Coronavirus, Europe, The Global Cable A Warning From Italy with Erik Jones

In this week's episode of our podcast, The Global Cable, we speak to Erik Jones, Director of European and Eurasian Studies at Johns Hopkins University's campus in Bologna, Italy.

Professor Jones is on the ground in one of the countries hit hardest by the coronavirus pandemic. He talks to us about what it's like in Italy during this crisis, what the United States and other nations should learn from the Italian experience, and what the economic ramifications of COVID-19 will be across Europe and around the world. 

Professor Jones teaches on topics in international and comparative political economy with a particular focus on Europe and the transatlantic relationship. He is a frequent commentator on European politics and political economy whose contributions have been published in, among others, Financial Times, New York Times, USA Today, and newspapers and magazines across Europe.

Listen on Apple Podcasts | Libsyn | Spotify | Stitcher

Music & Produced by Tre Hester.

Franklin Few

On every episode of The Global Cable, we ask our guests the 'Franklin Few' - an updated version of a questionnaire used by Penn founder Benjamin Franklin. Here are Erik Jones' answers.

Someone you'd like to meet: Charles de Gaulle, former President of France.

A book, movie, or anything else you'd recommend to listeners: Faithful and Virtuous Night by Louise Glück.

Someone who's recently done something that deserves praise or attention: Emergency medicine staff around the world.

Something Penn and Penn students can do to be of service to the world: Learn from the coronavirus pandemic, so we're prepared for the next global crisis.

Transcript

Erik Jones [00:00:08] Well, what we're seeing are sights that are not so different from what you probably see in the United States right now, which is just a lot of empty streets, a lot of closed businesses, and not a lot going on. But the difference for us is that we've been seeing this for three weeks. The feeling is that this is absolutely vital, because when you look at what's going on, particularly if you go north of where I am—I'm in Bologna which is in the middle of Emelia, Romania. But if you go north, the death toll in Italy has just been staggering. And it's not just old people and it's not just the people that you would expect to see dying from illness. It's the whole cross-section of society. So when you look at it like that, you realize immediately this is something that we have to take seriously. And taking it seriously means staying at home.

John Gans [00:01:04] Welcome to the Global Cable, the podcast from Perry World House at the University of Pennsylvania where we discuss the world's most important issues with people who work on them. I'm John Gans, the Director of Communications and Research here at Perry World House.

 [00:01:17] Our guest today is Erik Jones, Director of European and Eurasian Studies and Professor of European Studies and International Political Economy at Johns Hopkins University where he works at the school's European campus in Bologna, Italy. So he's on the ground in Italy, one of the hardest hit countries in the coronavirus pandemic, and in Bologna in Emilia-Romagna, one of Italy's hardest hit regions. Ordinarily, he's a frequent commentator on European politics and economics whose contributions have been published in the Financial Times, New York Times, USA Today, and magazines across Europe. Today, he talks to us about what it's like in Italy during this crisis, what the United States and others should learn from the Italian experience, and what the economic ramifications are of coronavirus in Italy, across Europe, and around the world. Erik Jones, welcome to the Global Cable.

[00:02:14] Erik Jones, welcome to the Global Cable. Thank you so much for joining us. Now you are on the ground, Erik, in Italy, one of the hardest hit countries in the coronavirus pandemic. And you live and work in Bologna in Emilia-Romagna, which is one of Italy's hardest hit regions. What are you seeing and how are you feeling?

Erik Jones [00:02:34] Well, what we're seeing are sights that are not so different from what you probably see in the United States right now, which is just a lot of empty streets, a lot of closed businesses, and not a lot going on.

[00:02:49] But the difference for us is that we've been seeing this for three weeks. The feeling is that this is absolutely vital, because when you look at what's going on, particularly if you go north of where I am—I'm in Bologna, which is in the middle of Emelia-Romagna. But if you go north, the death toll in Italy has just been staggering. And it's not just old people and it's not just the people that you would expect to see dying from illness. It's the whole cross-section of society. So when you look at it like that, you realize immediately this is something that we have to take seriously. And taking it seriously means staying at home and emptying the streets. But how long we're gonna be able to do that? That's another question.

