BERLIN – Europe and its national governments are basking in their new capacity to act – and not without reason. Who would have dared, even a few weeks ago, to predict that in the end it would be the divided Europeans, not the United States, who determined how to contain the global financial crisis?
Serious crises are defining moments in history. To be sure, the US is in an interregnum until the election of a new president. Moreover, George W. Bush seems to be far weaker than any normal “lame duck” president, creating a global power vacuum that has been filled vigorously by French President Nicolas Sarkozy, who is also the current president of the European Council. Sarkozy already took on this role in the Georgia crisis; now he has reinforced it.
By summoning the euro group, which so far includes 15 European Union members, the French presidency could rely on a politically functioning avant-garde group. Especially with regard to financial and currency issues, the EU has a strong institutional base – the euro as a common currency, the European Central Bank, and the binding budget and debt criteria of the Maastricht Treaty. Indeed, the current global financial crisis has demonstrated once more that the EU is strong where it has integrated its member states’ interests and weak where it has failed to do so.
Of course, the crisis has not been overcome. We have gained time and can take a deep breath – no more and no less. When you are hanging over an abyss, as the global financial system has been in the past few weeks, then gaining solid ground, even if only temporarily, makes a big difference.