Praise for European leadership

Mediterranean Academy of Diplomatic Studies, University of Malta
Coordination of macroeconomic policies, one year after adoption of the Euro, is largely regarded as a blessing with the benefit of hindsight for some. The leadership shown during the financial crisis by the likes of British Prime Minister Gordon Brown and French President Nicolas Sarkozy, has been very welcomed by Malta.
2009 to be met with challenges, rising economic powers and increased globalization
The year 2009 is therefore certain to be a very challenging year, a year that calls for true leadership on a global stage. Twenty years since the end of the Cold War, the post-Cold War contours are becoming more and more clear as the rise of China, India and other powers becomes more obvious and the relative decline of America more apparent. Turbulence in the economic sector and chaos in the political sector are signs of a changing world order where the west is surrendering centuries of economic and political hegemony. 2009 will witness a further ushering in of a globalization process where weakened nation states and international organizations are seeking to find their place in the emerging multipolar system by addressing the multitude of challenges they are facing.
Continuation of reform

Common actions within the EU needed but no economic government

Centre d’Etudes et de Recherches Européennes Robert Schuman
A European response to the financial crisis and challenges of global governance makes sense to all politically and economically relevant actors in Luxembourg. As a very small country, whose economy is almost totally dependent on foreign trade relations and whose present prosperity is largely tributary to its financial services exports, Luxembourg is primarily hit by the financial crisis. But not for even one second can the Luxembourg government and parliament imagine reacting on their own behalf to the crisis. They can only act in cooperation with Luxembourg’s neighbours, within the Euro group, or in all EU coordinated actions. As Luxembourg’s Prime Minister and Minister of Finance, Jean-Claude Juncker is the current President of the Eurogroup, Luxembourg’s voice in this matter is most audible through the declarations of its Prime Minister.

Attention is focused on the national level economic crisis

Institute of International Relations and Political Science, Vilnius University
The issue of the financial crisis is widely discussed in Lithuania, both by the politicians and the public. Nevertheless, most of the discussions concentrate on the national level. The central issue in these discussions is the response of the new Lithuanian government to the crisis while the role of the EU in responding to the financial crisis is not widely deliberated.
There are only some remarks made publicly by the Lithuanian officials concerning the EU response to the financial crisis. In a press release published by the Lithuanian government, is it claimed that the Lithuanian government positively evaluates the European Council conclusion to form a group to coordinate the member states actions while dealing with the financial crisis.[1]
European actions are congratulated, but individual measures should also be applied
Lithuania supports the European Commission objective to foster the recovery of the European economy and at the same time holds a position that it is important to coordinate the actions taken to fight the financial crisis among the countries, but every state should take in to account its own situation before choosing concrete actions for fighting the financial crisis.[2]

Response to global challenges should not be decided by a select few

Latvian Institute of International Affairs
Latvia expects the EU to react energetically to the challenge of overcoming the global economic decline and restoring growth and that in order to achieve this, a new architecture and new mechanisms are needed for the global financial system. The response to this global challenge should also include pursuing actively the Doha Round of discussions on liberalising world trade to their logical conclusion and supporting consistently a policy of free and open trade.[1] The resultant agreements and policies, Latvia feels, would present a wider window of opportunity for developing its own foreign trade relations.
More specifically, during the Czech Presidency of the EU, Latvia anticipates implementation of the steps agreed upon during the European Council of 11 and 12 December 2008. Likewise, Latvia anticipates simplification in the application procedure for, and speedier disbursement of, the various EU funds for assisting agriculture.
Latvia endorses the principles of the G20 declaration, announced in Washington on 15 November 2008, and would like to contribute to the discussions at the EU level of the follow-up G20 Summit in April 2009.
The performance of the EU in the financial crisis so far

A year of uncertainties brings the need to connect with the new dynamic areas of the world

Istituto Affari Internazionali
In the last months, many opinions have been expressed in Italy on the way the European Union intervened in reaction to the financial crisis. In this context, the expectations towards the EU are quite high, since it is common opinion that nowadays “the globalised market is too complex to be managed at a domestic and national level”[1] and therefore there is great confidence in the role that Europe can play in the hard times we are going through. In this regard, it has been noted that, after the initiatives undertaken by the European institutions to face the financial crisis, “the public opinion may have a different perception, a more positive one, of the role that the Union can play”[2].

