Some random toughts, trown together without any pre- or post-editing.
I must say that I am not all that fearful of at least the Dutch economy being unrecognisable a year from now (or, at least, unrecognisable from what it might have been had Covid-19 not come along). The situation for other countries, in or out the EU, may be well different. For a number of reasons, but let me explain by example, and compare some economic aspects of The Netherlands and Italy. I choose Italy because that country has been very aggressive towards The Netherlands and some other EU members for refusing to freely hand over some billions to Italy, calling those countries ‘irresponsible’, ‘niggard’ and ‘sickening’.
Let’s compare some figures
National debt: Netherlands: 48,6% (2012: 67,4%); Italy 135% (2012: 123,3%)
https://www.transparency.org/en/cpi/2019/results/ Corruption index: Netherlands rank 8 (of 198); Italy rank 51 (of 198)
https://www.transparency.org/en/cpi Shadow economy: Netherlands 7,8% (rank 4 of 158); Italy 23,0% (rank 56 of 158).
https://www.theglobaleconomy.com/rankings/shadow_economy/ So, after the financial crisis, The Netherlands managed to
downsize their debt by almost 20% (almost a quarter of the entire debt); Italy mananged to
increase its already hopeless debt even further. Few counties are less corrupt than The Netherlands (and of the top 16, four are not in North/West Europe). Italy’s shadow (i.e. tax evading0 part of its economy is close to one quarter of the total economy, while in The Netherlands it’s about 1/13th (and only 3 countries have smaller shadow economies).
Now Covid-19 has hit the economies at large, creating huge financial problems (businesses getting in trouble or going down, rising unemployment, etc), which the various governments struggle to take in. How well they manage to do so depends on how much ‘elasticity’ any economy has in all its components. Turns out that a country like Italy can hardly loan any money, so has huge troubles getting money to pay for all emergency measures. At that, it can never hope to pay back those loans unless they, draconically, reform their economy. The Dutch can quite easily loan money, for it has 1) room to pay back and 2) has shown to pay back (i.e the falling national debt).
Fact is, that this crisis is not a war. No infrastructure has been damaged. No industry has been destroyed (damaged, yes, in certain places). Unemployment in The Netherlands hasn’t risen dramatically (unlike for ex in the US). So while many things have
temporarily slowed down or stopped, people still have money (in fact, most have
more money because they have been unable to spend over the past months). So once things get normal again, I do think there will actually be a surge in the Dutch economy.
Now, a country like Italy can do two things.
One. Reform the economy (break down corruption in all layers, inclusive of the government itself; get the shadow economy into the light and get the taxes therefrom (Italy’s GBP in 2019 was about $2 trillion [
https://tradingeconomics.com/italy/gdp] officially, so if that $2trillion is only 77% of the
real GPB, that real GPB is something like $2,6trillion. If they levy some taxes at that shadow $600billion, they could buy quite some Covid protection).
Two. Do nothing but start whining and demanding free money. Again. As they always have done. And why not, they got it all the other times! But now even the normally backbone-free Dutch government has grown one to say ‘no’, because we are dealing with our own financial Covid-problems, which will no doubt result in tax increases to deal with that, and they very well know that to increase the Dutch taxes while at the other hand give away billions (of tax money) to several bottomless pits such as Italy will be political suicide. And rightly so.
The latest EU-proposal is to give €1billion to the Suffering South, and loan some €500billion. I do fear they actually believe the burghers of the Nodding North will believe they will ever see that half trillion back.
What all this proves is that
there is no European Union. There are many countries, running on various different political, cultural and financial course, bunched together based on the belief that if you push things together hard enough all things will equal out and become the same. They do not. It has been tried in the past, and we just remembered the result of the last attempt ending 75 years ago.
You can divide Europe in several regions, where things are roughly even-handed. Benelux/Germany/Scandinavia. Spain/Portugal/Italy/Greece. Balkan/Hungaria/Bulgaria/Poland. Within these groups, countries will be alike enough to reasonably work together on a comparable basis. But these
groups do not work well together because of fundamental differences. No matter how much governments pretend otherwise. No matter how much in denial the “EU Parliament” is about this.
What EU can be, and should be, is a collection of independent yet interdependent countries, where each country seeks to optimise its working relation with each other country, yet remain fully in command of its own future. That would be a true union, rather than the now pretty much moribund unification into one super-state it never was and never can or will be. The current situation is that ‘richer’ (read: more financial responsible) countries keep bleeding for the ‘poorer’ (read: less financial responsible) countries.
If you have a neighbour that keeps wasting money, and officials state you are under duress to keep paying for that neighbour, and your neighbour never being put under duress to stop wasting, you will not only resent that neighbour, you will resent these officials. And, if possible, send them packing. That can turn quite nasty.
I do think that is at least part of what many UK ‘leavers’ turned to vote either ‘leave’ in the (ill-conceived, -executed and –followed-up) referendum, and/or vote for that party that at least promised to actually follow up on Brexit. A nation that is no longer in control of the course of its own future is no longer a nation, it’s a province. That may not be a bad thing by definition, depending on what you are now a province of. Considering the state of how EU is currently run, I doubt The Netherlands will be at a winning end of become a province.
That does not mean I want an end to the EU (it would cost dearly to deconstruct, and doing so would also obliterate all things that are going well), or The Netherlands leaving the EU (for the same reasons); I want an end to what the EU is starting to look like: an olicharchy where ideology is more important than reality, where power is more important than democracy, and where keeping that power is more important than transparency, or trust from the populace (there is only one way to keep the power when the majority of the populace does not want you to keep that power..).
If the EU is to survive, it needs to radically restructure and reform. Which might include ejecting such countries as show not to be (willing to be) up to high standards. It should not drive for mediocrity or average, it should drive for each country to try and outdo the country one rung higher. And that can only happen when each country can develop itself; countries going down are going out.
As for UK, EU and Covid. No doubt the UK will suffer severely due to Covid. But it also has reserves, and has not been damaged in the sense it was in, say, a war. Infrastructure is still in order and functioning. So it can bounce back. There is, even if Brexit will be a fact (which it may well not ever become!), a trading going on between UK and the EU and others. The nature of that trade may change, but that trade itself will not. The effects of Covid are bad, as they are everywhere. But I do believe there will also be gaps to fill, new ways of doing trade, old ways trod again. UK will bounce back. As will every country that has itself under control.