The EconomistMarch 21st 2020 Europe 49“M
ore europe”is the invariable mantra for the European Un-
ion’s most devout believers. The president of the European
Commission, Ursula von der Leyen, is particularly fond of the
phrase, usually as a solution to the pressing geopolitical questions
of the day. The answer to a rising China? More Europe. A response
to a wayward Washington? More Europe. “The world is calling for
more Europe,” declared Mrs von der Leyen after her selection last
summer. “The world needs more Europe.”
Faced with the covid-19 pandemic, however, the commission
has so far opted for a different tactic: less Europe. It has focused on
getting the euout of the way of national governments. Fiscal rules
are being quietly abandoned, allowing national governments to
spend heroic amounts to allay the crisis. State-aid rules, which
stop governments from flooding pet businesses with cash, are be-
ing loosened. Some €37bn ($41bn) of funds earmarked for the
structural projects that make up the humdrum daily business of
the eubudget can be spent on keeping people alive instead.
From one perspective, covid-19 torpedoes the logic of “more Eu-
rope”. At its heart was a belief that a body like the euis the only
means of survival in a globalised world. In comparison, the bog-
standard nation-state—developed to fend off the miserable
Hobbesian state of nature—seems dated and almost vulgar. A pan-
demic, however, is a nasty blast from this ugly past. The euevolved
to deal with a post-modern world, where borders blurred and mar-
kets ruled. Pandemics are a pre-modern problem, best solved by
the tool that brought order to a brutish world: the modern state.
Keeping people safe is, after all, a state’s primary concern.
Health is the purview of national governments, according to the
eu’s treaties. Previous European crises festered in the cracks be-
tween national and euresponsibility. Monetary union without a
fiscal union left a wound that turned gangrenous. Introducing a
passport-free Schengen zone without a functioning European asy-
lum system was another example of half-baked federalism. Often,
Brussels is left with responsibility for a topic but not the power to
do anything. In this case, responsibility is clear. The actions of na-
tional governments will determine how many live or die. Com-
plaining that the euis failing to help on health matters is akin to
buying a cat and moaning when it will not fetch a stick.When not pursuing “less Europe”, the eucan be most efficient
by maintaining the same amount of Europe. Each country will si-
multaneously face colossal strains on its health service. A func-
tioning single market can churn out medical equipment more effi-
ciently than states going every man for themselves. Yet already
accusations of hoarding are flying, while traffic jams build up on
intra-eufrontiers after panicky border closures. If goods disap-
pear and markets collapse in a crisis, then old-fashioned autarky
starts to appeal and the allure of the eu’s slick trading system
fades. Keeping national governments from actively working
against one another would be triumph enough for Brussels.
For the optimists, however, this is a perfect moment for the
“more Europe” mantra. So-called coronabonds would allow strug-
gling euro-zone states to fund themselves with debt guaranteed by
the bloc as a whole. Such an idea is often floated as a cure for the
euro-zone’s ills. Countries such as Italy, whose borrowing costs
have shot up, love the idea; those who would probably end up pay-
ing, such as the Netherlands and Germany, have historically been
far less keen. Attitudes could shift. A pandemic comes without the
moral baggage of borrowing and the caricatures of feckless Italians
running up debts. It is a natural disaster, endured by all.
The European Central Bank, based in Frankfurt, has now done
its bit for “more Europe”. It launched a €750bn bond-buying pro-
gramme late on 18th March. Unlike with earlier schemes from the
central bank, Greece’s debt, previously excluded, will be eligible
for purchase. After bungling her initial response to the crisis, ecb
chief Christine Lagarde issued a belated guarantee: “There are no
limits to our commitment to the euro.” The statement was a hom-
age to the mantra of her predecessor, Mario Draghi, who said he
would do “whatever it takes” to save the euro.
Yet not all euleaders are as happy to seize the “more Europe”
moment. Some are chomping at the bit. The French president, Em-
manuel Macron, applauded the ecband called for “greater finan-
cial solidarity” in the euro zone. Other leaders were muted. In
meetings behind closed doors, euleaders agreed to stick with the
“whatever it takes” formulations beloved by the ecbbut have of-
fered few actions to back up the words. At the moment, the phrase
is used in the same way children say “open sesame!”. Monetary
policy is only one half of the solution. A co-ordinated fiscal re-
sponse at a European level is still necessary for leaders to dig them-
selves out. It is not guaranteed to happen.Leviathan unleashed
If European leaders spurn “more Europe” on the fiscal level, then at
least they should remove the manacles that fetter Leviathan.
Shackling the state was not some Lilliputian scheme by small-
minded bureaucrats. The euhas reined in the worst impulses of
national governments, first in the name of peace, by binding econ-
omies so closely together that war was impossible; then, with the
aim of prosperity, by stopping them running huge deficits or pour-
ing mad amounts of money into airlines because they have the na-
tional flag on the tail-fin. Deficits and bungs are petty concerns in
the face of mass death. The state must be unbound.
Covid-19 will offer the most brutal test not of the eubut of Eu-
rope’s member-states. Without the eufinally binding itself to-
gether fiscally, it will be left to individual states to write the
cheques that stop their economies choking. It will be states that
deal with the sick. It will be states that take the blame from the be-
reaved. “More Europe” offers a tantalising solution to the eu’s lat-
est crisis. But “less Europe” must also have its role. 7Charlemagne Europe, more or less
The EUmust move closer together—or let states save themselves