Covid-19: transforming a threat into an opportunity

By Emiliano López Atxurra

The Covid-19 pandemic has spread worldwide. Previous pandemics were confined mainly to regional areas. This global health emergency has many sorts of consequences including the tension that has begun to emerge about access to supplies, which can be classified as the battle for medicines and healthcare materials, and, above all, a systemic risk for the European Union.

The EU has failed to fully guarantee the health and medical safety of European citizens. If this is combined with the systemic risks posed to European security by a pandemic rampant amongst African demography, in addition to the climate war that many neighbouring countries have been fighting for some time, the failure of the European Defence Community, back in 1954, will weigh heavily on us. All the more so if we repeat the pre-eminence of unbridled nationalism over the necessary European governance.

The EU has failed to fully guarantee the health and medical safety of European citizens

The outlook for the security and wellbeing of and within the European Union is on yellow alert and no time must be wasted if we want to avoid going into red. The treatment and cure of Covid-19 for the European Union are not the same as those used for other crises such as that of 2008. They have a different strategic dimension.

The problem we face is of historic proportions and is also structural. In these circumstances, referring to the problem as if it was like broadcasting a football match, or simply a matter of being lazy or working hard, or a way of making others take the blame for one’s own responsibilities, is far from helpful in a situation which may, in the absence of strategy and seriousness, send us over the cliff of history for many future generations.

Simply out of dignity and respect for the generation that made our welfare state possible, we must work to high standards and demand the very best of ourselves for future generations.

Covid-19 crisis
This crisis may send us over the cliff of history for many future generations (Photo: Tedward Quinn/Unsplash)

The world we have entered is quite different from the one we knew. The arrival of the black swan obliges us once and for all to update and transform available structures. There is no need to plunge blindly into the unknown, just a determination to address the issue and deal with it effectively.

Subsidiarity is not a silly principle but one that requires serious management and planning at all levels, from the EU authorities down to the local level.

It is not a principle deep-rooted in administrative bureaucracy, it is a principle that calls for good governance. And this is the responsibility of all of us who share this home we call Europe. The strength of the EU is what has enabled the wellbeing of Europeans and the strength of effective management is what makes us more European.

The European Union was born of a need to safeguard our future during a historic journey from 1951 to the Europe of 27 states, after the unfortunate withdrawal of the United Kingdom. The EU is now necessary more than ever if we are to avoid becoming the fragmented western end of Eurasia.

The EU is now necessary more than ever if we are to avoid becoming the fragmented western end of Eurasia

Covid-19 is revealing the problem of the relocation of European industry, its loss of productive capacity in essential sectors, and demonstrates more than ever the urgent need for a technology and industrial renaissance in Europe.

In contrast, we can see the importance of China in the global productive economy and its relentless strategy of technological and industrial leadership in geopolitical terms.

Nor must we forget the importance of other countries such as India in significant pharma sectors. These are just two of many examples that show that the global European economy consolidated since 1600 is undeniably in the terminal phase of its historic cycle.

This outlook should concern us but not paralyse us. On the contrary, it should make us look at the world in all its complexity and, above all, make us adapt our structures, goals and policies to the new world in this century. To do so, nothing could be better than to revive the vision of the EU’s founding fathers who realised, as Monnet said at the end of his memoirs, that Europe and its values would be in serious danger of being nothing in the future world unless European governance kept pace with the challenges of the new international society.

The global European economy is undeniably in the terminal phase of its historic cycle

This pandemic will not only have far-reaching economic fallout. It uncovers the fundamental issue of the danger posed to the European values that made the EU possible and which are set forth in its charter of basic rights, as opposed to a colonisation of values at odds with European democracy.

Against this backdrop, European strength is more necessary than ever to ensure solidity in a world economy in which the geopolitical struggle for leadership in international society, in the broadest sense, will be cut-throat in terms of wellbeing, cohesion and fundamental rights.

This is why we need to restore the leading role of tech industry policy as a first-rate strategic priority. To do so, different measures can be taken to balance industrial policy with competition policy. We cannot have regulations that damage our industrial position in comparison with China and the USA. There is no need for major changes. Just one: an amendment to article 173 of the treatise to give the Commission more resources and foster a real European policy on industry. And for the policy on competition not to be higher in the hierarchy of the treatise.

Covid-19 airport
Covid-19 is revealing the termites that have invaded the main beams built over the years in the European Union (Photo: Markus Spiske/Unsplash)

The post-Covid era makes it necessary to reverse a situation uncovered by the pandemic: the need to recover the industrial sovereignty of Europe. This will require a determined commitment to the productive economy with priority being given to tech industry policy.

The tech industry renaissance mentioned back in 2014 during a Franco-German summit as the central concept for boosting the energy transition and the mechanism for strengthening the EU in global geopolitics is more necessary than ever. There can be no national sovereignty without European sovereignty, and no European sovereignty without tech industry clout.

