To change or to break apart: Italy and the EU confronting the pandemic - Essay

Written for The Initium, translated in Chinese, 09 April 2020 

‘The pandemic is the bullet.
Neoliberism is Franz Ferdinand archduke. Either the system change or we’ll all
die. Starting from Europe.’ The headline of Fabrizio M­aronta’s opinion piece
in the Italian geopolitical magazine Limes take us back to the 28th of June 1914, the day of the assassination of
the Austro-Hungarian in Sarajevo that the World War I. That’s how
dramatic the coronavirus pandemic is perceived at the moment in Italy
and most generally in the Western world, as the health and economic systems of
our societies were found unprepared to deal with the current shock. Concerns
about the situation in Wuhan have been widespread throughout the month of
January, yet few of us
believed our cities and villages could so soon become the same. Italy and Europe
first treated the epidemic with a mix of scorn and panic: supermarket
were assaulted and deprived of their pasta and toilette paper
provisions, yet all kind of jokes relating to the coronavirus were
circulating in the internet. After the first locus of the virus were
discovered in Italy, in the regions of Lombardy and Veneto, where I live, the
government was fluctuating between the need of calming the panic and the
preoccupation of soon being dealing with a potential emergency. The
state of emergency was declared on January 31st. Few weeks later, citizens
of provinces such as Bergamo, Brescia, Milano were getting accustomed to
just two sounds while they are sitting home in lockdown: the sound of the
ambulances and the church’s bell. People have died so fast in such high numbers
that obituaries were occupying always more space on the local newspapers,
funeral agencies were called all day long and had no time to rest, crematories
were overwhelmed. The health system slaughtered by austerity cuts in the last
decade, started quickly to run out rooms, respirators and equipment to
deal with thousands of people experiencing heavy respiratory problems. The
virus started to be very lethal with the Italian population, one fourth of
which is over 65 years, the second-oldest population of the world and the
oldest of Europe. On March 9th, the government imposed a national
quarantine, restricting the movement of the
population except for necessity, work, and health circumstances, in response to
the growing pandemic of Covid-19. Despite soldiers have been deployed to
the cities to enforce the measures and significant fines are being
inflicted to all those who circumvent the rules, many workers from the
center and south who were living in the northern regions mostly hit by the virus,
managed to return to their motherlands, bringing inexorably the
virus with them. ( i cut a sentence here) Every evening
at 6 o’clock, we are told how many people have been affected by the
virus in the last 24 hours, and how many of them have perished. The
numbers are merciless: in the last two week there was an average of 700 people per day are
passing away. No other country in the world has so far
registered as many casualties as we had in these two months: they are
over 17.000 at the moment. The dramatic
news of doctors having to choose which people to treat and who not to
treat, of doctors dying on the frontline of the epidemic’s emergency, have
been accompanying our lives in lockdown. But finally, in these last days, the number of
daily-contaminated people is slowly decreasing.

Giuseppe Conte, current prime
minister of Italy, could have never imagined that he would have
the responsibility that no predecessor had since at least most of Italians
can remember, when he sworn in on June the 1st, 2o18. The former law
professor was completely unknown in Italy before being chosen as the potential
independent leader for the populist coalition composed by the 5 Star
Movement and the League (formerly, Northern League). Despite the inexperience, Conte
showed a growing confidence and the necessary charisma to deal with the
political ambitious of his greatest challengers, which at the time
was his interior minister: populist Ligue’s leader Matteo Salvini.
Thanks to a powerful social media strategy dubbed ‘the Beast’ -
managed by 35 communication experts that covers Salvini’s life 24/7 -
the Ligue became the first political party on the Italian polls with their
anti-migration and anti-EU rethoric. When Salvini tried to seize his
support to bring Italy to the ballot boxes last summer, aiming to
get ‘full powers’, his attempts was halted by an unexpected alliance
between the 5 Star Movement and the arch-rival Democratic Party (PD).
Their deal saved a set of planned reforms and prevented Italy to get in the
hands of the Ligue, a sovranist party which could have lead Italy towards a
secure clash with the European Union. Giuseppe Conte was therefore
confirmed at his office at Chigi’s Palace in Rome, from where, a few month
later, he had the daunting task of being the sailor navigating Italy
out of the storm, as the head of the new coalition. 

