Amid troubles, the EU takes a step forward

Amid troubles, the EU takes a step forward

The union spent the year struggling to achieve unity, and was alarmed by trouble on its periphery


THE MOST dismal year in Europe since the end of the second world war ended with a bit of a triumph. A rare outburst of agreement meant that at least the EU is not heading into 2021 without a budget. EU leaders, meeting for once in person rather than by Zoom, approved a €1.1trn ($1.3trn) budget to cover the next seven years. Perhaps even better news was that they also managed to bolt down a €750bn fund to help countries recover from the pandemic, something that had been in the works for months but had been held up by a row over whether places like Poland or Hungary which are accused of violating the rule of law can be punished by having payments withheld.

More significant still, the EU had earlier also agreed for the first time that this money would be raised by issuing jointly-guaranteed bonds, a step towards the mutualisation of debt that poorer southern countries have long wished for and the north has long resisted. Some called it a “Hamiltonian moment”, echoing Alexander Hamiton’s success as America’s first treasury secretary in getting the federal government to assume the debts of the 13 American states after the war of independence, a crucial building-block of the new union.