The Eeonomist March 21st 2020 Europe 49Charlemagne I Europe, more or less
The EU must move closer together-or let states save themselves
"M ORB BUROPE"istheinvarlablemantraforthe 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 clay. The answer to a rising China? More Europe. A response
to a wayward washington? More Europe. "11le 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
gettiog the EU out 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-
iog loosened. Some €31bn ($~n) of funds earmarked for the
structural projects that make up the humdrum dally business of
the BU budget can be spent on keeping people alive instead.
From one perspective, covid"'l.9 toipedoes the logic or-more Eu-
rope". At. its heart was a belief that a body like the EU is the ooly
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 almostwlgar. A pan-
demic, however, is a nasty blast from this ugly past. The BU evolved
todealwitha post-modem world, where borders blurred and mar-
kets ruled. Pandemics are a pre-modem problem, best solved by
the tool that brought order to a brutish world: the modem 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 cr:acks be-
tween national and EU responsibility. Monetaty union without a
fiscal union left a wound that turned gangrenous. Introducing a
passport-free Schengenzone 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. nie actions of na-
tional governments will determine how many live or die. Com-
plainiog that the EU is failing to help on health matters is aldn to
buying a cat and moaning when it will not fetch a stick.
When not pursuing "less Europe", the BU can 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 chum outmedical equipment more efti-
ciently than states going every man for themselves. Yet already
accusations of hoarding are ftying, while traffic jams build up on
intra-Bu frontiers 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 Bo's slick trading system
fades. Keeping national governments from actively working
againstoneanotherwouldbetriumphenoughforBrussels.
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. counUies such as Italy, whose borrowing costs
haveshotup, lovetheidea; 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 Baok, based in Flankfurt, has now done
its bit for "more Europe". It launched a €1sobn 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 theeuro." The statement was a hom-
age to the mantra of her predecessor, Marlo Draghi, who said he
would do "whatever it takes" to save the euro.
Yet not all EU leaders are as happy to seize the "more Europeu
moment. somearechompingatthe bit. The French president, Em-
manuel Macron, applauded the ECB and called for "greater finan-
cial solidarity" in the euro zone. Other leaders were muted. In
meetings behind closed doors, EU leaders agreed to stick with the
"whatever it takes" formulations beloved by the ECB but 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 leaden to dig them-
selves out. It is notguaI3Ilteed to happen.Leviathan unleashed
If European leaden 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 BU has 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 moneyintoairlinesbecausetheyhavethe na-
tional tlag on the tail-fin. Deficits and buogs 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 BU but of Eu-
rope's member-states. Without the EU finally binding itself to-
gether fiscally, it will be left to individual states to Wlite 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 iess Europe" must also have its role. •