THELOOK AROUND the world to the devastation caused by the covid-19 pandemic and something strange stands out. The European Union is rich, scientifically advanced and endowed with excellent health and social protection systems and a political consensus strongly geared towards the protection of its citizens. Yet during the pandemic, he stumbled.
In the brutal and brutal classification of deaths, the EU overall, did less harm than Britain or America, with 138 deaths per 100,000, up from 187 and 166 respectively, although Hungary, the Czech Republic and Belgium all did worse than the ‘one or the other. However, he’s in the throes of a vicious surge fueled by a deadly variant. This underlines the danger of the low vaccination rate in Europe. According to our tracker, 58% of UK adults have had a jab, compared to 38% of Americans and just 14% of EU citizens. European countries are also behind on the other criterion of a covid-19 scorecard, the economy. In the last quarter of 2020, America grew at an annualized rate of 4.1%. In China, which suppressed the virus with totalitarian rigor, growth was 6.5%. In the euro area, the economy continued to contract. A year ago, Pedro Sánchez, the Spanish Prime Minister, called covid-19 the worst crisis to afflict the EU since the second world war. How did his answer turn so badly?
Part of the problem with Europe is demographics. EU populations are aged by global standards, making them more susceptible to the disease. Other less well understood factors, such as overcrowded cities, can also make Europeans vulnerable. Cross-border mobility which is one of the EUThe great achievements of the epidemic have likely worked in favor of the virus, and no one is going to want to stop that when the pandemic subsides.
But part of Europe’s problem is political. Jean Monnet, a French diplomat who helped found the European project, wrote that “Europe will be forged in crisis”. When the going gets tough, these words are typed in to suggest the EU will snatch victory from the clutches of defeat. Indeed, during the euro crisis, the European Central Bank (BCE) finally saved the day with new policies; Likewise, the 2015 migration crisis considerably strengthened Frontex, the EUthe border security force.
However, Monnet’s saying is also a source of complacency. The civil war in Yugoslavia in the 1990s led to the declaration “It is time for Europe”. Years of carnage followed. Likewise, last year’s decision to give the European Commission sole responsibility for purchasing and sharing covid-19 vaccines for 450 million people has been a disaster.
It made sense to pool the research efforts of 27 countries and their funds to pre-purchase vaccines, just as Operation Warp Speed in America brought together 50 states. However, the EUThe bureaucracy mismanaged contract negotiations, perhaps because national governments typically oversee public health. The project was mainly managed by the president of the commission, Ursula von der Leyen, who gleefully called the decision to expand her empire a “European success story”.
Barely. His team focused too much on price and too little on security of supply. They have haggled unnecessarily over liability if vaccines cause harm. Europe procrastinated during the August holidays. It was as if forging an ever closer union à la Monnet was the real price and the task of making vaccination a secondary spectacle. The ensuing bickering, pointing and threat of blocking vaccine exports did more to undermine faith in immunization than to restore the commission’s reputation. If she were still a member of a national government, it is difficult to see how Mrs von der Leyen could remain in her post.
Europe has also failed economically. Again, he used the pandemic to make institutional progress, creating a meaty new instrument known as the Next Generation. EU funds, or NGEU. Worth 750 billion euros (880 billion dollars), it is aimed mainly at the weakest countries which need it most. More than half of the money is in grants, not loans, reducing the effect on the national debt. It is also paid through a debt for which the union as a whole is jointly and severally liable. This is welcome, because it creates a mechanism that breaks the link between fundraising and the solvency of national governments. In future crises that could protect euro area countries from capital flight.
As with vaccines, however, triumph over NGEUThe creation of ‘s belies its slowness of execution. The first money is still months away, as member states deal with the commission on their individual programs. By the end of next year, only a quarter of the fund will have been disbursed.
This lack of urgency is a symptom of a much bigger problem: the neglect of the underlying health of European economies. Even with his new money, the EU the budget will only represent 2% GDP over the next seven year fiscal year. At the national level, where governments typically spend around 40% of GDP, the Europeans have been too cautious.
The consequences will be profound. By the end of 2022, the US economy is expected to be 6% larger than it was in 2019. Europe, on the other hand, is unlikely to produce more than it did before the pandemic. Granted, Joe Biden’s $ 1.9 billion stimulus after nearly $ 4 billion in the Trump era risks overheating the economy, but Europe is on the other extreme. Its budget deficits for 2021 are on average perhaps half of what America projects. After the conjunction of the financial crisis and covid-19, the EUs production will be 20%, or 3 trillion euros, lower than if it had maintained the growth it managed in 2000-07. The EU suspended its budget rules limiting the deficit. Thanks in part to BCEmonetary activism, European governments have the fiscal space to do more. They should use it.
Smaller and smaller union
Europe can take comfort in the fact that the vaccination program will catch up during the summer. Across the continent, Euroscepticism waned during the pandemic, and politicians who flirted with leaving, like Matteo Salvini or Marine Le Pen, have changed their tone. But, inexorably, the EU lags behind China and America in failing to competently tackle each successive crisis. In a dangerous and unstable world, it is a habit that must be changed. ■
All of our pandemic and vaccine related stories can be found on our coronavirus hub. You can also listen to The Jab, our new podcast on the race between injections and infections, and find trackers showing global vaccine deployment, excess deaths by country and the virus spread through Europe and America.
This article appeared in the Leaders section of the print edition under the headline “What went wrong?”