Leadership within the EU will do much to decide the length and depth of the recession, write Étienne Davigonand Giles Merritt.
THE FINANCIAL crisis has already highlighted both the strengths and weaknesses of the European Union. Had it not been for the euro, the shockwaves from the meltdown in September and October would have spread to the currency markets, creating tensions that would have set Europe's political and economic integration back by decades, perhaps imperilling the whole project.
Much less positively, EU member states have been slow to work in concert. At first the European Commission drew criticism for its slowness in making proposals to rally national governments and their policymakers. Now many member states are resisting the urgent need for a co-ordinated EU-wide policy response to the deepening crisis.
The speed and the severity of the economic slowdown are far greater than any of the post-war downturns of the past 60 years. In Europe we, by and large, failed to heed the warning signals of the US subprime mortgage crisis in the late summer of 2007, and thus were unprepared when the next phase of the crisis engulfed European banks too. The lesson to be drawn is that the EU must move more quickly and with greater determination than has been the case so far.
Throughout the EU people are asking, "What is Europe doing to fight the crisis?" The answer is, "Not nearly enough", and the political price may be high at next summer's European Parliament elections.
The remaining weeks of 2008 will be crucial to Europe's efforts to regain the initiative and to attempt to attenuate the effects of the crisis while also addressing outstanding problems on the EU reform agenda.
As trustees of Friends of Europe, we would urge the European institutions, along with EU political leaders, to renew their efforts regarding both the Lisbon Treaty and the Lisbon agenda.
France's EU presidency has done much to improve co-ordination between member states of responses to the financial crisis, and the European Commission has also begun to play the more active role that Friends of Europe called for on October 10th. The challenge now is for the presidency and the commission to give fresh political impetus to the EU's stalled reform drive.
The European Council meeting today and tomorrow should signal clearly the timetable envisaged for reopening the Lisbon Treaty's ratification process, thus clearing the way for its streamlining of EU decision-making responsibilities. Failure to do so would bring the risk of still greater political problems after next June's European elections.
The treaty is a step towards adapting the EU's decision-making mechanisms to the 21st century and an EU of 27 or more countries.
The global nature of the present crisis makes it plain that Europe must be able to decide quickly and coherently, or suffer adverse consequences. There seems little doubt that public opinion right across the EU is increasingly drawing the same conclusions.
The sovereign right of the Irish people to decide its own future is unchallengeable. But Ireland should also allow the EU's other member states to proceed with the treaty if that is what they wish. Even if another referendum is to be held in Ireland, the Irish Government should foresee a procedure that, irrespective of the outcome, allows other member states to implement the essential parts of the treaty.
The commission now needs to take action to ensure that member states redouble their efforts with regard to the Lisbon agenda for overhauling Europe's global competitiveness. In 2000 the EU set a 10-year programme of agreed reform targets, yet in many cases its member states have lacked the political will to implement these.
Europe's increasingly gloomy prospects make these reforms more necessary than ever, not less.
• Viscount Étienne Davignon is president of Friends of Europe. He is a former vice-president of the European Commission. Giles Merritt is secretary general of Friends of Europe and editor of the policy journal Europe's World. A list of presidium members and trustees who support the aims of the group is available via http://www.friendsofeurope.org/