The evolution of EU law post the global financial crisis
Today at the Taxand Global Conference in Milan Professor Enzo Milanesi, previously Italian Minister of European Affairs, discussed the evolution of EU law in light of the global financial crisis.
Today at the Taxand annual Global Conference in Milan, Professor Enzo Milanesi, previously Italian Minister of European Affairs, discussed the evolution of EU law in light of the global financial crisis.
In the conference session, Professor Milanesi explored the different impact the financial crisis had on Europe compared to the US and the rest of world. The key difference was the sovereign nature of economic crisis experienced in Europe, which resulted from the vast increase in country deficits as numerous financial institutions, on the brink of bankruptcy, were bailed out. This predicated a loss of trust from EU citizens in the financial system, undermining financial institutions and creating a dangerous environment for the integrity of the EU.
The different phases of the crisis led to a number of phases of EU regulation, which sought not only to address the immediate issues created by the particular phase of the crisis, but also to strengthen the level of integration between European countries in the future.
Key regulation came at the height of the financial crisis in 2011, when six new EU regulations were introduced, not least the insertion of a reverse majority rule which sought to avoid the situation encountered in 2003 when both France and Germany found themselves with excessive levels of deficit but were able to avoid EU sanctions. The introduction of ‘firewalls’ to facilitate assistance for specific countries in financial trouble were also introduced.
Regulation introduced during the third phase from 2012-2013 were more forward looking, with the aim of achieving growth and employment across Europe. 12 member states signed a letter in February 2012, committing to this objective, which helped alter the direction of travel for legislation and resulted in the Pact for Growth and Employment in June 2012, which harnessed the single EU market as an accelerator for economic growth.
Reflecting on EU regulation post the financial crisis, Professor Milanesi argued that the future of a better functioning European Union is dependent on two key factors:
- Granting the EU the fiscal capacity to allow the issuance of debt onto the market to finance development and other growth initiatives
- A mechanism to monitor and control the end result of national economic reform programmes for the benefit of the EU
He also argued that more rigorous rules across the EU are essential due to the huge inter-dependency that results from the single market and the fact that knock-on effects can be extremely problematic for a number of countries.
Your media contact for further queries is:
Barnaby Fry, MHP
T. +44 (0)203 128 8215
Quality tax advice, globally
Whilst recognising the rise of some anti-Euro sentiment from electorates and political parties in certain countries and the dangers posed by geo-political events, the Professor pointed to the fact that we are in the process of entering a new political narrative for EU regulation and one which moves on from the theme of rigour and severity, to an acknowledgement that EU law must have a degree of flexibility, democratic accountability and should be understood by the general public in order to adapt to an ever changing environment.
Taxand's Take Author
Register to receive Taxand’s latest opinion on topical tax news