The European Union has always been quintessentially risk averse. What a surprise therefore to see it jeopardising its very existence by playing a high-stakes multi-handed poker game involving debt mutualisation, financial reflation and constitutional law against a backdrop of anti-EU sentiment.
The founding fathers of the European project championed progress towards an ever-closer union by evolution not revolution. Opportunistically the European Commission – guardians of the treaties – seized on important international moments to widen and deepen European integration, as with the end of the Cold War and German reunification to extend state membership, pass the Maastricht treaty and institute the euro. They justified and executed them on the basis of consensus, albeit more in the mould of ‘democratic centralism’.
Perhaps the Covid pandemic is just one of those opportunities, when the EU can again change gear and take integration deeper. Why not attempt that much-touted ‘Hamiltonian moment’ to federate the member-states by debt mutualisation, financial transfers and EU-wide taxation? In doing so, the EU would follow in the footsteps of America’s first Secretary of the Treasury, Alexander Hamilton, in the 1790s following the War of Independence.
But getting the reluctant wealthy ‘frugal’ states to bail-out the poorer spendthrifts via greater fiscal federation, as Hamilton did, is only one of the high-stake poker hands the EU is playing.
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