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NUMERO 12 - 17/06/2009

 State aid, nationalism and financial protection in response to the global crisis: the cohesion of the EU at stake

Basically there are two ways to tackle this issue. The first one would be to focus on the more immediate causes of the present crisis, by describing why and how things went wrong.
I prefer to go for a second and possibly slightly more ambitious approach looking at the fundamental factors of change. This is not at all for ideological reasons but because by taking a slightly more detached view it might be easier to respond to the question of the impact of these trends on EU cohesion.
The present crisis has followed a rather incremental path. Hence different governments have taken different measures or set different priorities during its course. This has somewhat blurred the transition from its initial financial dimension, in particular the banking failures, and the ensuing transmission of the credit squeeze to the real economy. Across the board we have witnessed a growing propensity to act following national patterns. That is true as far as the rescue operations of the ailing financial institutions are concerned as well as for the fiscal stimuli and in the string of supportive measures to various industrial sectors. More generally it is probably fair to claim that the increasing national retrenchment that taints many of these steps may not have been initially intended. However, the fact of the matter is that the accumulation of these measures tilted the debate towards a partial questioning of the workability of the macro-economic regulatory, and ultimately political, framework that characterized our recent past. This trend is further accentuated by the impact of the intensive involvement of governments in the corporate sector. In this context three aspects deserve to be borne in mind:
The first goes back to the dialectic tension between a more libertarian economic philosophy and the more social-market oriented countries in Europe. There is no doubt that the latter are trying to “re-conquer” parts of the ground “lost” over the last decade to a more liberal orientation by reaffirming a stricter rule-based and government-controlled economic fabric.


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