The positions of the European and national employers’ associations on the pandemic recovery fund from the viewpoint of the theory of uneven development

Drawing on the Marxist international Political Economy, Eurozone is characterized by uneven development between an advanced-industrial core led by Germany and the Southern economies that are oriented toward low added value economic activities. My presentation focuses on how unevenness between the European capitalist classes determines the positions of the European and national employers’ associations on the EU management of the Covid-19 economic crisis and how are these positions correlated with their respective positions on the Eurozone crisis. In the Eurozone crisis we find a concurrence between the positions of the Italian, French and German employers’ associations (BDA and BDI) and the positions of BusinessEurope. The bottom-line was that for European employers the saving of the Euro was a top priority and that is why they suggested the granting of loans to the indebted countries but only under strict conditionalities. The Italian and French associations did not particularly insist on the idea of debt mutualisation, thus the German negative stance toward them prevailed. The economic repercussions of the Covid-19 lockdown are hitting the Eurozone member states severely yet asymmetrically. The economically weaker European states do not have the fiscal resources for funding a quick economic recovery and that is why the Italian CONFINDUSTRIA suggested already in March the issuing of Coronabonds and a European recovery fund. This suggestion faced at first the negative stance of the German employers’ associations and BusinessEurope. However, the magnitude of the crisis, the rejection of the Italian and Spanish governments to borrow money from the ESM and the rise of Euroskepticism in Italy, paved the way for a change of position of BusinessEurope and BDI (but not BDA). Both BusinessEurope in its April 30th policy paper and BDI in a May 12th joint declaration with the French MEDEF and CONFINDUSTRIA asked the EU to provide in the new Recovery Fund “a good balance of loans and grants”. This consensus among the employers was reflected a week later in the Merkel and Macron proposed EUR 500 billion EU recovery fund that - if approved by the EU-27 - will grant money to the most affected member states. It may seem that the EU is now experiencing a “Hamiltonian moment” and that this constitutes a rupture with the way the Eurozone crisis was managed. However, a closer examination shows that there is actually more continuity than it seems at first sight between now and then. The compromise of the German employers’ associations to give grants to the states in need is actually in the same spirit as their proposals in 2010 to lift the no bail-out clause to avoid the bankruptcy of Greece. They are making enough concessions to prevent a dissolution of the Euro, but not what is needed to address uneven development. As long as advanced European capital is not willing to promote a deeper but costly economic integration with its technologically less-advanced European counterparts domiciling in the Southern countries, uneven development will continue to undermine European integration.