A Dispatch from The Hague: Step Up for Europe
Binnenhof, in The Hague. Photo by Uwe Aranas, CEphoto.
The year after World War II ended, Winston Churchill suggested that the clearest route to lasting peace would be a “United States of Europe.” The European Union has brought the countries of Europe closer than they have ever been; united, however, they are not—a chronic condition that the carnage of the pandemic has laid bare. European leaders are once again bickering about that most fractious of E.U. subjects: the budget. This time, the challenge of unity is uniquely difficult.
Here in The Hague, Prime Minister Mark Rutte oversees the governance of the Netherlands from a small turret in the thirteenth-century Binnenhof castle. It was there on June 23 that Emmanuel Macron, the French president, laid out his pitch for the European Union’s proposed €750 billion aid package, a sweeping response to the economic calamity that the pandemic threatens. The stimulus, originally proposed by France and Germany and broadened by the European Commission, would be financed by issuing debt common to all E.U. member states and be targeted to help those worst affected by the pandemic. It is due to be voted on at an E.U. summit in July. True to form, E.U. bureaucrats, noted for their lyrical prowess, have dubbed it “Next Generation E.U.”
Mr. Macron made his visit to the Netherlands because of Mr. Rutte’s side job: being the de facto leader of the so-called “frugal four” E.U. members: The Netherlands, Austria, Sweden, and Denmark. These fiscally conservative countries stand in stark opposition to greater fiscal integration and have voiced their concerns that the proposed package will be the first step on the path to reckless debt-financed spending. Some leaders have been more diplomatic than others; Wopke Hoekstra, the Dutch finance minister, expressed resentment that his country was obliged to help the poorer Southern states—comments he later admitted showed “too little compassion.”
The frugal four’s worries have some merit. The Eurozone is still traumatized by the crisis of the last decade, fueled by a bonanza of debt-based spending. The Commission’s proposed common debt issuance is unprecedented in its scale and represents a landmark moment in E.U. history. Two points must be noted, however, to stave off talk of a “Hamiltonian moment”, a phrase bounding enthusiastically around the European media in recent weeks. First, the stimulus package does not write off member states’ existing debt, nor additional debt that they accrue because of the crisis. Second, Angela Merkel, Germany’s chancellor and Mr. Macron’s partner in proposing the fund, stressed that she viewed it as a “one-off effort” rather than a permanent change to the E.U.’s fiscal structure. As Europe’s most influential voice and leader of its financial behemoth, her reassurance carries great weight. Germany’s willingness to push for E.U. spending is a marked departure from its conduct during the Eurozone debt crisis, when it was the most vocal opponent of loose fiscal policy. Mrs. Merkel—chancellor then, as now—has proved to be adaptable and pragmatic. It is also possible that the frugal four are coming around: Mr. Macron sounded optimistic about the results of his meeting with Mr. Rutte, speaking vaguely of their shared “European fibre.” Mr. Rutte’s fellow conservative, Austrian chancellor Sebastian Kurz, has also made cautious but positive noises about the fund.
There are inherent contradictions in the E.U.’s structure. Chief among these is the fact that its 27 members, with wide socioeconomic disparities, operate under a single monetary union without a unified fiscal policy. Regardless, the E.U. has been a great engine for prosperity, peace, and the interconnectedness of the European continent, and is a project worth preserving. Mario Draghi, who headed the European Central Bank through the worst years of the Eurozone debt crisis, declared at the downturn’s lowest point that he would do “whatever it takes” to save the single currency. Now, the time has come to save the bloc itself. A one-off recovery fund to meet this unprecedented hour—amounting to less than 4% of the E.U.’s gross domestic product—is the right approach. Mr. Macron and Mrs. Merkel deserve praise for their proactive approach to European unity; the European Commission has done well to build on their plans. Responsibility now falls to the rest of the bloc to back them.
For the E.U.’s wealthier members to block the stimulus package would suggest that the idea of European solidarity is nothing more than a romantic dream, an empty idea backed by fine words and little action. Solidarity is not a fair-weather treat; it is a founding premise of the European project. At a time when the continent is stricken by circumstances beyond its control, to turn inwards and drop all pretense of group responsibility would be a rejection of the E.U.’s most basic principles. Failing to share the pain now will only lead to the rise of further Eurosceptic resentment; that is a time-tested path to the rise of anti-E.U. demagogues.
Hanseatic complacency must not be allowed to endanger the long-term survival of an institution that has transformed Europe for the better. It would be a tragedy for the words of Albert Camus, spoken in the founding year of the European Economic Community, to become prophetic: “In the very midst of the sound and the fury of our history: Let us rejoice. Let us rejoice, indeed, at having witnessed the death of a lying and comfort-loving Europe.”
Aditya Sharma is staff writer at CPR and a junior studying Political Science and English in the dual B.A. program with SciencesPo. When we can return to campus, you'll probably find him buying coffee in Butler. Talk to him about fiction, free speech, and politics in India, Britain, and Europe.