COVID-19: What Can We Expect From the G20 and the EU?

Article by Sébastien Treyer, Executive Director of IDDRI, and Nicolas Berghmans, Research Fellow on Energy and Climate Policies.

In the midst of this unprecedented crisis, Europe is in a state of shock. Italy, Spain and France, in particular, are experiencing extremely deep sadness and a sense of powerlessness to help the most vulnerable, especially the elderly in our societies, despite health and social protection systems that could generally be considered better endowed and better organised than in other parts of the world. This deep moral distress goes beyond the question of how effectively different governments have managed the crisis, and beyond questioning the policies that have undermined these social systems, although both questions will remain legitimate when it comes to learning the lessons of the crisis. The extreme vulnerability of the most fragile is bursting into our lives and into the public debate in industrialised countries. At a time when the international community is seeking coordination, what responses can we expect from the G20 and the European Union?

Do we need a new social contract?

In Asia, the countries that seem to have coped best with the crisis are those that have already experienced this moral imperative in depth in previous health crises. But in tomorrow's world, where such crises are likely to be recurrent, the fact that some of the countries with supposedly the greatest amount of resources do not have foolproof solutions for the most vulnerable raises questions about the very foundations of stability and resilience in our societies.

Moreover, while Europe is in this state of shock, it cannot turn a blind eye to the health, human, social and economic consequences of the crisis, which could be even more dramatic and unequal in other continents, particularly in Africa. In view of these existential vulnerabilities for both individuals and societies, it is essential to restore a profound sense of the social contract that binds us together as individuals within each country, in regional institutions such as the European Union, and on a global level.

The most spontaneous response for a think tank working on multilateralism and sustainable development is to say that we already have- formally- such a social contract: it is the set of agreements reached in 2015 within the framework of the UN, namely the Paris Climate Agreement and the national commitments listed therein; the 2030 Agenda for Sustainable Development and its 17 Sustainable Development Goals, to which all the countries of the planet have subscribed and which they have promised to take as a guide to their development path; and the Addis Ababa Agenda on financing sustainable development, which defines the main principles of financial solidarity between the countries of the planet.

Formally and conceptually, this is indeed the case. These 2015 commitments provide a common direction, a common "political project", and partnership and cooperation modalities, based on the specific needs of each country. In addition to recording the commitment made by each country to guarantee access to essential services, including health, education, water, energy and food, the SDGs also set out a desired state of societies, one that is less unequal, and that has an ideal relationship with the environment. Far from conflicting with one another, these interlinked objectives especially emphasise that it is not sustainable to provide access to essential services, which we all concretely experience as being urgently needed, without addressing the root causes of vulnerability, both in terms of social inequalities and the degradation of climate and biodiversity. It is for this reason that they can be summed up as both an imperative for the profound transformation of our societies and economies, and as a political project aimed at "leaving no one behind".

Providing evidence of the relevance of SDGs in the fight against inequalities and vulnerabilities

The 2015 agreements are highly relevant for organising our partnerships and reminding us of our commitments to solidarity between countries during and after the crisis, and serve as a guide for emerging from the crisis by tackling the structural causes of our vulnerabilities.

Politically, however, the work of conviction within societies is not guaranteed. It seems imperative today not to declare the relevance and ardent necessity of a profound transformation towards the achievement of the SDGs, but rather to demonstrate it on the basis of the very lively political concerns of our societies, which are going through an absolutely unprecedented crisis, and at a time when urgency rightly prevails. The political debates in different countries are dominated by awareness of the inequality in terms of vulnerability within our societies (the oldest and most in need of care, the poorest in many countries, the homeless, refugees, etc.) and between societies (in the countries of Southern Europe more specifically, where health systems were greatly weakened by the previous crisis and the austerity policies that followed), and call for rebuilding the foundations of our resilience, particularly in terms of supply chains.

The fact that SDGs seek collective solutions to the root causes of these inequalities of vulnerability makes them all the more relevant today. By demonstrating this in concrete terms, we can avoid making climate ambition and SDGs appear as a conditionality for access to recovery plans, and they can be supported politically as a proposal to prepare for the future, meeting the needs of societies.