John Gans [00:03:36] You've written a little bit about the timeline of Italy's getting its first cases, dealing with its first tests, and sort of spiraling up. Lombardy in northern Italy has quickly taken on as one of the  epicenters of this pandemic. How did that feel as somebody who is close but not exactly in it? And how did you feel like Italy responded to this quick trajectory? Has it sort of spiraled upwards in a hurry?

Erik Jones [00:04:09] Well, I think the key thing to think about is that this is a learning process for everyone. And as a learning process, the most frustrating part for me was my inability fundamentally to recognize the seriousness of what was happening in real time. I was just always, always behind.

[00:04:30] And so we had the first cases that were reported in Italy at the end of January. They were tourists who had come from abroad. The first community contagion took place at the end of February. And that was up in those parts of Lombardy that you mentioned. And my son goes to college up there. We even planned a weekend trip up to Milan, that happened to be taking place on the day that they were just about to shut down everything. So rather than us going up to Milan, we moved our son down home and he's been home with us ever since. So I guess the answer to your question is I'm still trying to wrap my head around just how transformative this experience really is. And I think most of the Italian population is trying to wrap its head around the same problem. And as we learn, the world is going to change.

John Gans [00:05:26] How long have you lived in Italy and how do you think the Italians have fared with the pandemic and the lockdown itself?

Erik Jones [00:05:36] Well, I first came to Italy in 1988 and I have lived in Italy continuously since 2002. So that's a reasonably long exposure to the country. And Italians are not great at authority. So when the lockdown took place, I was very surprised at how well the people took it. There were obviously differences, you know, when it was just part of the country that was under lockdown. Quite rationally, people who didn't want to be under lockdown left to go to some other part of the country which meant basically moving from north to south. That's why they extended the lockdown to include the whole of the country because those population movements were so unbelievably dangerous in transmitting the disease. But once people realized what was at stake and the scale of the problem had to be faced, people have tended to fall in line and do what the government tells them to do. The popularity rating of the government has correspondingly increased dramatically. It's now over 70 percent approval for the prime minister, which is pretty dramatic given that the prime minister's approval rating had been down in the 30s beforehand.

John Gans [00:06:50] And, generally speaking, have Italians forgiven the government for that learning lag? In the sense of obviously there's still hundreds of deaths per day in Italy and it seems as though the Italians are being relatively forgiving of the government as a response to this unprecedented in modern times pandemic. Is that what we are seeing that the people are more forgiving of government during these times than you would maybe have guessed? Or does that track with how you would have thought it would've gone?

Erik Jones [00:07:23] Obviously, there've been some tensions, particularly between the different levels of government. Some of the regional presidents wanted government at the national level to crack down much more firmly, much more quickly. And I think those tensions continue to fester. But at the popular level, this government has been very good at bringing the people along with it and helping them in very reassuring tones to understand the nature of the problem. So I don't think that there's a widespread popular perception that the government has mishandled the crisis. On the contrary, I think there's a widespread popular perception that the government is doing the best it can. The same is not true with the popular perception about the rest of the European Union, and that might be something we want to explore in more detail later.

John Gans [00:08:16] So, and if I can follow up, you mentioned the lag in terms of learning. What should the world, the broader European community, and the United States where you grew up, as I'm sure people are guessing from your accent—what should we all learn from the Italian experience so far?

Erik Jones [00:08:36] So Italy only had the the Chinese case to follow. And I think that Italians have a hard time wrapping their brains around the possibility even of imposing the kind of lockdown that we saw take place in China, in Wuhan, and in the surrounding province.

[00:08:59] I don't think that the rest of the world can look at Italy and say this is not possible. And I don't think that the rest of the world should look at Italy and say this is an overreaction. When you look at the statistics, you see that the Italians are really struggling to get ahead of this problem because the geometric progression of spread and in serious illness and death is unstoppable and it happens with almost a two week lag. So I think what the rest of the world should learn from this is act early, act decisively, and don't expect to see significant results for at least two weeks after you start. And if they learn that lesson and move as decisively as one might imagine Italy would have if Italy had had the experience of other countries to look at apart from just the Chinese experience. I think in that context, I think that there's a possibility for other countries like the United States to get a handle on this. Having said that, the United States has got such a piecemeal approach. It looks a lot more like Italy in the early phases than it does like Italy today. And that early phase Italy is the explanation for why the death toll is so staggeringly high and the hospital system is under such strain.

