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
governance in the EU and the euro area. For example, the European Commission’s proposal for a coordinated EU-wide fiscal stimulus programme worth € 200bn – an unthinkable suggestion only a few years ago – found the support of the European Council. Learning processes for national policy design Despite notable differences across member states concerning: n the starting positions and structures of national financial systems; n the features of national financial market instruments and conventions; n the degrees to which financial institutions and national economies are affected by the turmoil; and n the extent of public support for government intervention in the financial sector. Domestic policymakers have been part of a mutually beneficial learning process in designing the measures to resolve the crisis. One clear example is Gordon Brown’s rescue plan of October 2008, which served as a blueprint for the EU-wide consensus on how to address the crisis. Also more recently, national measures in a number of member states have evidently only been designed after some countries have “shown the way” (e.g. guaranteeing bank deposits) or EU bodies have laid down common principles which have informed and guided national policy measures (e.g. pricing of recapitalisations). Demonstration effect shows the benefits of coordinated EU response The vigorous and effective response of the one financial authority with the responsibility and capability to act within, and for the euro area as a whole – the ECB – has undeniably demonstrated what unified supranational decision-making, combined with real leadership and adequate resources can achieve in the face of the worst financial crisis in decades. Similarly, the obvious and measurable confidence effect of using the common EU label for the set of coordinated national rescue packages outlined at the Paris and Brussels Summits confirmed the beneficial impact of bringing national policy initiatives under the EU umbrella. Against the background of this experience, the notion of a similarly effective and forceful EU-level framework for financial supervision is now clearly an idea whose time 54 After the crisis: A new socio-economic settlement for the EU
has come. The convocation by the Commission of an expert group led by Jacques de Larosière, 17 which fed into a set of Commission proposals 18 to reform financial stability arrangements in the EU, by creating a European System of Financial Supervisors (ESFS), as well as a European Systemic Risk Board (ESRB) under the auspices of the ECB, and which has since been accepted by the European Council of June 2009, 19 bear witness to the willingness to pursue further significant institutional innovation. Why it might be back to “business as usual” That said, there are also a number of factors which suggest that the crisis was indeed a high-point in European economic cooperation, and that once the crisis abates, “business as usual” will return to economic governance in the euro area and the EU as a whole. It could even be argued that “less Europe”, i.e. a reaffirmation of national policy action over EUlevel responses is the answer to the challenges of the crisis. At least six arguments could be made why the elevated level of cooperation will not last: Leadership mattered but was coincidental Most observers agree that it has been a case of serendipity for Europe and the world that the intensification of the financial crisis fell into the period of the French EU presidency. The actions – and activism – of the French presidency attached the formal EU label to the various national policy responses and brought them under the EU umbrella. It would seem likely that if the crisis had happened under a different presidency, the policy response would probably not have been very different in substance. It would in all likelihood have been a big power (European members of the G7) or a euro area response; it would have happened anyway – just simply not under the EU label. It has been a fortunate coincidence for the EU, but should not be mistaken as a reflection of the EU’s enhanced strength, the relevance of its institutions or inherent capacity of action. Ad hoc responses worked It is fair to say that the EU, with its current structures and procedures, fared reasonably well in dealing with the crisis. Existing institutions, fora and cooperation methods functioned relatively smoothly and reasonably effectively. Nevertheless, the ad hoc solutions created within the EU framework all demonstrated that the EU is capable of handling extraordinary situations. If that line of argument is accepted, then there should be no need for a permanent increase in the supply of enhanced integration outcomes, especially once the “normal” times return. Indeed, as the discussions on the review of the financial supervision framework Chapter 3 – Gabriel Glöckler 55
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has come. <strong>The</strong> convocation by the Commission of an expert group led by<br />
Jacques de Larosière, 17 which fed into a set of Commission proposals 18 to<br />
reform financial stability arrangements in the EU, by creating a European<br />
System of Financial Supervisors (ESFS), as well as a European Systemic<br />
Risk Board (ESRB) under the auspices of the ECB, and which has since<br />
been accepted by the European Council of June 2009, 19 bear witness to<br />
the willingness to pursue further significant institutional innovation.<br />
Why it might be back to “business as usual”<br />
That said, there are also a number of factors which suggest that the<br />
crisis was indeed a high-point in European economic cooperation, and<br />
that once the crisis abates, “business as usual” will return to economic<br />
governance in the euro area and the EU as a whole. It could even be argued<br />
that “less Europe”, i.e. a reaffirmation of national policy action over EUlevel<br />
responses is the answer to the challenges of the crisis. At least six<br />
arguments could be made why the elevated level of cooperation will not<br />
last:<br />
Leadership mattered but was coincidental<br />
Most observers agree that it has been a case of serendipity for Europe<br />
and the world that the intensification of the financial crisis fell into the<br />
period of the French EU presidency. <strong>The</strong> actions – and activism – of the<br />
French presidency attached the formal EU label to the various national<br />
policy responses and brought them under the EU umbrella. It would seem<br />
likely that if the crisis had happened under a different presidency, the<br />
policy response would probably not have been very different in substance.<br />
It would in all likelihood have been a big power (European members of the<br />
G7) or a euro area response; it would have happened anyway – just simply<br />
not under the EU label. It has been a fortunate coincidence for the EU, but<br />
should not be mistaken as a reflection of the EU’s enhanced strength, the<br />
relevance of its institutions or inherent capacity of action.<br />
Ad hoc responses worked<br />
It is fair to say that the EU, with its current structures and procedures,<br />
fared reasonably well in dealing with the crisis. Existing institutions,<br />
fora and cooperation methods functioned relatively smoothly and<br />
reasonably effectively. Nevertheless, the ad hoc solutions created within<br />
the EU framework all demonstrated that the EU is capable of handling<br />
extraordinary situations. If that line of argument is accepted, then there<br />
should be no need for a permanent increase in the supply of enhanced<br />
integration outcomes, especially once the “normal” times return. Indeed,<br />
as the discussions on the review of the financial supervision framework<br />
Chapter 3 – <strong>Gabriel</strong> Glöckler 55