Unanimity rule paralysing European economic policy

Since the emergence of the Greek financial and economic crisis, Italy has always approved and encouraged an European coordinated action to resolve the situation. As Prime Minister Berlusconi maintained, if the EU is not willing to help a member of the Euro area afflicted by a severe economic crisis full of perilous potentials, then the EU has no reason to exist.11Reuters: Grecia Berlusconi: Unione Europea deve dare aiuti, 21 March 2010, available at: http://it.reuters.com/article/topNews/idITMIE62K02M20100321 (last access: 26 April 2010).
On the same line, the Italian Minister for Finance and Economy Giulio Tremonti, commented that the finance package to support Greece was the right thing to do.22La Repubblica: Atene alla prova bond: 16 miliardi entro Maggio, 26 March 2010, available at: http://ricerca.repubblica.it/repubblica/archivio/repubblica/2010/03/28/atene-alla-prova-bond-16-miliardi-entro-maggio.html (last access: 26 April 2010). More sceptical, however, was the opposition leader Enrico Letta, highlighting how the decision to involve the International Monetary Fund (IMF) undeniably discards the idea of a possible European Monetary Fund (EMF).

In this particular regard, the research community and various opinion-makers have adopted a rather severe and rigid position. Indeed, the agreement on the first rescue package, announced at the end of March 2010, has been described as a last minute solution, in which Germany seems to have obtained the most concessions.33Paolo Guerrieri: Europa delle patrie, AffarInternazionali, 29 March 2010, available at: http://www.affarinternazionali.it/articolo.asp?ID=1428 (last access: 26 April 2010). According to a comment which appeared in the Italian leading economic journal Il Sole 24 Ore, the financial package was a reasonable outcome aimed at lowering the risk of moral hazard. Germany is right in its restrictive approach to the Greek situation, and to deem the creation of an EMF a futile and complicated operation.44Alberto Alesina/Roberto Perotti: Processiamo le cicale greche non le formiche tedesche, Il Sole24Ore, 27 March 2010, available at: http://www.ilsole24ore.com/art/SoleOnLine4/dossier/Italia/2009/commenti-sole-24-ore/27-marzo-2010/salvataggio-grecia-accordo-francia-germania.shtml?uuid=f773d266-3978-11df-9fa9-1d4f0b3be0c7&DocRulesView=Libero&fromSearch (last access: 26 April 2010). Although necessary, Daniel Gros suggested that the IMF is not able to offer Greece enough money, and that the EU will probably have to participate with its own resources.55Daniel Gros: Dilemmi Greci, La Voce, 23 March 2010, available at: http://www.lavoce.info/articoli/-europa/pagina1001622.html (last access: 26 April 2010). In conclusion, it has been noted that politicians should not confuse European patriotism with financial irresponsibility, since the future of the whole EU economic project is involved.66Francesco Giavazzi: Più che un fondo serve coraggio, Corriere della Sera, 11 March 2010, available at: http://www.corriere.it/editoriali/10_marzo_11/giavazzi_e253ab20-2cd2-11df-a00c-00144f02aabe.shtml (last access: 18 May 2010).

Following the latest financial and political developments of the Greek crisis, including the tragic death of three people in Athens on 5 May 2010, an improved European rescue package has been promptly announced. With the realistic danger of a massive European financial infection, the Italian press shifted its attention to the political aspects of the crisis, asking for a substantial and rapid intervention, which indeed materialised.77Marco Onado: Ora la politica curi l’infezione, Il Sole24Ore, 7 May 2010, available at: http://www.ilsole24ore.com/art/SoleOnLine4/dossier/Italia/2009/commenti-sole-24-ore/7-maggio-2010/crisi-euro-politica-curi-infezione.shtml?uuid=6d2c43b4-599d-11df-acb8-823383602e85&DocRulesView=Libero (last access: 10 May 2010). In this regard, the Italian government expressed satisfaction with the 750 billion Euro agreement, with the President of the Italian Republic Giorgio Napolitano praising the Italian role during the political negotiations.88Corriere della Sera: “Il premier ha sbloccato i negoziati”. Napolitano “Italia ha fatto la sua parte”, 10 May 2010, available at: http://www.corriere.it/economia/10_maggio_10/chigi-napolitano-frattini_fd247162-5c1d-11df-92dd-00144f02aabe.shtml (last access: 10 May 2010). Nevertheless, some analysts noted that this solution represents only a second best, and that the EU ultimately needs to reform its economic institutions, creating automatic mechanisms to effectively control future crises.99Tito Boeri/Tommaso Monacelli: Non aggiungiamo miopia alla miopia, La Voce, 10 May 2010, available at: http://www.lavoce.info/articoli/-europa/pagina1001702.html (last access: 10 May 2010).

