European Tribune - Comments - The State, the EU and the current crisis

The State, the EU and the current crisis | 53 comments (53 topical, 0 editorial, 0 hidden)

I do agree that national governments can use the European Council, not to mention the Council, as a way of bypassing public debate and accountability. But certainly not the European Parliament. (The Commission is yet another thing, but I leave that to Jérôme.)

However, In last Sunday's agreement on separate but parallel bank saving packages at the special EU summit on the financial crisis counter-measures, what I find noteworthy is that the national governments felt pressured to respond to public debate: in particular the talk about constraining manager renumerations. (Yesterday, German finance minister Peer Steinbrück got a quite heavy grilling in a public TV interview on the German €500 billion package.)

So, I don't think debate on general interest was bypassed this time, even if of course I'd wish a much stronger debate on it. More, as the national nature of the bailout plans indicates, I think it's still the disconnect of the nation states separately and that of markets that really matter, not their use of the EU.
From the little of what I heard of the German, Austrian, French and Spanish plans so far, the state would control. The state would not exert total control, but more than simply its voting weight: the credits would be given on condition of letting the finance ministers or central banks set terms (including at management decision level) and review financial conduct.

Now, putting such power in the hands of a finance minister is of course a bouble-edged sword: he could both choose to completely overhaul and micro-manage banks, or to be done with it and allow bank CEOs free rein without much oversight. (But, this is again a question of the accountability of national governments.)
That's a significantly weaker point. Methinks the EU is primarily organised around political aims, even if the bulk of its current legal institutions and texts and budget deals with economic issues (even the Common Market has political aims).

_{*Lunatic*, n.

One whose delusions are out of fashion.}

by DoDo on Tue Oct 14th, 2008 at 04:18:01 AM EST
[ Parent ]

Supplement: it is also noteworthy that Paulson, too, changed the US bailout package from one aimed at acquiring bad assets from banks to one injecting capital by buying stakes in banks.

_{*Lunatic*, n.

One whose delusions are out of fashion.}

by DoDo on Tue Oct 14th, 2008 at 04:20:07 AM EST
[ Parent ]

Yes, while I critize mainstream economists ... (none / 1)

... for relying almost exclusively on an analytical toolkit that is incapable of addressing a number of critical factors (intrinsic uncertainty being among them) ...

... on this occasion, I must applaud the way that so many mainstream economists have latched onto and pushed the basic fact that a solvency crisis cannot be solved after it has broken simply by paying fair market value for assets that are on the books.

With so many "serious" people pushing for an equity stake as a preferable alternative to overpaying for troubled assets, it becomes hard for even a former Lehman Bros. CEO to ignore.

I've been accused of being a Marxist, yet while Harpo's my favourite, it's Groucho I'm always quoting. Odd, that.

by BruceMcF (agila61 at netscape dot net) on Tue Oct 14th, 2008 at 01:56:08 PM EST
[ Parent ]

The State, the EU and the current crisis | 53 comments (53 topical, 0 editorial, 0 hidden)

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