During the first days of the
lockdown, it was surreal to see the world still moving, from an Italian
perspective. Our life was suspended, to allow our health system to
cope with the number of hospitalized people. In the United Stated however, Donald
Trump was still referring to the Sars-Cov19-2 as something similar with
a ‘flu’, losing precious time to offer a prompt reaction to the
threat (US would some weeks later become the country with most infected
people). In the UK, Boris Johnson was still talking about ‘herd
immunity’ (he would be proved positive to the test some time later and
hospitalised). In a national channel, popular
Dr.Christian Jensen said: ‘the Italians, any old excuse to, you know, shut
down everything and stop work for a bit and have a long siesta’. In the
beginning of March, the French TV Canal + broadcasted a video
featuring a pizzaiolo coughing and spitting on a ‘pizza corona’ was
broadcasted: Italians didn’t like it very much. A week later, thousands
people dressed as Smurf in Landernau, to set the Guinness world record for
the largest-ever gathering of the blue comic characters. On March 15th in
France, people went to vote for local elections. In Italy we couldn’t
understand how our European neighbours couldn’t worry about what would
have arrived to them sooner than they could have imagined. Around Europe,
people were mostly convinced that the virus had become an Italian problem and
that they would be personally unaffected. As the spread - measure of the risk differential between the two
sovereign debts between Italian government bonds and German Bunds - started to
grow, European Central Bank (ECB)’s president Christine Lagarde’s
commented that it was not her job “to close the spreads”. The
result was a spike of it by 60 basis points, the biggest daily increase’s
record, which caused heavy financial losses for Italy.  “In a totally
rational world, you might assume that an international pandemic would lead to
greater internationalism” said historian Mike Davis, a renowned American chronicler of the
disasters incubated by globalisation quoted in an article by the Guardian. What
was happening was however quite different. Davis in his book
have described how global capitalism, as involves the constant
movement of people and goods, is particularly vulnerable with pandemics, which
are considered in international relations as number 1 system
risk. “The political outcome of the epidemic,” said Mike Davis, “will,
like all political outcomes, be decided by struggle, by battles over
interpretation, by pointing out what causes problems and what solves them. And
we need to get that analysis out in the world any way we can.” 

In Italy the debate on whether to
stop most of the industrial activities caused an arm-wrestling between the General Confederation of Italian Industry
(Confindustria) and the government trying to contain the deadly spread of the
virus. As the numbers of casualties became overwhelming, the stop of production
became inevitable. Italy had to look to the EU for help and asked the
activation of the European Union Mechanism of Civil Protection for the supply of medical
equipment for individual protection but not a single EU country responded.
France and Germany were still checking out their own stocks, to see
whether they’d have enough to deal with the virus on their own,
and imposed a ban on the exports. Austria and Slovenia unilaterally closed
the borders with Italy. Italian citizens experienced traveled limitation all
over the world because of their nationalities. Finally, the first help
came from China, which airlifted 30 tons of medical supplies to
Italy. The news was welcomed by the Italy’s Foreign Minister Luigi Di
Maio, which has often stated that “Italy is a friend of the Chinese
people and stands by the Chinese government”. Di Maio published a video of
the arrival of the supplies on his Facebook page commenting “we are not
alone, there are people in the world who want the help Italy”: a real triumph
for Chinese propaganda and a true nightmare for the European Union.

