Debt Crisis, Brexit, Now Virus. Can the EU Survive?

The European Union is in crisis, again. Effectively the world’s third-biggest economy, the 27-nation bloc is struggling to muster a united response to the deepest recession in almost a century unleashed by the coronavirus. Old divisions have resurfaced and legacies of past crises are threatening to pull it apart. While this isn’t the first time the EU has faced an existential threat, German Chancellor Angela Merkel says none has been as serious as this one.

Having forecast the biggest decline in regional output since World War II, the European Commission warned that the unevenness of contractions and recoveries country-to-country will put at risk the survival of the euro area. The common currency bloc, encompassing 19 countries, is at the core of the European unification project but lacks many of the tools that regular economies can deploy. There’s no common treasury to direct funds where they are needed and, so far, little agreement on proposals to help out poorer nations. Less wealthy southern members are demanding more financial support from their richer peers but without the strings that are typically attached. Wealthier nations, who have long seen themselves as being asked to bankroll profligate southerners, are resisting.