, there are people in the world who want the help Italy”. The contrast was further amplified by the arrival of 50 Cuban doctors answering a call by the Lombardy region for help.

Surely the EU is also the sum of its member states, most of which are struggling with the pandemic. Managing healthcare systems, as well as the economic and social consequences of the epidemic, remains entirely in the hands of each member state.

In Brussels, the European Commission has tried taking the initiative by creating a “coronavirus response team”, and an investment fund to alleviate the economic effects of the epidemic. But these actions have not drawn much attention, failing to convince those who continue to ask “what is Europe doing?”

Ironically the general response smacked of the “every nation for itself” recipe advocated by the far right, with sovereignity resulting in situations like Belgians crossing over to the Netherlands to shop, drink and dine. While some were closing their borders, others merely advised not travelling abroad. As some nations closed schools, crèches, restaurants and cafés, others imposed a quasi-lockdown.

The absence of concrete solidarity between European member states in a moment of need led people in the most afflicted countries to openly question: where is the EU when we need it?

As former Greek finance minister Yanis Varoufakis observed, COVID-19 has revealed a fundamental truth: Europe is only as healthy as its sickest resident, and only as prosperous as its most bankrupted. “But the EU’s leadership is paralysed by its beggar-thy-neighbour – and now sicken-thy-neighbour – mindset”. Even worse: the unfolding of events showed that the EU failed to pre-empt a pandemic, widely expected in scientific communities.

A chronicle of a plague foretold

Prof. Roderick Pace, of the University of Malta’s European Institute, described the EU’s approach to pandemics as “a case of European myopia and half-measures”. He considers the response as even more inadequate because experts had long been warning about the risks.

In fact the first warning shots were fired during the SARS outbreak between 2002 and 2004. The rapidity with which it crossed borders convinced the EU to set up the European Centre for Disease Prevention and Control (ECDC) in 2005. Its objective was to collect scientific information, cooperate with international organisations such as the World Health Organisation and with national focal points.

But as Pace points out, whatever action needed to be taken on its advice, remained firmly in the hands of the member states who are responsible for national health services. “In sum, another EU agency had been created with the capacity to show us the way, but with its hands tightly handcuffed behind its back when it came to the mobilisation of a collective European effort.”

He contrasts this lack of a collective response with the situation in the United States where the President, the federal executive, and Congress have the power to lead the 50 states into battle against COVID-19 – albeit noting that the executive has also bungled there, mainly due to the initial dilly-dallying by President Donald Trump.

“So when COVID-19 hit Europe it was ‘every man for himself’. Belatedly we are witnessing some token and voluntary gestures of solidarity from a few EU member states toward the worst hit countries. These deficiencies are magnified by most welcome external help from China and Cuba. Moreover, the deficiencies are also highlighted by the fact that Italy with a population of 60 million and Spain with a population of 47 million, have recorded more deaths than China with a population of 1.4 billion. And the worst is not over yet,” Pace says.

“Member states can only be partially excused for being caught off-guard. We have had several harbingers of the risks of pandemics and more could have been done to prepare us for them.”

In fact, the 2003 European Security Strategy and its 2009 review did mention pandemics with reference to the spread of HIV in developing countries. But the strategy remained detached from the possibility that new pandemics could actually reach Europe’s shores.

The 2016 EU Global Strategy was slightly more forthcoming, promising to work for more effective prevention, detection and responses to global pandemics. But pandemics get only two mentions in the document.

“The current pandemic has taught us a few lessons: an effective European Health policy with real powers should be created side-by-side with national health services,” Pace says.

Moreover, pandemics also have economic and social impacts apart from the obvious health ones and we need to develop an EU-comprehensive approach to deal with all their facets when the need arises. But ultimately, as Pace is quick to remind us, “it is national governments which have to empower the EU”.

Emergency call: Why is the EU so slow to move?

Economist Robert Micallef, who co-chairs the Brussels-based Working Group on the Future of Europe and a former Labour MEP candidate, thinks the slowness of the EU’s response is a reflection of its institutional set-up.

“By its nature, the EU moves slowly because, in many cases, it has to carry with its decisions 27 member states that often have divergent starting points and positions with difficult compromises that need to be negotiated.”

In fact, Europe’s policy responses to COVID-19 have so far been mostly at the national level, emphasising differences rather than bringing Europe together in a moment of crisis.

Still, he also notes that important decisions have been taken at the European level such as the suspension of European budgetary rules and the relaxation of the state aid framework. “These measures have given breathing space for member states that need to address a tough domestic economic situation with the kind of state intervention that is normally not allowed by EU rules.”

But he contends that an unprecedented crisis requires unprecedented solutions. “I think this crisis will stay with us for longer than we hope and member states need to come together to take big decisions with a view to protecting the European economy and way of life in the medium to long term.”

This, according to Micallef, will require strong leadership by the European institutions, particularly the European Commission whose role it is to support member states by providing recommendations on a common course of action, and to ensure a coordinated approach across Europe. “The hardest job for the Commission will be to avoid members taking contradictory measures that could potentially obstruct common efforts to fight the COVID-19 outbreak and protect the economy.”

This coordination is necessary not just in the areas of public health, but also in other fields such as border control, internal markets and trade. “The main problem that I see is that European governments will understandably be too busy trying to safeguard public health, avoiding economic collapse and protecting social cohesion within their borders and will have a very low appetite for European solidarity and burden sharing.”

How far should the EU intervene?

Peter Agius, a PN candidate in last year’s MEP elections and former head of the EU Parliament’s office in Malta, thinks the Union should only act where its action is more efficient than that of the member states.

“When it comes to emergency measures on containing the virus and its handling, I believe that member states are best placed to take immediate decisions under guidance by WHO and following best practices as they emerge.”

