Navigating Uncharted Waters : The E.U.'s Response to the Financial Crisis (2008-2010)

The E.U. was institutionally ill-prepared to manage a financial crisis, especially with regards to the assignment of competences between the Union and Member States. The E.U. was largely successful in coordinating the stabilisation of the banking sector, where it was able to rely on its exclusive competition competences. On the other hand, the E.U.'s coordination and role in macro-economic policies, with the exception of the balance of payments assistance, can only be called lackluster. A similar pattern emerges when one looks at the E.U.'s supervisory proposals which, as a consequence of financial stability being a national competence, represent a fragile balancing act between national and E.U. interests. More progress has been achieved in the regulatory arena, where the E.U. has a shared competence, under the purview of the internal market. Soft-law instruments have shown their value in areas where the E.U. lacks competence or is faced with stiff resistance, these are, however, not a solution to the institutional problems facing the E.U. Looking back at the E.U.'s response, the limitations of inter-governmental cooperation are clear