The roles of the main EU institutions (Council, Commission and Parliament) in the management of the continuing/financial crisis

Financial crisis and beyond The single regulatory structure is restructured as a response to the crisis. National supervisors face greater harmonisation of practice at EU level. The need to prop up the banking system introduces a new actor, the Resolution Authority (in the UK a role of the Bank of England), as the Tripartite Authorities50 put in place legislation to deal with bank resolution after the collapse of Northern Rock. Major banks are now required to have recovery and resolution plans (‘living wills’). Government announces the planned break-up of the FSA in 2012. It transfers the prudential supervision of banks

The European Union (EU) is a unique economic and political partnership between 28 different countries. It consists of about half a billion citizens, and its combined economy represents about 20 percent of the world’s total economy (Briney, 2015). Today The European Union works as a single market, with free movement of people, goods and services from one country to another. There is a standard system of laws to be followed, and since 1999 many countries share a single currency called the Euro (Europa.eu, 2015). This essay will explore the background history of the European Union and the benefits and drawbacks of the European Union.

In 2008, the world experienced a tremendous financial crisis which rooted from the U.S housing market; moreover, it is considered by many economists as one of the worst recession since the Great Depression in 1930s. After posing a huge effect on the U.S economy, the financial crisis expanded to Europe and the rest of the world. It brought governments down, ruined economies, crumble financial corporations and impoverish individual lives. For example, the financial crisis has resulted in the collapse of massive financial institutions such as Fannie Mae, Freddie Mac, Lehman Brother and AIG. These collapses not only influence own countries but also international area. Hence, the intervention of governments by changing and

In 2008, a series of bank and insurance company failures triggered a financial crisis that effectively halted global credit markets and required unprecedented government intervention. Fannie Mae and Freddie Mac were both taken over by the government. Lehman Brothers declared bankruptcy on September 14th after failing to find a buyer. Bank of America agreed to purchase Merrill Lynch and American International Group (AIG) was saved by an $85 billion capital injection by the federal government. Shortly after, on September 25th, J P Morgan Chase agreed to purchase

Hill, C.W.L. & Hult, G.T.M. (2016). Global Business Today. (9th ed.). New York, NY: McGraw-Hill Education.

Monetary policy, which is usually managed by a central governing financial body, has become very out of focus in the EU. This power was once held by governing bodies in each individual country, thus allowing for them to make changes that helped their country and citizens the best. This apparatus once allowed a buffer to radical changes in the national economy and national disasters; which was taken away as the European Central Bank (ECB) became the single body that governs the monetary policy and action plans of the EU (Wypolsz, pg. 239). The ECB now has to consider all of the sovereign bodies within the EU and the power of the euro as a whole, not trying to combat supply issues in Italy that affect their real GDP or the disasters in London that might have led to a decline in expenditures by citizens. Looking at Graph 1 we can see the sporadic spread of government bonds in the different countries within the EU. The graph shows the instability of the Euro because the government bonds of each state fluctuated when Italy was rumored to be leaving the EU, to return to their economy. This shows that the monetary policy actions of the ECB cannot really benefit all of the EU equally. It has been noted that France and Germany have flourished best under the euro, which is where the ECB and other bodies of the euro exist (Sheridan). Sheridan

During the recent financial crisis, in the autumn of 2008, the Lehman Brothers bank collapsed. It was the biggest bankruptcy in history

Richter Franziska, Wahl, Peter: The Role of the European Central Bank in the Financial Crash and the Crisis of

When the Eurozone was founded on January 1, 1999, it was with the intention of further integrating and strengthening the nations of Europe, both economically and politically. Until recently, it was believed that the euro provided a stable currency with low inflation and low interest rates and encouraged sound public finance. That the use of a single currency increases price transparency, eliminates currency exchange costs, oils the wheels of the European economy, facilitates international trade, and gives the European Union a more powerful voice in the world. That the size and strength Eurozone would better protect it from external economic shocks, and provide the EU’s citizens a tangible symbol of their European identity, of which they can be increasingly proud as the euro area expands and multiplies these benefits for its existing and future members (European Commission).

