After initially hesitating for about four weeks, the European Union realized the magnitude of the healthcare, economic, and social crises resulting from the novel coronavirus pandemic. Its main political and institutional leaders are gathering to put together a strong aid package for the most affected countries, with its total value exceeding 1 trillion euros.
“This time, the reaction was faster and more substantial than during and after the 2008-2009 global financial crisis (which affected Europe for several years). At that time, it took us up to four years to act properly, now it has taken a few weeks. The package is causing a lot of polarization and drama among the 27 member countries, but it will come out and prove Europe’s resilience once again,” said the former president of the European Union José Manuel Durão Barroso (2004-2014) in a live session with Brazil’s former president Fernando Henrique Cardoso (FHC).
The resulting debt is expected to be borne by the bloc as a whole, and not by the 27 member countries individually, many of which are already tax-burdened. The EU is considering creating new taxes on carbon dioxide emissions and non-recyclable plastic waste across the continent to pay for it, starting in 2024, in addition to a digital tax. The new taxes would target global technology companies, which often evade taxation in countries where they sell products and services.
Fernando Henrique Cardoso and Durão Barroso defended the ratification of the agreement between the EU and Mercosur to send a signal to the international community that trade, cooperation, and multilateralism remain the best path for global development. “As we are already seeing, the crisis resulting from the COVID-19 pandemic will accelerate and deepen the technological and trade dispute between the USA and China. The EU and Mercosur, with Brazil at the head, must set an example of how important it is to fight protectionism and preserve an open and collaborative world order. The more poles of power there are in the world, the better. Together, the EU and Mercosur are stronger,” defended FHC.
Destruction of the Amazon postpones EU-Mercosur agreement
The former Portuguese Prime Minister (2002-2004) warned, however, that ratification of the EU-Mercosur agreement is unlikely as long as deforestation and slash and burn in the Amazon continue to increase without a clear, effective, and permanent response from the current Brazilian administration, increasingly seen abroad as contrary to the environmental agenda. The EU-Mercosur agreement was announced in 2019 after almost 20 years of negotiations, but to enter into force it needs to be ratified by the European Parliament and the parliaments of the four Mercosur countries (the agreement will become valid for each member of the bloc when each respective Congresses ratify it).
“Europe made an environmental pact to achieve neutrality in its carbon emissions in 2050. The political leaders of the right and the left, both in the European Parliament and in the national parliaments, as well as the companies and populations of all the countries, are firmly committed to this agenda. The Amazon is a symbol of Brazil's commitment (or lack thereof) to the environment. The argument that the Brazilian government is not acting to contain deforestation will be used to postpone the agreement,” said Barroso. The agreement with Mercosur is strongly resisted in Europe due to the strength of South American agribusiness, seen as a threat by European producers, and the growing environmental concern among European voters and consumers.
According to the speaker, "climate change diplomacy will be a fundamental element in Europe's relations with the rest of the world in the coming decades."
Angela Merkel and the European legacy
Barroso, who chaired the European Commission (EU executive arm, based in Brussels) for a decade, drew attention to the fact that Germany (the continent's largest economy) will assume the rotating EU presidency in the second half. German Chancellor, Angela Merkel, is by far the most experienced and respected leader in Europe, and will certainly not miss the opportunity to move forward in tackling the crisis together nor to carry out the urgent and necessary reform of the bloc in the face of the upsurge in nationalism and populism in the old continent.
“The chancellor obviously defends Germany's interests, but she also has a European legacy to protect. I am sure that Merkel will put her full political weight in favor of the EU at such a crucial time. It is also good news that she and President Emmanuel Macron are getting along, because, although the France and Germany union does not guarantee that the EU will reach an agreement, it is a necessary condition for that to happen,” he explained. Merkel, who is serving her fourth and probably last term as prime minister, initially opposed the European Union's debt proposal to support the member countries hardest hit by the coronavirus (such as Italy and Spain), but soon changed her mind and began working to structure aid.
Barroso wants a 'geopolitical Europe'
“Europe should move towards replacing national sovereignty with European sovereignty. After all, we are 27 relatively small member countries compared to the size of the United States, China, India, Russia, or Brazil. To defend our interests in an increasingly competitive and rapidly changing world, I am in favor of a Europe aware of how important its union is in order to have more voice and influence on the world stage. A geopolitical Europe,” said the former Portuguese prime minister.
According to him, several points of the extensive contemporary agenda, which includes digital security, personal-data protection, technological monopolies, global warming and other ecological issues, chronic unemployment and new forms of jobs, increased social inequality, and illegal immigration, among others, must be analyzed and pushed forwarded by the European Commission, the European Parliament, and the governments and parliaments of the member countries from this geopolitical perspective.
“Trump repeats the slogan 'America First' every day. Putin wants to 'make Russia great again'. Beijing is working to increase Chinese influence in the world. The EU must also think about its interests and defend them jointly, without prejudice to national identities. It is already clear that we will never be the United States of Europe, but it is essential to position ourselves unitedly, consistently, and coherently in relation to the rest of the world. We have to be more geopolitical for that to occur,” he concluded.
Fernando Henrique Cardoso defends a 'social market economy'
The pandemic made it clear for the sociologist and former Brazilian president that the State will have to play a more relevant role in the short term and also in the medium and long term, in a permanent fight against social inequality and in the construction of a social market economy.
“The government should not replace society, but governing must be exercised. What matters more is whether it is a good government or a bad government, not whether it is left or right; these are outdated concepts. Companies play a fundamental role, but the Federal Government must regulate the market, collect taxes in fairly and effectively, and redistribute resources to the entire population using quality services,” he said.
Fernando Henrique Cardoso proposed the discussion of programs that can reduce inequality in a scenario of a sharp increase in unemployment, both due to the current crisis and the ongoing technological revolution. “It is time to break paradigms and put ideas that we can sometimes consider Utopian into practice, such as a universal basic income."
“We are increasingly aware that social inequality is incompatible with a smooth functioning democracy in the medium- and long-term, especially in developing countries, including Latin America and Brazil. It is essential to include all citizens in the political, economic, and social lives of our countries. Europe has already built a state of post-war social well being, having positive results for many decades. Brazil started to move in that direction after the re-democratization, but there have been setbacks, and there is still a lot of work to be done. We must go beyond social democracy and build a true social market economy, in which there is a balance between private initiative, the Federal Government, and society,” he concluded.
The three things needed for 'globalization with humanistic values'
“Since the financial crisis that started in 2008 and which still has an impact in Europe today, there has already been a trend towards the Union having a greater role on the continent. The pandemic will reinforce this, as we have seen in Spain, which has just instituted a universal basic income program. But without ideological glasses: public action must translate into better public services and more equal, more just, and democratic society,” agreed Barroso.
The former Portuguese prime minister ended by suggesting that Brazil (and Mercosur) and Europe unite, as they have done until recently, to make a “contribution to world peace, freedom, and prosperity.” He proposed that this work focus on three main areas: protecting the environment and building a green economy; investing in science and technology; and firmly committing to democracy, the rule of law, and human rights.
"We should join forces to build globalization with humanistic values, thus sending a powerful signal to the whole world," said Barroso.
Otávio Dias, journalist, specialized in politics and international affairs, former correspondent for Folha in London and editor of the estadao.com.br website. He is currently a content editor at Fundação FHC.
Portuguese to English translation by Melissa Harkin & Todd Harkin (Harkin Translations)