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Europe grapples with 'socio-economic tsunami' of Covid-19 crisis

President of European Commission Ursula von der Leyen says the EU is ready to do everything that is required and will not hesitate to take additional measures as the situation evolves.


ITALY's Prime Minister Giuseppe Conte on Tuesday declared that the coronavirus was causing a "socio-economic tsunami" as European leaders agreed to seal off external borders, but many countries thwarted solidarity by imposing frontier curbs of their own.

Separately, European Commission President Ursula von der Leyen said: "The enemy is the virus and now we have to do our utmost to protect our people and to protect our economies." She was speaking after the second videoconference in a week of the 27 leaders of the European Union (EU). "We are ready to do everything that is required. We will not hesitate to take additional measures as the situation evolves."

Mr Conte, whose country has been hardest hit by a global health crisis that has now spread to Europe, said no nation would be left untouched by the "tsunami". He called for special "coronavirus bonds", or a European guarantee fund, to help member states to finance urgent health and economic policies, an Italian government source said.

Rome has issued similar calls for joint EU funding during previous crises, usually running into opposition from the bloc's most powerful economy and paymaster, Germany.

The EU has scrambled to find a coherent response to the outbreak, with countries imposing their own border checks in what is normally a zone of control-free travel; they have also limited exports of medical equipment or failed to share key data swiftly.

The national leaders agreed on Tuesday to close the external borders of most European countries for 30 days and establish fast-track lanes at their countries' frontiers to keep goods like medicines and food moving. Ireland will not join the travel ban on Europe's borders, Dr von der Leyen said, because the United Kingdom - which left the EU in January - was not in it either.

Despite Brexit, the two have an obligation to preserve an open border on the island of Ireland. Should Ireland go with the majority of European countries while the UK stays away, it would mean erecting controls on the sensitive border with Northern Ireland, something the parties had sought to avoid at all cost in three years of tortuous Brexit divorce talks.

France went into lockdown on Tuesday to contain the spread of the highly contagious disease and Belgium announced it would follow suit.

As the death toll in Italy jumped above 2,000, European banks warned of falling incomes and pummelled airlines pleaded for government aid.

The EU's executive European Commission warned member states that this was just the beginning of the crisis, and Germany said it would run for "months rather than weeks", diplomats said.

Alarmed by the unilateral border restrictions being imposed in a bloc that prizes the free movement of people, French President Emmanuel Macron had pressed for the decision to close Europe's external borders to foreigners.

"This is meant to convince European countries to drop internal and unilateral border moves. But it's hard to see anyone doing it," a EU diplomat said, adding the move was largely symbolic as the virus was already within.

Indeed, tensions over borders still abounded across the EU, with three Baltic countries - Lithuania, Latvia and Estonia - criticising Poland for blocking their citizens in transit from returning home.

Portugal and Spain on Tuesday notified Brussels that they have imposed controls on Europe's internal borders, bringing the total making such moves to at least 12 countries.

Slovakia, Slovenia and Hungary have not formally informed the EU about such moves despite pursuing them, meaning the real number is likely higher.

The EU has also moved to repatriate Europeans stranded abroad as airlines cut flights. Dr von der Leyen said nearly 300 Austrian and other European nationals were flown back from Morocco to Vienna on Tuesday.

The bloc's antitrust chief proposed letting governments offer grants or tax perks of up to 500,000 euros (S$784,690) to ailing companies, though some EU countries want Brussels to go further. REUTERS.