After the attack on the New York twin towers in 2001 and the financial and economic crisis in 2007-2008, the pandemic generated by the coronavirus this year is the third event of global dimensions since the beginning of the millennium which knocks over our expectations, upsets our habits and endangers our lives. The growing severity of those crises shows that the world is lacking appropriate regulatory bodies. Said in simpler terms, it needs a government. The rapid dissemination of the virus from China to the rest of the world has shown how interdependent is the world we live in. No country can win the battle against the virus alone. In the globalized world the destiny of humankind is indivisible.
We knew this. But governments were unprepared. Hospital structures have been found insufficient to face the challenge of the pandemic. But the unprecedented severity of the current crisis lies in the combination of the health crisis with the economic one.
The first lesson we have learnt by the crisis is that health is a public good whose provision and management cannot be entrusted to market mechanisms. The neo-liberal principles which have led the first phase of globalization have been a resumption of the ideology of the minimal state which dates back to the origin of liberal democratic thinking and confined itself to protect life, liberty and property (Locke) or life, liberty and the pursuit of happiness (Jefferson). The historical experience of the nineteenth and twentieth centuries has taught us that healthcare is a sector of social life where markets fail to provide the public goods, that only public powers can ensure.
The second lesson is that the pandemic has produced a symmetric shock in the global economy with similar consequences on all countries and a recession of historic proportions. Its impact is horizontal. It affects equally emerging and developed economies. Pestilences, like wars, are great equalizers. Therefore, a global coordinated response is necessary.
The response of the EU to the emergency of the coronavirus pandemic marks an awakening of European solidarity.
The third lesson is the re-evaluation of the role of scientists, discredited by populism, which has classified them in the negative pantheon of the elites. The coronavirus is a new pathogenic germ, which has found scientists unarmed – they have neither specific drugs nor vaccines. However, people’s trust in science lies in the fact that it elaborates a shared knowledge built on the basis of experiments and evidences, which are the objective criteria of truth.
The fourth lesson is that the emergency powers granted to governments to combat the pandemic could become permanent constitutional changes. We should avoid a drift toward authoritarianism. For example, the decision of the Hungarian Parliament to suspend constitutional freedoms and grant full powers to Orban is alarming. According to the Freedom House Institute, Hungary is the first EU member state to leave the club of democracies. Therefore, the emergency powers granted to governments should be submitted to parliamentary control and have a temporary character.
The response of the EU to the emergency of the coronavirus pandemic marks an awakening of European solidarity. The European Council, paralysed by cross vetoes and unable to decide, has entrusted the European Commission to elaborate a recovery plan. This means that the coronavirus crisis has triggered off two potentially revolutionary developments: (1) The Recovery Fund, now renamed Next Generation EU, that the Commission will submit to the European Council and the European Parliament for approval, entails a joint issuance of European debt, which will be paid back with money raised through European taxes (web tax, carbon tax, corporate tax). The investment plan necessary to get out of the crisis will require an unprecedented amount of EU budget resources that may reach the figure of EUR 2400 billion; therefore, from now on, the budgetary powers will be shared between member states and the EU, as it is the case in all federations; (2) The shift of the EU decision-making power from the European Council to the European Commission, which is beginning to act as a true federal government.
The European Commission President, Ursula von der Leyen, in her remarks at the European Parliament has evoked the precedent of the Marshall Plan, which mobilized an enormous amount of money for the recovery of Europe following the devastation of WWII.
Several political observers have defined the current EU’s situation as a “Hamiltonian moment.” It is appropriate to compare the European Commission’s initiative to the economic policy of Alexander Hamilton, the first Treasury Secretary of the United States, who was the architect of the creation of a common debt of the various member states, the national bank and an ambitious investment plan for the industrialization of North America. Just as Hamilton was the prophet of the industrial revolution in the United States, von der Leyen is the promoter of the environmental and digital revolutions in Europe. The difference lies in the fact that Hamilton’s plan was formulated after the ratification of the Constitution, while today’s Europe is not a full-fledged Federation.
Jean Monnet said: “Europe will be forged in crises and will be the sum of the solutions adopted for those crises.” The coronavirus pandemic confirms this statement, since it offers an opportunity to move towards an increase of the European budget’s own resources never seen before, practically doubling its investment capacity. The creation of a common debt and a EU fiscal power is a milestone of the same importance as the monetary union, that can provide the impetus for a stronger and more united Europe.
The core of the problem the EU is facing these days is the same. Success is not guaranteed at all. The European Commission in alliance with the European Parliament will have to win a challenging arms wrestling with the European Council and all the political forces of national conservatism. The recovery plan is the way to associate the citizens and the economic and social interests to the European institutions. The attainment of the no return point in the European unification process does not lie in the formal transfer of this or that competence from the member states to the Union, nor in this or that change in the architecture of the European institutions, but rather in the strengthening of the support of the people, civil society and economic interests to the EU.
Prof. Levi is editor of Federalist Debate and a former President of the Union of European Federalists. He is based in Italy. This article is based on excerpts from the July 2020 Federalist Debate.