John Gans [00:10:16] So if I can tease that out a little bit. You grew up in the United States and grew up in Texas, which is a country all its own. Do you think that the United States is accustomed to learning lessons from other countries? And, you know, it's exceptionalism occasionally gets in its way. How do you think the United States is at adapting lessons from abroad, whether they're from China, Italy, or anywhere else?

Erik Jones [00:10:44] Well, to be fair, I don't think any country is good at learning lessons from other countries. I think most people tend to be very nationalistic in terms of conventional wisdom. I don't remember growing up that we ever referred to other parts of the world as the example that we thought we should follow, either when I was living in Texas or when I was living in New Jersey or when I was living in Washington.

[00:11:07] So I'm not surprised that that's not happening, but it is an opportunity missed. And I think that looking at the experience of other countries and particularly looking at the experience of those parts of Europe that have been responding at the leading edge of this crisis is a real chance for Americans to avoid making what turned out to be very damaging, very fatal mistakes.

John Gans [00:11:31] That's fascinating. So like you said, you spent a little time and, more than a little time, a long time, studying and writing about the evolution of the European community and the eurozone economy. Do you think the coronavirus pandemic will lessen or intensify some of the pressures we've seen internally on the union part of the European Union in terms of keeping people together? Coming so soon after Brexit and some of the other challenges to the union, do you think this pandemic will bring the continent closer together or is it going to exacerbate those tensions?

Erik Jones [00:12:12] I think without a doubt, this crisis is exacerbating the tensions in Europe. Which is not to say that Europe can't overcome those tensions and respond in a in a much more unified fashion or that there are no true Europeans left. But if you look at the nature of this crisis, this crisis exacerbates tensions between local communities, let alone between nations because of the nature of it. The virus doesn't spread like a thin layer of mist across the whole of the country. The virus hits discrete communities intensely. And the instinct to isolate those communities and to let them deal with it rather than treating it as a general problem is immense. And we're seeing that across regions in Italy but we're also seeing that across countries in Europe.

[00:13:04] And that instinct is what needs to be overcome if a centralized political system, or even a decentralized but coordinated political system, is going to survive this. And there's a very real prospect that decentralized coordination is not going to survive this. And I don't mean just in Europe. Look at the G20 today and ask yourself whether the G20 is really going to survive the coronavirus crisis. And I'm doubtful that it is.

John Gans [00:13:37] How has Europe—the rest of Europe—reacted to Italy's struggles and how have Italians perceived wider European response to Italy's struggles?

Erik Jones [00:13:52] Early on when it was first revealed that Italy was suffering from this virus, the instinct of Italy's near neighbors was to close the borders. And when it was revealed that Italy had the shortage of medical supplies, the instinct of Europe's European partners was to safeguard those medical supplies that were produced within their own countries and to say we're not going to send these to Italy because we'll need them for ourselves at some future point. Now, the borders do remain closed, but at least the medical supplies are flowing freely across the European economic area. And that, I think, is an important achievement.

[00:14:33] There are other issues at stake that may be a little bit more complicated—too complicated to get into in a podcast—that have to do with the way the European Central Bank is responding to the crisis and the way the fiscal piece, how government spending is going to be allowed to respond to the crisis. And there I think that tensions are even more acute and fundamental and could jeopardize the continuation of the European project.

John Gans [00:15:00] If you could explain just that, because I think that's a really interesting point. Because to be a member of the eurozone, you have some limits on what you can spend, correct? I think that's in terms of a percentage of your economy, is that correct?

Erik Jones [00:15:13] There are limits on how much of a deficit you can run. So in other words, the gap between expenditure and revenue. But those limits were suspended last Monday formally. So now, so long as this crisis goes on, you can spend as much as you need to spend and run up debts accordingly. The real issue is who actually is going to pay for those debts? And is it as easy for all parts of Europe to raise debt? Because if it isn't, then those parts of Europe that are most hit by the crisis may also find themselves being the same parts of Europe that have the hardest time getting access to money, which is like adding insult to injury. And there you would hope that other parts of Europe would step in to facilitate access to credit so that these governments can respond accordingly. And that's where the debate is at the moment. How they would structure the way governments borrow and how much solidarity will be involved in how the debt is managed after the crisis passes. Because we all can see—I mentioned at the start of this conversation the empty streets and the shuttered businesses—that the economic crisis is immense. And if you add a major period of austerity on top of that, as soon as the crisis is passed, then you'll be sentencing some parts of Europe to generations of slow economic activity. That's just not a viable proposition.