Mario Draghi, current Bank of Italy’s governor and candidate to head the European Central Bank, noted that one of the main results of the Greek crisis has been to underline the need for a more robust and comprehensive Stability and Growth Pact (SGP).1010La Stampa: Draghi: Governo economico Ue e con regole più severe, 20 March 2010, available at: http://www.lastampa.it/redazione/cmsSezioni/economia/201003articoli/53316girata.asp (last access: 26 April 2010). Generally, the same opinion is shared by Italian politicians and public opinion. Stricter rules are deemed necessary, and the European Commission should be allowed to indicate targets/actions and, when required, impose the Europe 2020 Strategy.1111Antonio Villafranca: The future of Euroland after the Greek crisis, ISPI Policy Brief n. 179, March 2010, available at: http://www.ispionline.it/it/documents/PB_179_20101.pdf (last access: 26 April 2010). But the reform of the SGP cannot be limited to sanctions. Indeed a structural approach able to offer a more solid and balanced European economic organisation is also needed.1212Giancarlo Corsetti: Cambiamo il Patto di stabilità, La Voce, 16 February 2010, available at: http://www.lavoce.info/articoli/pagina1001560.html (last access: 26 April 2010).

As has been highlighted, however, the Greek crisis is both economic and political. Therefore, any reform has to find a common political agreement among the EU member states, which seems to be, according to the last analysis, the main problem of an EU in which the current global financial crisis has brought an acute mutual distrust.1313Antonio Missiroli: Of Greek and gifts, ISPI Commentary, 4 March 2010, available at: http://www.ispionline.it/it/documents/Commentary_Missiroli_4%20marzo%202010.pdf (last access: 26 April 2010).

The possibility of a European economic governance, which has been suggested on several occasions during the Greek financial crisis, has remained rather unexplored in Italy. Nevertheless, some ideas have emerged from the public debate. Finance Minister Tremonti, for instance, admitted the need for a European direction of public investments, the first step towards an improved coordination between member states’ economic policies.1414Giulio Tremonti: Un ruolo per il Fondo monetario nel salvataggio della Grecia, Il Corriere della Sera, 6 March 2010, available at: http://www.corriere.it/economia/10_marzo_06/tremonti-grecia-fondo-monetario_c2a71ffc-28f2-11df-a5a9-00144f02aabe.shtml (last access: 26 April 2010). Moreover, the institution of new agencies aimed at the creation of a financial regulation system could be a complex development for the European economy, since such a system would have to be successfully applied to all the member states of the Eurozone. After all, the credibility of the whole EU is at stake, and the consequences that a failure or a weak system could trigger are indeed pervasive.1515Nicolas Veron: Il fallimento che l’Europa non può permettersi, La Voce, 23 April 2010, available at: http://www.lavoce.info/articoli/pagina1001661.html (last access: 26 April 2010).

In a nutshell, a coordinated governance of the European economy is a vast political operation, in which all the European institutions should receive a precise and improved role. Italian researchers and politicians appear rather favourable in principle, but it will take time before a concrete agreement is going to be reached.1616Romano Prodi: La speculazione, l’Europa divisa e la speranza di Kohl, Il Messaggero, 9 May 2010, available at: http://www.romanoprodi.it/articoli/italia/speculazione-europa-divisa-e-la-speranza-di-kohl_1494.html (last access: 18 May 2010).

