EU urged to play 'leading role' in tackling global bank crisis

A former commission vice president has said the global financial crisis has cast doubt on the ‘role and relevance’ of the EU and its institutions.

Viscount Etienne Davignon said that, in the past, the EU has played a ‘central role’ in addressing Europe’s economic and political crises.

But he added, “So far, that has not been the case.”

Davignon was speaking ahead of a weekend attempt by EU leaders to head off financial meltdown by spending billions of euros to guarantee loans and the survival of leading banks.

After a briefing from UK premier Gordon Brown in the Élysée Palace, French president Sarkozy and Angela Merkel, the German chancellor, agreed a joint pledge with the 13 other leaders of the eurozone to recapitalise banks and guarantee lending between them.

Davignon, widely regarded as one of the ‘grandees’ of European politics, spoke about the EU’s role in managing the current financial crisis at a high-level conference on Thursday, organised by Friends of Europe, the leading Brussels-based think tank.

He said, “The credit crunch that spread across the atlantic to induce financial meltdown in Europe has necessarily been a challenge to be met by national governments. But their measures clearly need more coordination if European solidarity is to be maintained and one nation’s measures do not harm the interests of others.

“Who should perform the role of coordinator? The European Central Bank in Frankfurt has shown positive and valuable leadership, but its powers and resources are limited.

“Important as the eurozone’s monetary stability is, the situation clearly demands a more political role from the EU,” said Davignon, who was commission vice president from 1981-85.

He called on the commission and its president, José Manuel Barroso, to take ‘the leading role and responsibilities that belong to the institution.’

“Together, member states and the commission must devise ways to ensure that the EU becomes a relevant and central actor in the policymaking needed to confront the financial crisis.

“The European parliament also has a vital role in ensuring the legitimacy and transparency of these policies.

 “The essential point is that the media and the public across Europe should cease to ask ‘where is Europe?’  If concerns about the EU’s relevance and usefulness are not allayed, then the political price to be paid at next June’s European elections may be damagingly high," said Davignon, a former Belgian government minister.

“Similarly, it will behove the commission to show Europe’s citizens that the concern of those of its members seeking re-appointment to retain the approval of EU governments should not prejudice its leadership in containing the financial crisis."

• Previous article
• Next article