John Gans [00:16:52] So what do you think at the end of the day? We talked a little bit about exacerbating the tensions in terms of the European experiment, but what is the end game, do you think, on the impact of coronavirus on the eurozone economy? And then if you could break that out. Some are writing about how this will have dramatic implications for the future of the U.S. centered international economic order. What do you think the pandemic in Europe will do to the eurozone economy? And then if you could talk a little bit about broader, the international economy.

Erik Jones [00:17:34] So what I want to do, John, is flip that and do the international piece first. Because remember, this whole thing started in China, which plays a critical role in the international economy and what we call the value chain. So if you imagine there are little bits and pieces that get made in China and then those little bits and pieces that get made in China get shipped to other countries where they get out into other bits and pieces. And as the assembly takes place and then moves along the production chain, then you end up with the finished product. And the finished product doesn't actually come from any one country. It comes from lots of different countries. So, for example, if you were to look at the supply chain that goes into your standard automotive, you would find that a car is built up of thousands of pieces that come from tens, if not hundreds, of different countries.

Erik Jones [00:18:26] You get the point that I'm trying to make. When this crisis hit China, it took out key parts of that supply chain. And that meant that everybody else who was producing bits and pieces that needed to be added in were accumulating the stuff that they were producing. Now, it's swept into a different part of the supply chain. Northern Italy, where the crisis is most intense, is one of Europe's most productive manufacturing regions. And so now it's shut down. And that means factories in other parts of the world are accumulating stuff that they don't need because they need to add it to stuff that they're not receiving. And as you imagine this going on and on and on over a period of time, you can imagine the whole supply chain is going to be damaged. And at that point, you have to ask yourself, how are we going to fix this? Because we got too much of all the wrong stuff and all the wrong places. And none of it is adding up into a finished product that anybody wants to buy. And by the way, all those services that are not traded—the restaurants and bars and hairdressers and the rest—those guys are gonna go unemployed. Because at the end of the day, they have debts they have to pay. They're not gonna be able to make their payments. They're not earning any income. So they're not going to be able to buy stuff at the end of this process. So the whole economic system from manufacturing through to employment is being shattered in the context of this crisis. And that needs to be repaired. The institutions to repair it obviously are largely based in finance, but the banks themselves are also under tremendous strain. So if your question is, how is the Italian economy going to function? The answer is we really don't know.

The state is going to end up owning much of the industry, subsidizing much of the labor and guaranteeing much of the credit in the financial system. And then it's going to have to slowly pull itself back out again. This is just like a wartime economic experience. And when you scale that up to the global level, what you'll see is that lots of different countries are going to find themselves in that situation, except those countries that refused to play that role because they don't want to become so deeply embedded in the economy, on which point you're just going to see the wastage of economic assets. Real capital, physical capital, but also human capital that's not going to be used because those businesses are going to be closed and those economies are not going to recover at all that quickly. In the United States, alas, from its many great strengths is precisely that kind of economy that's very resistant to government intervention.

Erik Jones [00:21:01] And yet that resistance to government intervention may, in the context of this crisis given how long it's likely to last, prove the undoing of the American economy in many respects unless we get a big change.

John Gans [00:21:19] So as I mentioned, we do a regular question form on our podcast and we call it "The Franklin Few." These were questions developed by Ben Franklin, one of Penn's first trustees, who knew a thing or two about Europe economics and just about everything else.

[00:21:34] And he developed a questionnaire he used for conversations with his fellow Philadelphians interested in current global affairs. We've updated it for use today and to anchor our Global Cable podcast. These are short questions that can have short answers, so let's start. Who would you most like to meet today and why? And I assume, given how restricted you guys are in Italy, you'd like to meet just about anybody today. But this particular person you wouldn't mind running into on a lonely walk through Bologna. Who would it be?

