Authors Iain Begg | Gabriel Glöckler | Anke Hassel ... - The Europaeum

Markets with rules
The overall conclusion, therefore, is that the impact of the crisis will be
that “market liberalism” loses out and “market orderers” gain the upper
hand. This should not lead to a retreat from the promotion of competitive
markets or indeed globalisation as a tool of efficiency and a driver of
innovation. But it does mean a new framework of “markets with rules”
for the future.
More effective coordination of the EU internal economy is the key both to
a stronger economic recovery and to more European clout on the global
stage. At the same time on the international stage the G20 has emerged
as the major player. The main significance of the G20 is positive in that it
is a recognition by the rich nations of the G7 of the necessity to embrace
the world’s large emerging economies if global decision making is to be
effective. But from an EU perspective it re-asserts the role of the EU’s big
member states rather than making it essential to develop a single EU voice.
The EU needs to become the strongest advocate of greater international
policy coordination and macro-economic global governance. This requires
taking bold steps so that the EU speaks with a single voice in international
financial institutions.
In coming months a heavy responsibility falls on the Commission to exert
its Single Market powers and propose far reaching and radical economic
reforms, especially on bank failure and recapitalisation; investmentorientated
fiscal rules; as well as reformed internal economic governance
and the EU’s external representation. There can be no return to business
as usual after the global recession runs its course: public policy cannot and
will, in any case, be unable to return to status quo ante. Instead, the EU
needs to focus with even more urgency on the new economic paradigms
of the twenty-first century: economic globalisation, low-carbon transition
and the ageing society. Overcoming these immense challenges, in tandem
with coping with the long-term impact of the current recession, will
require a greater steering role for government. At the same time, this must
happen within a strong and credible EU framework, otherwise the EU will
succumb to “beggar thy neighbour” policies.
The EU, therefore, needs a new overarching internal policy framework
to replace Lisbon – a new socio-economic settlement for the future. This
should be based on seven pillars:
n An enlarged euro area that is consolidated as a zone of economic
and security for all member states who wish to join.
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After the crisis: A new socio-economic settlement for the EU