Europe's Covid-19 Battle.

• Author: Engelen, Klaus C.

The leaders of Europe's two largest countries, Germany and France, are determined to respond to the challenge of the coronavirus pandemic and save the increasingly disintegrating European Union at all costs.

At least German Chancellor Angela Merkel's success as a crisis manager during the pandemic has impressed her voters. As The Economist observed, "If any big European country can be said to have so far had a good corona crisis, it is Germany. Deaths are fewer than in other countries, the state helps ailing firms, and workers and the politicians seem level-headed and competent. Places with more erratic leadership have noted the contrast."

This response by Merkel and her ruling Christian Democrats could very much improve their standing in the opinion polls against the Social Democrats, although SPD ministers in the coalition--especially Finance Minister Olaf Scholz and Labor Minister Hubertus Heil--have also been doing a good job.

A FRAGILE EUROPEAN UNION

The unprecedented Covid-19 lockdown in Germany and most other European countries was rather chaotic and uncoordinated, with border closings in a bloc where most countries are under the Schengen Agreement of 1985 which abolished their national borders.

The leaders of Italy and Spain--with France in the background--have used the crisis to wage a bitter campaign pressuring Germany and the Netherlands to capitulate in the decade-long struggle over sovereign debt mutualization. To accept issuing sovereign debt through Eurobonds--now called "corona bonds"--is proclaimed as the litmus test of European solidarity.

Both Italian Prime Minister Giuseppe Conte and Spanish Prime Minister Pedro Sanchez put the stakes of coping with the coronavirus pandemic even higher. "The EU is in danger if there is no solidarity" Sanchez warned.

To complicate this precarious state of the European Union, in early May 2020 the German Constitutional Court in Karlsruhe--after half a decade deliberating the issues and after asking for a judgement from the European Court of Justice--ruled essential aspects of the European Central Bank's asset purchase program, first introduced in March 2015, "to be unconstitutional under German law."

The court demands that the Bundesbank stop participating in ECB asset purchases and work together with the ECB within three months to come up with the required legal remedies. The ECB must demonstrate how its policies are "proportionate" to their goal. Under the concept of proportionality which is rooted in German basic law, the ECB has to explain that the benefits of the asset purchase program outweigh the negative impacts on certain groups, including German savers. Also, the ECB's asset purchases will need to have an embedded end date and exit strategy.

Because the EU Commission--in reaction to the German court's ruling--is considering starting legal proceedings against Germany over the bond purchasing ruling and over ignoring the ruling of the superceding European Court of Justice, the bloc is drifting into a full-blown open-ended crisis regarding the legal foundations of the European Union's major institutions.

SLOW EU REACTION

There has been a wide range of reactions by the twenty-seven members of the European Union to the spreading of the coronavirus. Journalist Alessio Perrone reported through Wired UK how, "On January 29, when Italy detected and isolated its first coronavirus cases--two Chinese tourists--authorities were sure they had put together the safest protection system in Europe."

But the coronavirus pandemic...