Speakers Marco Airaudo from the Drexel University Lebow College of Business, John Dinnage from the Villanova University School of Law, Fernanda Nicola, visiting Earle Mack School of Law professor, Mark Pollack from Temple University and Valerie Rouxel-Laxton, Head of the Economic and Financial Affairs Section of the Delegation of the European Union to the United States, discussed the constitutional and economic implications of the EU financial crisis at the law school on March 22.
Speaker James Dinnage provided the legal backdrop for the financial crisis, pointing out that, prior to the crisis, there was no mechanism for the EU to stabilize failing economies in member nations. However, in the aftermath of the crisis, EU powers have been amended and member nations have entered into treaties which both provide for mechanisms to stabilize the economies of member nations in times of crisis, Dinnage said.
Rouxel-Laxton provided some valuable insight into the economic shortcomings of the EU. At its inception, the EU was designed solely to create a unified currency for member nations that would control market pricing throughout Europe, Rouxel-Laxton informed the audience. However, Rouxel-Laxton opined that these limitations contributed to the crisis while speaker Mark Pollack revealed that, at the time of its founding, competing views existed on how the EU should be structured, with a centralized monetary system succeeding over a more comprehensive fiscal policy with centralized banks and economies. Pollack, Rouxel-Laxton and speaker Marco Airaudo agreed that focusing solely on monetary policy is not enough, each member state’s economies need to be intertwined as well.
Rouxel-Laxton added that, while there is no “quick fix to generate growth” for EU nations in the aftermath of the financial crisis, the EU is developing ways to interconnect the economies of member nations and to establish fiscal discipline among nations. Part of the formula for growth, Airaudo added, must incorporate mechanisms for increased labor flexibility that would allow workers from member nations to travel across borders for work with limited restriction. To this end, “we’ve seen steps in the right direction,” Airaudo concluded.
Speaker Fernanda Nicola tied the financial crisis to the European court systems’ relaxed approach to enforcing EU penalties when challenged in court. It is not enough for the EU to penalize member nations that allow their economies to fall apart, Nicola said, to ensure financial stability in Europe, it is incumbent upon courts, such as the EU Court of Justice, to enforce those penalties.