The global economic crisis is testing the cohesion of the European Union
The global financial crisis has jolted Europe's historic journey toward “an ever closer union.” For many years, the great European project progressed smoothly, adding new members, eliminating the barriers that divide its people, and delivering greater prosperity. This crisis is its first major test, revealing framework flaws that the good years had covered up. Although national and regional responses to the crisis have grown more coordinated over time, it is still too little and too late. Will European institutions and policymakers be able to respond and adapt to keep moving toward “more Europe” or will the result be “less Europe,” or indeed “many Europes”? The choices made during this crisis will shape Europe's destiny for the foreseeable future. The problems differ in the west and in the east, but many, indeed the most important, challenges must be tackled jointly.
Financial to-do list
Advanced Europe is experiencing the worst recession since World War II. Decisive and unprecedented policy action has helped prevent an outright meltdown of the financial sector and even more brutal consequences for output, but the outlook is still bleak and the eventual recovery will likely be tepid and fragile. Beyond the immediate need for crisis management, Europe must revisit the frameworks on which it is based, because many have been revealed to be flawed or missing.
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