Just after the release of the Commission’s proposal for a new Europe 2020 Strategy, the Italian government expressed support for the document, in particular with regard to its references to innovation, the value of small/medium enterprises, and the attention posed on international markets.1717Governo Italiano: Strategia Europa 2020 condivisa dal Governo Italiano, 3 March 2010, available at: http://www.governo.it/Presidenza/Comunicati/dettaglio.asp?d=56062 (last access: 26 April 2010). The Italian Minister for Finance and Economy, Giulio Tremonti, called the text interesting, as long as it is not understood as an instrument to incentivise public expenditure by the member states.1818ANSA: Tremonti a Ue, strategia 2020 non sia bancomat spesa, 16 March 2010, available at: http://notizie.it.msn.com/business-news/articolo.aspx?cp-documentid=152597706 (last access: 26 April 2010). Moreover, following the Franco-Italian summit of April 2010, both parties have argued that a stronger role for Common Agricultural Policy should be inserted in the final version of the Strategy.1919ANSA: Strategia 2020 Italia e Francia puntano sull’agricoltura, 30 March 2010, available at: http://www.newsfood.com/q/3600765e/strategia-europa-2020-italia-e-francia-puntano-sullagricoltura/ (last access: 26 April 2010).

However, the economic provisions contained in the document are probably not enough. In fact, it appears to be indispensable to also deal with the structural weaknesses of the European economic project, like the unanimity rule, which is ultimately paralysing most present EU actions. Only in this way does a better and more coherent economic future for the EU seem achievable.2020Giampiero Gramaglia: Europa 2020 chi fa da se fa per tre, AffarInternazionali, 4 March 2010, available at: http://www.affarinternazionali.it/articolo.asp?ID=1404 (last access: 26 April 2010).

