Amidst the global financial crisis, Europe is gradually learning how to recover within its existing institutions, EU Commissioner Janusz Lewandowski stressed on June 23 at a GMF event titled “Overcoming the Crisis and Securing the Future of Europe.” In discussing the ramifications of the spillover effects of the Greek crisis to markets overseas, the EU Commissioner responsible for Financial Programming and Budget emphasized the need for a global approach to respond to today’s financial and sovereign debt challenges. Moreover, as the Global Trade Alert has identified 300 new protectionist measures over the course of the last year, the Commissioner mentioned the importance of building international support to discourage countries from resorting to raising tariff and non-tariff protectionist measures as the major economies continue to recover from the crisis.
As for the Euro zone, the Commissioner contended that it’s become “fashionable” to give a gloomy forecast for the common currency due to the Greek crisis. In addressing this criticism, he pointed out that until 2007 the “common currency was a true success story” and highlighted the fact that the euro has facilitated cross border trade to an area of 500 million consumers without the stress of fluctuations in exchange rates. Additionally, until 2007 the major euro zone economies reduced their national debt, while the spread between bonds of countries remained at or below 0.25 percent. “This was [the] story of the Euro until it has been tested by the severe crisis and its successes were overshadowed by the Greek crisis.” The Commissioner also asserted that in order to understand the response of the European Union to the crisis one must grasp the structural nature of the European Union as critics tend to disregard the fact that the EU isn’t a national state but a union of sovereign states, in which only certain powers are delegated to Brussels.
Commissioner Lewandowski acknowledged that the € 750 billion EU Stabilization Mechanism represented an extraordinary crisis intervention tool, which will have to be complemented by stable anti-crisis mechanisms within EU institutions. The speaker stated that “Europe was about peace, and then about integration, now it’s tested as to its anti-crisis ability.” In order to be better prepared for the future, he contended that the EU needs to establish a dual level of crisis prevention – one on the national level and one on the supranational level. The proposed anti-crisis machinery will not work unless it is supported by national laws and limits – limits that will act as a safety net at the national level to support the administration at the Brussels level. “The real answers are at the national level; we are about pragmatic steps towards cooperation, not dissolution,” the Commissioner said.