OED x Advance Politics – Exploring Critical Action to Prevent a Terminal Crisis
These OED120 Emergency Dialogues took place in the “Advance Politics” framework, a OED collaboration with the Institute for Integrated Economic Research. They consisted of three calls, taking place on 9 April, 17 April, and 4 May 2020, that enabled 18 parliamentarians from 14 countries to explore the critical economic, financial, and social implications of the Covid-19 crisis, as well as looking at the decisive national and pan-European actions that may be required in response to the pandemic.
For the series, two global experts, Hannes Kunz and Nate Hagens from The Institute for Integrated Economic Research (IIER) joined the call to provide input on the leadership and action required to support society in tackling the Covid-19 crisis. Over the past decade, both experts have focused their work on simulating economies with a sophisticated modelling approach that they have since applied to analysing the Corona crisis and its larger economic effects.
To kick off the discussion, the experts identified three inter-related crises that are related to and go beyond the corona crisis:
- A public health crisis: managing the spread and severity of COVID 19.
- An economic crisis: restrictions are having severe economic consequences, with most businesses affected to the extent that it threatens their viability.
- A crisis of personal uncertainty: the growing uncertainty faced by tens of millions of Europeans puts enormous stress on existing (and new) vulnerable populations and threatens social cohesion and the stability of communities.
Both experts went on to give facts and figures on what consequences parliamentarians may see materialize if lockdowns continue. Thanks to their unique modelling system approach, they were able to directly calculate what impact curfew measures put in place to tackle Covid-19 would have for the EU economy. Their models suggested an annual drop of cross-EU GDP for 2020 by about 10-12% if curfews continued until the end of June.
Aside from looking at the direct and indirect economic consequences of the Corona crisis, MPs were engaged to discuss what actions are required for best tackling these consequences. This conversation revolved around four priorities: (1) business support with no division between essential and non-essential business, (2) income support to backstop social distancing measures, (3) ECB liquidity support – already in place, and finally, (4) community/emotional support.
The participants responded to these suggestions and engaged in a conversation on the extent to which each priority was or was not being implemented in their respective countries.
Collectively, the parliamentarians represented 14 different countries such as Austria, Bulgaria, Croatia, Denmark, Germany, Hungary, Italy, France, Latvia, Lithuania, Luxembourg, the Netherlands, Portugal, and Romania. They were able to share how these priorities could also be taken on board at a national level and what challenges they saw in their national context.
You can find the preparatory briefing here.
Dig a little deeper with a summary of Insights and Risks, to be found here.
Please note, the content of the briefings and the opinions of our guest experts do not reflect the views of the Open European Dialogue or any affiliated partners, but only those of the authors themselves.
Open European Dialogue x Advance Politics
These dialogues are part of “Advance Politics”, a collaboration between the Open European Dialogue and The Institute for Integrated Economic Research. The format proposed allows policymakers to challenge assumptions and dig deeper into the big questions of our times, while engaging in out-of-the box thinking with a select group of peers from across Europe.
The Institute for Integrated Economic Research is a non-profit organization based in the Netherlands and the U.S. It focuses on identifying empirically validated macroeconomic system descriptions and models. Key aspects of the work of IIER include the development of a thorough understanding of our (human) eco(nomic) system, integrating traditional economics, resource use, financial systems and human behaviour, and providing and promoting inputs for society, academia and policymaking with the aim of broadening knowledge and effort towards understanding and mitigating future risks. For more information about IIER, please click here.