Can Europe Stay Back From the Brink?

https://www.nytimes.com/2020/05/22/opinion/europe-back-from-brink.html

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PARIS — When Jean Monnet, one of the founding fathers of the European Union, warned decades ago that Europe would be forged through crises and “would be the sum of its solutions,” little could he have imagined that his prediction would one day be put to the test by a virus. On Monday, speaking jointly onscreen from their respective capitals, Chancellor Angela Merkel of Germany and President Emmanuel Macron of France emerged from what Ms. Merkel described as “the most serious crisis of the E.U.’s history” and announced that they had found a solution.

Back from the brink after three months of chaos and deaths caused by the pandemic, Europe is giving convergence another try. In a bold move that could radically transform the European Union, France and Germany have taken the lead to propose a 500 billion-euro recovery fund to help rebuild devastated economies.

Just how audacious is this, one may well wonder, at a time of gigantic rescue plans around the world? The audacity is not so much in the suggested size of the fund — which, added to the rescue plans of national governments and the European Commission, will make a total of 3 trillion euros available for the whole bloc. It is rather in the method of the funding: For the first time in its history, the European Commission would be allowed to borrow from financial markets. Not Germany or France, not Germany and France, but the E.U. as such. The recovery fund would then be allocated as grants to the regions hardest hit by the coronavirus pandemic, and to sectors, like tourism, directly affected by the economic crisis. Grants, not loans: The money borrowed from financial markets will be reimbursed by the E.U., not by the individual countries that benefit.

“Because of the unusual nature of the crisis, we are taking an unusual path,” Ms. Merkel remarked of the initiative, which breaks with European practice and represents a major ideological shift for Germany. As the wealthiest European country, it has always resisted the idea of a “transfer union,” in which it would have to pay for less-well-managed member states. This resistance, and the stringent conditions attached to assistance provided to several of Europe’s southern countries during the euro crisis 10 years ago, have left a deep scar on European unity.

President Macron revisited that episode on Monday, recalling how such austerity programs had pushed vulnerable countries to sell major infrastructure to non-European powers —- for example, Greek ports to Chinese state-owned companies. These sales weakened European sovereignty and were, he said, “a strategic mistake.” For her part, Ms. Merkel, also shifting toward the new priorities expected of the post-Covid world, noted that European policy on competition had left the field open for China, the United States and South Korea to create global industrial champions. Now is the time, she said, to create “European champions.”

This has long been President Macron’s geopolitical dream, but getting Berlin on board took major political efforts on both sides. The two leaders held long video conversations over the past couple of weeks to overcome their differences. Christine Lagarde, the head of the European Central Bank, who is known to have Chancellor Merkel’s trust, was brought into the process.

It remains to be seen whether the 27 member states will seize the opportunity and succeed in saving their common ideal from the demons of division and selfishness. Hard work will certainly be needed to convince so-called “frugal” northern countries that they “will be better off if the E.U. is doing well,” as Ms. Merkel put it for Germany.

The stakes are high. Europe has been shaken to the core by a crisis that exposed its weaknesses and — according to another mythic figure, 94-year-old Jacques Delors — threatened its very existence. This winter, under the brutal initial shock of the pandemic, European unity simply broke up. Member nations reinstalled borders within the Schengen area and fought over deliveries of masks. Lacking a statutory common health policy, Europe failed spectacularly on the health front at first, until solidarity slowly started moving aid toward the most affected countries.

As Brussels came to its senses and E.U. institutions set out to organize the indispensable economic response, Europeans, warily waking up from long lockdowns, realized what a dismembered continent looked like and how much their uncoordinated health policies have cost them. Then they looked around. Those who were at first in awe of China’s efficiency in dealing with the disease —- where else do you build hospitals in 10 days? —- were silenced by Beijing’s gross propaganda offensive and refusal to shed light on the origin of the virus. In fact, the violence of this crisis and the scope of its consequences may well have given way to a new sense of European purpose.

Paradoxically, the United States may have helped. Responses to the economic devastation caused by the coronavirus have laid bare deep trans-Atlantic differences and resurrected the idea of a “European model.” While millions of American workers were filing for unemployment benefits, the five biggest European economies —- Germany, France, Britain, Italy and Spain — all took early measures to protect workers from layoffs by adopting a procedure that, tellingly, the Germans call “partial activity” and the French call “partial unemployment.” Governments have been paying the wages of private-sector workers, thus preventing job losses, at least for a while. France has a particularly generous program, with idle workers getting 84 percent of their wage. “The state will pay,” President Macron promised when he declared war on the virus. From that point of view, the state has delivered.

Big government is back, and Europeans have no qualms about it. This crisis has shaken many beliefs and opened a lot of avenues in the search for a better world, but it has also strengthened faith in an essential element of European identity: the safety net that the state is expected to provide to its citizens. Governments in some badly hit countries, like France and Spain, have come under heavy criticism for their lack of preparedness and belated decisions on the health front, but the frustration was directed at their leaders, not at the system itself. The French have had only praise for their public hospitals which, despite anxious warnings early on, have held up well under tremendous pressure. The welfare state has proved to be worth the cost: most economists expect European governments to pour even more money into their public health systems in the future.

More important, social unity has prevailed so far. Even in divided countries like France, which was scarred by two years of discontent and upheavals, or in Brexiting Britain, Europeans have mostly accepted the enormous constraints imposed by the fight against the disease, while keeping an anxious eye on the protection of public liberties. They now know that we are nowhere near the end of this crisis; mass unemployment looms, and social tensions will flare up again.

There will be more moments of truth for Europe. But at least it has survived — for now.

Sylvie Kauffmann is the editorial director and a former editor in chief of Le Monde, and a contributing writer.

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