Since the 1970s the EU has had solvency requirements in place which require a regulatory capital to protect against any unforeseen circumstances. EU states agreed in the 1990s that a review should be put in place to reform and improve standards. Solvency I was the result of this review (Lloyd’s, (no date)).

With the accounting aspect, the concept of accountability, representation, and control might describe the failure of euro crisis to some degree. Representation of accounting could reveal various issue about financial organization. However, the whole picture might not be reflect by its representation as explained above. First of all, representation in this situation refers to financial statement. National budgets and accounting tend to be more distorted (Nelson, 1993). Many organization tend to present only good performances to benefit their confidence. For instance, Greece might distorted the amount of debt and deficit of GDP for their advantage such as higher amount of borrowing. Greece fail to represents their real practice and tend to mislead the information to receivers. Subsequently, Greece spreads their debt over the set of rules. Many countries might cover a bad operating process for their own benefit (Chawstiak, Young, 2003). Government might not shows much concern to the issues that derive from accounting

Dr. Clark: I am writing this brief policy memo in regard to the recent monetary crisis involving certain European countries, namely Greece and Spain. The focal organization handling the issue is the EU (European Union). The EU was established on November 1, 1993 by the treaty of Masstricht. It developed a single, regionalized, market structure through a system of standardized laws that apply in each member state so that citizens, goods, capital, and services are regional rather than local. With the establishment of a common currency, the Euro, the EU is also concerned with the overall economic and fiscal health of each member country. EU banks oversee localized financial institutions, and have the legal authority to enact localized changes in order to keep currency balanced. There are also branches of the EU that focus on legal and foreign policy issues, which sometimes blend into the economic realities of globalism (Europa, 2009). The EU acts as much more than an economic modifier, though, and member nations are encouraged to participate in cultural sharing (music, the arts, etc.), religious tolerance, and of course sport. This changes the overall rubric of the EU in that it actively seeks out foreign trade and markets as a large regional economic sector, so successfully that it counts for approximately 30 percent of world trade output (The EU Single, 2009).

‘Observers warned for well over a decade that the EU was ill-prepared’ (Pisani-Ferry & Sapir, 2010) for a Financial Crisis if one was to occur. This was certainly the case as Europe was engulfed in the financial crisis. The spreading of the credit crisis across Europe, originating from The USA, exposed Europe’s weaknesses and tested its strength (Sayek & Taskin, 2014). This paper reveals how lack of regulation and supervision alongside with banks who let their solvency and liquidity ratios run too low, which consequently resulted in the financial crisis. Furthermore, paper examines how the financial crisis solution varies with the macroeconomic structure of the economy.

Europe may not have the luxury of experimenting for many years before finding workable arrangements for modern economies, and of politics in the independent democracies that comprise the eurozone. Popular calls for public goods, social insurance, financial stability, and countercyclical macroeconomic policy cannot be brushed aside so easily as in the less-democratic era of the nineteenth-century classical gold standard. Furthermore, the fact that the score of the eurozone is so poor on optimal currency area grounds that it suggests a need for mechanisms allowing smoother and more symmetric adjustment between its member countries.

The essay will draw heavily on the interpretation of the original documents of the EU, particularly the European Commission. In addition, quantitative interpretation of the Europe 2020 target levels and the current progress will be reviewed. Moreover, peer-reviewed articles and policy reviews by commentators will also be deliberated to provide for a critical evaluation of the adequacy of the Europe 2020 strategy. The essay will begin with an overview of the Lisbon Strategy, the predecessor of the Europe 2020 strategy. This section will particularly focus on the Open Method of Coordination (OMC) and the weaknesses of the Lisbon Strategy, highlighting the appropriateness for a new response in the light of the global financial crisis. The second part of the essay will explore the thematic nature of the Europe 2020 strategy, especially the individual targets set by the European Commission. Although the Strategy is more streamlined, the level of targets set is nevertheless too ambitious especially with the current situation in the global economic and financial market. The next section of the essay will consider the new governance structure envisaged in the Europe 2020 strategy, particularly the European Semester, which promotes greater policy-coordination and surveillance between member states in achieving the Europe 2020 goal (The European Semester). In addition, the essay will also briefly inspect the changes in the ownership of the strategy with