Coordinated Covid-19 crisis management among EU member states took weeks to develop. The initial response was slow, at times contradictory, frequently displaying nation-state unilateralism and obviously divisive. An unprecedented architecture of fiscal and monetary partnership is now building in Europe. The ECB is taking the lead in this construction process, with national governments asserting their political prerogatives while the Commission in Brussels is careful not to overstep the national sovereignty of its member states. As the crisis response to Covid-19 has highlighted manifest fault lines among EU member states, these divisions could morph into bigger controversies during uncoordinated exit strategies. Once the cessation of economic activity can start to unwind, the debate across Europe will accelerate over budget rules, further relief programmes and the demand for debt forbearance.

You may find here the full text of the Policy Brief by Dr. Jens Bastian, Senior Policy Advisor of ELIAMEP.