Quarantine podcasts, Bologna Edition – a discussion with Erik Jones on Italian and EU politics

The recent episode of our podcast is an interview with Erik Jones, the director of European and Eurasian studies and professor of European studies and international political economy at the Johns Hopkins University, SAIS Bologna Policy Center. We discussed currently trending topics such as the political and economic situation in Italy, policy responses to the corona crisis, the future of the European integration and transatlantic relations during and after the crisis.

Source: The Freethink Tank

We do not know when the coronavirus will end, but we surely know that the pandemic will clearly change European societies, institutions, both on the level of the European Union and the member states. It will lead to political and economic cataclysms.’ – says Peter Krekó to kick-start the conversation.

As Professor Jones lives in Bologna and he delivers lectures on European politics, he is well equipped to talk about the Italian situation, where we witness the ‘rally around the flag’ effect. Italian party preferences are frozen, yet the prime minister, Giuseppe Conte is more popular than ever in his entire career. He came from outside of politics without any particular party affiliation. As stated by Erik Jones, as soon as parties start arguing with each other once again after the pandemic, the preferences will continue to move, probably in the same direction as they had before the coronavirus outbreak.

The economic consequences of this crisis are problems that we are going to live with for many months, if not years, in Italy.’ According to Professor Jones, the consequences are going to be pretty dramatic for Italy, but it is not certain that it will cause problems for the Eurozone. People are not earning money right now and the government will have to substitute that money, which means that the state is going to have even larger debt than before the crisis.

The general macroeconomic response of the European Union has been quite poor so far for numerous reasons, partly because the EU is not designed to coordinate macroeconomic stimuli. That is why we have only seen national fiscal responses. The EU’s monetary response to the crisis is more impressive, yet, it is not enough to remedy all the problems we face. For that, the EU would need a collective fiscal response. How it would happen remains to be seen, since that question is still highly debated. For instance, a „corona bond” would be possible. ‘It is not the only way you can achieve that objective, but it is one way that you can achieve that objective, therefore the idea deserves careful consideration before discarded.’

It is impossible to say whether and how the EU budget will be redistributed in response to the coronavirus. There are voices inside the Commission wanting to do more ambitious things with the budget. But, according to Professor Jones, let’s not forget that the budget is a share of output, and output is going to decline due to the virus and Brexit. Now that the UK is leaving and there is another very serious problem affecting all member states, it is hard to imagine that people would support a more ambitious European budget. Coming to an agreement on the multiannual financial framework (2021-2027) will be extremely difficult.

Since ‘global pandemics don’t express as global problems, they express as local problems’, the current conflicts between EU member states are natural. EU integration is not in danger, but since the problems are of a local nature, we will most likely not see a rise in global solidarity, but that does not mean that European integration is in danger. While there are, of course, things one country can do for another, Europe is organized in a way that countries and economies mostly take care of themselves, and that probably won’t change too much.

There are legitimate fears that the transatlantic cooperation (cooperation between USA and the European Union) will take a negative turn. Still, according to Erik Jones, transatlantic relations have been changing anyway for quite some time, and not only because of the current Trump administration, as it is frequently said.

The presumption that there is some way to respond to this crisis without economic and health-related consequences is false – even without lockdowns, there would be economic consequences, people being on sick leave and hospitals collapsing, for example. With or without a lockdown, the consequences are devastating, but at least with a lockdown, fewer people die and medical systems will not collapse – ‘This is the least costly way’, says Jones. This was, for example, the reason for the UK to retreat into lockdown mode from the herd immunity strategy.

Thanks for Márk Gomilkó, an intern at Political Capital, for contributing to this summary.