Why the EU must deliver on its vision for post-pandemic reconstruction

THE European Commission last week laid out its vision for post-pandemic recovery across the continent, with a proposed 750 billion-euro stimulus plan.

To much self-acclaim, Commission President Ursula von der Leyen asserted that "this is Europe's moment ...we either go it alone ...or we pave a strong path for our people and the next generation". Yet, while she was long on rhetoric, she is right to highlight that the pandemic has shaken Europe to its core. This is not just illustrated by the huge number of deaths, but also the economic fallout. The European Central Bank forecasts a 15 per cent contraction of GDP in the single-currency area in the second quarter of 2020; the Commission has said that the 27 EU countries together could contract by 7.4 per cent this year.

The pandemic has exacerbated the bloc's vulnerabilities that in the past decade have been driven by the euro zone crisis, an influx of migrants and growing Euro skepticism, including Brexit. In so doing, it has also intensified the political fault lines across the continent, intensifying long-standing splits between the northern and southern states. In particular, there are clear and present divisions between Spain and Italy, hit hardest by the crisis, and the so-called "Frugal Four" of The Netherlands, Finland, Denmark and Austria, who tend to be more fiscally conservative.