KLAUS F. ZIMMERMANN: Professor of Economics, Bonn University, and President, Global Labor Organization.

After the onset of the Covid-19 crisis, European institutions remained absent for a long time, leaving relevant activities to the largely uncoordinated national policies of single governments. The European Union only returned with a coronavirus relief plan based on the issuance of common debt after a long delay.

Heavily debated among governments and within the European Parliament has been whether the mutualized debt should be provided as grants or loans, and what the negative financial implications of the rescue would be for the pre-corona European plans of fostering structural change. But the move was also considered as a potential "Hamiltonian moment" of re-creating Europe as the United States of a zone based on fiscal and political integration.

Is such a creative leap conceivable? Can the crisis be instrumentalized to foster the needed long-term structural changes in economy and society, including establishing EU-wide fiscal stability and coordination? Simple political observation says that it pays not to waste a crisis, and no political measure is as permanent as a temporary measure. But the prospect of a new United States of Europe is not only driven by accident and the political logic of muddling-through. It is also suggested by the long-term economic forces and the immense global challenges the world is facing.

The past and future lockdowns of economies and social life will generate a tremendous recession much stronger than the global financial crisis (2007-2008)...