PUBLIC POLICY ADVOCACY POST COVID-19

Public Policy Advocates are now more than ever, of crucial importance, not only because of their knowledge of national and international regulatory frameworks, their capacity to build bridges of public-private understanding or ability to communicate the right messages at the right time, but also  because of their capacity to contribute through their work and strategic vision to anticipate the needs of a country, a region, a community that is going to have to act with the same speed with which it fell into the health crisis if it does not want the breakdown of the social contract to become an irreparable fracture.

The COVID19 will force us to change the action protocols in numerous sectors, both public and private, starting with the health sector, logically, which will have to rethink how to organize its supplies, procurement, personnel management, budgetary expenditure or public-private coordination, and continuing with that of security, social and economic forecasting, e-Commerce or the much-vaunted telework, to mention some of the most obvious. Public policy advocacy has a golden opportunity to show that this is not about lobbying, that this is not about making the interests of one sector prevail, but that it is possible to work side by side, between the public and the private, in a transversal way between different sectors, so that everyone has a better place and a better fit in the social framework in which we relate to each other on a daily basis and that our societies are better prepared to face any type of future crisis, from any sphere – local, regional, national, European and even global – and in any sector.

Only if we manage to make society perceive our work as an added value to their lives – and not as a continuous struggle of particular interests – will we be able to make the profession, understood as an integral whole, become one of the most important social glue, whose work contributes to maintaining the social cohesion and balance needed to strengthen the social contract, and that institutional solidarity does not break down, favouring organisations that come out of this crisis..

European Commossion Post Covid-19

The EU will need to rebalance its priorities, but the green deal, the circular economy, a revision of FDI rules and a focus on big tech will remain prominent features of the EU’s efforts to regulate the post-COVID-19 world.

The economic challenges the EU faces are severe. The eurozone economy will contract by a record 7.7 percent this year because of the Covid-19 pandemic and inflation will almost disappear while public debt and budget deficits will balloon. Europe is experiencing an economic shock without precedent since the Great Depression. Both the depth of the recession and the strength of recovery will be uneven, conditioned by the speed at which lockdowns can be lifted, the importance of services like tourism in each economy and by each country’s financial resources. The Commission forecast that, as the economy contracts this year, consumer prices will almost stagnate. The inflation rate will slow to 0.2 percent in 2020, before accelerating to 1.1 percent next year, when the eurozone is to return to growth of 6.3 percent. Investment will plunge 13.3 percent this year. The effort to keep economies alive will boost budget deficits in the eurozone to an aggregate 8.5 percent of GDP this year from 0.6 percent last year, before the aggregate gap shrinks again to 3.5 percent in 2021. A surge in public debt, however, will take longer to undo, and the eurozone debt will jump to 102.7 percent of GDP this year from 86 percent last year, and receding only to 98.8 percent in 2021.

Italy, Greece, Spain and Portugal will be among the hardest hit by the economic effects of the pandemic, while Luxembourg, Malta and Austria are to weather the shock better. Greek GDP is to contract the most, by 9.7 percent, with Italy recording the second deepest recession of 9.5 percent and Spain 9.4 percent. The budget deficit of Italy, the EU country hardest hit by the coronavirus, will surge the most to 11.1 percent of GDP this year from 1.6 percent last year, but will fall back to 5.6 percent in 2021. Spain’s deficit will just exceed 10 percent this year, up from 2.8 percent in 2019 and France will be close behind with a budget gap of 9.9 percent this year. Italy’s public debt will also record the biggest increase this year to 158.9 percent of GDP from 134.8 percent in 2019. It is seen falling to 153.6 percent in 2021.

There are lessons that the Commission must learn from its immediate response to this crisis, if it is to bolster its credibility. The EU institutions must be better able to help Member States overcome shortages and other challenges in the health sector. It will also need to improve its existing crisis management mechanisms, which were not deployed as they might have been.

Looking further forward, the Commission’s plans for the next five years will doubtless be reshaped by the recovery from COVID-19. However, the regulatory framework it presented in the autumn remains the structure through which it will channel these efforts. With the COP26 global climate conference postponed, the immediate urgency for the EU to take a leadership role on green issues has subsided somewhat—and in this lockdown year, global emissions will be down substantially.

Yet the Commission will seek to build the European Union’s plans for a recovery around the various stages of the proposed Green Deal. This is likely to gain support from European citizens. And though the difficult decision on emission targets for 2030 may be delayed—both because of the limited bandwidth at EU Summits and in view of the postponement of the COP26 global conference—this politically sensitive decision will have to be made sooner or later.

The pandemic has once again highlighted the dependence of global supply chains on China. In Europe, we can expect to see a reaction in the form of heightened focus on recycling, reuse and recovery of materials, and the circular economy more generally.

On the digital scene, the Commission’s ambition had seemed, more or less explicitly, to establish the EU as a thought leader in the digital age. Commission Executive Vice President Vestager, and Internal Market Commissioner Breton, have stated clearly that the Commission’s tech regulatory plans remain unchanged. It remains to be seen whether the constructive role that “big tech” has played in the reopening of the world’s economies has any impact on regulators’ stance.

The European Commission has also encouraged Member States to be at greater pains to screen new foreign direct investments. Such funds might be attractive for companies that have suffered heavily from the crisis, but could cost Europe yet more of its technological and economic autonomy. Yet these proposals must also maintain a balance between resisting state- sponsored buyouts of key companies on the one hand, and enabling badly-needed investment in Europe’s future on the other.

There will be no quick or easy return to normalcy after these months of lockdown. This will hold true even in the most optimistic scenario, where the health crisis subsides fast, and a vaccine emerges later this year. For the EU, it will not be easy to swiftly re-establish the respect for single market rules, with the freedom of movement of goods, services, and persons—once it is safe to do so. Yet this integrated market is key to the EU’s economic success. The challenge will be to make the EU’s single market framework more resistant to future shocks.

To come out of the crisis unscarred, and play its proper role in the economic recovery, the EU’s usual enforcement of state aid rules will need to be re-established quickly. This will undoubtedly be politically difficult for Member States, notably in respect of the airline industry. State aid will be an essential tool in preventing harm and securing the recovery, but weakening the rulebook for industries with pre-existing problems risks throwing good money after bad.

Yet the EU’s first priority must be the Multiannual Financial Framework, the Union’s seven-year framework budget. Just as the crisis erupted, the Member States were haggling over the eventual shape and size of this budget. They have now agreed that the proposal on the table should be revised, with substantial sums set aside for the economic recovery. The EU will probably need a higher overall budget, but will also need to curb its ambitions in some areas. The “frugal” northern European countries trying to hold back spending will have to retreat somewhat.

This autumn will be decisive in many respects. Will a credible comeback be possible? Will a resurgence in the pandemic lead to further economic harm? And can Brexit issues—which remain fraught—be resolved, before a new, steep cliff edge approaches at the end of the year? These and many other challenges will test this new Commission’s resolve.

In July, Germany will once more assume the Presidency of the Council of the EU—an EU with regulatory ambitions that resonate with German priorities. It is after all not surprising that the policy priorities of Ursula von der Leyen—Chancellor Merkel’s one-time protégé and the first German Commission President in half a century—would chime with those of a government she left only months earlier. The EU will look to German leadership to right the ship. Angela Merkel will be called on to take centre stage—her task: to drive the recovery, and revive the EU.