The last ten years showed that there were two big issues that could blow up the EU: the flaws in the structure of the euro currency and the refugee crisis on the southern border. Both in practice promoted nationalistic attitudes that encouraged anti-EU sentiment. Neither has been adequately addressed. Now the COVID-19 crisis is showing the cost of kicking the can down the road on both issues. The scandalously overcrowded refugee in Greece are particularly vulnerable to COVID-19 outbreaks, which Doctors Without Borders have been sounding the alarm about. (Immediate evacuation of migrant camps in Greece needed to contain coronavirus, says MSF Euronews 03/14/2020)
And that makes both the current refugee emergency and the COVID-19 pandemic more difficult to address.
The "social distancing" that is requiring a massive reduction of immediate economic activity in EU countries, along with the lack of EU-wide fiscal policy to compensate for it, could very well bring a new round of the euro crisis. Which is what Münchau focuses on here:
Taken together, the national policies will constitute a stimulus of sort, but they will end up increasing the eurozone’s internal imbalances. The fiscal deficits of Italy, Spain and France will increase a lot. Those of Germany, the Netherlands and Finland may go up too, but by a lot less. The fiscal gap between the north and the south will widen. ... we are back to arguing about Italy’s solvency, which depends on low bond yields.In other words, it can set off a new euro crisis. "Italy has not forgotten the reluctance of other EU member states to take in Syrian refugees who landed on Italian shores. Italy will emerge from its Covid-19 nightmare to a different world. It is not good for the EU to antagonise a founding member state."
Yanis Varoufakis talks about the economic repercussions of the COVID-19 crisis in Yanis Varoufakis on the economic and political impact of the coronavirus DiEM25 03/15/2020:
No comments:
Post a Comment