EU warning: Bloc at risk of ‘imploding because of coronavirus’ – expert

The bloc has come under fire from several member states for its handling of the pandemic and its slow response to addressing the needs of countries hit hard by COVID-19. Jens Südekum, professor of international economics at Heinrich Heine University Düsseldorf, believes Brussels’ inaction which has led to nations going it alone in the battle against coronavirus could spell trouble for the EU’s future.

He said: “My biggest concern is that the European Union is imploding because of corona.

“The shock hit all of Europe through no fault of its own.

“But not everyone can act as powerfully as Germany can.

“In general, I don’t think it’s a good thing that all countries are now acting alone.

“We need a pan-European strategy with pan-European funding – for example through one-off coronabonds.”

Germany Chancellor Angela Merkel has won praise for how she dealt with the coronavirus in her own country but has been criticised for her response to the plight of other European nations.

She has refused to bow to pressure on the continent to back so-called coronabonds.

The Germans’ reluctance to create a new form of EU-wide, mutualised debt has been shared by the Dutch.

The nine EU countries who have called for the bonds are: Ireland, Spain, Italy, France, Belgium, Luxembourg, Portugal, Greece and Slovenia.

Achim Wambach, president of the Centre for European Economic Research (ZEW), warned of a rising tide of nationalism in EU members states.

He said: “My major concern is that the crisis will further intensify the nationalist tendencies that can be seen in many countries.”

Mr Wambach argued a strong exit strategy to help countries recover from the lockdowns is vital to ensure the future of the bloc.

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He said: “The exit from the partial closures also requires a European response.”

“It will be difficult if we want to start up in a controlled manner and the economy in France is paralysed – or vice versa.”

And Sebsatian Dullien, scientific director of the Institute for Macroeconomics and Business Cycle Research (IMK), said companies on the continent will have to look at different ways to address supply chain issues caused by the crisis.

He warned the pandemic, which has killed more than 173,000 people worldwide, is the latest in a series of incidents to have shaken industries.

Mr Dullien said: ”We will see a fundamental change in the international value chains.”

“Companies will rely less on delivering important parts from abroad.

“After the financial crisis, Brexit and the US-China trade dispute, the corona epidemic is now the fourth major event that companies will use to rethink their supply chains.

“There will be some reversal of globalisation.”

Compared to many other European countries, Germany’s coronavirus death toll is considered low at 4,869.

But Mr Dullien warned the pandemic could still have drastic consequences for the country’s economy.

He said: “It is not yet clear where the pendulum will go for the German economy, whether it will be a winner or a loser.”

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