A“Hamilton’ moment”. Towards financial, fiscal and political union Domenec Miquel Ruiz Devesa and Rosa Pérez Monclús Introduction The year 2020 will be remembered in the history of European economic integration for the agreement reached by the European Council on 21 July to establish a Recovery Plan for Europe to deal with the devastat­ing economic consequences of the COVID-19 pandemic, unparalleled since the Second World War. According to the projections of the European Statistics Agency, Eurostat, 1 the continent faces a fall in GDP of 12.1 per cent across the eurozone, and 11.7 per cent for the EU as a whole, during the second quarter of 2020, com­pared to the preceding quarter(see Chart 1). The eco­nomic impact in Spain is expected to be even greater as a result of the economic slowdown caused by the country’s extended lockdown and other containment measures, with Eurostat forecasting an 18.5 per cent fall in Spain’s GDP. The number of people in work fell by 2.8 per cent in the eurozone and by 2.6 per cent in the EU in the second 1  Eurostat: Euro-indicators. Preliminary flash estimate for the second quarter of 2020, 121/2020 , 31 July 2020. quarter of 2020, compared to the preceding quarter, fig­ures that would undoubtedly have been far higher had it not been for government furlough schemes(see Chart 2). However, in Spain the impact was greater, with a fall of 7.5 per cent, leaving no doubt as to the seriousness of the current crisis. Inflation has fallen well short of the European Central Bank(ECB) target of below, but close to, 2 per cent. The rate for the eurozone is expected to be 0.2 per cent for August 2020, falling from 0.4 per cent in July(see Chart 3). Spain has been harder hit, with prices falling by 0.6 per cent in August(compared to 0.7 per cent in July). In the light of these figures, it is impossible to over­estimate the serious impact the crisis will have on our societies, or the need to develop a massive Europe-wide fiscal and monetary stimulus package. European insti­tutions have recognized the need for a robust reaction to minimize the damage to its citizens, who were still recovering from the twin blows of the 2008 financial crisis and the 2010 debt crisis. The European response has been informed by this experience and differs from the handling of the previous crisis in terms of the speed of response, the mechanisms used and, above all, a phi­43