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Since the outbreak of COVID-19, EU countries have argued whether aid should be paid out in grants or loans in a bid to revive the economy in a post-virus world. But John Keiger believes the EU’s handling of the outbreak is a risk to its existence.
Professor Keiger, former research director of the Department of Politics and International Studies at the University of Cambridge, argued the EU is “playing a high-stakes multi-handed poker game”.
He compared the issues in the EU to the War of Independence in America and said the EU could federate the members-states by “debt mutualisation, financial transfers and EU-wide taxation”.
However, Professor Keiger claimed the COVID-19 pandemic could be the “reverse [Alexander] Hamilton moment”.
Writing for the Spectator, he said: “But getting the reluctant wealthy ‘frugal’ states to bail-out the poorer spendthrifts via greater fiscal federation, as [Alexander] Hamilton did, is only one of the high-stake poker hands the EU is playing.
“In reality, the COVID pandemic could be a ‘reserve Hamilton’ moment for the way it exposes the fudge that holds together the EU project.
“That judge pervades every aspect of the EU, from its multi-currency status to its legal and constitutional governance to its monetary and financial responsibilities.”
He argued the EU’s “audacious gamble” could lead to an “unravelling of much of the integration achieved over the last 70 years.”
Professor Keiger argued the clearest path to resolve the “looming crisis” that the EU’s COVID policy provoked is for a “treaty change”.
However, due to the anti-EU sentiment across the continent, Professor Keiger claims this is “anathema to the Commission” and other member states.
He said: “The EU is at a stand-off in its high-stakes game.
“If its bluff is called it could take some very big losses that could change its very nature for the future.”
Fears of Italy leaving the EU were raised last month as fury erupted over the way it was abandoned by its European partners during the coronavirus crisis.
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It comes as the UK has already left the bloc and will exit the transition period at the end of the year.
Minister-President of Bavaria, Markus Soeder, warned without the UK and Italy, there will no longer be a “strong Europe”.
He told German newspaper Frankfurter Allgemeine Zeitung: “Brexit is now underway.
“I still cannot imagine a strong Europe without the United Kingdom, but without Italy, little remains of the original idea.
“The Treaty of Rome was the basis of the EU.
“Italy is the cultural and historical centre of Europe.”
He noted how the outbreak of the deadly COVID-19 has “deeply affected and injured Italy”.
Last week, former Greek finance minister Yanis Varoufakis said Angela Merkel’s plan to halt chaos caused by the economic fallout from the coronavirus crisis could be “extremely negative and destructive for the European Union”.
He claimed the German chancellor had no plans to introduce eurobonds to help Southern European countries during the crisis.
The idea of eurobonds was first raised in 2011 during the European sovereign debt crisis and once again this year as a response to the COVID-19 pandemic.
Concerns were raised that these eurobonds would help indebted states access cheaper credit thanks to other eurozone communities.
However, the plan to introduce them never moved forward due to opposition from Germany and The Netherlands.
But according to reports, Ms Merkel’s alternative deal has increased concerns that eurobonds will be introduced through the backdoor.
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