Europe: From coal and steel to carbon-free and digital: the EU reaches turning point

Years from now, 2021 may be seen as the moment the European Union took a leap forward from its post-World War Two birth as a coal and steel bloc to a modern green and digital economy.

It could also be one of the biggest missed opportunities in the 70-year history of EU integration, which has always tended to lurch forward in the aftermath of shocks ranging from the end of the Cold War to the current coronavirus pandemic.

“If now done thoroughly, it could be a real game-changer,” said Carsten Brzeski, global head of macro research for ING bank, as European capitals this week finalise plans to spend an unprecedented 750 billion euros of jointly raised EU borrowing.

While Friday’s deadline is “soft” – there are no penalties if countries are a few weeks late – the urgency is all too real.

And while it is not comparable to the multi-trillion-dollar U.S. stimulus plan being mooted – Europe’s national governments must support their own economies and together have already spent over three trillion euros doing so – the stakes are high.

In the short term, the EU wants to create a durable investment and reform impulse for economies ravaged by the coronavirus and which are seen returning to their pre-pandemic size several months later than those in Asia, the United States and Britain.

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