Authors Iain Begg | Gabriel Glöckler | Anke Hassel ... - The Europaeum
Authors Iain Begg | Gabriel Glöckler | Anke Hassel ... - The Europaeum Authors Iain Begg | Gabriel Glöckler | Anke Hassel ... - The Europaeum
or indeed re-impose, what they regard as essential commitments to the “four freedoms” of the Rome Treaty and the centrality of the EU’s espousal of the Single Market to its work. n There will also be some “market redistributionists” who would count themselves in the market liberal camp, but would be more prepared to embrace social measures aimed at strengthening political support for open markets, as long as they cause no significant damage to competition, efficiency and dynamism. Significantly, Mario Monti, the archetypal market liberal of his age, has called for a new balance to be struck between market liberalism and redistribution. n Finally there will be “better market orderers” who in the classic German social market tradition place heavy emphasis on closer social regulation of how financial markets operate and how business conducts its affairs and exercises its wider social responsibilities. This view gives priority to getting frameworks right and frowns on day to day public interventionism: it is fundamentally about shaping behaviours in the market place not altering market outcomes. How will these different perspectives play out in their impact on future policy? The fundamental concern that will unite all strands of pro-European thinking is the survival of the euro. For “market orderers” the euro is what binds together the social market they seek to build. For “market liberals and redistributionists” it is the cornerstone of liberalisation without which the risk of fragmentation in the Single Market would grow as member states sought to protect their economies against the consequences of exchange rate instability. For “interventionist integrationists”, the existence of the euro holds out the hope of stronger European economic government. The strength of determination to preserve the euro was demonstrated when at the height of the crisis earlier in 2009 the German finance minister signalled that the euro area should be prepared to take steps to prevent any member country being forced out of the euro by market perceptions of a risk of default on its national debt. This is not to say that the future of the euro will be without crisis or fierce political rows. No one can tell whether the euro area will one day be confronted with a credibility crisis if the markets refuse to fund the borrowings of an overindebted member state. The Germans (with the support of other richer member states) may be prepared as a last resort to bail other countries out – but this emergency support will not be for 26 After the crisis: A new socio-economic settlement for the EU
free. For instance, the Irish could come under pressure to phase out the tax rules that are seen to give them an unfairly favourable advantage in attracting US investment. A major uncertainty concerns the speedy enlargement of the euro to all member states (other than the UK) who see it as a safe haven of stability. “Market liberals” will tend to argue that “politics” should not determine “the economics”, though the question of what makes for sensible entry criteria has been thrown wide open by the crisis. “Market orderers” may take a longer term view of Europe’s essential interests, though on strict conditions that the central and eastern Europeans could be forced to follow a disciplined path to Euro membership and curb “social dumping”. The crisis has strengthened the importance of the role of government at both nation state and EU level. The nation state gains in importance because of the added urgency to reform welfare states and hasten lowcarbon transition. Countries like the UK and Ireland need to develop a new growth model as an alternative to their previous dependence on financial services. These are tasks that given the division of competences within the Union, only the nation-state can reasonably fulfil. Yet, at the same time, the necessity of greater nation-state activism requires a stronger framework at EU level that will make nation state activism effective and to prevent it resulting in “beggar thy neighbour” policies. Nation-state efforts to combat unemployment will be most effective within a framework of EU policy coordination given the scale of the economic spillovers created by European economic integration and the Single Market. Similarly an effective EU framework for carbon pricing is essential if large scale low-carbon investment is to take place. And when it comes to efforts to promote economic development, nation-states and regions must operate within a clear framework of EU rules for state aids and incentives. Similarly, the debate about regulation of “bankers’ bonuses” is symptomatic of a wider concern that the crisis has intensified: that our economies need to be governed by “fair rules”. This implies that in the years ahead there will be a continuing focus on issues of corporate governance and responsibility. The striking change is how far in the UK the mood has shifted against the “light touch” mentality of Anglo-Saxon capitalism. There is an acceptance of the need for “market ordering” across the political spectrum that simply did not exist before. Although this is as yet unrecognised in UK public discourse, this opens up new possibilities of EU consensus. Chapter 1 – Roger Liddle 27
- Page 1 and 2: Authors Iain Begg | Gabriel Glöckl
- Page 4 and 5: Published in 2009 by Policy Network
- Page 6 and 7: 4 After the crisis: A new socio-eco
- Page 8 and 9: 6 After the crisis: A new socio-eco
- Page 10 and 11: Simona Milio is associate director
- Page 12 and 13: Chapter 10 Simona Milio ...........
