Europe’s Coronavirus Battle

The coronavirus pandemic has exposed longstanding divisions in the European Union, with the issue of eurobonds dividing the north and south – and solidarity in short supply.

An extended March 26 meeting of the European Council failed to reach agreement on which economic tool the European Union (EU) should deploy to combat what is predicted to be a severe recession caused by the coronavirus pandemic, instead kicking the can down the road for a further two weeks.

With the coronavirus pandemic triggering a human and economic crisis worldwide, and panicked lockdowns in member states grinding economic gears to a halt, the European economy sits on the verge of a depression and total shutdown. National governments across the EU took the lead in combating the virus, closing borders and businesses, and in some cases with significant spending programmes to protect workers, jobs and businesses from the resulting downturn. As appeals by Italy for urgent assistance went unheeded by all but China and Cuba, and it was beginning to look like “European solidarity” was an idea for fairer weather.

Playing catch-up, the European Commission muscled-in on border closures, while on March 12 the European Central Bank (ECB) announced an initial €120 billion package aimed at ongoing liquidity in the financial and banking sector. A further 37 billion was mobilised from existing EU funds, but it was soon obvious that the disaster posed a threat of several magnitudes greater than anticipated.

[Read the full article in Tribune Magazine here].