In New York Magazine, Anke Hassel and Lucas Guttenberg weigh in on potential consequences for the European Union in facing the pandemic.
Europe has been deeply affected by the outbreak of the coronavirus, but Southern European countries whose economies are heavily dependent on tourism are in a much weaker position and will need financial help, a feature in New York Magazine suggests.
“This coronavirus affects everyone, but it affects some people more than it affects others — it’s a symmetric shock with very asymmetric effects,” said Lucas Guttenberg, Deputy Director of the Hertie School’s Jacques Delors Centre. “Clearly, it is no one’s fault, but if some countries come out of this much stronger than others, that is going to politically undermine the European project as a whole.”
Last week, nine countries called for the issuance of emergency “Eurobonds” in order to spread the costs more evenly among the European Union. However, Germany, which is Europe’s largest economy, still remains undecided in this policy debate. In the past, Germany has been reluctant to help out less fortunate European Union countries, as was the case during the financial crisis in 2008.
“The [German] business community is strongly against the idea, so the debate could end the same way it did before — without issuing the bonds,” said Anke Hassel, Professor of Public Policy at the Hertie School. “And the conservative politicians here don’t see any reason why they should have to support them — that is, unless they think the eurozone could fall apart or Italy could leave the EU.”
Read the full article in New York Magazine.