Ideas

Coronavirus Exposes Weakness Of China's Autocratic System

The virus could have been better contained if China had not tried to hush it up at the start. Autocracy comes at a price.

Spraying disinfectant in Changsha on Feb. 5
Lea Deuber

-Analysis-

The coronavirus outbreak in China has stirred up anti-Chinese sentiment in many countries across the world and there have been growing reports of attacks on people of Asian heritage. This violence cannot be tolerated. Diseases recognize no nationality, respect no borders. There will always be epidemics, and as the world becomes more connected, the risk of a disease spreading across the globe will only increase.

It's important for the international community to learn from crises like this one and invest in international bodies such as the World Health Organization, whose work is proving to be incredibly important. Like racism and prejudice, nationalist politics have no place in this crisis. Those affected in China deserve our solidarity, especially those in poorer regions who have little chance of receiving adequate medical care.

No one is to blame for the epidemic, but when it comes to dealing with and containing the disease, we must hold the Chinese government responsible. For political reasons, they did not inform the population or the international community about the outbreak quickly enough. The virus was therefore able to spread across the world, as the local government first arrested eight doctors who discovered the outbreak, then waited three weeks to go public, when the epidemic could no longer be concealed.

2019-nCoV virion, a.k.a. coronavirus — Source: CDC

Foreign powers assumed that the affected province of Hubei was being sealed off in January for political reasons, when in fact it was a desperate attempt to contain the virus — an overreaction from a political system under stress. Nowadays Beijing's actions come as no surprise in Germany, where we are used to dealing with an autocratic China and accept that they promote their political system as an alternative to our liberal democracy. We lap up the benefits of working with China, happy to profit from their economy without having to bear the human cost of such lack of freedom.

China prioritized its international reputation over its citizens' wellbeing.

The epidemic could have been contained much sooner if people in the affected region had been warned by the authorities. Instead, China prioritized its own international reputation over its citizens' wellbeing. If the virus spreads to Germany, that could be one of the prices of an autocratic system, but here we're not used to paying the price.

There are already hints about what lessons the Chinese government will draw from the crisis. What the country needs is independent reporting so that the political failings can be identified and rectified. It needs apolitical institutions that people outside of the government can trust. And yet, Beijing is currently stepping up censorship, preventing journalists from reporting from the region and arresting citizens who draw attention to mismanagement or need.

Still, the lesson China's leader Xi Jinping is most likely to take from the crisis is proof that his power is actually not far-reaching enough, not all-encompassing enough. And that spells trouble for the future.

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Economy

European Debt? The First Question For Merkel's Successor

Across southern Europe, all eyes are on the German elections, as they hope a change of government might bring about reforms to the EU Stability Pact.

Angela Merkel at a campaign event of CDU party, Stralsund, Sep 2021

Tobias Kaiser, Virginia Kirst, Martina Meister


-Analysis-

BERLIN — Finance Minister Olaf Scholz (SPD) is the front-runner, according to recent polls, to become Germany's next chancellor. Little wonder then that he's attracting attention not just within the country, but from neighbors across Europe who are watching and listening to his every word.

That was certainly the case this past weekend in Brdo, Slovenia, where the minister met with his European counterparts. And of particular interest for those in attendance is where Scholz stands on the issue of debt-rule reform for the eurozone, a subject that is expected to be hotly debated among EU members in the coming months.

France, which holds its own elections early next year, has already made its position clear. "When it comes to the Stability and Growth Pact, we need new rules," said Bruno Le Maire, France's minister of the economy and finance, at the meeting in Slovenia. "We need simpler rules that take the economic reality into account. That is what France will be arguing for in the coming weeks."

The economic reality for eurozone countries is an average national debt of 100% of GDP. Only Luxemburg is currently meeting the two central requirements of the Maastricht Treaty: That national debt must be less than 60% of GDP and the deficit should be no more than 3%. For the moment, these rules have been set aside due to the coronavirus crisis, but next year national leaders must decide how to go forward and whether the rules should be reinstated in 2023.

Europe's north-south divide lives on

The debate looks set to be intense. Fiscally conservative countries, above all Austria and the Netherlands, are against relaxing the rules as they recently made very clear in a joint position paper on the subject. In contrast, southern European countries that are dealing with high levels of national debt believe that now is the moment to relax the rules.

Those governments are calling for countries to be given more freedom over their levels of national debt so that the economy, which is recovering remarkably quickly thanks to coronavirus spending and the European Central Bank's relaxation of its fiscal policy, can continue to grow.

Despite its clear stance on the issue, Paris hasn't yet gone on the offensive.

The rules must be "adapted to fit the new reality," said Spanish Finance Minister Nadia Calviño in Brdo. She says the eurozone needs "new rules that work." Her Belgian counterpart agreed. The national debts in both countries currently stand at over 100% of GDP. The same is true of France, Italy, Portugal, Greece and Cyprus.

Officials there will be keeping a close eye on the German elections — and the subsequent coalition negotiations. Along with France, Germany still sets the tone in the EU, and Berlin's stance on the brewing conflict will depend largely on what the coalition government looks like.

A key question is which party Germany's next finance minister comes from. In their election campaign, the Greens have called for the debt rules to be revised so that in the future they support rather than hinder public investment. The FDP, however, wants to reinstate the Maastricht Treaty rules exactly as they were and ensure they are more strictly enforced than before.

This demand is unlikely to gain traction at the EU level because too many countries would still be breaking the rules for years to come. There is already a consensus that they should be reformed; what is still at stake is how far these reforms should go.

Mario Draghi on stage in Bologna

Prime Minister Mario Draghi at an event in Bologna, Italy — Photo: Brancolini/ROPI/ZUMA

Time for Draghi to step up?

Despite its clear stance on the issue, Paris hasn't yet gone on the offensive. That having been said, starting in January, France will take over the presidency of the EU Council for a period that will coincide with its presidential election campaign. And it's likely that Macron's main rival, right-wing populist Marine Le Pen, will put the reforms front and center, especially since she has long argued against Germany and in favor of more freedom.

Rome is putting its faith in the negotiating skills of Prime Minister Mario Draghi, a former head of the European Central Bank. Draghi is a respected EU finance expert at the debating table and can be of great service to Italy precisely at a moment when Merkel's departure may see Germany represented by a politician with less experience at these kinds of drawn-out summits, where discussions go on long into the night.

The Stability and Growth pact may survive unscathed.

Regardless of how heated the debates turn out to be, the Stability and Growth Pact may well survive the conflict unscathed, as its symbolic value may make revising the agreement itself practically impossible. Instead, the aim will be to rewrite the rules that govern how the Pact should be interpreted: regulations, in other words, about how the deficit and national debt should be calculated.

One possible change would be to allow future borrowing for environmental investments to be discounted. France is not alone in calling for that. European Commissioner for Economy Paolo Gentiloni has also added his voice.

The European Commission is assuming that the debate may drag on for some time. The rules — set aside during the pandemic — are supposed to come into force again at the start of 2023.

The Commission is already preparing for the possibility that they could be reactivated without any reforms. They are investigating how the flexibility that has already been built into the debt laws could be used to ensure that a large swathe of eurozone countries don't automatically find themselves contravening them, representatives explained.

The Commission will present its recommendations for reforms, which will serve as a basis for the countries' negotiations, in December. By that point, the results of the German elections will be known, as well as possibly the coalition negotiations. And we might have a clearer idea of how intense the fight over Europe's debt rules could become — and whether the hopes of the southern countries could become reality.

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