Matthew Lynn

The vaccine disaster has fatally undermined the EU

The vaccine disaster has fatally undermined the EU
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It might be a bit late, but the supply will come on tap eventually. France’s Sanofi has partnered with Pfizer to start manufacturing its vaccine. BioNTech has just bought a factory in Marburg, Germany from Switzerland’s drugs giant Novartis to retrofit into a vaccine plant. With plenty of money being splashed around, production will arrive soon. Making vaccines is tricky, but not that tricky. By the summer, Europe should have enough Covid-19 shots to jab everyone who wants one.

Crisis over, right? Ursula von der Leyen can get back to setting diversity targets, or making climate pledges, or whatever it was she was up to before people started asking why the Israelis and the British were inoculating people so much faster than she was. While Stella Kyriakides, the EU heath commissioner, can slink back to the relative obscurity of Cypriot politics. The whole saga will blow over, and everyone can get back to normal. Except, hold on. It isn’t that simple. Sure, the immediate vaccine supply issues will soon be fixed. The trouble is, the catastrophe will still do lasting damage to the EU even after it has all the vaccines it could possibly use. Why? Because it undermines its legitimacy – in three ways.

First, the EU is by its very design a technocratic elite, without much in the way of democracy. Of course, that’s fine if you like that sort of thing. In the political theory seminars there have always been respectable arguments for letting the experts run everything without all the messy business of elections. There is a catch, however. The technocrats have to be genuinely technically competent, otherwise what’s the point? The vaccine disaster suggests the EU’s technocrats are third division, and even that is probably generous.

Next, it has shattered the myth of market power. The EU has built itself on the idea that the Single Market worked better than lots of fragmented national economies. Its bargaining power, and sheer size, meant that companies, no matter how big and powerful they might be, would always have to bend to its will. Left to themselves, smaller countries, and even France and Germany, would simply be ignored. But that doesn’t seem to have worked in this case. Israel isn’t a big market. Nor on the world stage is Britain. Serbia, vaccinating at twice the rate of Germany, definitely isn’t. Small, it turns out, is fine.

Finally, it has called into question its status as a ‘regulatory superpower’. The EU has made a lot in the last decade of its ability to become the world’s leading rule and standard setter. It certainly isn’t a military superpower anymore, and its claims to be an economic one fade with every accumulated year of underperformance. But at least when it came to regulations it could argue it led the world. The EU’s rules would be the gold-standard that everyone else would have to follow. And yet why would anyone want to follow a regulator that makes such a hash of things?

Any particular crisis will blow over eventually. Very few last more than a couple of weeks, and any industrial problem can always be fixed if you have unlimited money to throw at it. But the vaccine affair has exposed how hollow the EU has become – and that will do lasting damage.

Written byMatthew Lynn

Matthew Lynn is a financial columnist and author of ‘Bust: Greece, The Euro and The Sovereign Debt Crisis’ and ‘The Long Depression: The Slump of 2008 to 2031’

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