Covid-19: the direction of the EU after the crisis

Covid-19: EU stands powerless before the governments of member states to block internal commercial byways. What will the direction of the Union be?

Since January 2020, the Covid-19 pandemic has had a tremendous impact on the world economy due to local, regional and national lockdowns worldwide. In the face of this crisis, the EU has demonstrated weakness and an inability to handle resulting market shocks effectively. The EU stands powerless before EU member states that have blocked domestic commercial arteries, thereby prompting a key question: will the pandemic instigate further EU integration beyond an economic level? If so, what factors are necessary to deepen alliances amongst member states?

As a result of the economic and social integration through the Single Market, the impact on the national sovereignty of EU member states has been and remains negative. Turkish economist Dani Rodrik identifies the three key objectives for today’s global economies: globalisation, democracy and national sovereignty. However, all three objectives cannot be achieved simultaneously; only a duo-combination can be successful.

The EU is a union forged by states that have agreed to give up some of their national economic policy-making power to enable democratic cooperation, to form a stronger, more interconnected economy. The biggest failure of the Member States’ integration plan arises from the excessive focus on market integration rather than on establishing common national standards.

As the UK voted to leave the EU in order to increase national sovereignty, its government was left with two choices. Firstly, it could remain in the Single Market and continue with economic integration, where feasible, at the cost of losing democratic legitimacy in the eyes of those who voted for Brexit. The second choice is to exit the EU entirely, including the single market, in order to maintain democratic legitimacy, and in doing so, distance themselves from the globalized international market.

What can Rodrik’s trilemma tell us about the direction of the EU after Covid-19?

Negative direction: more national sovereignty

Research has shown that within the industrialized EU countries, the objective of democracy has more or less remained a constant for member states, which has allowed for further integration in exchange for partial surrender of national sovereignty. Will the aftermath of the pandemic change this? Within the last few years, populist parties and movements have gained support across Europe, calling for the repatriation of the EU’s centralized power.

Positive direction: increased globalisation

The initial reaction to the pandemic by both the EU and the member states has shown that the existing infrastructure was not equipped to manage a cross-border crisis. The EU bodies in place for transnational threats, such as the European Centre for Disease Prevention and Control, were not empowered to react in time before the virus hit Europe, as it has no power to demand reports from the MSs. Additionally, the malfunctioning of the EU Protection Mechanism, which was issued by Italy in March, showed the inadequacy, but also the potential, of the EU to tackle crises on a supranational level.

Though the pandemic has shown a need for the EU to be strengthened and go beyond the economy, the EU still consists of both inter- and intra-governmental bodies. As a result of intergovernmental bodies, the supranational body lacks a central authority with which to act. It can therefore be said that existing political and new methods of economic integration appear to be the best way for the EU economy to recover post-Covid-19.

A social democratic approach to the economy by creating new social and economic standards falls in line with the fundamental principles of the EU. Ultimately, the unanimity of the European Union and the Council is fundamental to the success of this project – a laudable but challenging task.