    Footnotes

  • 1Reuters: Grecia Berlusconi: Unione Europea deve dare aiuti, 21 March 2010, available at: http://it.reuters.com/article/topNews/idITMIE62K02M20100321 (last access: 26 April 2010).
  • 2La Repubblica: Atene alla prova bond: 16 miliardi entro Maggio, 26 March 2010, available at: http://ricerca.repubblica.it/repubblica/archivio/repubblica/2010/03/28/atene-alla-prova-bond-16-miliardi-entro-maggio.html (last access: 26 April 2010).
  • 3Paolo Guerrieri: Europa delle patrie, AffarInternazionali, 29 March 2010, available at: http://www.affarinternazionali.it/articolo.asp?ID=1428 (last access: 26 April 2010).
  • 4Alberto Alesina/Roberto Perotti: Processiamo le cicale greche non le formiche tedesche, Il Sole24Ore, 27 March 2010, available at: http://www.ilsole24ore.com/art/SoleOnLine4/dossier/Italia/2009/commenti-sole-24-ore/27-marzo-2010/salvataggio-grecia-accordo-francia-germania.shtml?uuid=f773d266-3978-11df-9fa9-1d4f0b3be0c7&DocRulesView=Libero&fromSearch (last access: 26 April 2010).
  • 5Daniel Gros: Dilemmi Greci, La Voce, 23 March 2010, available at: http://www.lavoce.info/articoli/-europa/pagina1001622.html (last access: 26 April 2010).
  • 6Francesco Giavazzi: Più che un fondo serve coraggio, Corriere della Sera, 11 March 2010, available at: http://www.corriere.it/editoriali/10_marzo_11/giavazzi_e253ab20-2cd2-11df-a00c-00144f02aabe.shtml (last access: 18 May 2010).
  • 7Marco Onado: Ora la politica curi l’infezione, Il Sole24Ore, 7 May 2010, available at: http://www.ilsole24ore.com/art/SoleOnLine4/dossier/Italia/2009/commenti-sole-24-ore/7-maggio-2010/crisi-euro-politica-curi-infezione.shtml?uuid=6d2c43b4-599d-11df-acb8-823383602e85&DocRulesView=Libero (last access: 10 May 2010).
  • 8Corriere della Sera: “Il premier ha sbloccato i negoziati”. Napolitano “Italia ha fatto la sua parte”, 10 May 2010, available at: http://www.corriere.it/economia/10_maggio_10/chigi-napolitano-frattini_fd247162-5c1d-11df-92dd-00144f02aabe.shtml (last access: 10 May 2010).
  • 9Tito Boeri/Tommaso Monacelli: Non aggiungiamo miopia alla miopia, La Voce, 10 May 2010, available at: http://www.lavoce.info/articoli/-europa/pagina1001702.html (last access: 10 May 2010).
  • 10La Stampa: Draghi: Governo economico Ue e con regole più severe, 20 March 2010, available at: http://www.lastampa.it/redazione/cmsSezioni/economia/201003articoli/53316girata.asp (last access: 26 April 2010).
  • 11Antonio Villafranca: The future of Euroland after the Greek crisis, ISPI Policy Brief n. 179, March 2010, available at: http://www.ispionline.it/it/documents/PB_179_20101.pdf (last access: 26 April 2010).
  • 12Giancarlo Corsetti: Cambiamo il Patto di stabilità, La Voce, 16 February 2010, available at: http://www.lavoce.info/articoli/pagina1001560.html (last access: 26 April 2010).
  • 13Antonio Missiroli: Of Greek and gifts, ISPI Commentary, 4 March 2010, available at: http://www.ispionline.it/it/documents/Commentary_Missiroli_4%20marzo%202010.pdf (last access: 26 April 2010).
  • 14Giulio Tremonti: Un ruolo per il Fondo monetario nel salvataggio della Grecia, Il Corriere della Sera, 6 March 2010, available at: http://www.corriere.it/economia/10_marzo_06/tremonti-grecia-fondo-monetario_c2a71ffc-28f2-11df-a5a9-00144f02aabe.shtml (last access: 26 April 2010).
  • 15Nicolas Veron: Il fallimento che l’Europa non può permettersi, La Voce, 23 April 2010, available at: http://www.lavoce.info/articoli/pagina1001661.html (last access: 26 April 2010).
  • 16Romano Prodi: La speculazione, l’Europa divisa e la speranza di Kohl, Il Messaggero, 9 May 2010, available at: http://www.romanoprodi.it/articoli/italia/speculazione-europa-divisa-e-la-speranza-di-kohl_1494.html (last access: 18 May 2010).
  • 17Governo Italiano: Strategia Europa 2020 condivisa dal Governo Italiano, 3 March 2010, available at: http://www.governo.it/Presidenza/Comunicati/dettaglio.asp?d=56062 (last access: 26 April 2010).
  • 18ANSA: Tremonti a Ue, strategia 2020 non sia bancomat spesa, 16 March 2010, available at: http://notizie.it.msn.com/business-news/articolo.aspx?cp-documentid=152597706 (last access: 26 April 2010).
  • 19ANSA: Strategia 2020 Italia e Francia puntano sull’agricoltura, 30 March 2010, available at: http://www.newsfood.com/q/3600765e/strategia-europa-2020-italia-e-francia-puntano-sullagricoltura/ (last access: 26 April 2010).
  • 20Giampiero Gramaglia: Europa 2020 chi fa da se fa per tre, AffarInternazionali, 4 March 2010, available at: http://www.affarinternazionali.it/articolo.asp?ID=1404 (last access: 26 April 2010).

The reports focus on a reporting period from December 2009 until May 2010. This survey was conducted on the basis of a questionnaire that has been elaborated in March and April 2010. Most of the 31 reports were delivered in May 2010.

The EU-27 Watch No. 9 receives significant funding from the Otto Wolff-Foundation, Cologne, in the framework of the ‘Dialog Europa der Otto Wolff-Stiftung’, and financial support from the European Commission. The European Commission is not responsible for any use that may be made of the information contained therein.