A political crisis in an economic tempest (January 2008 – December 2012)

Abstract:

The aim of this paper is to analyze the evolution of the European Union in the economic and financial field during the global crisis that stroke Europe, from January 2008 until December 2012. My argument is that the European Union has faced certain political and economical imbalances since its beginnings in 1992 which have worsen the European economic and financial scenario.

These imbalances - rooted in the EU architecture – were the result of a primary political choice: building a European market based on neoliberal values and setting aside any political controversy that may have caused a slowdown in the economic and financial integration.

Since 1992, the Maastricht Treaty has shown some incongruities which were not resolved in the following two decades. Moreover, the decision-making process became more intricate so that Europe faced the worst post-war financial crisis without the instruments to answer rapidly to the financial speculation.

The ECB, following its price stability mandate, was not able to react with counter-cyclical measures, thus exacerbating the financial imbalances between Northern and Southern European States. After an economic “perfect storm”, EU Member States need to have enough farsightedness to implement some fundamental reforms in order to give the necessary means to EU institutions to erect an efficient firewall against financial speculations.