Editorial | Solidarity, balance and proportionality

A €750 billion recovery fund proposed by the European Commission is an ambitious response to the economic fallout of COVID-19.

The plan has been dubbed as Next Generation EU, with Commission President Ursula von der Leyen telling the European Parliament yesterday that “this is Europe’s moment”.

With European economies taking a battering as a result of the pandemic, this is truly Europe’s moment of reckoning.

In her words, no country can emerge from this situation on its own.

It is within this context that solidarity must shine at a European level.

Not all countries have been hit with the same intensity by the crisis and this is where the possible fault lines of a disparate EU rest.

The division between the northern countries like Germany, Netherlands, Sweden and Austria, and the southern countries like Italy, Spain and Greece have re-emerged in what is the return match of the big debate had 10 years ago during the financial crisis.

The difference today is that all countries, to varying degrees, are experiencing economic disruption, unemployment, loss of incomes for workers, and social and health repercussions.

In these circumstances, it is normal for countries to look inward and protect the national interest.

Edward Scicluna’s warning in parliament yesterday to beware the fruit of an EU rescue package lest it turns into a prickly pear, is one such example.

The Finance Minister said the argument should not only be about the size of the rescue package that will benefit Malta, or the proportion of funds that will be based on grants and loans, but also how it will be financed.

He said some of the proposals put forward by the Commission to raise its own funds through taxes could actually harm an island economy like Malta.

Scicluna’s cautiousness is not to be disregarded. Other countries, probably have their own share of concerns.

But the answer to this must be a balanced deal that sees the stronger EU countries shoulder a bigger burden, while insisting on expenditure transparency to ensure utilised funds are invested well.

It must also include sensible ways of financing the huge bill without putting disproportionate burdens on small countries like Malta and others on the periphery of the continent.

Any green European-wide taxes to finance the bill risk damaging Malta unless the particularities of an isolated island economy are taken into consideration.

Taxing shipping and air travel, while fitting into the notion of the polluter pays principle, will effectively punish those countries that depend exclusively on these modes for international transport.

There is no easy solution as leaders juggle the national interest they are elected to protect with European solidarity they have pledged to uphold.

Like many other important debates within the EU, a resolution is very likely to be found, even at the umpteenth hour when all hope is lost.

Whether the agreement will be bold enough to tackle the COVID crisis head on still has to be seen.

However, an EU that aspires to look forward to its next generation must ensure, at the very least, that the wide disparities between member states are taken into consideration and efforts done to flatten them out.

Surviving on the global stage will be dependent on how fast and deep the union can react to the crisis.

This is why solidarity remains a key component of the EU, even if it has been tested severely over the past three months.