Europe’s Covid response risks snatching defeat from the jaws of victory

When the EU runs into difficulties, policymakers and pundits in the 27-nation bloc turn to Jean Monnet. So it is proving in the pandemic. Like some tablet from Mount Sinai, the French economist’s observation that “Europe will be forged in crises, and will be the sum of the solutions adopted for those crises” is held aloft as emotional sustenance and a guide to action by those hoping to use the emergency to promote closer EU integration.

As one of the EU’s founding fathers, Monnet had much wisdom to impart to his political heirs. But one can surmise he would not be entirely confident that the EU’s actions since the start of this year back up his talismanic insight. Instead, the EU’s faltering vaccination effort, coupled with uncertainties over its post-pandemic economic recovery plans, increase the risk that the EU will snatch defeat from the jaws of victory.

To be sure, some things have gone well for the EU since the virus outbreak a year ago. Unlike the post-2008 bank and sovereign debt crises, and unlike the refugee and migrant emergency of 2015-16, the pandemic has not yet spiralled into an existential threat to the EU. After some hesitation, leaders united behind an ambitious, collective response. Their €750bn recovery fund broke new ground with a framework for borrowing on financial markets to enable transfers to EU member states.

Furthermore, mainstream democratic politics has held up relatively well and extremist, anti-system parties have failed to capitalise on the crisis. Two encouraging signs are the revival of pro-Europeanism in Italy under Mario Draghi’s new government and the outcome of last week’s Dutch elections, in which the progressive D66 party scored the biggest gains. Meanwhile, Joe Biden’s election as US president gave heart to the EU, a stout defender of the liberal multilateral order that took a hammering under Donald Trump.

In other respects, the outlook for the EU is troubling. The slow vaccination campaign means more people are at risk of death. It undermines the case for ever-advancing European integration by casting doubt on whether Brussels is really best equipped to take control of areas such as health that are normally the preserve of national governments.

Digging a still deeper hole for itself, the EU talks of restricting vaccine exports in a manner suggestive of panic and helplessness, not confidence and strength. There is a terrible irony in the fact that EU leaders are demanding their “fair share” of vaccines despite having dented public confidence in the Oxford/AstraZeneca jab so badly that millions of doses are in storage unused.

Delayed vaccine rollouts, rising cases of infection and continuing lockdowns risk slowing Europe’s recovery and damaging countries such as Greece, Italy, Portugal and Spain that rely on summer tourism. These are among the EU’s most heavily indebted states. The danger is that the prosperity gap between northern and southern Europe will widen, testing the sense of common purpose among EU governments.

The recovery fund on its own is too small to drive Europe’s economic revival. Help is needed from the European Central Bank which, fortunately, can be relied upon to maintain its emergency asset purchase programmes. But the most pressing need is for national governments to provide large-scale, sustained fiscal support, as the Biden administration is doing in the US with its $1.9tn stimulus plan. It is cause for concern that, as in the eurozone crisis, EU governments are not responding with the vigour of the US.

Christine Lagarde, the ECB president, hit the nail on the head when she said the recovery fund should “support structural reforms and growth-enhancing investment projects”. As matters stand, too many governments are parroting EU platitudes about reform that have long echoed around Brussels. Yet the culprits are not limited to southern or eastern European countries, which are so often the target of high-minded northern critics. Germany, the motor of the EU economy but a laggard on structural reforms since a Social Democrat-Green coalition held power in 1998-2005, also needs to pull up its socks.

The EU’s priority must be to set right its vaccination programme. In the longer term, however, disappointing results from the recovery fund would lend ammunition to critics of EU financial transfers. Prospects for eurozone fiscal union, an element missing from the EU’s economic architecture since the euro’s launch in 1999, would recede to the horizon. Setbacks like this might not deal a fatal blow to European integration, a process now in its eighth decade. But picking up the pieces would be a long and arduous task.

tony.barber@ft.com