Issue link: https://maltatoday.uberflip.com/i/1226904
13 NEWS maltatoday | SUNDAY • 29 MARCH 2020 NEWS How our MPs have reacted ROBERTA Metsola, head of the PN's delegation, has called for more coordinat- ed action to ensure that Eu- ropean healthcare systems have all the resources they require to deal with the in- creased pressure. Noting that the impact on the economy will be more acutely felt in smaller tourism-dependent states like Malta, she called for a European stimulus pack- age backed by increased EIB-supported loan facili- ties to support local econo- mies while calling for more flexibility in the adoption of State aid rules, "for a lim- ited period of time, to sup- port pillars of our economy and those businesses who need it the most." The Head of the PN Del- egation said that "we must be flexible enough to en- sure that employers, em- ployees, people working in the gig economy and, cru- cially, the self-employed can continue to work while minimising the risk to their health and that those un- able to work, or who see a disproportionate impact, are supported." Labour MEP Miriam Dalli is actively pushing for the European Union to joint- ly procure medical equip- ment to be used across member states to battle the novel coronavirus. The joint procurement exercise would allow the EU to bulk buy medical equipment such as venti- lators to then distribute among member states, pushing purchase prices down while also ensuring smaller countries such as Malta are able to access the vital items. "Instead of every EU coun- try trying to do it locally, a coordinated EU effort could ensure that life-sav- ing equipment is distribut- ed more fairly," Dalli, who serves as vice-president of the S&D grouping, said. Dalli is part of an S&D task force responsible for drafting a policy action plan with measures aimed at helping the fight against the pandemic and tackle the consequences and af- termath. strong leadership by the European institu- tions, particularly the European Commission whose role it is to support member states by providing recommendations on a common course of action, and to ensure a coordinat- ed approach across Europe. "The hardest job for the Commission will be to avoid members taking contradictory measures that could po- tentially obstruct common efforts to fight the COVID-19 outbreak and protect the econo- my." This coordination is necessary not just in the areas of public health, but also in other fields such as border control, internal markets and trade. "The main problem that I see is that European governments will understandably be too busy trying to safeguard public health, avoiding economic collapse and protecting social cohesion within their borders and will have a very low appetite for European solidar- ity and burden sharing." How far should the EU intervene? Peter Agius, a PN candidate in last year's MEP elections and former head of the EU Parliament's office in Malta, thinks the Union should only act where its action is more effi- cient than that of the member states. "When it comes to emergency measures on containing the virus and its handling, I believe that member states are best placed to take im- mediate decisions under guidance by WHO and following best practices as they emerge." On the other hand, he thinks the Union needs to play a strong part in the economic comeback by triggering strategic investments and launching EU-wide solidarity mechanisms to address unemployment. "The globalisation adjustment fund used in the past to assist It- aly and Spain can be used for other member states to counter large-scale unemployment". The Union should also aim to make full use of its joint procurement mechanisms in ac- quiring large stocks of medicinal supplies to fight the virus. "Eleven major research initi- atives are ongoing in Europe on COVID-19 right now; we need to ensure that we exploit the synergies of these efforts to reduce the de- lay for the deployment of a covid-19 cure". How austerity laid the ground for COVID-19 This is not the first crisis to threaten the continent's economy and to bring hardships on entire nations. The first 'disaster' to stike the EU was the eurozone crisis in 2010, dur- ing which country after country fell to market contagion. To avoid bankruptcy and ejection from the currency zone, countries 'at risk' suffered harsh austerity programmes, which slashed health and education budgets as well as job and welfare protections. This also partly explains why Italian health services are strug- gling today to cope with the coronavirus crisis. It is therefore no surprise that Malta, which has been spared from austerity measures part- ly thanks to its dubious role in the world econ- omy as a financial hub, has emerged as one of the most prepared to combat the spread of the virus. One reason for this is our robust nation- al health system. But there's one undeniable, major difference at play. This time round, member states are finally setting aside the fiscal rules to con- front the crisis. While 2010 represented the triumph of neoliberalism, 2019 represents a return to Keynesianism. The German chancellor, Angela Merkel, didn't hesitate to announce the roll-out of the biggest stimulus ever, with unlimited liquidity assistance to German businesses, salary and job guarantees to workers. The French presi- dent, Emmanuel Macron, has pledged billions to support the economy, with an 'exceptional and massive mechanism of partial unemploy- ment'. Malta also intends to spend €61 million every month in direct assistance to businesses hit by the crisis. What is the EU actually doing? The Commission has announced a €25 bil- lion coronavirus investment fund, saying it will use all 'flexibility' available, while setting aside state-aid rules, the same rules which Malta had struggled with back during the 2009 financial crisis, to protect its manufuc- turing industry. The Commission has declared that the pan- demic fell within 'unusual events outside the control of government' and permitted ex- emptions for related spending under the fis- cal rules. It stood ready to activate the general 'escape clause' that would permit more gener- al fiscal loosening, subject to approval by the Council of the EU. Eurozone finance ministers also announced that member states should allow the 'auto- matic stabilisers' to play in full and also to permit liquidity support for firms and work- ers and spending on health measures, without regard to countries' current fiscal situation. It affirmed that 'the budgetary effects of tem- porary fiscal measures taken in response to COVID-19 will be excluded when assessing compliance with the EU fiscal rules'. These decisions increase the head room for national measures. But so far EU-level support has gone unnoticed by the general public. The Commission has proposed a reprioritisation of its own budget, although this is unlikely to be decisive compared with national efforts. It also intends to increase spending under the Cohesion Fund – purportedly by 'mobilising' €37 billion of unspent monies, although the mechanism for achieving this remains un- clear. Time to think bigger? Without a robust EU-level response to ac- company national measures, the union risks limping along once again. Yet muddling through is not an option – especially because the economic and health-related devastation is likely to be accompanied by even greater po- litical anger than before. But where will the money come from? "It is time to launch the EU pandemic-bonds," argues Luca Visentini, General Secretary of the European Trade Union Council (ETUC). "Europe risks a recession even worse than the one following the financial crisis of 2008-9 and needs to invest in protecting jobs and the economy." The ETUC had also called on the Eurogroup to play its part in the package of measures to tackle the social and economic impacts of the coronavirus pandemic by issuing Europe- an debt securities. The trade union council's proposals include EU-labelled bonds issued at close-to-zero interest rates and to use these not only to finance infrastructure and supplies for national health systems but also employ- ment-related emergency measures. Diem 25, the European movement set up by Yanis Varoufakis, has proposed an even more ambitious plan for Europe, one consisting of a long-maturity, 30-year, eurobond for €1 tril- lion collected by the European Central Bank to replace national debt, in proportion to the coronavirus-induced national recessions & public health cost. This would be coupled by the cash injection of a €2,000 European Soli- darity Cash Payment to every European res- ident.