The European Union's survival as a political and economic union depends on its response to the sovereign debt crisis, even if such response was unimaginable by the framers of the union itself.
The ongoing national debt crisis in Europe has forced Germany to approve another bailout plan to rescue Greece. However, there hasn’t been any good plan set by any officials either from the European Union (E.U.) or other E.U. member states to resolve the actual problem; how are PIGS (Portugal, Italy, Greece, and Spain) nations going to pay off their national debt in the long term?
It seems natural for the E.U. to step in as a supranational authority to manage and organize the current crisis, but such role has probably not been imagined by the framers of the E.U. itself. E.U. was created to provide a political and economic union across different nation states in order to reduce transaction cost in commerce and harmonize the region with a certain common identity. No one imagined the E.U. to be the institution that would be able to manage a European wide crisis.
It is not to say that the E.U. as an institution was not sufficient to prevent the current sovereign debt crisis; the crisis happened precisely because certain actors in both public and financial sector have violated all E.U. financial regulations. Simply put, if everybody followed the established rules faithfully, then perhaps Europe won’t be facing this crisis today.
But the E.U. is facing the crisis, and so far it has not provided a sufficient response to quell the problem. It also doesn’t help to see that the current center of political power is not within the E.U. itself but in the hands of a few powerful E.U. members, mainly Germany, that have de facto veto power over policy proposals to respond to the crisis. It might be good news to those believing in nation-state centric international perspective, but it has become a threat for the E.U. to act as a leading force in instituting policy that is not skewed towards one E.U. member over the other.
What is the E.U.’s role in the current crisis? I think the E.U. should become more active and assertive in policy making on the debt crisis so that not only a workable supranational macro plan can be devised to rescue Europe as a whole but also instill confidence to E.U. citizens that the institution is autonomously responding to the crisis as an active player, so that the E.U. can be seen as a legitimate and effective authority on important crisis in Europe.
Work Cited:
"Germany Approves A Bailout That's Way Too Small To Solve Europe's Problems : Planet Money : NPR." NPR : National Public Radio : News & Analysis, World, US, Music & Arts : NPR. http://www.npr.org/blogs/money/2011/09/29/140915984/germany-approves-a-bailout-thats-way-too-small-to-solve-europes-problems (accessed September 30, 2011).
