Marshall Plan 2.0 in the time of corona?

Amid the coronavirus outbreak several European leaders have called launching an all-encompassing Marshall Plan-style public investment program to mitigate the economic impact. Turkey was a part of the Marshall Plan as it was automatically considered to be a part of Europe and the Western bloc back in 1951. How about now?

Though Brussels and the headquarters of the European Union institutions are pretty much deserted these days, rarely has there been a more historic time for Europe in the recent decades. 

Spanish Prime Minister Pedro Sánchez called for the EU to launch an all-encompassing Marshall Plan-style public investment program to mitigate the economic impact from the coronavirus pandemic on April 5. His proposal foresaw issuing pan-European bonds to aid member countries — but the Marshall Plan, the aid program initiated by the United States in 1948 to help countries in western Europe recover after World War II was much more ambitious than simply issuing bonds or giving financial aid. The Marshall Plan was a part of a post-apocalyptic collective vision to never go back to the past. Ironically, the roots of the EU itself belong to that very vision.

Sánchez is not alone: the European Commission President Ursula von der Leyen echoed his call by saying “We need a Marshall Plan for Europe.”

Both Sánchez and von der Leyen wrote articles to convey their messages, choosing German readers as their primary audience. The EU Commission President’s article appeared in the Welt am Sonntag, and Spanish Prime Minister’s in the Frankfurter Allgemeine Zeitung — albeit with reprints in many other sources.

“The many billions that have to be invested today to avert a greater catastrophe will bind the generations together,” wrote von der Leyen. First, Germany has to be convinced if a self-fashioned “Marshall Plan 2.0” for Europe is to be introduced.

France already put its offer on the table five days earlier than Sánchez and von der Leyen’s proposals were made public. France’s Finance Minister Bruno Le Maire declared (to the Financial Times, notably) that they supported a common EU fund to help Europe through the coronavirus crisis. Le Maire said that they are “thinking about a fund which would be limited in time with an indebtedness possibility for the long-term response to the crisis.” He also made his own “post-war” analogies by stating that, “It’s absolutely crucial to keep the door open for long-term, broad instruments that would allow us to face a ‘postwar’ economic situation.”  

France’s offer reiterates President Emmanuel Macron’s proposal for common “Eurobonds” (dubbed as “Coronabonds”), which was supported by eight other “Euro” states but rejected by others.  

The “Marshall” ball in Germany’s court

It was Germany's Chancellor Angela Merkel who rebuked “Marshall Plan” analogies three years ago, just before Germany hosted a G-20 meeting in July 2017. She was then referencing the Marshall Plan to point out that it was a “win-win strategy” in the end. Merkel said that it was important not to forget that George C. Marshall, the U.S. statesman after whom the Marshall Plan was named, “was convinced that good trade and a strong economy in Europe is good for American companies too. Protectionism, isolationism impedes innovation and in the long-run this is disadvantageous for everybody, especially for those who count on isolationism even if they use different terminology for this.”

But protectionism and isolationism are what, at least some, European states are looking for momentarily: thinking these two things are indeed “saving them” from the coronavirus. 

Denmark was already pondering returning to “normal” by ending the lockdown after Easter, and Austria officially announced it will be back to business after April 14. In fact, the Austrian Chancellor Sebastian Kurz talked about the “resurrection of the country” when he set the goal of becoming the first European country to lift lockdown measures. With polls showing that his job approval received a boost of roughly 30 points, Kurz is one of the many politicians who has witnessed how a crisis makes the public more eager to rally behind their leaders at the helm. Merkel had her support surge by around 28 percent, and all other European leaders by around 10 to 15 percent. 

Rallying behind leaders is not just a European development: Recent polls indicate that President Recep Tayyip Erdoğan, too, received a boost around 15 percent in both his job approval and popularity. In Turkey’s case, just as New York Governor Andrew Cuomo’s job approval surged, Istanbul and Ankara Mayors Ekrem İmamoğlu and Mansur Yavaş had their support up around 15 points as well. 

Surges in support do not discriminate among leaders, though, at least in the short run: even the U.S. President Donald Trump’s job approval ratings were higher than his average of around 40 percent since he assumed office in 2017.

Leaders may find the “Corona Crisis” boost to their popularity tantalizing — getting hooked on nationalism, and opting to preserve isolationism and protectionism. 

First of all, any sort of Marshall Plan of contemporary times must be far more comprehensive and visionary than the mere issuing of bonds or setting up of a fund. Beyond bonds, there must be genuine bonding if we are to talk about a new Marshall Plan. In other words, just as the first Marshall Plan was an instrument of an ambitious vision of international bonding and cooperation (for better or worse), any newer version should encompass such spirits and determination. 

By the way, Turkey was a part of the Marshall Plan as it was automatically considered to be a part of Europe and the Western bloc back in 1951. How about now?

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