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Europe and the illusion of new Marshall plan

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If there is one ready-made, off-the-shelf cliché politicians like to invoke in the current COVID 19 crisis, it is the need for a new Marshall Plan to help Europe overcome the economic impact of coronavirus lockdowns. Named after the then United States Secretary of State, General George Marshall, his idea which was first proposed in 1947, was signed into law in April 1948 and became known as the European Recovery Act.
Denis MacShane, the former UK’s Minister for Europe and is the author of “Brexiternity. The Uncertain Fate of Britain” indicated that Ursula von der Leyen, President of European Union (EU) Commission, Giuseppe Conte, Prime Minister of Italy and Pedro Sanchez, Prime Minister of Spain are among the political leaders who have called for a modern-day version of the Marshall Plan. EU Commissioner Thierry Breton has even called for a Marshall Plan for Europe’s tourism industry.
75 years later, EU leaders seem to have forgotten their history. None of them seem to have the first idea about the Marshall Plan. Simply put, according to Denis MacShane, the conditions that gave birth to the Marshall Plan do not exist today. And the way it was implemented after its launch in 1948 would cause uproar if proposed now.
The purpose of the Marshall Plan was above all political, to stop Europe turning communist at a time when the communist parties in France and Italy were winning most votes in elections. Jozef Stalin, the Soviet ruler, was encouraging communist uprisings in Greece and Turkey. In addition, he had shown his ruthlessness by disposing the non-communist left in countries occupied by the Red Army.
Denis MacShane further noted that today, there are worries that populist-nationalist right-wing parties with a clear anti-EU bias might strengthen politically if the countries worst hit by COVID 19 are left without help. To be sure, from Brexit to the ultra-nationalist Prime Minister of Hungary, Viktor Orban, the EU is living with new populist national identity politics. However, these forces are not even remotely on a par with communist efforts to take over Europe after 1945.
Holger Schmieding, Chief Economist at Berenberg Bank in London strongly argued that EU already outgunning the Marshall Plan. The money which the United States government initially offered up under the Marshall Plan back in 1948 in today’s money amounted to $202 billion (or €186 billion). Compare that to the €1.5 trillion which the EU is making available today for a much bigger recovery fund. It comes in various forms, including cheap loans from the European Stability Mechanism and the European Central Bank (ECB).
According to Holger Schmieding, there is a row between different EU governments on how the money should be disbursed. Northern European governments, including Social democratic-led ones in Denmark and Sweden, as well as the Social Democrats in the German coalition government are resisting an open-ended pledge. They are not prepared to hand over their taxpayers’ money to countries in southern Europe which, in their view, have refused to undertake the economic management reforms in their countries since the Euro was introduced two decades ago.
Kallum Pickering, Senior Economist at Berenberg Bank in London stated that the Marshall Plan money was not a gift, but a repayable loan used mainly to buy goods from the United States. In particular, it was used for machine tools and other industrial equipment to get European industry going again. It was closely supervised by Marshall Plan envoys, mainly United States business executives. They opened up offices in the capital cities of the countries receiving the aid and made sure it was disbursed according to United States rules. American productivity experts and trade unionists toured Europe, explaining why modern management methods to increase productivity were the key to Europe’s future economic prosperity.
Kallum Pickering stressed that in contrast, today’s Italian government insists that no help can arrive that would come with any conditions attached. Nor does it accept any external supervision of the measures taken by the Italian government under the European plans offered up. However, such supervision was precisely the norm under the Marshall Plan.
Egged on by the Soviet Union, which refused to take part in the Marshall Plan, Europe’s populist anti-American left in the late 1940s opposed all United States aid. French communist trade unionists even derailed a train bringing aid to France, killing 16. Their anti-Americanism was part of the reason why the dream of a progressive left Europe evaporated in the countries receiving Marshall Plan aid. As a result, in the 1950s conservative politicians ruled the roost in Britain, Germany, Italy and France.
The Marshall Plan was based on open trade and political integration in Western Europe. In that regard, it was ultimately a functional precursor of the EU. Demanding a new Marshall Plan now sounds evocative and generous. However, the Marshall Plan of the 1940s has nothing to do with what Europe needs to do to recover from the 2020 pandemic.

