It took just 15 days to bring the global economy down. The current crisis, more serious than the one in 2008 in terms of its economic impact, will keep us busy for many years to come. That assertion may seem banal, but the virus is indeed changing the world. The post-covid-19 world will no longer be the same as the world before the pandemic.
And yet, 2020 started rather well. Sovereign debt was falling, public spending was, so to speak, stable, the banking crisis was behind us, the eurozone had, in the meantime, provided rescue mechanisms or at least means to mitigate the shocks. The European Union had just appointed its new leaders for the next five years. Even if it is no longer a dream, it is still in working order. Its biggest concern at the beginning of the year was the uncertain outcome of the negotiations on future relations with the United Kingdom, which had just turned its back on the EU.
After nearly 23 semesters of uninterrupted growth, creating more than 13 million jobs, the EU seems to have recovered sustainably thanks to its internal market and its single currency, less contested than in the period following the 2008 financial crisis. On the other hand, apart from its export performance, the Union’s situation in the world is much less favourable. Whether in the Middle East, in Libya, in the Ukrainian conflict, we expect (nothing more) from the European Union. The United States, which still dominates the Atlantic alliance, the foundation of our security, has become less benevolent towards us. Meanwhile, the devastating effects of the pandemic present an existential challenge.
“Very few sectors remain untouched by this unprecedented economic decline.”
It is against this backdrop that the 27 member states must reinvent themselves. Very few sectors remain untouched by this unprecedented economic decline. Whether they are small, medium, or even systemic, they all turn to the state. Up until now, we have observed two inalienable things: firstly, most of the companies that can no longer cope alone ask the political authorities for help; secondly, the member states, apart from the so-called frugal ones, have realised that the end of the crisis has become unthinkable without massive intervention of the European Union. Once again, it took the exceptionally dramatic nature of a crisis to appeal to the European Union.
Paradoxically, it was the German chancellor, whose political demise has repeatedly been predicted, who took the whole political class by surprise. By presenting, along with president Emmanuel Macron, a €500 billion stimulus proposal, she has definitively paved the way for the recovery of our economies. The proposals of the European Commission president Ursula von der Leyen to increase the supply to €750 billion are nothing more than a logical extension of the Franco-German initiative.
“There is every reason to believe that the indispensable fight against climate change will not be sacrificed on the altar of economic recovery.”
Without wanting to speculate too much on the details of the recovery plan, whose adoption still requires the unanimous agreement of the 27, we can already guess at the shape of the post-covid world. There is every reason to believe that the indispensable fight against climate change will not be sacrificed on the altar of economic recovery. Designing the global energy transition will be crucial if we want a zero-carbon economy to become a reality.
Moreover, digitalization, whose usefulness during the period of confinement was recognised even by the most sceptical, will be imposed at an accelerated pace both in the economic field and in everyday life. Obviously, significant investments are going to have to be made.
European sovereignty will be on the EU’s agenda. It will have to materialise first and foremost in the industrial field. In this regard, the citizen eager for security is ahead of politicians. The time when one or two countries produce medicines for the rest of the world has passed.
Therefore, in the future, the EU will face increasing resistance from citizens in its trade negotiations, unless its partners share our environmental and social standards.
Finally, according to OECD tax expert Pascal Saint-Amans, zero tolerance for fraud and even tax evasion will become the norm.
As in the past, this crisis has allowed us to explore new paths and discover new opportunities. If we do not handle it too badly, in the next six months, the management of the present crisis will allow us to make more progress in terms of European integration than in the last 30 years.