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Press Release: EU`s reaction to the financial crisis - "rushed and harmful"
Posted on
Mon, 2012-04-30 21:21

Press Release:

NEW STUDY: EU's reaction to the financial crisis - "rushed and harmful"
The EU has produced an unprecedented 68 new items of legislation, neglecting even its own principles of openness and accountability
 

London, 6 March 2012 – A new study published today by New Direction – The Foundation for European Reform argues that the European Union has pushed through an endless flow of laws potentially harmful to the economy of the EU member countries.

The EU’s reaction to the financial  crisis has been hasty and incoherent, lacking deep analysis of the consequences, concludes the study EU’s Runaway Train – How the EU neglected principles of openness and accountability in its reaction to the financial crisis, published today in London in cooperation with the Centre for Democracy and Culture, a Czech think tank.

 

The study is available at: http://newdirectionfoundation.org/train.pdf

 

The main findings of the study, which mapped all relevant EU legislative steps from the fall of Lehman Brothers in September 2008 until December 2012, are:

  • The EU legislative torrent is unprecedented: from September 2008 until December 2012 (period of 40 months), the EU has drafted – under the heading of “crisis” alone – 68 legislative texts comprising 2,575 pages.
  • By the end of December 2012, 52 of them have been adopted and made fully valid.
  • Apart from 30 regulations adopting international accounting standards, two thirds of the remaining proposals have been designed to put a completely new, formerly non-existing regulation into practice.
  • Most of the proposals have been endorsed by the European Commission alone, or by using a shortened version of the Council and European Parliament co-decision procedure.
  • The 68 proposals were accompanied by only 19 descriptive impact assessments and 18 public consultations, which lasted only 50 days on average (2 months is a standard). A crucial overhaul of the Stability and Growth Pact, for example, came with no impact assessment and/or public consultation.
  • The aforementioned approach has in most cases led to poorly-drafted legislative texts as demonstrated in case studies, for example the case of proposals on deposit guarantee schemes.

Conclusions:

According to the study, the EU reacted too hastily by drafting one new law after another, failing to enforce current rules; rushing to legislative solutions; and accompanying the proposals with poor consultation and impact assessment.

 

“This is in contradiction to the principles of good governance which have been set out in the European Commission’s 2001 White Paper on European Governance, because the EU was unable to take into account opinions of actors beyond the EU premises. The outcome is inevitably disputable and makes implementation much harder with unforeseen consequences,” says author of the study, Ondřej Krutílek.

 

"For the EU every crisis is an opportunity, and this economic crisis has been no exception. The EU's mandarins have sought to extend their reach and deepen political integration by imposing an endless stream of indigestable regulation", stated Geoffrey Van Orden MEP, President of New Direction.

 

“This study demonstrates an alarming fact, that the European Union is gaining far more central powers, while these changes have come though often in a non-transparent and opaque process, mostly unwatched by the European voters,” said Director of New Direction, Shane Frith.