European leaders need to pull together amid economic, political crisis

EUROPE has been jolted yet again in recent weeks, becoming - for the second time - the epicentre of the global pandemic. Yet while much attention is focused on the renewed healthcare emergency, the new crisis could also seriously impact the bloc's economic and political prospects in 2021.

For while the new phase of the healthcare emergency is centre-stage in European debate, the impact on political and economic stability may be critical too. Not only is the continent's economy spluttering but the pandemic has also jolted political and social solidarity, with support for Brussels in some nations slipping. Since the pandemic began, there have been significant divisions on display between the higher-debt south - including Italy and Spain - hit hard by the pandemic and the wealthier, thrifty north of Europe - including the Netherlands, Austria, Sweden and Finland. The latter group of more fiscally conservative nations have been sceptical about providing significant economic support for the south.

Ultimately the scale of the economic and political trauma that hit the continent jolted the 27 European presidents and prime ministers to secure a breakthrough agreement over the summer on an roughly one trillion euro (S$1.6 trillion) long-term budget, and 750 billion euro coronavirus recovery fund. While this represented a major political milestone in the post-war history of Europe, this is now threatened as Poland and Hungary may block next week's final approval of the European Union's (EU) budget over a clause that ties funding with adherence to the rule of law in the bloc. Both Budapest and Warsaw have been criticised for violating democratic standards enshrined in the EU's founding treaty. The EU is investigating both for undermining the independence of courts, media and non-governmental organisations. The clause threatens to cost them billions of euros in funding.