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

in the EU show, authorities at the national level – which are set to lose
power and influence within a more supranational setting – are engaged
in a broad rearguard action and continue to advocate national solutions
combined with some strictly limited EU-level coordination as a sufficient
and workable response to the problems thrown up by the crisis.
The “EU label” on the box, national measures inside
A closer scrutiny of the measures agreed at the Paris Summit reveals that the
supposedly European measures were little more than a set of rather general
framework principles, within which the Member States were free to devise
their own measures. In some cases, not even basic elements of common
agreement, e.g. a common minimum guarantee of depositors’ funds,
could be achieved. Even the initial (Dutch-inspired) idea of an EU-wide
recapitalisation fund was in fact a misnomer, since it merely represented
a compilation of national commitments, which – in their totality and
enhanced by the EU label – were to be “sold” as an “EU rescue package”.
The policy substance – “tax & spend” – remains
quintessentially national
Regardless of the EU coordination processes that might have had an
impact on the timing and presentation of national policy responses to
the crisis, the very substance of government interventions to reign in
the crisis remains fundamentally a national prerogative: the spending
of public money. Whether it concerns state guarantees for emergency
liquidity assistance for illiquid, but overall solvent, financial institutions;
or the assistance to otherwise troubled banks via recapitalisation or other
measures, or fiscal stimulus packages for the macro-economy: the policy
responses call for public expenditure – taxpayers’ money. The public
discourse on such spending remains quintessentially national. Indeed, the
explicit exclusion of fiscal burden-sharing in the event of serious problems
of particular financial institutions has been made the sine qua non of any
British agreement to the (limited) reforms of the European supervisory
framework agreed at the June 2009 European Council. 20
Moreover, also on macroeconomic policy, the appetite to spend public
money for European causes remains distinctly limited, even if certain
not insignificant amounts were made available to Member States in need
via the EU financial instruments (the so-called Medium-Term Financial
Assistance and special lending from the European Investment Bank). The
aforementioned initial proposal for an EU-recapitalisation fund, by simply
combining national contributions, was based on the underlying premise
that national funds should not be spent on rescuing other countries’
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After the crisis: A new socio-economic settlement for the EU