EU Covid-19 Stimulus Negotiations and Its Historic Backdrop

EU Covid-19 Stimulus Negotiations and Its Historic Backdrop

After a long debate between the opposing factions, the European Union agreed on a recovery fund to aid the economy amidst the Covid-19 pandemic. The animosity among EU nations, manifested in the debate, has been a regular feature of the EU nations in recent years.

Crux of the Matter

Conflict And Agreement
The European Union (EU) recently “clinched” a budget and recovery fund of € 1.82 trillion ($2.1 trillion). After 4 days of discussion over the amount and the conditions applied, the EU leaders agreed on a € 750 billion fund to aid the economy affected by Covid-19.

Difference Of Opinion
“Frugal” North
North European nations wanted smaller recovery fund – a maximum amount of €350 billion – and wanted to put a limit to split of payouts in grants and repayable loans. Italian Prime Minister Giuseppe Conte blamed the Netherlands and its allies Sweden, Austria, Finland, and Denmark of “blackmailing” the country in negotiations.

Going Dutch
The allegations came after Dutch Prime Minister Mark Rutte and several major politicians of Netherlands promised their citizens to not provide money to “the Italians and French”. Reports have cited increasing resentment in the country as the reason, with citizens disapproving Netherlands being one of the largest “net contributors” to the EU.

Frozen Funds
The EU also proposed a “freezing of funds” for countries violating fundamental principles of democracy. In return, Hungary and Poland threatened to veto the move if any conditions were levied on the recovery funds.

History Of The EU

  • 1946: Winston Churchill, the Prime Minister of Britain during World War II, advocated the creation of the United States of Europe.
  • 1949: The Council of Europe was formed, which focused on “human rights and democracy”.
  • 1952: The European Coal and Steel Community was formed (ECSC).
  • 1957: The European Economic Community (EEC) and the European Atomic Energy Community (Euratom) were formed by the Treaty of Rome.
  • 1963: After the Elysee Treaty of 1963, Germany and France’s relations strengthened, which had deteriorated after the former occupied the latter in WW II.
  • 1967: The Merger Treaty fused ECSC, EEC, and Euratom into the European Committees (EC).
  • 1993: On 1 November, The Maastricht treaty was signed, officially forming the European Union.
  • 2020: 19 of 27 EU countries use the Euro (€) as official currency.

Interrelations And Controversies

  • 2003: The EU was split over the US-Iraq war. While France and Germany advocated peace talks, Britain, Italy, Spain, etc supported the US and advocated for the war.
  • 2018: France accused Italy of “cynicism and irresponsibility” when the latter forbade the Aquarius Dignitus ship, carrying rescued migrants, to enter its ports. In response, Italian Prime Minister Giuseppe Conte labeled French President Emmanuel Macron “hypocritical”.
  • 2019: Italy backed the “Yellow vest movement” of the working class in France, and condemned the treatment of the protesters by the French Govt.
  • 2020: On 31st January, the UK left the EU in a move called “Brexit”. Experts have claim perceived “economical disadvantage” and increasing nationalism as reasons for the move.

About Nationalism
Experts have pointed to the increase of nationalism across the world in recent years with leaders like Donald Trump, Narendra Modi, Boris Johnson, Shinzo Abe, etc coming to power. However, there are several types of nationalism, with the major forms being:

  • Ethnic nationalism: Defines a nation on the basis of ethnicity, having a belief in shared culture and ethnicity.
  • Expansionist nationalism: Aggressive form of nationalism, believing in re-gaining formerly lost territories.
  • Civic nationalism: Nationalism with emphasis on liberal values of freedom and co-existence.
  • Cultural nationalism: Intermediate between Ethnic and Civic, it is a belief in national identity while recognizing the impact of different cultures, but rejects shared “ancestry or race”.
  • Grexit was a hypothetical scenario under which Greece would withdraw from the Eurozone to deal with the now-expired Greek government-debt crisis. The term ‘Grexit’ was coined by the Citigroup economist Ebrahim Rahbari and was introduced by Rahbari and Citigroup’s Global Chief Economist Willem H. Buiter on 6 February 2012.
  • The Inner Six, or simply “the Six”, were the six founding member states of the European Communities. The countries are Belgium, France, Italy, Luxembourg, Netherlands, and West Germany.
  • The European Union flag, first adopted by the Council of Europe, consists of 12 golden stars in a circle on a blue background. The stars symbolize the ideals of unity, solidarity, and harmony among the peoples of Europe. The number of stars has nothing to do with the number of member countries, though the circle is a symbol of unity.