Meeting on May
23, 2012, the E.U.’s European Council failed to come up with a plan to offset
the recessionary aspect of Greece’s budget cuts. The pressure was on; the OECD had
just warned that the E.U. go back into recession. Interest rates on state
debt-namely that of Spain—had reached an unsustainable level the week before due
to concern regarding banks based in the state. Besides the debt and banking
vulnerabilities at the state level, the E.U. itself was struggling with its
political weakness, which can be attributed to the states’ rights (or
euro-skeptic) ideology that was not exactly going away in the context of the
debt-contagion that had prompted the establishment of a permanent E.U. bailout
fund for states in over their heads on debt. In this context, the European
Council was at the intersection of debt, banking and political problems.
The full essay is at Essays on the E.U. Political Economy, available in print and as an ebook at Amazon.