While Donald Trump was calling the
Cov19 the ‘Chinese virus’, Italy never blamed China for
the catastrophe that was happening right in its territory, despite a few
cases of Sinophobia happened at the first stages of the crisis. In fact,
the supplies sent from the Chinese Red Cross to the Italian one, reciprocated
the help offered by Italy just one month earlier, when Rome sent 18 tons of
supplies to Wuhan. Still, the photos of Chinese doctors and the hospital
supplies made the news for a day in our country. The narrative seemed for
a moment to have changed: the far-away land we were looking at with anxiety was
now offering us help. It was like if the world have turned around, as Europe so
far was the power accustomed to project its role to the globe. “The friendship road
knows no borders” was written on the large aid shipments of medical
supplies. Beijing’s propaganda seemed to have worked, as China
seemed to be no longer associated in Italy just with the origin of the pandemic
and to the mismanagement of the containment of the virus in Wuhan.’ Matteo
Salvini and Lombardy’s councilor for health services Giulio Gallera
kept reiterating the ‘don’t forget that the virus was brought here
from China’ mantra, preferring to hail the arrival of a team of
virologists and epidemiologists from Russia, just a few days later, with
medical equipment and pharmaceuticals. Still slightly touched by the virus,
Moscow decided it was a good idea to jump on the bag-wagon of China
and offered their aid dubbed ‘from Russia with love’ to the northern regions
ruled by his friend Salvini. Russians’ media applauded Moscow for step-in in
‘where Europe and NATO failed’. However, newspaper ‘La Stampa’ declared that 80% of Russian supplies were of
little use to Italy and the author of the article
was accused by the spokesperson of Russian Defence minister Igor
Konashenkov who accused the newspaper of ‘russophobia’. “Russia and China both have been using the pandemic as an opportunity to
project their soft power,”commented Rose Gottemoeller, former NATO Deputy Secretary General. “That is
understandable because that is what they like to do.” Josep Borrell, the
EU’s foreign policy chief wrote on his blog that the EU “must be
aware there is a geo-political component [to the crisis] including a struggle
for influence through spinning and the ‘politics of
generosity.’” Most of Italians however were mostly touched by
China’s state media images of the ‘normalisation’
in Wuhan, claiming victory over the virus and showing their support
for other countries. They impacted also on
the seriousness that Italians accepted the rigorous measures adopted,
despite being a country well known for his love for not following the
rules. China showed that it is possible to contain the virus: that fact gave
enough hope to Italy that we could do it too. Time was ripe for China’s Xi
Jinping president to call Giuseppe Conte to propose a new “Health Silk
Road” aimed at sharing information and knowledge to fight the pandemic.
As the US are disengaging from the
Mediterranean and the EU seemed to have abandoned Italians at the beginning of
the pandemic some observers reflected whether Italy could get increasingly
under the Chinese sphere of influence. In part this is already happening,
as Italy became the first and only G-7 country to have
signed the Memorandum of Understanding for China’s Belt and Road
Initiative. However, Italy’s moves are rather associated to an opening towards
a multipolar world, as Rome is at the same time involved in
similar infrastructures projects with Japan and the US. But the world
is changing, Russia is pushing populist government within the EU to break the
Union from inside, the country is going forward a very hard recession and while
people the curve of contamination isn’t yet decreasing, Italy find
itself with many more question that answers.

As productions have been stop,
small and medium business and enterprises are at risks, tourism is paralyzed
and precarious workers have not enough savings to rely on, the
state came up with the ‘Healing Italy’ decree to come across the
needs of the population. The European Union suspended
the Stability and Growth Path regulations as to guarantee unlimited national
public spending to save jobs and avoid social tensions to arise.
The European Central Bank (ECB) has started an ambitious 750bn euro
quantitative easing program to provide liquidity to the member states. Italy has asked to use the
European Stability Mechanism (ESM) to help the economies hit by the novel coronavirus but without policy conditions that
implies rescue
loans and strict
austerity measures such as the ones adopted during during the Greek financial
crisis. At the time, indebted countries like Greece, but also Spain, Italy,
Ireland and Portugal, started to experience weaker growth and the budget
deficit became unsustainable. Investor were seeing higher financial risks
and demanded higher yields on bonds, which raised the cost of the country’s
debt and necessitated a series of bailout from the EU and the ECB. The
indebted country had to ask for higher borrowings, leading to further fiscal
strain. A vicious circle that in no way Italy is interested in undertaking at
this point. PM Giuseppe Conte called on his counterparts for
solidarity: ‘Europe needs to show whether it can live up to this call of
history […] I will not go into history as the one that didn’t take
the responsibility to do what needs to be done for European citizens’ he
declared. At the wake of the video meeting between the
EU’s 27 leaders on March 26th, Conte asked ‘extraordinary and exceptional
measures’ to be taken to cope with the sharp Europe’s economic downturn and the
consequent surge of joblessness resulting from the lockdown. Together with Spain,
France and seven other eurozone countries, Italy called for common
European response with ‘European recovery bond’, or ‘coronabonds’, to
lift member states out of recession and increase spending on healthcare. The answer
they were hoping to receive, however, did not arrived. The bloc was far from united. The Netherlands not only
refused the plan, but its finance minister Hoekstra during the
video meeting called for Brussels to investigate why some countries did not
have enough financial rooms for manoeuvre to weather the economic
impact of the crisis. Germany sided with the Netherlands, so that
their taxpayers would not have to be on the hook for countries they
say have long lived beyond their means. Any decisions were suspended
until a new meeting, two weeks later. 