On the other hand, he thinks the Union needs to play a strong part in the economic comeback by triggering strategic investments and launching EU-wide solidarity mechanisms to address unemployment. “The globalisation adjustment fund used in the past to assist Italy and Spain can be used for other member states to counter large-scale unemployment”.

The Union should also aim to make full use of its joint procurement mechanisms in acquiring large stocks of medicinal supplies to fight the virus. “Eleven major research initiatives are ongoing in Europe on COVID-19 right now; we need to ensure that we exploit the synergies of these efforts to reduce the delay for the deployment of a covid-19 cure”.

How austerity laid the ground for COVID-19

This is not the first crisis to threaten the continent’s economy and to bring hardships on entire nations. The first ‘disaster’ to stike the EU was the eurozone crisis in 2010, during which country after country fell to market contagion. To avoid bankruptcy and ejection from the currency zone, countries ‘at risk’ suffered harsh austerity programmes, which slashed health and education budgets as well as job and welfare protections. This also partly explains why Italian health services are struggling today to cope with the coronavirus crisis.

It is therefore no surprise that Malta, which has been spared from austerity measures partly thanks to its dubious role in the world economy as a financial hub, has emerged as one of the most prepared to combat the spread of the virus. One reason for this is our robust national health system.

But there’s one undeniable, major difference at play. This time round, member states are finally setting aside the fiscal rules to confront the crisis. While 2010 represented the triumph of neoliberalism, 2019 represents a return to Keynesianism.

The German chancellor, Angela Merkel, didn’t hesitate to announce the roll-out of the biggest stimulus ever, with unlimited liquidity assistance to German businesses, salary and job guarantees to workers. The French president, Emmanuel Macron, has pledged billions to support the economy, with an ‘exceptional and massive mechanism of partial unemployment’. Malta also intends to spend €61 million every month in direct assistance to businesses hit by the crisis.

What is the EU actually doing?

The Commission has announced a €25 billion coronavirus investment fund, saying it will use all ‘flexibility’ available, while setting aside state-aid rules, the same rules which Malta had struggled with back during the 2009 financial crisis, to protect its manufucturing industry.

The Commission has declared that the pandemic fell within ‘unusual events outside the control of government’ and permitted exemptions for related spending under the fiscal rules. It stood ready to activate the general ‘escape clause’ that would permit more general fiscal loosening, subject to approval by the Council of the EU.

Eurozone finance ministers also announced that member states should allow the ‘automatic stabilisers’ to play in full and also to permit liquidity support for firms and workers and spending on health measures, without regard to countries’ current fiscal situation. It affirmed that ‘the budgetary effects of temporary fiscal measures taken in response to COVID-19 will be excluded when assessing compliance with the EU fiscal rules’.

These decisions increase the head room for national measures. But so far EU-level support has gone unnoticed by the general public. The Commission has proposed a reprioritisation of its own budget, although this is unlikely to be decisive compared with national efforts. It also intends to increase spending under the Cohesion Fund – purportedly by ‘mobilising’ €37 billion of unspent monies, although the mechanism for achieving this remains unclear.

Time to think bigger?

Without a robust EU-level response to accompany national measures, the union risks limping along once again. Yet muddling through is not an option – especially because the economic and health-related devastation is likely to be accompanied by even greater political anger than before.

But where will the money come from? “It is time to launch the EU pandemic-bonds,” argues Luca Visentini, General Secretary of the European Trade Union Council (ETUC). “Europe risks a recession even worse than the one following the financial crisis of 2008-9 and needs to invest in protecting jobs and the economy.”

The ETUC had also called on the Eurogroup to play its part in the package of measures to tackle the social and economic impacts of the coronavirus pandemic by issuing European debt securities. The trade union council’s proposals include EU-labelled bonds issued at close-to-zero interest rates and to use these not only to finance infrastructure and supplies for national health systems but also employment-related emergency measures.

Diem 25, the European movement set up by Yanis Varoufakis, has proposed an even more ambitious plan for Europe, one consisting of a long-maturity, 30-year, eurobond for €1 trillion collected by the European Central Bank to replace national debt, in proportion to the coronavirus-induced national recessions & public health cost. This would be coupled by the cash injection of a €2,000 European Solidarity Cash Payment to every European resident.

How our MEPs have reacted

Roberta Metsola, head of the PN’s delegation, has called for more coordinated action to ensure that European healthcare systems have all the resources they require to deal with the increased pressure.

Noting that the impact on the economy will be more acutely felt in smaller tourism-dependent states like Malta, she called for a European stimulus package backed by increased EIB-supported loan facilities to support local economies while calling for more flexibility in the adoption of State aid rules, “for a limited period of time, to support pillars of our economy and those businesses who need it the most.”

The Head of the PN Delegation said that “we must be flexible enough to ensure that employers, employees, people working in the gig economy and, crucially, the self-employed can continue to work while minimising the risk to their health and that those unable to work, or who see a disproportionate impact, are supported.”

Labour MEP Miriam Dalli is actively pushing for the European Union to jointly procure medical equipment to be used across member states to battle the novel coronavirus.

The joint procurement exercise would allow the EU to bulk buy medical equipment such as ventilators to then distribute among member states, pushing purchase prices down while also ensuring smaller countries such as Malta are able to access the vital items.

“Instead of every EU country trying to do it locally, a coordinated EU effort could ensure that life-saving equipment is distributed more fairly,” Dalli, who serves as vice-president of the S&D grouping, said.

Dalli is part of an S&D task force responsible for drafting a policy action plan with measures aimed at helping the fight against the pandemic and tackle the consequences and aftermath.