Wednesday 4 March 2009

Don't worry, the Commission has a cunning plan

The Commission apparently has a plan to aid Eurozone countries that default, though it will not reveal them to the public. Though since there can be no buying up of national bonds or bailing out of defaulting governments, the balance of payments scheme seems to be the only mechanism available (that I know of - not being an economist, I can't say for definite). If that's true, it seems the amount of money that is involved is minuscule (unless the ceiling is raised significantly: at the moment the ceiling is €25 billion).

I'm not too impressed by the claim that they're "equipped intellectually, politically, and economically to face this crisis scenario", either. First of all, I would question the fact that the aid (under "The Plan") seems to be on offer only after the country has defaulted, or at least it is only spoken about in these terms. Second, the Commission's performance over the last few months hasn't been inspiring. If its defence of the single market, the heart of the EU, is so weak, then I don't expect much ambition in this area either. That the Commission has proved so inept in demonstrating the usefulness of the EU to the public by taking a pro-active stance is, in my opinion, the most damning aspect of Barroso's Commission.

Never mind the lack of political promotion and initiative during the referendum campaigns, etc. as highlighted by the Anyone But Barroso campaign, though these reasons are by themselves important - this failure to act effectively cannot be rationalised away with the idea that the Commission shouldn't be assertive in the national political arena; the crisis is huge, and the need for effective common plans and co-ordination has never been greater. If the Commission cannot summon up the courage and ambition to act in an area where it is so desperately needed, then I can only assume that this one has a death wish.


  1. I tend to agree with you. I am far from confident that operators in the financial markets and the real economy sleep any better after Almunia's vague hints at rabbits to appear from his top hat.

    The national political leaders have given the European Union treaty rules and a Commission sea-worthy only for fair-weather sailing, but seem clueless as to the action to take when they enounter a storm.

    At least the ERM II countries should be helped into the Eurozone as fast as possible.

  2. I just came across the following on EurActiv (5 March 2009):

    In a single strike, European Commission President José Manuel Barroso put a stop to rampant speculation regarding issuing EU bonds, rebutted suggestions that troubled EU countries would be put on a fast-track to eurozone accession and dismissed calls for a single EU-wide financial supervision watchdog.


    Makes one wonder even more what Almunia thinks he has up his sleeve.