Treaty constraints, power and creativity in the EU’s handling of the financial and economic crisis

The financial and economic crisis of 2008–2010 constituted a unique challenge to the economic-financial governance of the European Union. On the one hand, economic and fiscal policies remain national competencies of the Member States. On the other, the latter exercise these within an EU system of non-discrimination, solidarity and mutual co-ordination, with seventeen of the Member States sharing a common currency and common monetary policy. These central elements of the EU’s economic and financial governance were all challenged by the deep crisis of large parts of the financial system, by economic recession and unemployment, and by an exploding public debt in the Member States.

The scale of this crisis gave national political leaders strong incentives to concentrate primarily on battling their economies’ slide into recession, and only in the second place on respecting – not to mention deepening – the EU’s economic governance. How does one prevent domestic crisis-management from damaging European integration? How do we assess the added value of EU integration and take advantage of it in anti-crisis policy? Can the crisis favour new advances in European Union building? These are questions which merit closer analysis in assessing the EU’s reaction to the crisis.