The COVID-19 Crisis: The EU Recovery Fund and its Implications for European Integration – a Paradigm Shift

The EU’s latest decision on adopting the recovery fund was revolutionary, both quantitatively and qualitatively. It would also dominate the EU’s economic governance of the decade of the 2020s. This article is an attempt to evaluate whether the EU’s recovery fund was the right policy answers to the post-COVID-19 EU economy or not, and explore its meanings and implications for European integration. This article argues that COVID-19 hit the EU at a time of health and social precariousness, and proved the conventional economic governance unsustainable. Necessities for game-changing in the post-COVID-19 economic governance were justified on both practical and moral grounds. Judging with these yardsticks, the EU’s recovery fund was evaluated as a welcomed paradigm shift in both the ideology and methodology of its economic governance. Beyond a contemporary economic rescue package, the recovery fund implied laying the cornerstone of completing a fiscal union in the Eurozone, for enhancing institutional functions of the European Commission, and for rediscovering the nature of European integration as the rescuer of national states, through the newly-forming consensus between Eurosceptic nationalists and pro-EU integrationists. This article reminds us that the COVID-19 crisis was a crucial opportunity for EU leadership to legitimize the EU’s existence in the post-Brexit era. If well implemented, the recovery fund could usher in a new chapter of European integration. If it fails, European integration would be at risk of further fragmentation and entrench into an ever-stronger anti-EU populism.