What began as a purely economic union has eventually burgeoned into a strong political-economic organisation at the dawn of the 21st century, spanning its influence across a spectrum of policy areas, from climate, security, regulation, to health, environment, etc. The European Union (EU), from trailing behind in adapting to the global digitalisation drive and disruptive technologies, to crawling forward in immunising its citizens against Covid-19, has brought to the fore the vulnerability of stringent regulatory policies, a lack of competitive drive amongst the member nations, and a highly stagnated innovative landscape.
The latest developments arising from the supply and production of Covid-19 vaccines and the red tape that hampered the vaccination drive are projected to worsen the economic recovery, apart from the political infights. This puts a question mark on the very purpose of the vision of the single market. The EU has thus far vaccinated only 2.70% people, in contrast to Israel and the UK, that have administered vaccines to around 53.91% and 13.05%, respectively (29 January 2021). In its typical spirit and customary practice to ensure fair play and a firm base to its member countries, the EU rolled out its strategic plan for the collective procurement of vaccines and for sharing them equally among members. Though the ultimate objective of the aforedescribed collectivism is to make sure that countries do not attempt to outbid each other, it has led to an evidently demonstrable lack of competitive drive among its member nations.
While political leaders across the world are in an unprecedented wild spree to source and secure vaccines and inoculate their citizens in phases to ensure the quick containment of the rampaging virus and a rapid revival of normalcy, the political leaders of the EU member nations, administrators at the apex of the European Commission, and drug manufacturing companies are busy apportioning the blame to the sluggish roll out of vaccines.
The rapid rollout of vaccines is highly crucial for the EU to protect the lives and livelihoods of its citizenry, apart from reducing the effects of the economic disruption which has resulted from continuous lockdowns. The IMF, in its latest report released last week, has narrowed down its growth predictions for the Euro zone by 1% to around 4.2% at the end of 2021 and has anticipated that the European economies may take until the end of 2022 to get back to the pre-Covid growth levels in light of the growing infection rates and crawling vaccination rates. The IMF prediction has exacerbated the tensions and criticism mounting around the administration and authorities for their handling of the vaccine procurement, the delay in kicking-off the vaccination drive, the sluggishness in strategizing the roll-out and the crisis created by the shortage. That the vaccination roll-out is not the first instance where the EU and its member nations have demonstrated a strange synchronous reluctance in their spirit to endure competition, is not to be brushed aside. If one delves deeply into the strategies adopted by the EU in tackling competition, it has a standard practice and a dubious logic of enforcing stringent rules against foreign firms as an anti-competitive strategy.
The same was the case with the Digital Services Act passed in December 2020, that put forth rigorous regulatory laws and liabilities to curb the monopolising attempts of the big tech firms who act as gatekeepers, as a means of pampering small businesses and domestic players, while also protecting them from the competition posed by foreign firms. Such regulatory norms are based on the prejudice that controlling the dominance of large foreign firms while protecting the domestic firms within the EU from competition would buttress the innovativeness and competitiveness of the latter at the global landscape. History is a strong shred of evidence for the fact that the leading American tech firms grew big only by delivering a compelling value proposition as a means of evolving and establishing themselves inside highly competitive global markets.
On the other hand, the ambitious spirit and ethos prevailing in the apex institutions of countries like India, Israel and Japan in leveraging the benefits of proactive collaboration and in entrenching a stronghold in an enormously competitive world have enabled them to handle Covid-19 effectively. The fact that they are surrounded by hostile neighbors has only fueled the fire. If there is one lesson that can be learnt from the ongoing vaccination drive rolled out by the EU, it would be that collectivism, standardisation and strict regulation as strategies to curb competition in a highly competitive world and to ensure equality and fairness in wealth distribution will only demotivate, disincentivise and depress the economic and political ambitions of the stakeholders involved in the long run.
Proactive collaborations, targeted technological investments and futuristic policies are but the need of the hour for the EU to revive itself from the lockdowns and restrictions and re-establish its standing, more so to achieve its very purpose.
Sindhu Bharathi is a senior research analyst with Infinite Sum Modelling. Dr Badri Narayanan is the founding director of Infinite Sum Modelling, Seattle and a senior economist with University of Washington Seattle. He is also a non-residential senior fellow with ECIPE Brussels and CSEP New Delhi.
If there is one lesson that can be learnt from the omgoing vaccination drive rolled out by the EU, it would be that collectivism, standardisation and strict regulation as strategies to curb competition in a highly competitive world and to ensure equality and fairness in wealth distribution will only demotivate, disincentivise and depress the economic and political ambitions of the stakeholders involved in the long run.