YES—Bruno Maçães
Indeed it could, but not in the way you think. Nations will not turn their backs on the European Union in search of lost national spirit. Quite the contrary. They will turn to the institutions in Brussels with increasingly taxing demands, and that is something the system was not built for. The EU was not designed to take hard decisions between competing interests. It is very bad at making choices. What it does well is to govern by rule, and the more impersonal and automatic the rules, the better.
But suppose that the present difficulties are only the beginning. Deep interconnection between different systems leads one crisis to cascade into the next. Start with debt in the south. Italian debt is expected to surge above 160 per cent of GDP, with France and Spain also at risk. These countries are bound to demand the creation of new EU-wide financing mechanisms; they will be refused because that would fundamentally change the union. At the same time, countries such as Germany will ask for new rules on monetary policy to lock in new safeguards—the recent ruling of its constitutional court against the European Central Bank showed this is an increasingly fraught issue. But again, these requests will be refused because they would undermine the European project.
“Deep interconnection between systems could lead one disaster to cascade into the next”
Many countries will demand clear guidelines on how to deal with China and the US, as the two giants enter a new cold war. Brussels, though it is supposed to have sole competence over trade, will not have an answer.
At some point an impotent EU could pronounce itself incapable of solving problems without a mandate larger than the one it currently enjoys. National leaders would return home, frustrated and angry about an outcome no one really wants, and fearful that a new push for centralisation could turn their electorates against Europe altogether.
There are few outright Leavers on the continent. But with politics stuck, leaders would proceed to address their problems alone or in small coalitions. Those of us who have argued for years that federalism is not an emotional goal but an insurance policy against dangerous paralysis might feel vindicated. But for the EU as we know it, it could be game over.
NO—Anu Bradford
Of course, national interests differ in this crisis, as in many crises before. But for me, the EU was built precisely to reconcile competing demands. That is what it does. The key moments of integration have all been controversial: building the single market, adopting a common currency, enlarging the union. Even the technocratic rule-making rests on delicate compromises.
I share your concern about the cumulative effect of current challenges. The pandemic is triggering a financial crisis, and the debts of countries such as Italy risk becoming unsustainable. But the eurozone is better prepared to tackle this crisis today, thanks to measures taken after the previous financial crisis. While those have not resolved the fundamental flaw in the design of the currency union—common monetary policy without joint fiscal policy was always unsustainable—if the solution is to either unwind monetary co-operation or strengthen fiscal co-operation, my bets are on the latter. That was the outcome of the last financial crisis as well, which saw the EU’s powers grow, not diminish.
Other problems are manageable in comparison. The EU can and will defend the integrity of the single market when faced with Franco-German demands to convert competition policy into a tool for industrial policy. Berlin and Paris do not always get their way, as evidenced last year when the commission refused to approve the proposed rail merger between Siemens and Alstom.
China-US tensions do pose a challenge, but opportunities for engagement remain. The EU can work with the US to counter China’s disinformation tactics and its stealthy export of digital surveillance. Similarly, it can engage with China on climate change or defending the international trade system, as it did recently by agreeing on a temporary World Trade Organisation dispute resolution mechanism when US actions rendered the existing mechanism dysfunctional.
You trace the EU’s incapacity to solve problems to its limited political mandate. But the EU is known for using crises to expand its mandate. Following this one, it may well gain more powers in public health, as few believe that member states alone are capable of protecting their citizens from global pandemics.
YES—Bruno Maçães
When I look back to past crises affecting the EU, I do not see the ability to make hard choices and pick the best way forward. What I see is the technocratic drive to make the choice disappear. Greece didn’t leave the euro, but neither was it allowed genuine debt relief. The technical ingenuity was impressive, but will it work this time, when debt levels will be higher and when markets might not spare even France?
Italy and Spain will ask for debt mutualisation, but in return Germany would demand complete control over their budgetary decisions. Berlin is already demanding that competition policy be diluted because it fears Chinese economic power. But if European giants end up devouring smaller companies, how can other countries go along with that? It is no coincidence that the German constitutional court recently questioned the primacy of EU law: I see it as a direct consequence of deep German anxieties about a world suddenly looking much more dangerous. What do you make of the commission’s response, threatening Germany with the possibility of infringement proceedings?
My fear is that “rule by rules” was good enough for normal times. But the virus creates an emergency in which you need to be able to decide disputes between opposing sides. I fear the EU is already tempted to answer the most difficult questions by saying they are “beyond competence.” Issues too difficult for Brussels to deal with are sent back to member states. How else do you explain the fact that quarantines and travel restrictions are being decided by national capitals, with the EU stepping aside? Has the EU reached system overload already?
