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The Year Ahead

Big Government Muscles Back Into Europe’s Covid-Hit Economy

The pandemic has forced countries to ditch austerity and reawakened an interventionist impulse.

European Union leaders met in Brussels in July to begin hammering out a bloc-wide rescue package. 

European Union leaders met in Brussels in July to begin hammering out a bloc-wide rescue package. 

Photographer: Francois Lenoir/Pool Reuters

French Finance Minister Bruno Le Maire had just recovered from Covid-19 in October when he faced a familiar adversary at a parliamentary hearing. The government, a leftist legislator told him, needed to bring industry and jobs back to France and was being naive about global trade and the benefit of free markets.

“There are a number of points on which I agree with you—Covid must have unblocked something in me,” Le Maire quipped, citing massive spending on job support, a push for carbon border taxes, and the huge sums earmarked for state aid to encourage domestic investment. “Everyone is able to change their beliefs and ideas to respond to the very particular crisis we are in.”