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

countries, the presidents of the European Commission and the ECB as
well as the British prime minister (for parts of the meeting). This time,
a European response was agreed upon. 14 There are several reasons why,
within the span of a week, the demand for a coordinated EU response had
risen:
n First, it was obvious that financial markets did not distinguish
between national markets any longer – especially not in the
euro area. The relevant indices across euro area countries were
plummeting in sync, regardless of the specific situations in
individual countries.
n Second, after the bold US government action (the “Paulson Plan”),
the financial markets expected “the Europeans” to come up with an
answer to the problems generated by the market tensions for the
financial institutions in Europe.
n Third, there also was a clear understanding among EU governments
that the confidence effects of a common approach were significant,
and that these effects would be larger the more “Europe” a package
of measures contains – a sort of “shock-and-awe” strategy for
financial markets through the sheer size of the joint action. In other
words, the effects of a common EU package would be larger than
that of the sum of its (national) parts.
The answer provided by the Paris Summit was a euro area umbrella
of guiding principles and common intentions for the design of national
responses with a view to upholding the common market and level playing
field.
But was it a genuine EU response? On the one hand, the set of measures
that was agreed upon can be called an EU response because the French
Presidency managed to stick the EU label on the outer wrapping of a
package that mostly contained a collection of national policy measures.
On the other hand, however, the package was not actually an EU response
that would conform, strictly speaking, to the méthode communautaire,
involving a Commission proposal which is thoroughly discussed by the
various layers of the Council machinery, or possibly even seen by the
European Parliament. Rather, the measures of the Paris Declaration
were very much driven by national governments. The Commission was
essentially sidelined in this initiative, though it provided support via its
existing infrastructure for cooperation among governments.
Chapter 3 – Gabriel Glöckler 51