Erik Jones [00:22:08] I think I'd like to meet Charles de Gaulle, the former French president who was also the general in charge of the French Free Army during the Second World War, and I'd like to meet him because I would like to understand how he could pull the country together both during the Second World War and then again at the end of the 1950s in a context where the country was deeply divided. I think we're gonna need strong leaders who are capable of that kind of unifying effort at the end of this crisis. He's certainly one from whom I think we have a lot to learn.

John Gans [00:22:49]  Did you ever read that Julian Jackson bio, the one that came out a year ago or two years ago?

Erik Jones [00:22:54] No, I haven't read that one.

John Gans [00:22:56] It's great. It's a single volume. It's a big volume bio of him from start to finish. It's a really, you know, a complicated figure, but it really scratches a lot of new stuff that I didn't know. He had theorized that he had a disabled daughter who he cared for his whole life. And it's really a staggering view of a statesman, somebody who you know from history and in conic ways. But somebody really humanized him in a very compelling way.

[00:23:29] I recommend it. All right, so that's my book. So usually we ask next if you're reading anything, listening or anything, seeing anything that you recommend to viewers and listeners in terms of what's interesting out there that you've read, seen, or listened to?

Erik Jones [00:23:48] So I think like most of the people who will listen to this podcast, I'm drowning in current events and I'm also, if they're academics, I'm desperately trying to keep up with what's going on among my colleagues. So I would have to say, I would try to figure out something that you could read that would make you think about something else. And the book that I would recommend is a book of poetry that's called "Faithful and Virtuous Night" by Louise Glück. The poetry is really beautiful. I'm new to poetry. I hadn't thought I was going to turn to poetry like I have. And I find it somehow restful between news broadcasts and Twitter feeds and paper editions and all the rest.

John Gans [00:24:41] All right. That sounds like a good recommendation. Do you know of any individuals in the United States, Italy, or elsewhere who's recently done something that deserves praise or attention that we should single out?

Erik Jones [00:24:56] The phrase individual, I think, is what has me confounded in this question, because I just think about the people who show up at work in emergency rooms every day. And I don't know how they do it because the risks that they must face personally are extraordinary and the work that they have to do must be so frustrating given the material shortages that we know all hospitals are facing. So I guess those are the people that I would reserve for my praise at this point.

[00:25:35] My first job ever was working the night shift from 11:00 at night to 7:00 in the morning in our emergency room. And so I can tell you that on a normal day, it's an interesting but stressful, rewarding but emotionally exhausting occupation. I can't imagine what those people are going through right now.

John Gans [00:25:56] Yeah. And I know you come from a medical family and I'm in a medical family. So I was impressed with those people before this all started. But it's certainly an amazing thing to watch right now, to see how they're all doing and all they're sort of giving to this unique moment in time. Then the last question I have is what do you think Penn and Penn students can do to be a service to the world at this interesting moment? Where do you think they should be looking as they think about their careers, whether they're seniors who are graduating remotely in a couple of months or freshmen who are looking at a new world, a new world order and want to contribute in some way?

Erik Jones [00:26:44] I think we're going through a massive social experiment right now and that will need to be studied coherently in all of its dimensions: how we communicate, how we interact, what we take as as meaningful, how we integrate science into decision making. Virtually every aspect of it. And what I find staggering when I look back over time, when I first moved to Italy, there was the SARS crisis. And so I've lived through SARS and MERS and and swine flu and Ebola. And I mentioned frequently in my presentations when I would talk about future risks that there would be some kind of pandemic. But you've already heard me talk about the extent to which this was a learning experience. Future generations will not be able to afford to go through that learning process again. And so current Penn students need to invest the time in making sure we learn the lessons from this crisis and are better prepared for the next one, because the next one is just around the corner. It's not something that that may happen in 100, 150 years. It's going to happen in their lifetime. And there's no excuse not to be prepared for it. But being prepared for it means studying it and committing themselves to organizing themselves better to respond.

John Gans [00:28:15] All right. That sounds good. Well, it sounds like good advice. Erik, thank you so much for joining us on the Global Cable today. And happy birthday from everybody here at the Global Cable team.

Erik Jones [00:28:25] Oh, thanks a lot, John. It's been great talking with you.