Rolling the Dice: The E.U.’s Financial Regulatory Agency (the ESMA)

Even though the European financial sector integrated significantly during the first decade of the twenty-first century, the E.U. Government’s regulatory infrastructure and content did not keep up. As in the U.S. until 1933, state regulation carried the bulk of the weight. As the twenty-first century notably differs from the nineteenth, the relatively integrated financial sector in the E.U. means more risk is entailed in continuing to rely on state regulators. This is not good news for David Cameron, who in late 2011 tried and failed at a European Council meeting to hold strengthened enforcement of state-deficit limits hostage by demanding protection for state-level financial regulation over federal regulation. Like South Carolina was in the nineteenth century, United Kingdom was decidedly in the states’ rights camp as late as a decade into the twenty-first.

The full essay is at "Essays on the E.U. Political Economy," available at Amazon. 

Van Rompuy as the European Council's First Extended-Term President

“In a sense, Europe seemed to be living down to expectations. Earlier, the foreign minister of Sweden, Carl Bildt, warned against a 'minimalist solution' that would reduce the European Union’s 'opportunity to have a clear voice in the world.'"  Olivier Ferrand, president of Terra Nova, a center-left research institute in France, said, “It is quite astounding. . . . It is jaw-dropping. It is the end of ambition for the E.U. — really disappointing.”

The full essay is at "Van Rompuy as the First President."

Source:

Stephen Castle and Steven Erlanger, "Low-Profile Leaders Chosen for Top European Posts," The New York Times, November 19, 2009.

Divergent Fiscal Policies in the E.U.

States on divergent fiscal paths can test the flexibility of an empire-scale union, particularly if it is relatively new and still developing. Simply having different industrial/agricultural make-ups can put states at odds with each other. That the richer states can use fiscal policy to become even richer, while the policies imposed on poorer states may aggravate their fiscal conditions, can mean that the economic distinctions between states can become an increasing problem in a federal system, even given the allowances enabled by federalism itself (e.g., by the principle of subsidiarity). 

The complete essay is at Essays on Two Federal Empires, available at Amazon.

The E.U. States on Bailouts and Immigration: Where Lies the Vulnerability?

The history of the E.U. and its predecessor, the EEC, can be characterized as a series of fits and starts. For example, at one point France vetoed the accession of the U.K. as a state. Before long, Britain was in and the EEC could step forward. At another point, the proposed “constitutional treaty” was voted down in referendums in two states. A few years later, the Lisbon amendment was ratified and the E.U. could adjust, albeit piecemeal, to being larger. Without knowing the overall pattern in this history, one could easily take one of the backward steps for the demise of the union. Even an awareness of the pattern is not sufficient to arrest doubts. Moreover, a back step can be of sufficient symbolic value that it breaks even the “fit and start” pattern with truly dire consequences. Given the overall pattern, however, it is difficult to discern such a baleful symbolic move back.

The full essay is at Essays on the E.U. Political Economy, available at Amazon.