Constitutional Reflections and Crisis Ruminations

‘From the Board’. Legal Issues of Economic Integration 41, no. 4 (2014): 315–330.

The crises have brought about a variety of responses from the European Union (EU). Here are some legal reflections and ruminations on the wider context. Two sets of trends may be perceived, both pulling in different directions. There is a greater reliance on instruments outside of EU law proper and a larger role for the Member States acting collectively (‘inter-governmentalism’) versus an increased role for the Commission and the ECB, which may be described as a more ‘federal’ or ‘integrationist’ element in crisis response. And there is both more and less transparency in the legal instruments and their judicial review by EU and State courts. Constitutional issues beyond EMU relate to the centrifugal forces to which the EU is subject. Secession is on the table, both from the EU and from its Member States. Globally, too, there are many crises to face in which law can only modestly contribute. The (inter-) cultural element of legal issues is never far away. The cultural aspects of the crises need to get our collective attention beyond legal-technical issues. Lawyers and politicians need to address mutual understanding and tolerance when engaging in policy-making.  8 August 2014


Stumbling Blocks and Corner Stones in Building a Deep and Genuine EMU

‘From the Board’. Legal Issues of Economic Integration 40, no. 2 (2013): 95–104.

Reflections on the crisis measures adopted by the EU and its Member States. Long-term, unified representation of the Euro Area at the IMF should be on the agenda, whilst now already individual Member States should not engage in exchange rate policy undertakings at G20 or G7 level as this is a policy area reserved for the EU. A joint approach to public finances, and a Eurozone budget, is a cornerstone of EMU: the Euro area should fund basic elements of State spending that are linked to the economic cycle to offset cyclical downturns. Also, a common narrative to understand the crisis and meet the current challenges is needed. This more ‘cultural’ element in addressing the situation has been sorely absent. 24 February 2013


Perspectives on the Euro Crisis

‘From the Board’. Legal Issues of Economic Integration 38, no. 2 (2011): 107–114.

The approach to the crisis through strengthening of economic governance will not ensure proper economic governance because of the primary role reserved to Member States. When the Council, where each fights for its ‘national interests’, is to set policy, no common vision will ensue. Such vision may result if proposed by the Union executive and discussed in the European Parliament, and ultimately agreed in the Council. Now, ad hoc agreements between national capitals decide economic policy choices. The cultural aspect of the crisis is almost entirely overlooked: political thinking remains along national lines and labour markets are disintegrated. A mental shift is necessary for the feasibility of the single currency in the long run. Unified representation internationally, notably at the IMF, is called for. A combined crisis response to the various challenges facing Europe (energy crisis, currency crisis) would be mutually reinforcing. The international situation puts the European crisis in perspective: poverty in Europe is miserable; in some places elsewhere in the world, reduction in income may constitute the difference between life and death. A world in which 1 billion people are chronically hungry and where 1.4 billion people live below the poverty line is unsustainable. February 2011


The Credit Crisis and Its Aftermath

‘From the Board’. Legal Issues of Economic Integration 36, no. 4 (2009): 279-284.

Lessons may have bene learned from the worst financial crisis since the 1930s but not in the financial sector where client focus and sustainability of financial products should become paramount instead of the bankers’ short-term own interests. There are serious misgivings about the gaps in the De Larosière report for a new EU financial supervisory architecture, such as the absence of a proposal on burden sharing among nations in case of bank failures and its timidity in respect of deposit insurance schemes. The Commission and the ECB deserve praise for their joint efforts to uphold the market and competition when vetting the Member States’ massive financial support for banks. The resurgence of nationalistic and anti-EU sentiment does not bode well for a continent deeply integrated economically, socially, and culturally but without a common European public domain. The broader world context should not be forgotten: reduction of the development gap remains the major challenge the world faces after the crisis, together with the issues of sustainability (including climate change) and of living together with so many faiths and cultures in a global village. August 2009


ABN AMRO: A Take-Over Battle with Far-Reaching Implications

Tribune’ (editorial), Euredia, Revue européenne de Droit bancaire et financier - European Banking and Financial Law Review, 2007-2008.2, Winter 2008.

European legislation adopted to address the issues that played in the take-over battle for an Italian bank (Antonveneta) by ABN AMRO comes into force when the Dutch bank is itself subject to a take-over bid. Integration of the European banking market through cross-border take-overs makes the post-Antonveneta Directive (2007/44/EC) topical. The EU’s supervisory arrangements, based on national regulation and home State control, seem no longer fit for the financial market reality. Italian Minister of Finance Tomasso Padoa Schioppa was right to plead for a single European rulebook and integrated European supervision over cross-border market players. Differences in corporate governance between Member States can be decisive in the outcome of take-over battles, as recent examples in the financial and energy sectors show. The take-over battle for ABN AMRO raises fundamental questions: on how Europe wishes to organise its capital market (regulation), on how it prepares for effective and efficient Europe-wide supervision of an ever more integrated financial market and on how we would like our companies to be managed and valued: with shareholders ultimately determining their future or with more influence for other stakeholders? How do we like to see the future direction of a free enterprise determined: guided solely by shareholder value (and by the spin-off for board members whose bonuses upon leaving office may be difficult to explain in view of the company’s underperformance or against the backdrop of average income in society), or by broader values and interests alike?

5 January 2008