A face mask and protective gloves are seen on a lawmaker's desk during a session of Italy's Senate, the upper house of the country's parliament, on the spread of the coronavirus, in Rome, Italy, March 26, 2020.
A face mask and protective gloves are seen on a lawmaker's desk during a session of Italy's Senate, the upper house of the country's parliament, on the spread of the coronavirus, in Rome, Italy, March 26, 2020.

Europe is currently the epicenter of the deadly coronavirus pandemic, with more than 150,000 confirmed cases and thousands of deaths. As the number of cases soars across the continent, observers are questioning whether the 27-member European Union can remain cohesive in the fight against the infection. They note that Europe’s resilience and cooperation have taken a big knock amid the outbreak.  

In a speech on March 11, German Chancellor Angela Merkel acknowledged the virus caught the continent off guard.
 
“When the virus is out there,” and the population has no immunity, and no vaccination or therapy exists,” she said, “then a high percentage—experts say 60 to 70 percent of the population—will be infected, so long as this remains the case.” Merkel herself is in self-quarantine as a precaution after coming into contact with a physician who has tested positive for COVID-19.
 
Merkel has closed some of Germany’s borders, nullifying the Schengen Agreement of freedom of movement of people and goods throughout Europe. Other EU members have also taken steps to counter the infection.

Schengen, viewed by many as essential to creating a unified continent, covers a population of over 420 million people and an area of 4,312,099 square kilometers.

But some critics say individual actions by EU members could tear the bloc apart.

“These crises, instead of having the effect of pulling Europe closer together, have strengthened the individual member states at the expense of the EU institutions. To various degrees, each one of them has pursued its own foreign, economic, and social policies,” Carnegie Europe expert Judy Dempsey noted in a recent article.

But others point out that Merkel’s measure is only provisional.

“EU member states are temporarily closing national borders, just as many other countries around the world are banning entry by non-citizens. Once the pandemic eases, I expect Schengen rules to be reinstated, although the EU's external borders may well be tightened, a process already begun in response to the flow of migrants and refugees,” says Charles Kupchan, former presidential advisor for Europe during the administration of President Barack Obama.

A police vehicle is seen passing a truck back-up near the German-Polish border, near Frankfurt an der Oder, during the coronavirus outbreak in Germany, March 19, 2020.

Daniel Hamilton is the founder of the Washington-based Center for Transatlantic Relations. He suggests Merkel was acting in Germany’s best interests but predicts that the measures would be for the short-term.

“Chancellor Merkel has consented to close some but not all of Germany's borders, following similar measures taken by other Schengen states. She was careful to state that these were extraordinary steps that were necessary at an extraordinary time to break the chain of infection that could come from cross-border travel, and that such actions would be temporary.”

Hamilton also said he thinks that once the crisis passes, it will be back to business as usual.

Throughout Schengen's history, “Member states have periodically introduced border checks and controls. But despite such activities, the Schengen zone has continued to operate, and I believe it will continue to do so once the cascading shocks of COVID-19 passes,” he said.

But yet another Merkel-led "orthodoxy" of fiscal prudence and tight monetary policy is about to be cancelled.

Two weeks ago, the German government surprised most international observers by announcing its own version of what some call a “bazooka” to protect the German economy from the economic and financial consequences of the coronavirus.

The German Finance Ministry has pledged unlimited credit for businesses negatively impacted by the pandemic and an expansion of support for companies forced to reduce working hours of their employees.

“The downside risks of the pandemic and its economic impact are simply too high. It is a turbulent time, but it is a health emergency, not a financial crisis or a eurozone crisis per se. The challenge will be to weather the COVID-19 hurricane and then to stimulate a recovery once it has passed. This is not the time for incremental, baby steps,” Kupchan says.

Many economists predict a V- or U-shaped economic curve on both sides of the Atlantic, meaning -- a sharp drop in economic growth followed by a brief period of stagnation and then a renewed burst of growth once the crisis has passed.

 

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