“All of Europe is surprised by the speed of the spread of the virus. We are overwhelmed by a second wave that is set to be harder and more deadly than the first.”

— Emmanuel Macron, 28th October, 2020

Except, Monsieur Macron, that, outside of Europe, not everyone was surprised or overwhelmed by the pandemic!

From New Zealand and Kerala in India to more populous Asian countries such as South Korea, Japan, Thailand and Vietnam, the spread of COVID-19 was suppressed through strong public health systems that included robust testing, contact tracing and isolation. Reinforced public health mechanisms did not eradicate but, crucially, suppressed the pandemic to the point where it was rendered manageable.

Europe’s failure is entirely due to the long-term process of privatising, fragmenting and diminishing our public health systems.

The key to success, besides a strong public health system, was adequate economic support for those who needed to isolate.    

The false dilemma between looking after the people’s health and damaging the economy is now fully exposed. The countries which, through strong public health and social welfare systems, suppressed the pandemic were also those whose economies suffered the least. In Europe, only Germany, which has had Europe’s best public track and tracing system has experienced relative fewer deaths and a lower economic decline. We knew all this since at least April 2020, as repeated WHO circulars prove. So, why was Mr Macron caught unawares by the second wave, while some of the world’s poorer and less powerful countries did better than the world’s richest and most powerful?

When COVID-19 struck, the originators of neoliberal campaigns against public health and welfare systems, Britain and the US in particular, were the first to resist lockdown on the basis of a false dilemma between health and the economy. As a result, they — and other countries that followed their lead — fared far worse on both counts: public ill health and economic damage.

The way to control COVID-19 is to take the pandemic seriously and defeat it. What is standing in the way?

Europe’s COVID-19 response, like that of the US, is a scandal reflecting years of privatisation under the cloak of neoliberal dogma. Throughout Europe, investment in the fundamental public good of public health has been ravaged by policies of austerity yielding the lethal consequences of grotesque inequality.

COVID-19 has exposed most European governments’ calculated depletion of public health systems in the interests of privateers, their calculated inaction once the pandemic hit, and the disastrous effects of their motivated thoughtlessness on people’s health, social bonds and sense of trust in organised society.

COVID-19 has revealed the stubborn loyalty of governments to financiers and speculators, even in the face of deaths which could have been prevented by the public health system they were dismantling at the behest of the corporate and financial oligarchy. We observe, with considerable horror, how the Pandemic is turned into an opportunity for private rent seeking, in particular the speedy digitisation of public health services by means of private contractors who monopolise not just Europe’s health data but also our state’s digital infrastructure.

Under a cloud of panic, governments did fork out huge sums temporarily to nationalise everything: from labour markets to private railway companies, airports and airlines. But, while they have no problem harvesting the central banks’ money tree, they are still determined to stick to their guns: To rule out permanent support for public health systems or for the weakest members of our societies.

Wasted Money

As the pandemic wrecked lives and the real economy, a tsunami of money was produced by central banks ostensibly to prop up our sinking societies. Tragically, it was all wasted on the ultra-rich, leaving communities, small business and workers unassisted.

Here is what they did:

The Central Bank (e.g. the ECB, the Bank of England, the Bank of Sweden etc.)  extended new liquidity to a commercial bank, say, Deutsche Bank, at almost zero interest. To profit from it, Deutsche Bank had to lend it on, although never to the “little” people whose circumstances – and ability to repay – were diminished. So, it lent to, say, Volkswagen which, awash with cash, was already restricting its investment into new cars fearing that the “little people”, hit by universal austerity, would not be able to buy them even before COVID-19. So, Volkswagen takes Deutsche Bank’s money (that was provided by the central bank of Europe) without ever intending to invest it. But why take it, then? To buy with it, at the stock exchange, Volkswagen shares! Why? Because in so doing its share price skyrockets and, with it, the bonuses of Volkswagen executives.