NO—Anu Bradford
I certainly agree that overload is the order of the day. Governments everywhere are facing an overload due to the challenges triggered by Covid-19. But the European response cannot be to offload those challenges to governments that are too small to deal with them. Nation states alone cannot fight a global pandemic—and they know it. Your native Portugal and my native Finland may disagree on debt mutualisation, but neither can respond to global financial crises alone. The same goes for other hard problems, such as mitigating climate change or managing migration.
It is rarely wise to escalate intractable problems into all-out conflicts (a good strategy for marital and political unions alike). Take the German court challenge to ECB bond-buying. The EU institutions will likely respond, as they should, by de-escalating the conflict while defending the fundamentals: the independence of the ECB and primacy of EU treaties and the European court. If the conflict escalates, Germany might ultimately be more willing to amend its basic law than bring down the eurozone.
“The EU has used crises to expand its mandate throughout history—and may soon gain public health powers”
Globalisation will take a hit in the coming years. But deglobalisation is not the answer. Instead, we will likely see a move towards regionalisation. No European country can declare economic sovereignty and start sourcing, producing and selling locally. As trust in global supply chains evaporates, the EU’s large internal market provides a critical hedge, combining scale, diversity and reliability. It remains the fundamental unit around which economic destinies and political choices in Europe can be built. Plus, the member-state capitals need Brussels. The EU has always been a popular scapegoat for their unpopular but necessary policy decisions—and there will be many of those ahead.
YES—Bruno Maçães
I agree that member states are too small to deal with the problems they are facing now, but that does not guarantee that the EU can deal with them. That way of answering the question suggests that only pooled power will be enough to confront the overload challenge. Unfortunately, I see no sign that member states can take that leap. No leap leaves us with a weakened EU, and a growing gap between the gravity of the problems and the capacity the EU has at its disposal. The EU is weaker because the problems have become bigger.
The signs are very negative so far. Free movement in relatively normal times was effectively defended by the EU institutions, even during the refugee crisis. In the pandemic, on the other hand, those institutions have run away from the issue. Travel restrictions were imposed at the national level. There was no co-ordination, nor any attempt to exercise powers that were actually the EU’s in many cases. The institutions hid from view not out of inertia or incompetence, but because they knew their own weakness and were afraid of being exposed. And now, it is again the states that are lifting some restrictions—in a purely self-interested bid to salvage tourism revenue!
The proposed new EU recovery instrument, while good news, will leave the fundamentals untouched. It could have been different, but that would have required a clearer mandate. I do not think the EU institutions are undemocratic. They are democratic, but their mandate is insufficient when the situation becomes a matter of running risks, especially on life and death issues, or going against strongly felt national interests.
If normality is quickly restored, damage might be limited; prestige would suffer, but time might heal the wounds. If a deep crisis continues for three or four years, and Brussels continues to hide from difficult decisions, the sense that the EU has real power and legitimacy might dissolve, not only in the eyes of elites but of most citizens. At that point, only a political ghost would remain.
NO—Anu Bradford
In imposing travel restrictions, member states were acting on their public health mandate, which collided with the EU’s free movement mandate. But when the pandemic is over, this collision is likely to be resolved in favour of the EU. Free movement will be restored and the EU will have gained more powers in public health. EU policies often originate from national capitals, not Brussels. The commission’s role is to harness and implement EU-wide consensus. The Macron-Merkel recovery fund proposal is no different in this regard, providing a foundation for the commission’s €750bn proposal.
I also worry less about the EU’s weak mandate and more about the failure to deploy its strongest mandate to the fullest. The EU needs to complete the single market. This may finally happen as member states have few options but to anchor their post-crisis recovery on reanimating it. Intra-EU trade is already vital, and considerably more important than member states’ trade with third countries. As the pandemic and trade wars continue to destabilise the global economy, large European companies will refocus on opportunities at home. This may provide the impetus to deepen the single market in services and the digital economy, and even usher in energy and capital markets union. These require common regulation, allowing the EU to play to its strengths.
The single market does not only deliver economic benefits but important protections: a cleaner environment, safer food and enhanced protection of data, to name a few. These boost the EU’s relevance and legitimacy in the eyes of its citizens.
Brexit shows that states may choose to walk away from these benefits. But the UK’s example has made that choice distinctly unappealing. “Sovereign Britain” looks less sovereign when UK companies continue to follow EU rules to retain access to the single market even after their country has lost all say over them. If anything, Brexit vividly illustrates the value of European integration by reminding people of the lonely alternative.
That integration, with all its shortcomings, has helped make Europeans safe, rich and free. While coronavirus will diminish those attributes for some years to come, restoring them calls for—and should bring into being—a stronger, not weaker, EU.
Bruno Maçães is a senior fellow at the Hudson Institute and a former Europe minister of Portugal
Anu Bradford is a professor at Columbia Law School and author of “The Brussels Effect: How the European Union Rules the World” (OUP)
