How is COVID-19 changing the EU? As far as I can see, most of the big changes are accelerations of trends that were already visible. Take six of them - a short thread. @CER_EU /1
There was already talk of de-globalisation and on-shoring. Now worries about security of supply of key drugs and bits of medical equipment have reinforced the notion that individual countries or the EU as a whole need to be more self-sufficient./2
Similarly, EU will favour emergence of European champions. Before coronavirus, the EU planned to tweak rules on foreign take-overs and mergers, to make it harder for unfairly-subsidised Chinese firms to buy up high-tech industry. Now suspicion of China is markedly higher. /3
National capitals have been winning v EU institutions for many years, & the crisis strengthens them further. Citizens expect strong leadership from national leaders & rally around their flags. And most of the competences on health, borders, fiscal policy rest with governments./4
Before the crisis struck, populists were starting to use hostility to green policies as a means of drumming up support. Now more voters will worry that climate change policies will make them even poorer, on top of CV-19 damage. At the very least green measures will be delayed. /5
Fifth, the crisis will worsen the EU's east-west rift. Poland, Hungary and others were already fighting Brussels over C02 emissions, refugees and rule of law issues. Now Orban has used coronavirus as an excuse to introduce rule by decree, exacerbating his confict with the EU. /6
The scariest trend is the north-south rift, as I wrote in a recent piece for @Parlimag cer.eu/in-the-press/c…. Ever since the eurozone crisis began, the south has looked to the EU for solidarity and the north has been wary of creating moral hazard. /7
Now, with Italy, Spain et al suffering more deaths and starting with higher debts, they expect their partners to help via some sort of eurobond or fiscal union. But Germany and the Netherlands remain opposed to significant transfers to the south. /8
Italy is already becoming an eurosceptic country, feeling abandoned by the EU during the euro and refugee crises. Salvini is ready to exploit a further abandonment to win support for his anti-EU platform. If in such a crisis the EU cannot commit to eurobonds it never will. ENDS
