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The EU response to the pandemic crisis in terms of climate change and European solidarity.

Updated: Feb 23

The EU response to the challenges arising from the pandemic crisis in terms of climate change and European solidarity.

In March 2020 the planet changed in an unprecedented way due to the Covid pandemic. The ominous predictions of scientists about the effect of climate change on the balance of the ecosystem were confirmed as they had predicted the emergence of pandemics in the coming years. Nevertheless, governments were taken aback which called into question their effectiveness. The health crisis caused by COVID-19 is undoubtedly one of the worst in the last century and, unfortunately, is still evolving. Equally abrupt and powerful is its economic impact. All the data so far show that the economic crisis is deeper and its evolution much faster than any previous one in the last century.

The COVID-19 crisis is linked to the climate crisis in both its parts. Regarding the health aspect, a series of scientific studies show that climate change combined with other environmental disruptions will facilitate the development of more, completely new, infectious strains such as COVID-19. The World Health Organization also reports how models of transmission of infectious diseases will change as a consequence of climate change (WTO, 2020). As far as the economic aspect is concerned, despite its magnitude, the current crisis will seem relatively small in the future if the climate crisis is allowed to unfold. Many studies over the last twenty years have highlighted the potential economic costs of climate change, which now appear with not so intense evolution and scattered on the planet, but cumulatively are already enormous. It is indicative that in the last decade even central banks have recognized the systemic risk of climate change in the global economy.

It is, therefore, necessary to take immediate action for the transition to a zero-carbon economy to limit costs and damages in environmental, health, and economic terms. The transition requires investments that are impossible to undertake by the private sector without significant state intervention. Until now, the amount of these interventions seemed a deterrent, but recent actions to contain the COVID-19 economic crisis prove that financing the rapid transition to a low-carbon economy is entirely possible. However, the role of the EU in the pandemic confrontation was examined closely to see if the measures taken were enough to contribute to the solution of this without any precedent situation.

The European Union is made up of 27 Member States and aims at economic and political integration based on common values and objectives. The specificity of its form raised questions about the extent of its responsibilities concerning the autonomy of the member states' action, an issue that has been highlighted by the current pandemic. Although Article 1 of the Treaty of Lisbon states that this Treaty marks a new stage in the process of an ever-closer union among the peoples of Europe, in which decisions are taken as openly as possible and as close as possible to the citizens, this was not the case with the speed that the situation required on the issue of the pandemic, resulting in the loss of valuable time. More specifically, the misgiving about the EU's institutional intervention was substantiated based on the argument that public health is not its responsibility, but that it is the Member States themselves who are responsible for coordinating the handling and action of the Member States themselves. This argument was refuted based on Article 168(5) TFEU which provides for the possibility for the institutions of Parliament and of the Council to exercise their legislative competence in matters relating to the treatment of health issues of transnational scope to address them. However, the same article ensures the autonomy of the Member States by limiting the extent of this legislative activity to avoid harmonization of the relevant national provisions.

Apart from the difficulty of immediately answering the question of the extent of the intervention of the European institutions regarding the pandemic, the plurality of the different peoples that make up the Union was another reason why it was difficult to deal more directly with the pandemic and especially its impact on an economic, employment and social level. More specifically, the objections were expressed by Germany and the Netherlands to the issuance of a Eurobond aimed at alleviating the economic consequences for the Member States, avoiding further loans given that the economic crisis of the last decade is still plaguing several EU members. At this point, the reactions have shown the limits of European solidarity and have led to long and arduous negotiations. In the end, common ground was found for compromise and bravely inadequate measures were taken, particularly in terms of budgetary matters. In this context, it was decided to provide fiscal easing and to activate the General Escape Clause of the Pact provided for in the Stability Pact in 2011, allowing the limit of government expenditure to be raised beyond the limit of the Pact, provided, however, that it concerns the additional amount in measures to support the health sector to strengthen action against the coronavirus. In addition, instead of issuing the Eurobond, it was decided to grant EUR 750 billion, which the European Council decided to pay a recovery fund. At the same time, a support package of EUR 540 billion was given. Euro, which are paid by the European Stability Mechanism, by the European Investment Bank for lending to businesses, and finally by the SURE fund.

Another important measure taken in this context is the granting of state guarantees for loans to businesses affected by the pandemic. This is a form of state support in an indirect way to companies that are required to take out a loan from banking institutions and not a bilateral relationship between a state of a company. In this case, the State acts as a guarantor for the repayment of the loan in case the company cannot meet this claim. This measure was clarified that it does not constitute State aid which could distort competition, as Article 107 TFEU (ex Article 87 TEC) provides in paragraph 3 that it may be considered compatible with the internal market: (b) aid to promote important projects of common European interest or to remedy a serious disturbance in the economy of a Member State.

It follows from the above that the European Union reacted as a political and economic union in this urgent context, even though the measures taken were delayed and hindered by individual Member States with different interests. Another example of this behavior, which extends beyond Germany's financial objections, is the case of Germany's refusal to provide additional protective medical equipment to the other Member States, raising further questions about its attitude in times of crisis. However, in the process, the economic measures by the EU (a total of 672.5 billion (312.5 billion in grants and 360 in loans) of the Recovery and Resilience Facility, 47.5 ReactEU, 5 billion Horizon Europe, 5.6 billion InvestEU, 7.5 billion in Rural Development, 10 billion In Just Transition Fund, 1.9 billion RescEU) have gradually increased.

The fact is that the effectiveness of the response to the pandemic cannot be evaluated solely by the reaction of the EU institutions as this is a situation with a lot of uncertainty. Hopes have been placed in science and in the effort to map unwritten issues such as a new virus whose effects are gradually being identified. This factor, therefore, does not allow the impression to form that a political, legal, and economic institution is responsible for its elimination.

Nevertheless, interactivity and initiatives to address the consequences of the pandemic are not only evaluated by the result but also highlight the limits of European solidarity as a crucial issue of global scope. Of course, we must not ignore the fact that other Western states such as the United States of America, although they have a leading role in international developments, have reacted comparatively less responsibly by showing significantly less social sensitivity than the European Union, even though they do not consist of different Member States to deal with the factor of different national interest. In both the US and the EU, the issue was not only a health and economic issue. The EU, despite showing the limits of its solidarity through individual behaviors, remained faithful to its social values by taking certain measures that allowed the upgrading of health units through the relaxation of fiscal requirements and European borrowing. Unfortunately, the uncertainty of the pandemic extends beyond the part of the disease and the future impact not only on Europe but also on the global economy, expecting a crash identical to or even greater than that of the 1930s. The EU is therefore once again called upon to demonstrate faith in its values and to react swiftly and effectively to prevent the after-effects of the day after covid in the long term.

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