The Single European Market in a Turbulent Age. Implications of the EU’s Crisis Response for the Core of Integration

The EU’s response to the COVID-19 crisis had immediate repercussions for the Single European Market (SEM): the free movement of people was suspended and the external Schengen borders closed; the free movement of goods was undermined both by border closures and the economic lockdown; competition and state aid procedures were relaxed to accommodate an unprecedented level of public spending; similarly, fiscal and banking supervision rules were suspended; and a temporarily increased EU budget now serves as the main tool to finance the recovery. Informed by an analysis of these SEM effects, we argue that the Corona crisis has hit the very core of European integration and is likely to have massive longer-term consequences in at least three respects. First, the crisis will redefine the contours of the EU as a regulatory state. Not only will supranational rules in numerous areas of the SEM be challenged, but the very nature of the EU as a polity that largely abstains from distributive and redistributive policies will be affected. Second, the market creation and integration logic underpinning the SEM project will cease to be the driving force of further integration for the next decade or so as recovery policies and state intervention will be the new game in town. Third, the core identity of the SEM and the integration project around the so-called four freedoms will have to be revitalised if not reinvented in order to offset the long-lasting political damage caused in the course of a few weeks and months. Our analysis of crisis responses and their likely long-term effects will address the role of key institutional players such as the European Commission, the European Council and the Council, the European Parliament and the ECB. Theoretically, it will revisit contributions on European integration and crisis drawn from research conducted over the past decade.