We shouldn’t have had to go through it. But the Coronavirus crisis has taught us some hard lessons. Most importantly, that globalisation, as it works today, is a failure.
As a consequence, we came to terms with our unhealthy dependence on China. Not because of politics, but economics.
The crisis forced us to recognise that the supply lines linking the People’s Republic to the European Union are unsustainable.
When they get disrupted, the rest of the world follows.
We learned that without more cohesion and solidarity, Europe could be swept away by a tidal wave of populist governments.
Nothing is how it was before.
With unprecedented speed, European governments have put measures in place to support their most affected citizens and companies.
An enormous amount of money can now be provided for immediate, medium and long-term relief.
To take advantage of this, the EU has a unique opportunity to become more proactive. But, in doing so, it shouldn’t forget what it had already set out to do.
In December 2019, with pomp and glory, Commission President Ursula von der Leyen announced the European Green Deal.
Has the Coronavirus crisis thrown her off track?
Every crisis offers opportunities related to the level of the threat. This is the challenge the European Union now faces.
The Coronavirus crisis could lead to a major Green revival of Europe and provide the basis for a sustainable recovery.
Unfortunately, last week’s 11th Petersberg Climate Dialogue, co-chaired by Germany and the United Kingdom, brought nothing more than a commitment to changing the rules and implementing a sustainable recovery stimulus.
The final declaration is very vague, in only stipulating that economic recovery has to be aligned with the Paris Agreement, the UN’s Sustainable Development Goals and the need for this to happen globally.
Over 30 years ago, in his book Ecological Communication, German sociologist Niklas Luhmann gave the sobering answer that issues like climate change have difficulty being resonant because politics and business operate according to their own logic.
The economy answers environmental issues with cost arguments. What has no price is irrelevant. What is ecologically reasonable cannot always be calculated in terms of price, either.
Accordingly, politics is about securing power, finding necessary majorities and negotiating socially acceptable compromises. The Petersberg climate dialogue conclusions give clear evidence that it takes time for substantial change.
But the climate issue has become much more concrete. Politics and economics can no longer ignore it in times of COVID-19.
Is it true that the Coronavirus will decisively change the way we live and work together, as Germany’s Federal Minister of Finance, Olaf Scholz said at a recent press conference? Will there be a “new normal”?
The world we knew can’t be restored. Whatever follows will not be the same. A “new normal” will develop but probably not in the manner imagined by business and politics.
Considering the attention given to the climate emergency before the crisis, by Greta Thunberg and the Fridays for Future campaigns worldwide, it is no coincidence that media are increasingly emphasising possible positive side effects of the Coronavirus lockdown on climate change.
Already, the forced departure from the old normal is being used by activists to advocate a future of reduced mobility, consumption, energy and different living standards.
It is only a matter of time before the idea of regular lockdowns is proposed as a way to save nature and the climate, like some kind of global fasting cure or eco-Ramadan.
The European Union should consider some preconditions:
First, the economic recovery needs to be made sustainable rather than a return to the pre-Coronavirus status quo.
The stimulus package — including leverage — is the most important financial initiative in the EU’s history. The amount envisaged would enable the European Union to fund programs that seemed unthinkable before.
This is a unique opportunity, but only when sound principles of aid allocation are properly considered.
The COVID-19 crisis has shown that inconsistent regulations restrict the movement of goods and services, even in the public interest. The EU should not do things in halves and remove remaining barriers once and for all. This will help to stimulate even more sustainable growth.
There has to be a clear separation between the resources required to absorb social shocks and the resources needed to increase sustainable growth, competitiveness and the struggle against climate change.
Fighting climate change should be the top priority. Concentrating on research and development, education and innovation will help ensure sustainability. This will help foster new global leadership.
Related issues such as digitalisation and logistics cannot be ignored. Therefore Europe needs a sectoral policy to help its key industries like aviation and the automotive industry to exit the crisis, but only with a clear emphasis on green resilience.
From the beginning, debt reduction through sustainable growth should be considered. To get out of debt, one has to focus on growth.
The first step is to save the economy and jobs. Only then will higher tax revenues reduce the debt. This is not only a lesson from the financial crisis of 2008/2009 but simple economic reasoning.
Clear growth, albeit sustainable, may be difficult for green activists to accept in the European Union. The aviation and automotive industries are key job-creating sectors in Europe.
They should receive financial help, but only if they innovate new concepts of traffic and transport. In Germany, for instance, a general scrapping premium like 2009 should not be allocated.
Second, European actions must remain global, but no longer naive.
The Coronavirus crisis has created two main challenges: repatriation and protection.
For good reason and without hostility towards China, Europe needs to facilitate the repatriation of its most sensitive products and strive for a healthy diversification of suppliers with the clear aim of sustainability.
It is not sustainable to be so highly dependant on China, which, for example, produces 80 per cent of the active ingredients in our medicines.
Consequently, Europe should revive partnerships with long-standing partners like the United States. Let’s hope for change in the presidential election, in November.
In order to diversify, strong new strategic partnerships should be reinforced with countries which are complementary and face the same challenges.
India should be a priority, but also the ASEAN countries. Japan, maybe Brazil and Africa, with its huge potential and enormous human resources, should also be considered
The return of sensitive activities must, of course, take place on a European basis. Nevertheless, strategic production can also remain outside the Union on the condition it diversifies and is not subject to tariff and non-tariff barriers.
As time is running out, the EU should enable more enhanced cooperation between those countries that are ready to do so and create consequently more stable structures within the Union.
Third, we need more resilient European governance. The main lesson from the Coronavirus crisis is that pandemic prevention and management are global, regional, national and local.
This requires effective coordination – therefore a collective resilience.
In this extremely concerning context, voices from the industry, political parties and Member States are questioning the validity of the European Green Deal, demanding that it be postponed, weakened or that some of the already existing environmental policy instruments be suspended or eliminated.
The Green Deal was designed to be the backbone of a sustainable growth strategy for Europe.
The economic downturn will present serious challenges to public and private budgets, and cause economic and social distress, potentially creating further pressure to reprioritise.
But the “new normal” does not change the objectives of the European Green Deal.
In the new context of economic downturn, a growth-enhancing sustainable policy is even more relevant.
This unforeseen situation offers a unique momentum to further amplify the European Green Deal.
Only a far-reaching European transformation ensures that future policies are sustainably, economically and socially robust.
A watered-down Green Deal, which fails to kickstart the new normal, would seriously threaten equity between countries and regions, and people for generations.
The poorest countries in the EU would likely be more exposed and are less prepared to cope with further fallout.
Hence, the different elements of sustainability could support each other, particularly in the long-term.
A coherent and cohesive European Green Deal, which includes social, environmental and economic concerns, should be a central element of any sustainable recovery programme.
Photograph courtesy of Joel Schalit. All rights reserved.