Europe’s Ambitious Parochialism
The idea that the European Union can save itself and emerge from the COVID-19 crisis while the rest of the world flounders will quickly be proved wrong. Even for wealthy regions like Europe, any plausible vision of a sustainable post-pandemic future necessarily requires international solidarity.
NEW DELHI – The European Union has changed its economic policy for the better by agreeing on a €1.8 trillion ($2.2 trillion) post-pandemic stimulus plan to be financed directly through the EU budget. In particular, more than half of the package – which comprises the EU’s long-term budget and the €750 billion Next Generation EU recovery fund – is earmarked for forward-looking public spending.
The plan is bold and impressive. There will be support for research and innovation via the Horizon Europe program, and for climate and digital transitions through the Just Transition Fund and the Digital Europe Program, respectively. The package will also establish a new health program, EU4Health, and a Recovery and Resilience Facility to disburse most of the Next Generation EU funds. And a hefty sum will be allocated to social protection, including income support for workers and the unemployed.
Such a policy shift is surely to be welcomed, because it lays the foundations for a more viable economic union. But in a fundamental sense, European leaders – much like their US counterparts – still don’t get it. Just as the stimulus measures announced by US President Joe Biden’s new administration are predominantly aimed at the US economy, the EU package expresses solidarity within Europe, with little concern for the rest of the world.