In short, European capitalism’s money tree has been working overtime, with not a penny finding its way in the direction our public health systems or, indeed into the pockets of people who need it or who plan to do useful things with it (e.g. invest in green jobs).

What about Europe’s Recovery Fund?

Commentators have waxed lyrical about the EU Recovery Fund, including many who were critical of European austerity before the pandemic. Alas, as DiEM25 warned from the outset, the EU Recovery Fund will do little to help Europeans recover either from the decade-long euro crisis or from the pandemic’s ill effects. Indeed, the EU Recovery Fund is proving part of the problem, not the solution. Why? For two reasons: Its size. And its structure.

Beginning with its size, despite the large numbers bundied about, it is macroeconomically puny. To be precise, even if it were to be spent tomorrow, its firepower is one tenth of what would be necessary to counter the macroeconomic impact of the economic pandemic. Not only that but, bundled as it is with the EU budget, it is so cumbersome that the monies will flow too slowly and, mostly, to those who do not deserve it (e.g. to large corporations that use it for purposes at odds with the public interest, rather than smaller companies investing in green jobs).

And then there is the fund’s structure: Agreed between governments representing Europe’s oligarchies, rather than Europeans, it will most likely confirm the fear of Northern European union-sceptics who claim, not without justification, that these transfers end up as monies taken from poor Germans and Dutch people to be given to Greek and Italian oligarchs.

A European response to pandemic’s effects on health & prosperity

What should the EU have done instead?

DiEM25’s answer, a 3-Point-Plan, came out on March 10th:

• 1) An ECB-bond of €1 trillion to cushion the blow across Europe

The European Council should ask the European Central Bank to issue an ECB-bond on behalf of the Eurozone for up to €1 trillion. If its maturity were to be set at 30 years, it would create a deadline effect so that Europeans would know we have three decades before we create a democratic political union (if we oppose, that is, the idea that, in 30 years-time, the ECB will print the money to repay its bond).

This €1 trillion would then be used for two purposes: To fund a European Health Union and to cushion the increases in the debt of member-states due to the pandemic, thus annulling the need for new austerity after 2021.

• 2) Implement a real Green New Deal for Europe by means of a coalition between the European Investment Bank and the ECB

Serious investment in creating a European Green Energy Union would replace many of the precarious jobs now lost to the pandemic with good quality green jobs across the continent, enhancing in the process the green capital of corporations that are now facing insolvency and zombification.

To this effect, the European Union Council should give the green light to the European Investment Bank to issue bonds up to 600 billion a year, with the ECB making the simple statement that it will stand behind them – as that would immediately mean that it will not need to do anything. (Note that all this is utterly compatible with the existing treaties, because the EIB issues bonds, and the ECB has been buying them since March, 2015.)

• 3) Supporting every European with a direct payment

Last March, the Hong Kong Government put in every resident’s bank account 1,250 US dollars. In 2009, the Australian Government became the only OECD country not to have a recession by crediting every household’s bank account with thousands of dollars. Our proposal was that the ECB should do likewise: Credit €2,000 euros in every resident’s bank account within the eurozone. The cost would have been €750 billion. (Nb. the ECB did print this sum, anyway, except that the money was wasted via the commercial banks — see above example featuring Deutsche Bank and Volkswagen). And then do it again if the lockdown was repeated or prolonged. That way, self-isolation would have been manageable even by people with few resources.

Health and the economy would benefit simultaneously in a manner that the oligarchy practises disallowed. Lastly, at the end of the financial year, rich Europeans (who did not need this ECB money) would be taxed close to the whole amount, at a special tax rate, thus benefiting too member-states’ treasuries.

DiEM25 calls upon progressive Europeans to join our ranks in demanding simple, rational, progressive policies that bolster existing public health systems, build a new European Health Union alongside a Green Energy Union, and press into the service of our communities and peoples European institutions and available public financial instruments. 

None of this will happen without European democrats organising transnationally to clash with the oligarchy-without-frontiers in control of our governments and of the European Union’s institutions.

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