The spectre of the ESM in
form of strict demands for cuts to the Italian deficit and debt or Greek-style
austerity cuts, could not bolster further the narrative of Eurosceptic
nationalist parties. ‘Italy needed help and it has been given a slap in
the face’ was the first reaction of Matteo Salvini, leader of the League
party. ‘Disgust and disdain for the Europe. They took 15 days
for evaluating if, who and how to help. Genius. While the people
are dying. It’s a den of snakes and jackals this “Union”. First we
defeat the virus, them we think about the EU. And if needed, we’ll
great them. Without thanking’ he tweeted on March 27th, commenting
the outcomes of the video meeting. A few days later he tweeted: ‘They
filled us for 20 years of the world Europe, and when we are in need we receive
help from Venezuela or Albania, while the “Union” give us two fingers
in the eyes. We won’t forget it’ Salvini commented. The League’s leader
also wished good luck to Hungarian
president Viktor Orbàn, which has declared the rule by decree to handle
the coronavirus, assuming full power of the
country, with an unprecedented move inside of the EU. ‘Orbán’s move brought back to the surface deep divisions within Europe’s
most powerful political alliance — between national member parties who want to
kick out the self-declared champion of “illiberal democracy,” those
who want to keep him in, and those who think he just wants a fight and is best
ignored’ wrote Maia de la Baume on Politico. ‘Europe didn’t existed so far. There is no Europe of solidarity, no
Europe of big choices’ commented Giorgia Meloni, leader of the
post-fascist party ‘Brothers of Italy’ that allied with the League would
constitute a potential political majority in Italy according to the
polls.  ‘Maybe they think that Italy and Spain must arrive on
their knees to the next Troika? They are wrong, without Italy this Europe is
going to dissolve. Economy can start again only if we can dribble the heavy bureaucracy
that strangles the enterprises. Money must come soon to the pockets of the
Italian’ she continued, adding that ‘in 2012 faced with an economic
crisis the Italian Mario Draghi used a bazooka to calm it’.

Indeed the figure of Mario Draghi,
former ECB’s president, who in 2012 announced that the European bank would
do ‘whatever it takes’ to save the eurozone is being revived these days in
Italy. On an article on written for the Financial Time, Mario Draghi
wrote: ‘‘Faced with unforeseen circumstances, a change of mindset is as necessary
in this crisis as it would be in times of war. The shock we are
facing is not cyclical. The loss of income is not the fault of any of those who
suffer from it. The cost of hesitation may be irreversible. The memory of the
sufferings of Europeans in the 1920s is enough of a cautionary
tale. Neither regulation nor collateral rules should stand in the way of
creating all the space needed in bank balance sheets for this purpose.
Furthermore, the cost of these guarantees should not be based on the credit risk
of the company that receives them, but should be zero regardless of the
cost of funding of the government that issues them.’ Draghi’s words gave
hope to Italy that a solution within the European Union would be found.
Draghi’s stance was shared by Christine
Lagarde (after his first embarrassing comment) at the helm of the ECB, Ursula
von der Leyen, Head of the EU Commission, and David Sassoli, President of the
European Parliament. The pressure is now on Northern European
countries that first answered with a nein that the 9 countries bringing
forward the ‘coronabonds’
proposal are not in the position to accept. Italy
wants to borrow money with Germany’s backing as a guarantor, so investors would
consider them less of a credit risk and demand lower interest rates, making it
easier for these country to tap into the bond market. But Germany has always
been extremely reluctant at the idea of violating their euro’s founding
principle: their citizens were promised that they wouldn’t end up paying other
countries debts. And again, even here, the risk is populism: as
extreme-right Alternative for Germany (AFD) is now the strongest opposition
force, ready to exploit every Merkel’s mistake. 

