Britannia Radio

This is what they did in Europe without the EU and without the Lisbon 
Treaty.

This shows the irrelevance to the real world of Brussels, when the 
chips are down.

Not many seem to have noticed.

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FINANCIAL TIMES   15.10.08
Brussels looks like a bystander amid turmoil
By John Thornhill

The giant financial rescue operation mounted by the eurozone's 
leaders has been hailed - prematurely, some may think - as a triumph 
for Europe. But the question must be asked: what kind of Europe?

What is striking is that the response has been driven by national 
governments rather than by the European Union commission. Already 
José Manuel Barroso, the commission's president, is facing stiff 
criticism that his team did not do more to anticipate the crisis and 
co- ordinate a pan-European response including all 27 member states.

Last week Friends of Europe, a Brussels-based think-tank run by 
several former commissioners, questioned the relevance of the EU in 
the crisis and called on Mr Barroso to take the lead. The think-tank 
contrasted the commission's inactivity with its central role in 
addressing all of Europe's economic and political crises since the 
early 1960s.

At times, the commission has looked like a bewildered bystander. The 
commission is quick to stress it is not responsible for regulating 
financial institutions. But its defence of its flagship economic 
policies such as competition and the stability and growth pact 
(fiscal rules underpinning the euro) has looked increasingly out of 
kilter with governments' desperate attempts to cobble together a 
response.

Should these somewhat theological debates about the divisions of 
institutional powers matter to ordinary Europeans? After all, the 
eurozone's 15 leaders plus Gordon Brown, the British prime minister, 
showed they could take decisive collective action to address the 
financial crisis even in the absence of the Lisbon reform treaty that 
was rejected by Irish voters.

It was a similar story when it came to fashioning an EU response to 
Russia's invasion of Georgia. As the holder of the EU's rotating 
presidency, Nicolas Sarkozy, France's president, was eventually able 
to hammer out a common position in spite of member states' wildly 
different sensibilities. "What is important is leadership, not 
Lisbon," as one French official said.

This ad-hoc style of European leadership, springing from national 
capitals more than Brussels, may have been surprisingly effective in 
the short run. But some observers question its longer-term 
sustainability. As one of the EU's biggest member states, France has 
had the clout to assemble a "coalition of the willing" to respond to 
events. But would one of the smaller EU members be able to do so? And 
are the EU's smaller states not in danger of being trampled in such 
arrangements?

Nicolas Véron, a research fellow at the Bruegel think-tank, says 
Europe's latest response cannot be considered a stable institutional 
arrangement. "The markets still need convincing that the cross- 
border banking model in Europe has a future. That is why a proper 
debate about supervision is so critical now even if the 
implementation is some way off," he says. "The commission has a role 
to play."

At a seminar organised by Friends of Europe last week, Mr Barroso 
admitted that the current crisis had exposed the failings in Europe's 
regulatory structure. But he suggested the fault lay with national 
governments rather than the commission. "It would be completely 
unfair to say the commission was the one resisting a more European 
approach in this area. On the contrary, [it] was asked not to do more 
by very relevant actors," he said.

The irony is that Mr Brown has been hailed as the hero of the hour 
for designing Europe's financial lifeboat. Yet it was Mr Brown, 
defending the interests of the City, who was one of the fiercest 
opponents of centralising European financial regulation.