Financial Solidarity: Ethics of the EU’s Financial Response to the Coronavirus Pandemic
By Violeta Perea Rubio
Abstract This paper evaluates economic relief packages introduced as an initial response to the first wave of the coronavirus pandemic in Europe between March and June 2020. The support funds were approved by the European Commission and processed by its financial mechanisms, such as the European Central Bank (ECB), European Stability Mechanism (ESM) or the European Investment Fund (EIF). The Next Generation EU economic rescue mechanism saw the first shift to full financial grants. These grants show a big step towards a fiscal union, moving from the already established monetary union of the Euro. Because of the gravity of the pandemic, for the first time in EU history the EC has taken on mutualized debt. After both outlining and evaluating the ethics of these first-wave responses, an in-depth ethical analysis of mutualized debt in the EU is carried out. Ultimately, the EU demonstrated financial collective sovereignty through the mutualized debt solution, securing the natural rights of the collective EU citizen whilst simultaneously respecting the socio-political sovereignty of each individual member state. The paper concludes that big steps were taken towards greater ethical financial solidarity in the EU.
Europe became the epicentre of the coronavirus pandemic in mid-March 2020. This led to the complete lockdown of most European countries, restrictions on freedom of movement between EU member states, and the first humanitarian crisis on EU soil since its formation as the European Economic Community (EEC) in 1957. By summer 2020, COVID-19 had infected over 18 million and killed 700,000 people worldwide. By August 2nd 2020, there have been over 1.6 million cases and 183,000 deaths in the EU (including the UK).
Eurostat estimates a 6.4% GDP drop in the EU for 2020, the biggest drop on record. Spain is the worst hit with an 9.1% year on year drop in fourth quarter GDP. Thus, the EU is facing its first humanitarian crisis and its worst economic crisis. The EU has had to take unprecedented measures in order to maintain unity and solidarity, and protect European citizens’ health, lives and welfare. This directly brings together moral dilemmas with consequence on health and livelihood with financial decisions.