The current situation is
quite different from previous North-South debates within the EU,
regarding the financial and the migration crisis. Today Northern European
countries cannot blame Southern highly indebted states to not have done their
financial homework, as they blamed them during the financial crisis. They
cannot blame them or having been unprepared for the
coronavirus: everybody did. At the opposite, Rome unwittingly
experience how a European country could be turned upside down by the
epidemic, transparently collecting and sharing data to allow our neighbors to
learn from our mistakes. “We are not writing the page of an economic
manual, we are writing the page of a history book” PM Giuseppe Conte told his
counterparts. “Europe needs to demonstrate whether it is the common house
for European citizens, whether — faced with epochal challenge — it succeeds in
offering an adequate response that lives up to the tasks it was created for by
[EU founding fathers] Schuman, Adenauer, De Gasperi.” The Italian demands,
as Covid-19 spread around the whole Europe, have started to be considered
in these first days of April, as the whole European project seemed to
sway. A group of 82 German and Italian intellectuals including Jürgen
Habermas have published a common petition on German newspaper Die Zeit
asking ‘Europe solidarity now’ and the opening from the ESM of a ‘credit
health line’ without condition and ‘European bonds for health’. In the
letter they state that ‘if the North does not help the South, it does not only
lose itself but also Europe’. Than it was the turn of 200 scientists asking
Angela Merkel including Nobel prize John Polanyi for the emissions of ’coronabond’ since the epidemic ‘is
threatening the EU that requires new forms of solidarity’. So far, European
ministers have agreed on a EU-wide unemployment reinsurance with an upper
value 100 bn (Sure) and to a 200€ bullion fund from the European Investment
Bank that can issue cheap loans to EU struggling companies. European leaders have taken two weeks time to come up with a solution
about the ESM. However, on Tuesday April the 7th, two weeks later after the
dividing discussions, 16 hours of meeting were not enough to come with a deal.
The Netherlands insisted on macro conditionality in case of use of the ESM and
keep opposing ’coronabond’, fearing as
much as Germany that they will be left holding the bill if southern countries
go broke. Dutch Finance Minister Wopke Hoekstra tweeted: “Apart from
[being] unwise, it is also not reasonable … [that the Netherlands] should
guarantee the debts that others make. The majority of eurozone countries
support this line.”

As the health crisis is becoming
a finance crisis worse than the one in 2008, the EU is finding itself plagued
by the same divisions of a more than a decade ago. Italy and Spain, with Madrid
being the first country heading towards a permanent universal basic income,
continue to firmly reject the conditions that the Netherlands wanted to impose.
The only hope for resolving an impasse are in the hands of French finance
minister Bruno Le Maire and his German counterpart Olaf Scholz, which have
tried to find a compromise to present to the EU leaders, leaving the ESM
conditionality open in order to let EU leaders continue the discussion, with
Spain opposing such alternative. The current stage is critical: either the
crisis break apart the Union or push towards its future, but with old wounds
bleeding in these days, the negative of the reason seems to prevail over the
optimism of the will.  ‘Without the eurobond this EU has no future. A country like Italy would not
be otherwise condemned to permanent depression’ commented Yannis Varoufakis, who
was Greece’s minister 2015 when the Mediterranean country was
negotiating rescue plans with the Eurogroup. ‘European Union cannot
continue in this way without generating nationalist xenophobic forces that
will tear up this union and deliver the whole of Europe towards
the ‘nationalist xenophobic international. That’s why corona bond is
a way to Europeanizing part of the debt. Without that, there will be no EU
in the day after the coronavirus. This is another 2015, not just for Greece,
for all European people. The only solution is a front that is united behind
disobedience’ Varoufakis concluded.

So far, as Catherine Fieschi
wrote on the Guardian: ‘fear and
deference have, momentarily at least, rendered citizens less inclined to
question mainstream governments and turn to populism’s snake oil vendors.
Better still: it looks as though governments led by populists or
populists-lite, such as Donald Trump and Boris Johnson, are set for a rough
ride, too, unless they change their ways’ Fieschi wrote. ‘If Italy can
be counted on to listen to the orders of a government that only a few weeks ago
was viewed as accidental and temporary, perhaps the tide has turned on
Salvini. And, if it has turned on Salvini, why should it not have turned
on all populists?
’ If the EU find the right
path of solidarity,
as the continent must prepare rescue plans to
face the coronavirus pandemic,
it could as
well develop its response
following the Green New
Deal guidelines, which aims to zero carbon emission by 2050,
and set a new beginning for the
European Union. ’
If governments do not use
stimulus funding to invest in a green economy, it will represent a wasted
opportunity” wrote 
Tubiana, head to the European Climate Foundations. 
“We can absolutely address this short-term economic
crisis, at the same time making the right choices that don’t lock in the
economy of Europe to the fossil fuel economy.” The Covid-19 has already
showed that people can quickly adapt to new way of livings. It showed that
states have still much power to change the political status quo.
Starting from the social limitations that we are experiencing, this crisis
could bring us towards some forms of more authoritarian controlled capitalism
or to a sort of return of Keynesianism. As China is trying to
show the world that life can return as it was, Europe is forced to use this
opportunity whether to progress or to collapse:
old financial tools these new set of problems could definitely waste this opportunity.
History have shown that crisis can
become opportunities and governments can do what in ordinary times would
otherwise be impossible, and this is one of these moments. Either
Europe change or it will die. Either the system change or we’ll all die as
from Europe.


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