In particular, among these concrete manifestations of proof, many analyses converge to underline the importance of the links between biodiversity degradation and the development of pandemics, but what exactly do we need to infer about what needs to change upstream in our development models to reduce this health risk and our exposure to risk? Not aggravating it by the climate crisis is a first element of response, but a certain number of more specific operational consequences (on our agricultural and food systems, spatial planning, for example) still need to be better identified and inventoried.

What international responses are needed?

At the global level, international cooperation must urgently seek to coordinate the health and economic response to this crisis, taking particular account of the situation of the most vulnerable countries whose access to financing is limited. Otherwise, the major macroeconomic imbalances created by the consequences of this crisis could durably hamper their development in the years to come. This subject must be put on the table at the G20 Extraordinary Summit on Thursday. But this forum, created as a rapid coordination force in the face of financial crises, seems today to be lacking in leadership, just like the G7.

For its part, China already appears to be in a de facto leading position: because it has the role of a watchdog, capable of already envisaging the plan for emerging from a crisis that it faced earlier than the others, which is why its decisions will be scrutinised very carefully; but also because it is responding to the requests for sanitary equipment from the European countries affected, such as Italy and Spain, more quickly than the other Member States, and is already engaged with its Belt and Road Initiative in a form of intervention in all the regions of the world.

The European Union must also play its part, particularly in relation to Africa. Even in times of internal crisis, the European Union must have a clear proposal to make to the African Union and its Member States. Europe and Africa were looking for an agenda for their "partnership of equals", and crisis and post-crisis management is a key moment to test the capacity of these two blocs to build a partnership that is as close as possible to their needs. Published by the European Commission before the COVID-19 crisis, the European Union's proposed strategy for Africa deserves to be analysed (see IDDRI's note on this topic), and crisis management itself is a fundamental test of this partnership: the Green Deal takes on a new dimension in this crisis context, both as a project for structural transformation of the Member States and the EU, and as a way out of the crisis for both Europe and Africa.

Solidarity within the European Union is itself under severe strain. After worrying demonstrations of an inability to coordinate and support each other, member states are meeting at the European Council to decide on coordinated action. In terms of economic support, it is still difficult to diagnose the extent of the crisis and the nature of the necessary responses, but there is an urgent need for coordination. If an economic recovery plan proves necessary, it will have to draw lessons from the 2008 recovery plan and ensure that the root causes of the crisis are taken into account. Integrating a greater social dimension could help to reduce the vulnerability of individuals and societies. More broadly, the resilience of our societies and our economic models is becoming a very concrete issue, and one that is destined to become deeply embedded in businesses' economic strategies.

A new economic organisation

In terms of investment, in addition to the shortcomings revealed by the current health crisis, there is much to be gained by building on the priorities of the ecological transition to invent the post-crisis world. Energy retrofitting of buildings, renewable energies, and GHG emission reductions in transport contribute to strengthening the resilience of our societies to climate risks, but also to improving the health of citizens. There are many possible convergences here. However, starting from the need to reduce the vulnerabilities revealed by this crisis, we are also seeing the emergence in the material organisation of economic sectors and markets of a profound questioning of the priorities given to reducing costs "at all costs", a priority generally motivated on the register of competitiveness in a globalisation operating in a relatively stable regime; it is now a question of giving much greater priority to what ensures our collective resilience, in a world where instability linked to crises must absolutely be integrated, whether it is of financial (as in 2008), health or environmental origin.

This resilience can emerge in the organisation of sectors, i.e. in logistics and supply chains and strategies (sourcing): diversifying supply chains and sourcing rather than seeking only specialisation, massification and economies of scale; maintaining the possibility of sourcing close to the customer in the event of a break in remote chains; ensuring forms of redundancy and duplication in logistics chains (doubling of storage infrastructures, for example). These are all potential additional costs if the need for resilience is not taken into account, but in many cases, they could lead to the bifurcation of economic strategies in different sectors, which are highly compatible with the transformations needed to protect the climate and biodiversity.

This article was originally published on the IDDRI website.

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