The COVID-19 pandemic is the defining health crisis of our time

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Beginning with a cluster of cases of pneumonia of unknown cause in Wuhan, China, this novel coronavirus has spread with alarming speed, shaking the foundations of health systems, economies, and societies around the world. European countries are among the most heavily affected. At the time of writing, five of the six most-affected countries are in Europe.
And yet, even as Europe is fighting to bring COVID-19 under control at home, it is also playing a leading role in building global solidarity. Even as we are physically distancing as individuals, we need to pull together collectively as actors on the world stage.
The European Union and WHO share a commitment to supporting vulnerable communities and countries around the world. Standing together as a global community is particularly crucial now, because we are all in this together as the disease knows no borders and does not discriminate. As long as it affects some of us, none of us is safe.
To support the global response to COVID-19, the European Union and its Member States recently put forward a Team Europe package, which is growing to be well over €23 billion. Of course, Team Europe will be delivering parts of its response to the coronavirus pandemic with the United Nations.
Like in so many crises, the most vulnerable suffer the most, and they must be our focus. The EU is supporting the WHO Strategic Preparedness and Response Plan with €30 million in new funding to strengthen emergency preparedness and response in countries with weak health systems or which are affected by humanitarian crises.
In addition, the European Commission, WHO, and partners from around the globe have also teamed up to launch ‘The Access to COVID-19 Tools Accelerator’, to speed up the development, production and equitable distribution of vaccines, diagnostics, and therapeutics for COVID-19, so that all people have equitable access to these lifesaving products.
Building on this historic commitment, the European Commission hosted a pledging event on 4 May at which more than 40 countries came together to pledge some €7.4 billion to support research and development for vaccines, diagnostics and therapeutics.
But our partnership extends well beyond the current crisis. The pandemic exploits the gaps and inequalities in health systems, underscoring the importance of investing in health workers, health infrastructure and systems to prevent, detect and respond to disease outbreaks.
Strong health systems are the best prevention not only against outbreaks and pandemics, but also against the multiple health threats people around the world face every day.
And yet, on current trends, more than 5 billion people will lack access to essential health services by 2030 – including the ability to see a health worker, access to essential medicines, and running water in hospitals. Even when services are available, using them can mean financial ruin for millions of people.
These gaps don’t only undermine the health of individuals, families and communities; they also undermine global security and economic growth.
That is why the EU has contributed €102 million to the Universal Health Coverage Partnership with WHO, supporting health system strengthening in 115 countries in Africa, the Caribbean, the Pacific, Eastern Europe, and Central and South East Asia. The world spends around US$7.5 trillion on health each year – almost 10 percent of global GDP.
But too many countries spend too much of their health budget on managing diseases in hospitals – where the costs are higher and the outcomes are often worse – instead of promoting health and preventing disease at the primary health care level. The COVID-19 pandemic will eventually recede, but there can be no going back to business as usual.
As we work on responding to this pandemic, we must also prepare for the next one. Now is an opportunity to lay the foundations for resilient health systems around the world.
Investments to strengthen health infrastructure and workforce are the only way to avoid future global health crises like the one we are facing now.
If we learn anything from COVID-19, it must be that investing in health now will save lives later. History will judge us not only on whether we got through this pandemic, but on the lessons we learned and the actions we took once it was over.

Dr Tedros Adhanom Ghebreyesus is Director-General of the World Health Organization
Jutta Urpilainen is Commissioner for International Partnerships of the European Commission

Abenezer Fekadu

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Name: Abenezer Fekadu

Education: 10+

Company name: Abeni Electronics

Title: Owner

Founded in: September 2017

What it does: Repair and sell different kinds of electronics

HQ: Adama

Number of employees: 4

Startup Capital: 8,000 birr

Current capital: Growing

Reasons for starting the business: To be my own boss

Biggest perk of ownership: Making money

Biggest strength: Hard worker

Biggest challenging: Work place

Plan: To create big company with my own brand

First career: None

Most interested in meeting: Sheik Mohammed Hussein Ali Al-‘Amoudi

Most admired person: My mother

Stress reducer: Spending time with my wife

Favorite past time: To spend time with my friends

Favorite book: The Bible

Favorite destination: USA

Favorite automobile: Hummer

Are GMOs the Answer to Ethiopia’s Food Crisis?

