Thursday, August 25, 2011

TPS - The determination of a Euro’s architect in the face of crisis (by Jeff)

The determination of a Euro’s architect in the face of crisis
Extracts of the conversations on the eve of the European Council published by Notre Europe in March, June, October and December2010

The Euro crisis, a confidence crisis
"The force really driving the attacks on the euro is a lack of confidence in the EU’s ability to move forward in the historic task assigned to it, namely setting up a fully-fledged union, building a power designed to complete and to supplement its member states› power (while curbing it at the same time). When all is said and done, what is at stake in this European crisis is not Greece but the euro, and beyond the euro, the Union itself. People have difficulty in grasping the nature of the European project because both market operators and a majority of observers are unwittingly bound to a political model in which all power is held by the nation state, and they think that any other kind of order, such as the one that the European Union is building, is not really feasible. We might call this a Westphalian mindset, going back to the Treaty of Westphalia in 1648 when the end of the Wars of Religion was marked by a treaty recognizing each country’s power to choose its religion and its right not to have to put up with any external interference. The majority of today’s actors still have a political culture anchored in this model. Now, the European Union is a new historic experience based on building a post-Westphalian order. If we fail to see that, then we will inevitably harbour scepticism and lack confidence in the very existence of such a thing as the Union. So if you are a market operator or a commentator, you naturally tend to put your money on the experiment failing rather than on its being a success. (June 2010)..."

EU’s answer to the crisis
"We blame the EU for not having acted quickly enough and it is true that, if the decisions had been taken two months earlier, we would have acted in circumstances where the markets would have been less nervous. Nevertheless, it must be said that extraordinary democratic decisions such as these require a longer gestation period that we would wish. In the EU, but also in Greece, it has taken some time to build the political will necessary for a real turning point. Besides, if we compare the time needed in the EU to come up with a decision with that needed in the US at the autumn 2008, after the general panic generated by the Lehman Brothers’ bankruptcy, we see that the implementation of the Troubled Asset Relief Program (TARP) was not faster, it even faced a negative vote from the Congress. It is not only in Europe where the time needed to build the political will to act is longer than that the time devoted to the conception of the measures. (March 2010)... "

The EU as an actor rather than a coordinator
"A real economic government can only be made of actions in which the Union is the actor - with its own instruments - rather than the coordinator. This is currently the case with the currency, the competition policy, the external trade. This should be the case for certain aspects of the energy policy, research, infrastructures and transports among others. These are fields in which the EU competence is – as we say – “shared”. However, this sharing can’t be achieved through coordination, nor by the simple creation of a big market. In this sharing, the EU’s part today is close to zero. (March 2010)..."



[Mrt: Hattip for Jeff for providing this link]

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