Analysis. 'Solidarity cannot be just a word that we use without any kind of commitment.' European finance ministers are at a stalemate over how to pay the staggering economic costs of the coronavirus pandemic.

Paralyzed by crisis, the EU faces a political and moral abyss

At the European Council on Thursday, the 27 heads of state and government ended with an understanding: to postpone any decision on the coronavirus-induced economic crisis for two weeks. The Economy Ministers are trying to find a solution to the false dilemma of whether the European Stability Mechanism (ESM or the “state rescue fund”) or the “Coronabonds” renamed as “Eurobonds” or “European Recovery Bond” (which mean different things) was a better option—and this will most likely not be enough.

The incalculable cost of a recession produced by a freeze in production, and the long-term consequences of a brand new capitalist crisis, could be tackled by the constitutionalization of a new supranational government that would feature, in addition to changing the role of the ECB as lender of last resort, an economic and social democracy at the European level.

However, this solution, like all others, is not within the realm of possibility of a compromise between the real actors of the ghostly political entity called “the European Union”: namely, the governments currently in office. 

It has been quite a few years since we last witnessed, on this modest stage, a clash such as this. Not even the previously emblematic battles between Wolfgang Schäuble and Greece represented by Tsipras and Varoufakis, recounted by the latter in his book Adults in the Room, can be compared to the current one between Italy, France, Spain, Belgium, Luxembourg, Greece, Ireland, Portugal and Slovenia, on one side, and the Netherlands and Austria, with Angela Merkel’s reluctant Germany in the background, but which is certainly the main actor in this stalemate.

If we were not in the middle of the most serious health, human, social and political crisis of the last 75 years in Europe, the two weeks to find an agreement on some combination between an austerity device and a principle of debt sharing at the European level, i.e. between the ESM and the Coronabonds, would be a situation resembling Russian roulette. 

The only purpose of the two-week delay seems to rely on a ghoulish calculation: the more the contagion grows in countries that have been spared the fury of the virus so far, the greater the likelihood of a deal. This is no longer the cowardly theory of “moral hazard” invoked by the Weberian Protestant spirit of the bourgeois capitalists of the North against the alleged Mediterranean “grasshoppers” who want to get the money of the industrious “ants” by increasing the public debt. Aesop’s much-invoked fable offers a false representation of a relationship of interdependence and economic-political dominance: the rulers in countries outside Germany are just as ruthless as the masters who speak the language of Goethe, as the “grasshoppers” have adopted the same neoliberal reforms as the “ants” with even more fanaticism, worse results, and even worse consequences in the present and in the future. 

This relationship will be definitively overturned by this new crisis that is severely testing the pre-existing economic relations—and, above all, the lives of the populations, finding themselves now in a state of emergency and tomorrow in a recession.

At this moment, imagining that it would be possible to restore the old conditions after the crisis (as the “ants” do) or thinking that one could continue with the small steps of timid and hesitant adjustments without a vision and without a politics (as the “grasshoppers” do) would mean fueling more and more compromises, not finding a solution for the future. 

The search for a common position within two weeks, in the hope that Germany will discover how to square the circle, takes place at the edge of the abyss of nihilism. It means betting on the rising number of infections, recoveries and deaths; on the growth of the epidemic at the continental scale; and on strategies for mere survival. That is the moral abyss before which European politics finds itself today.

As if to sweeten the bitter pill, Merkel’s spokeswoman said Friday that Germany was in solidarity with Italy and France because it was welcoming intensive care patients who could not be treated in those countries. Solidarity is a good thing, but it is not everything that is being asked of Merkel’s country. 

On Friday, Merkel and her allies were also the target of remarks from the President of the EU Parliament, David Sassoli: “We must push back against the short-sightedness and selfishness of some governments.” 

“Solidarity cannot be just a word that we use without any kind of commitment. Solidarity has to be proven by facts,” said Josep Borrell, EU High Representative for Foreign Policy. 

“The future of the European project is at stake and we need to choose between individualism and a coordinated, supportive EU,” said Spanish Prime Minister Pedro Sanchez. 

The Portuguese Prime Minister António Costa branded the Dutch position as “repugnant” and “small-minded” after Dutch Finance Minister Wopke Hoekstra reportedly called for the Spanish government to be investigated for its claim that it doesn’t have the financial resources to fight the pandemic.

“The game is always the same,” said former president of the EU Commission Romano Prodi on Friday. “The Netherlands attacks, and Germany is almost forced to follow. The Dutch minister is a nightmare.” 

As the dust settles, we find ourselves back to square one, to where we were 20 years ago. The “pro-Europeans” are fighting for a bare minimum option, which is realistic but difficult to agree upon. The “Nordics,” however, don’t want to share any financial risk, even when struck by the blows of a crisis that has arrived from “outside” the parameters of their vision of the economy as a moral fact. However, this is a systemic crisis that could overwhelm them as well. Not at this point, but at the moment when those countries that they now deem “guilty” because they are in debt finally collapse.

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