Readers will find news and documents in this issue of the newsletter to enable them to judge the outcome of the European Council of Thursday 18 and Friday 19 March 2009, along with comments from the protagonists and the full conclusions document. The actual news is the most important aspect and my comments will simply shed light on specific areas where further work will be required.
1. Taking a different stance from the United States? The holding of the summit was accompanied by pressure and comments from the United States, criticising the paucity of anti-crisis measures decided upon in Europe. I am not talking here of the official views of the United States' government but rather of key figures and Nobel Prize winners (like statements by Paul Krugman, see issue 9864 of our newsletter). I think one should be wary of thundering accusations from the country that caused the financial crisis and from people who didn't see the crisis coming. The difference between the EU's approach and some comments from the other side of the Atlantic (which don't seem to match President Obama's ideas and even put him under pressure at times) is becoming ever clearer. This boils down to:
a) the model being pursued in the United States reportedly aims to garner as much state aid as possible for banks and industry, leaving the regulations and governance of the financial world largely unchanged, particularly when it comes to monitoring behaviour;
b) the EU's approach is a root-and-branch review of rules and behaviour in the financial world, focussing on surveillance and keeping a close eye on state aid and subsidies to avoid colossal public debt. This does not mean refusing to help out, where necessary, but it does mean avoiding waste and not giving in to blackmail from some bankers and captains of industry who want to cling on to their abusive bonuses and privileges.
The EU seems to me to be taking the better approach by far.
2. News and announcements. Depending on how you calculate it, the EU is having as much influence on the rest of the world as the United States but in a different way. Social issues will be discussed at the European Council in Prague on 7 May 2009, and EU institutions have already started preparing for it. The size of the EU's budget means that the EU cannot provide such huge direct funding as in the US, but the funding the EU does provide is quite considerable and the summit in Brussels decided to ring-fence more money for anti-crisis measures. The Commission dug its heels in and managed to get funding released for some already identified projects. The extra €5 billion will come from the EU's budget. On top of this, there is the greater role of the EIB (the European Investment Bank) that has finally been recognised as an effective EU policy tool.
Just as significant progress has been made in the rules governing the financial world - there will be a total sea-change here, leading some analysts to say that the current crisis will have a positive outcome. Confounding his critics, Jose Manuel Barroso said that the Commission will endorse the conclusions of the Larosière Group, explaining that draft legislation on the structure of financial supervision in the EU would be unveiled at the end of May this year for the June European Council. In the autumn, new legislation “based on the Larosière report's recommendations” will be published. This timing is faster than recommended in the report. The revolution announced in this column in issue 9859 is advancing by leaps and bounds and that is the most important part, even if it causes displeasure among US commentators.
3. The “Community method” is crucial. In my view, the results of this summit confirm that it is essential for the EU to be strengthened. Its institutions and procedures cannot be replaced by intergovernmental cooperation. Only the Community method takes into consideration everyone's views and interests and institutional balance between the Parliament, Commission and Council means it can work democratically.
Much of the approved conclusions is a wish-list of EU action, indicating the direction to be followed in the future and ensuring the EU will act effectively at the G20 London summit in April.
Over now to analysis and reports from the European Council, and statements from the protagonists.
(F.R./transl.fl)