Friday, June 4, 2010
The European Union and the Financial Crisis: A State of Play (L'Union Européenne AU Chevet De La Crise Financière: Un État Des Lieux)
Posted by D. Daniel Sokol
Gaetane Schaeken Willemaers, Catholic University of Louvain and Damien Gerard, Chair of European Law, Louvain University advise on The European Union and the Financial Crisis: A State of Play (L'Union Européenne AU Chevet De La Crise Financière: Un État Des Lieux) .
ABSTRACT: The European Union was once portrayed as powerless in the face of the financial crisis. In fact, as apparent from this contribution, it has been at the forefront of the coordination of the rescue plans designed by the Member States and of the reform of the financial system. Those two aspects are dealt with successively, with no other ambition than to report on the current stage of the European Union’s involvement in the management of the crisis. The first part deals with the reliance on State aid rules as a tool of economic policy coordination. It shows how the enforcement of those rules has mirrored the development of the financial crisis and outlines the conditions imposed on the clearance of state guarantees and recapitalisation plans. The second part deals with the reforms of the regulatory framework applicable to the financial sector in the EU, in the aftermath of the de Larosière report. In doing so, it presents succinctly new regulations and pending proposals designed to make up for the substantive weaknesses highlighted by the crisis, and sketches the contours of the restructuring of the EU financial supervisory system.