There are quotes so good they become trite through overuse. So it might be thought of Jean Monnet’s line that Europe will be forged in crises and become the sum of the solutions it addresses them with. Cliché or not, the foresight of Monnet — one of the architects of the EU — has held up in this crisis as it has in past ones. The pandemic helped the EU cross the Rubicon of common borrowing for fiscal transfers.
But another change also pushed the EU forward in this crisis, which didn’t involve finding new solutions but rediscovering something old. For two decades from the 1990s on, Europe’s governing parties — the centre-right but also the centre-left, notably under Gerhard Schröder in Germany — were seduced by a form of market fundamentalism-cum-redistribution: restrain the state, let markets work their magic, then compensate where necessary. That governing philosophy was already wearing thin after years of fiscal austerity, under-investment, and the growing threat of climate change. The pandemic put the nail in the coffin: the obvious imperative of smart state intervention, to manage the health crisis and to support livelihoods through lockdowns, allows Europe to embrace the social market economy again.
The relish with which the European commission is running with this revaluation of the economy’s social aspects makes it near-unrecognisable from its own incarnation of just a decade ago. Then, it was the champion of fiscal consolidation, deregulation, and “competitiveness” in the form of lower unit labour costs, aka compressing the wage share of national income. And now?