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By Hiwote Bekele and Selam Nicola

Recently, Ethiopia reversed its two decade long anti-GMO stance and approved trials for commercialized cultivation of genetically modified organisms (GMOs), which are organisms whose genetic material has been altered in a manner that is not natural. The report issued by the United States Department of Agriculture (USDA) Foreign Agricultural Services states that the approval will aid Ethiopia in the continuous food security challenges and enable the country to feed the population at large. Though Ethiopia has been impressively resistant to GMOs in the past, the country approved and cultivated BT-Cotton in 2019, an insect and pest resistant-genetically engineered cotton seed. This time around, drought tolerant and pest resistant WEMA-TELA Maize as well as Enset or False Banana will be cultivated. Animal genetic engineering, on the other hand, is in the early stages, but will also be rolled out in the foreseeable future. While the rollout of GMOs in Ethiopia seems like a convincing solution to address food insecurity, it may have detrimental long term health, social and economic impacts.
Genetic engineering of plants has existed for thousands of years, as humans have bred and cross bred crops to have certain desired outcomes, i.e, sweeter fruits. Modern day GMOs, however, are artificially engineered by the removal or insertion of specific genes in a plant to alter the genetic composition of organisms. To be exact, the first genetically modified food was created in 1994. As the development of GMOs is only a few decades old, there is no conclusive consensus among experts that GMOs are a safe alternative to conventionally and/or organically grown food, and much more research is needed to thoroughly understand the comprehensive impact of GMOs. For instance, a recent study analyzing thirty studies on the effects of genetically modified plants concluded that results on potential GMO toxicity were inconsistent. In addition, the longest running study was done over a period of just ninety days, which is too short of a period to make conclusions about any long term health effects of GMOs.
Glyphosate is the main active ingredient in the RoundUp pesticide, which is the most commonly used pesticide for GMO crops. Use of glyphosate is controversial since its effect on health is highly debated. Earlier this year, the U.S Environmental Protection Agency (EPA) declared that there are no concerns to human health if glyphosate is used according to label and that it is unlikely a human carcinogen. To the contrary, however, evidence shows glyphosate residue in foods increases risks of chronic health conditions like cancer, autism, diabetes, rheumatoid arthritis and many more. A meta analysis study published in 2019 found that a group of individuals with the highest exposure to glyphosate had a 41% increase of Non-Hodgkin’s lymphoma, a type of blood cancer. Since then, the International Agency for Research on Cancer (IARC) has classified glyphosate as a carcinogen by mechanism of genotoxicity, meaning that glyphosate can cause damages or mutations to DNA. Other studies have found links between prolonged glyphosate exposure and improper function of the Thyroid-Stimulating Hormone (TSH), a hormone that is essential in fetal growth and brain development. A disruption of TSH’s function in pregnant women can increase incidences of autism in the offspring. These chronic health conditions can be extremely costly in the long term both in terms of health expenditure and in the availability of a productive and healthy society. For instance, in the US alone, the annual cost of allergies exceeds USD18 billion. In countries like Ethiopia, where the health infrastructure is underdeveloped with a per capita health expenditure of USD25, a rise in chronic health conditions will be extremely detrimental to the effective development of the country.
Moreover, a considerable amount of the studies presenting GMOs as a safer alternative for human consumption are performed or sponsored by biotech companies that produce GMOs. A study examining glyphosate residue in Roundup-ready crops found that two third of the studies analyzed were performed by biotech industries. Not only does this pose a conflict of interest issue, but also contaminates the validity and credibility of the pro-GMO research within the field .
The risks associated with pesticides containing glyphosate are not only a concern for human health, but also for the environment and the natural flow of the ecosystem. Glyphosate pesticides disrupt growth in honey bees by targeting their gut microbe and making them vulnerable to opportunistic parasites. As such, glyphosate plays a major role in the rapid decline of bee colonies. Not only does this disrupt the pollination process, but also poses a threat to global food security given that agricultural production depends heavily on pollinators like bees. Likewise, increased GMO use is a major threat to the biodiversity of organisms that make ecosystems more resilient and adaptive to environmental changes. A reduction in plant and animal genetic diversity increases organisms’ vulnerability to environmental changes and infestations. Namely, during the Irish potato famine, an invasive pathogen wiped out a massive amount of potato plants. This catastrophic event was even more exasperated because most, if not all, of the destroyed potato plants were clones of each other.
Just as starkly concerning, if not more, is the lack of diversity and depth in the research concerning the economic consequences of GMOs and the structure of the GMO market itself. The biotechnology industry responsible for the production and patenting of GMOs is an imperial oligopoly, with just four companies owning 60% of the market. This effectively leads to expensive seed prices and limited choices for farmers who have to undergo licensing regulations and pay fees in order to use GMO seeds. Furthermore, to ensure farmers purchase a new batch of seeds every year, the biotechnology industry continuously lobbies policy makers to enforce regulations that make it difficult for farmers to save seeds. To be exact, Bayer AG, one of the largest companies responsible for crop science research and production, including GMOs and pesticides, spent USD12 million lobbying in 2018, a 650% increase since 1998.