- Page 14 and 15: Before the crash: the EU as a parti
- Page 16 and 17: liberalisation. The City of London
- Page 18 and 19: of the Financial Services Action Pl
- Page 20 and 21: confidence and world trade, to whic
- Page 22 and 23: following the ECJ’s controversial
- Page 24 and 25: signals are in place to promote a n
- Page 26 and 27: need to be constructed to create ac
- Page 30 and 31: Markets with rules The overall conc
- Page 32 and 33: 30 After the crisis: A new socio-ec
- Page 34 and 35: Target financial stability The EMU
- Page 36 and 37: Belgium, the Netherlands and Luxemb
- Page 38 and 39: mortgage banks and the insurance se
- Page 40 and 41: financial market rules. The ESFS au
- Page 42 and 43: prudential regulation - though only
- Page 44 and 45: initiatives vis-à-vis ratings agen
- Page 46 and 47: 44 After the crisis: A new socio-ec
- Page 48 and 49: Even if membership in a monetary un
- Page 50 and 51: emained relatively contained to spe
- Page 52 and 53: The second channel of functional sp
- Page 54 and 55: But even so, the depth and intensit
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- Page 58 and 59: in the EU show, authorities at the
- Page 60 and 61: factors will remain prevalent and b
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- Page 68 and 69: terms only very slowly and as a per
- Page 70 and 71: policy proposal asks itself what th
- Page 72 and 73: ensure that a ceiling is put on the
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free. For instance, the Irish could come under pressure to phase out the<br />
tax rules that are seen to give them an unfairly favourable advantage<br />
in attracting US investment. A major uncertainty concerns the speedy<br />
enlargement of the euro to all member states (other than the UK) who<br />
see it as a safe haven of stability. “Market liberals” will tend to argue that<br />
“politics” should not determine “the economics”, though the question<br />
of what makes for sensible entry criteria has been thrown wide open by<br />
the crisis. “Market orderers” may take a longer term view of Europe’s<br />
essential interests, though on strict conditions that the central and<br />
eastern Europeans could be forced to follow a disciplined path to Euro<br />
membership and curb “social dumping”.<br />
<strong>The</strong> crisis has strengthened the importance of the role of government<br />
at both nation state and EU level. <strong>The</strong> nation state gains in importance<br />
because of the added urgency to reform welfare states and hasten lowcarbon<br />
transition. Countries like the UK and Ireland need to develop<br />
a new growth model as an alternative to their previous dependence on<br />
financial services. <strong>The</strong>se are tasks that given the division of competences<br />
within the Union, only the nation-state can reasonably fulfil.<br />
Yet, at the same time, the necessity of greater nation-state activism<br />
requires a stronger framework at EU level that will make nation state<br />
activism effective and to prevent it resulting in “beggar thy neighbour”<br />
policies. Nation-state efforts to combat unemployment will be most<br />
effective within a framework of EU policy coordination given the scale of<br />
the economic spillovers created by European economic integration and<br />
the Single Market. Similarly an effective EU framework for carbon pricing<br />
is essential if large scale low-carbon investment is to take place. And when<br />
it comes to efforts to promote economic development, nation-states and<br />
regions must operate within a clear framework of EU rules for state aids<br />
and incentives.<br />
Similarly, the debate about regulation of “bankers’ bonuses” is symptomatic<br />
of a wider concern that the crisis has intensified: that our economies need<br />
to be governed by “fair rules”. This implies that in the years ahead there will<br />
be a continuing focus on issues of corporate governance and responsibility.<br />
<strong>The</strong> striking change is how far in the UK the mood has shifted against the<br />
“light touch” mentality of Anglo-Saxon capitalism. <strong>The</strong>re is an acceptance<br />
of the need for “market ordering” across the political spectrum that simply<br />
did not exist before. Although this is as yet unrecognised in UK public<br />
discourse, this opens up new possibilities of EU consensus.<br />
Chapter 1 – Roger Liddle 27
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