BRUSSELS – The global financial crisis has already highlighted both the strengths and the weaknesses of the European Union. Had it not been for the euro, the shock waves from the meltdown of September and October would have spread to the currency markets, creating tensions that would have set Europe’s political and economic integration back by decades, perhaps imperiling the whole project.
Much less positively, EU member states have been slow to act in concert. At first it was the European Commission that drew criticism for its slowness in making proposals to rally national governments and their policymakers. Now it is the member states that are resisting the urgent need for a coordinated EU-wide policy response to the deepening crisis.
The speed and the severity of the economic slowdown are far greater than any of the post-war downturns of the past 60 years. In Europe, we by and large failed to heed the warning signals of America’s sub-prime mortgage crisis when it erupted in the late summer of 2007, and thus were unprepared when the next phase of the crisis engulfed European banks, too. The lesson to be drawn is that the EU must move more quickly and with greater determination than has been the case so far.
Throughout the EU, people are asking, “What is Europe doing to address the crisis?” The answer is “not nearly enough,” and the political price may be high at next summer’s European Parliament elections.