The performance of the EU in the financial crisis

Institute of International and European Affairs
Membership of the European Union is perceived to have had a positive effect on Ireland in helping to limit the damage that the country is currently suffering as a result of the financial crisis. In particular there is a perception that membership of the Eurozone and strong support from the ECB is crucial to the survival of the Irish economy, which on its own is relatively small and very open.[1]
Coverage has also been given to positive moves by the ECB, for example the doubling of loan aid available to governments[2] and the December 2008 European Council’s agreement on a pan-EU Economic Recovery plan[3] and joint action over toxic debt and the establishment of ‘bad banks’.[4]
Expected shifts in the international power constellation
The most significant expected shift in international power affecting Ireland is the relative weakening of US diplomacy following the global financial crisis[5] and the country’s military intervention in Iraq and Afghanistan.
As part of a speech delivered at Keio University on 15 January 2009, the Taoiseach highlighted the limits of US power evident in the Iraq war, and the fresh opportunities for co-operation with an America which needs partners and with emerging powers in Asia and a resurgent Russia.[6]

Global crisis – fragmented answers

Institute for World Economics of the Hungarian Academy of Sciences
The financial crisis hit the EU member states in different ways therefore the reactions to it have not been uniform either. In fact, a joint supranational approach could not be applied due to the fact that economic policies belong to national competences – only their coordination is effectuated at the EU level. These are the reasons why the EU does not have a single strategy to fight the crisis. The European Economic and Recovery Plan of 200 billion Euros proves this fact very well: 170 billion is originating in the national budgets, while 15 billion would be set aside from the EU budget and 15 billion could come from the European Investment Bank. Such a significant amount of money injected into the troubled economies of Europe may quickly entail the increase of budget deficits in the Eurozone countries threatening the Euro’s stability and also showing a bad example to the member states still outside the single currency area. So all in all, this is far from a genuine European response to the problem – and this criticism is shared by many Hungarian experts.[1]

Once more surpassing the threshold of the Stability Pact

Greek Centre of European Studies and Research
The severe financial crisis, as it has evolved, captured the attention of public opinion as well as of the political system in Greece. Initially the interest was more of a theoretical kind, since the Greek banking system was thought to be less exposed to ‘toxic’ sub-primes and the like; the first major indication that ‘something dangerous was happening’ came when the (then) Greek Minister of Economy and Finance took the lead in Europe (just after the Irish) to call for an increase to the legal bank deposits insurance (to 100,000 Euro) and to a ‘political’ blanket coverage of all deposits. Soon afterwards, a 28 billon Euro salvage package (+/- 10 percent of GDP) was voted in Greek Parliament to support the banking system – exposed as it was discovered to be to Southeastern Europe emerging markets, to Turkey and even Black Sea countries risk. As the days passed, the real economy also started to flinch and in early 2009 the refinancing of Greece’s public debt (which according to 2007 data stood at 93.4 percent of GDP) was discovered to be quite a problem, while the spread between Greek government paper and German bonds widened to more than 250 basis points. Thus, all complacency vanished and Greece really ‘discovered’ the financial crisis in a scary way.

United in economic diversity?

Institute for European Politics
Before giving an overview of the German debate about the European Union’s role in the current economic and financial crisis and the implications the crisis has for the global economic and political power constellation a short remark on the prominence of these topics in the general German discourse about the crisis has to be made. The topics touched here are less prominent in the public debate in Germany. Three other questions are fare more prevailing: 1) Is it necessary to bail out bankrupt financial institutions? 2) Should the same be done for companies active in the real economy? 3) How is the money to support the economy efficiently spent and who receives which shares?
The evaluation of the EU’s performance is often just a side aspect, but a general trend can be identified among these statements. Most people participating take an intergouvernmentalist view of the European Union in the debate. The debate about long-term implications is even more restricted to expert circles. Most participants agree that multipolarisation will be the major effect of the current crisis.
Europe – a continent petrified by the crisis?

EU needs to play a determinant role

Centre européen de Sciences Po
All political and economical actors, as well as observers in France, strongly underlined the determinant role that the European Union needs to play in the regulation of financial capitalism. The French Presidency announced its willingness to strengthen and increase the EU prerogatives in terms of financial regulation, especially on financial institutions.[1] Nicolas Sarkozy underlined the necessity of reinforcing the rules of governance and internal control within these institutions, and of a better control of rating agencies. The report elaborated by French ‘Commissaire aux Comptes’, René Ricol, on the financial crisis draws conclusions leading to this direction. Among them, it suggests to allow the European Parliament to tackle the issue of the recent increase of raw material’s prices.[2] As for French Trade Unions, they are largely advocating for a strong role of the EU in regulating the economic and financial system. As the major Trade Union CFDT points out, “the positive role of tense periods is to rediscover the role of the EU and its institutions […] Managing these difficulties imposed urgent and coordinated initiatives with undreamt success, even regarding the financial crisis”.[3]
Unity prevailed throughout the crisis