“Whatever it Takes”? How to Move Ahead in Post-crisis Europe | Conversations for the Future of Europe 2020 | #3
For the third Conversation of 2020, EUSOL and the Robert Schuman Center were very happy to welcome Prof. George Papaconstantinou (EUI Transformation of Global Governance Project) who discussed some of the core theses of his recent book “Whatever it Takes? How to Move Ahead in Post-Crisis Europe” with a special focus on the ongoing Covid-19 pandemic and the need for a concerted effort to rebuild Europe’s economy after once the lock-down will end. In particular, Papconstantinou’s maintained that Covid-19 amounts to a ‘perfect storm’ for the European Union: not only did the health crisis reveal the limits of European competencies, but it is likely to culminate in an economic recession far worse than the financial crisis that will put European social protection systems under incredible strains, test European solidarity under extreme conditions, and opens new challenges to liberal democratic institutions (civil liberties and participation under lockdown, populist narratives, misinformation campaigns about origins of the health crisis etc.). Faced with this situation, Papconstantinou argued, Europe will need to take drastic steps. Concretely, he laid out his plan for the European Commission to finance member states via grants and loans for which it borrows in capital markets against existing and future income/resources. These funds should be large enough to support both post-covid recovery and move towards a green transition of the European economy.
Papaconstantinou’s presentation was followed by two brief interventions, one from Prof. Adrienne Héritier (RSCAS and SPS, EUI), and one from Raffaele Fargnoli (European Commission). Héritier stressed the need for democratic legitimation for such an extensive economic recovery project and raised some doubts about feasibility, whilst Fargnoli focused more concretely on the features and potential mechanics of the anticipated instrument. Specifically, he raised some questions about the absolute size of the package, the financial terms and potential repayment structure, monitoring capabilities for the the use of these enormous resources by member states as well as the relevance of fiscal rules for the ability to access them. There ensued a lively debate in the following Q&A around some themes already flagged by the commentators —most notably on how to “get the politics right”, i.e. strike the right balance between ambition and feasibility, and some additional questions from the many (online) participants. In the final part of the session, our panelists discussed the potential impact of the German Constitutional Court’s recent ruling on the legality of ECB interventions, wondering what impact it might have on future balance between monetary and fiscal interventions to support the European economy.
In our next session (May 22, 2020), we will discuss whether direct democratic instruments could enhance the legitimacy of EU policy. Our main speaker will be Prof. Francis Cheneval from the University of Zurich.