More recently, the industry introduced Genetic Use Restriction Technology (GURT), also known as suicide or terminator seeds, to regulate a one time use of seeds by farmers. This technology genetically sterilizes second generation seeds, making them infertile. As opposed to traditional farming, where farmers can save seeds year after year to minimize their expenses, GMO seeds have to be bought every year or else, farmers will be liable for license infringement. Although Ethiopia’s most recently authorized Genetically Engineered (GE) projects are through a public-private company known as the Water Efficient Maize for Africa (WEMA), Monsanto, a biotech subsidiary of Bayer AG, is actively involved in the molecular genetics and breeding process of the GMOs, and has exclusive rights to the commercialization and production of the said seeds, meaning Ethiopian farmers will still be required to purchase seeds every year. As Arefayni Fanataye puts it more precisely, “The use of GMO seeds yokes farmers to corporate power, requiring ongoing purchases from multinational companies that have control over the technology through intellectual property rights.” This brings a new and unsustainable expense to farmers, especially for small scale farmers who previously utilized traditional seed storing methods. For countries like Ethiopia, with no revenue capacity to meaningfully subsidize seed prices for farmers, GMO adaptation can widen the inequality between domestic wealthy large scale farmers and marginalized small farmers in the country.
What’s more, the costliness of GMOs might even hurt Ethiopian farmers in the global market. Developed countries, unlike developing nations, have the economic capacity to provide price subsidies for their farmers, making the production process a lot more affordable. Most notably, the US, EU, and China provide the largest cotton price subsidy to farmers and as a result, farmers have access to cheaper production means, making it possible for them to mass produce cotton at competitive rates. These agricultural aids and subsidies from developed countries distort the global commodity market and make it extremely unprofitable for farmers who do not get price subsidies from governments. As aforementioned, countries like Ethiopia do not have the revenue or income to provide significant price subsidies to farmers, so even though farmers might potentially be saving water or increasing their yields with GM seeds, it is unlikely they’ll profit in the global market. We’ve seen this playout in India during the Green Revolution; the Indian government approved the use of high yielding seeds without providing substantial price subsidies to farmers. Consequently, farmers ended up incurring large debt they could repay due to the unprofitable and unsustainably competitive nature of the global market structure.
Unequivocally, food insecurity and low crop yields are urgent and pervasive threats requiring immediate solutions in Ethiopia. Although at face value, GMOs seem like an instant solution to Ethiopia’s food crisis, the negative consequences that are often hidden behind the influence of powerful corporations can be destructive to the biodiversity of the environment and the overall productivity and equality of the population. In addition, the USDA states labeling GMOs is a requirement in the adaptation to protect and ensure consumers’ right to choose; however, the Ethiopian government does not have the capacity of labeling GMOs at this time, which poses an ethical dilemma. Not only is there a lack of financial capacity for labeling, but much of the population rely on purchasing food from informal traditional markets, which present a great challenge in regulating GMOs once introduced to the market. Potential alternatives to GMOs do exist, and one alternative is increasing production capacity for and distribution of natural pest-repellants and bio-pesticides like Acetic acid to decrease crop loss due insects and pests. Crop rotation and biofertilizers increase yields while also resisting pests and revitalizing soil nutrients. Furthermore, expanding research on traditional pest and weed control methods will be beneficial for the country in the long run.

Hiwote Bekele is an Environmental Health Expert and Educator, someone who is deeply passionate about addressing health through creating awareness and empowering others about various environmental exposures. Hiwote earned her Master of Public Health in Environmental Health Sciences from the University of Minnesota and her Bachelors in Biology and Peace and Conflict Studies from the College of Saint Benedict. Hiwote has participated in various global health projects in East Africa. Her most recent project was implementing a global health case competition for undergraduate students in Kigali, Rwanda with The University of Minnesota One Health workforce.
Contact: hiwotemizan12@gmail.com
Selam Nicola holds a B.A. in Economics from Carleton College. Her academic interests include international trade and sustainable economic development practices. Having lived in both Ethiopia and the US, her passions are deeply inspired by and rooted in her personal experiences with the radically different ways through which different economies operate. Throughout her time in undergrad, Selam was engaged in multiple agricultural development studies in Ethiopia and India. Selam currently works in finance where she conducts Emerging Market Macroeconomic analysis.
Contact: selamnicolas@gmail.com