Covid-19 is revealing the termites that have invaded the main beams built over the years in the European Union, the home that Europeans share. Health must be restored to this building based on the clear concept of its founding architects to protect us from an uncertain world.

Restoring the health of this building is now, more than ever, an essential task in the post Covid-19 era. The institutions that comprise it have a great responsibility, and the energy for the qualitative leap required by the European project is to be found in EU resources. This project, in the course of its history, has been the shared house that has, with its regulations, offered hope to Europeans. We must not turn hope into frustration.

Covid-19 is calling out our weaknesses and challenges

Covid-19 shows that now more than ever the world has become a global village in the broadest sense of the term. It has, however, also shown that geopolitics did not go missing in the limbo of history. Quite the contrary, it is more present now than ever.

We Europeans – in our capacity as the fathers of geopolitics, of realism in the understanding of relations in international society and, therefore, of national interests – should be aware of the importance of European interests and, therefore, of European sovereignty on the geopolitical map now emerging. An uncertain future unless we rebuild the EU to shore up European sovereignty. This requires, amongst other actions, a different form of governance oriented towards the robust management of European tech industry policy and a solid strength in security and defence. 

Covid-19 is calling out our weaknesses and challenges. On the horizon, when we see the fallout of the battle against this pandemic, we must have the vision of General States of the Union to regenerate the institutional structure of each community and align it with the needs of a robust European sovereignty.

The EU is a passport to remaining a leader in the protection of European values in the new international society

The upholding of a reasonable welfare state; the special geopolitical circumstances of our vicinity; the risks to our stability; and the tough geopolitical confrontation that lies ahead are all challenges that force us to do so. Otherwise, goals such as the Green Deal and many others outlined by the European agenda to endow the European space with social cohesion and economic sustainability will be scarred by inefficiency and, what is worse, by despondency and doubts about the usefulness of the shared house.

Productive and tech industry sovereignty in sectors of crucial importance for European security, such as the health sector in the broadest sense of the word, and technology requirements including AI, a European energy model that requires an Energy Union and quantum computing, are just some of the major challenges facing us. The EU is not a fanciful administration of bureaucrats but a passport to remaining a leader in the protection of European values in the new international society.

We must urgently rethink the productive model that has led to a dangerous relocation of the tech industry outside Europe

More immediately, we must urgently rethink the productive model that has led to a dangerous relocation of the tech industry value chain. This is not a minor issue, we must be aware of the consequences of Covid for densely populated, developing societies with extreme urban poverty and a production model that supplies a significant part of the products essential for the western market. We must verify their geopolitical impact and how they create a risk scenario for Europe.

In this context, a question arises for Europeans. The risks of relocating production outside Europe. This leads us to rethink and re-assess the reasons that caused business to be relocated. Are we Europeans safe with a dependent tech industry ecosystem? It is important to answer this question because many things will change after Covid-19.

Factory in England
Manufacturers in aeroplane Factory, Birmingham, 1940 (Photo: Birmingham Museums Trust/Unsplash)

Things that were already expected, for example, will happen faster, such as regionalisation vs the recovery of tech industry value chains. The European industrial strategy should emphasise the reformulation and Europeanisation of its industrial and productive bases.

It is essential to rethink both the tech industry system and the global value chain. The European Union is the ideal place, not fragmentation, because this implies disrupting the European market completely and creating gateways for direct competitors of Europe in terms of civilisation and technological leadership.

Covid and its consequences have changed the everyday agenda of the EU. They have brought to the forefront all the issues that emerged during the 2008 crisis but more intensely. And their governance is crucial for the response to a systemic crisis in the global and European economy.

Covid and its consequences have brought to the forefront all the issues that emerged during the 2008 crisis but more intensely

The pooling of financial assets and shared responsibility for their effective management are an essential measure that enhances strategic management policies and necessary management control. Governance is a necessity, and one example is the management of cohesion and structural funds. This excellent central concept, floated by Delors in 1992, was in response to the need to provide the funds necessary to achieve the cohesion and stability of the European space after the fall of the wall and the prospect of a new Europe open to the East.

The experience of the impact of its funds and management shows that there are grounds for creating a sort of governance for the industrial and economic reconstruction of Europe, providing it is possible to guarantee a modern, European sort of governance and not a governance based on bureaucracy or intergovernmental prominence that gives rise to proven and verifiable inefficiencies.

There are grounds for creating a sort of governance for the industrial and economic reconstruction of Europe

We must learn from experience and emphasise the leadership capacities of a European model that calls for subsidiarity to be achieved intelligently, and for technology, industry and financial policies to be channelled into future strategic sectors rather than fuelling the old world.

Fiscal governance inevitably calls for stricter public accounting by member states, more robust control of the European parliament and closer collaboration, by means of the applicable mechanisms, with national parliaments.

Technical skills and legal intelligence exist. We must revive the spirit of our founding fathers and, in the case of Spain, we must stop thinking we are the smartest kid on the block and start building a multi-party agreement that bolsters our positions in this great adventure called the European Union.

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