Criticising the lack of harmony in the European reaction

Belgium
Centre d’étude de la vie politique, Université libre de Bruxelles

During the first days after the outbreak of the financial crisis, various Belgian political actors criticized the individual management of the events and the lack of harmony in the European reaction. The Belgian government expressed its dissatisfaction on this topic to the French President during the Eurogroup meeting on 12 October 2008. In addition, the Belgian Prime Minister denounced the lack of an answer from the EU at the beginning of the crisis, with the exception of the European Central Bank, while the parliamentary opposition particularly stressed the absence of the European Commission and of its President.[1]
 
The crisis revealed the need for a structural management of the events of all member states. Therefore, the Belgian government, in a very active but discrete way,[2] proposed the creation of a European harmonised organ in charge of supporting the preventive control, the granting of warranties, and the organisation of financial facilities in cases of insolvability, illiquidity and bankruptcy. Another proposal was the creation of a European fund aiming at solving the liquidity problems for a certain category of banks.[3] Eventually, other member states should be inspired by the way the Belgian government dealt with the financial crisis said Georges Dallemagne (CDH[4]), a MP belonging to the majority.[5] During the 15 and16 October summit, Belgium successfully proposed a warranty of the structure of the capital of bank institutions and a state warranty for interbank transactions, enlarged to 100,000 Euros in Belgium.
 
Other suggestions have been made by different political actors regarding the financial environment. First of all, several MPs from both the majority and the opposition stressed the need for a reform of the International Monetary Fund and other financial institutions as they apparently did not provide useful solutions to the crisis.[6] The main problem with such reforms is that Belgium alone can do little and a consensus would be required among European countries to reform these institutions. The suppression of the fiscal off-shores has also been discussed in the federal parliament,[7] as well as the creation of a European bank and finance Commission. This latter proposal can be useful for regulation and global initiatives besides the existing European Central Bank, but its main disadvantage would be its rigidity. As by definition, a financial crisis requires a fast reaction, this institution would be inadequate in rapidly dealing with the short term events.




[1] Le Conseil européen de Bruxelles. 15 et 16 octobre 2008, Report made for the Advice Federal Committee in charge of European Issues, 27 November 2008, Document 1616/001 (Chamber) and 4-0985/1 (Senate).


[2] Leterme se félicite de l’influence belge, in: La Libre Belgique, 7 November 2008.


[3] Y. Leterme réclame un fonds d’aide européen, in: La Libre Belgique, 25 October 2008.


[4] Centré Démocrate Humaniste, French-speaking conservative party.


[5] Le Conseil européen de Bruxelles. 15 et 16 octobre 2008, Report made for the Advice Federal Committee in charge of European Issues, 27 November 2008, Document 1616/001 (Chamber) and 4-0985/1 (Senate).


[6] Y. Leterme réclame un fonds d’aide européen, in. La Libre Belgique, 25 October 2008.


[7] Le Conseil européen de Bruxelles. 15 et 16 octobre 2008, Report made for the Advice Federal Committee in charge of European Issues, 27 November 2008, Document 1616/001 (Chamber) and 4-0985/1 (Senate).