"No, they can't!" - Potential and limits of the EU as a supranational state in the making, to reform finance and to overcome the crisis.

12.10.2012: This paper makes a critical assesment of the financial reforms and options of the EU for resolving the crisis.

Summary

EU financial reforms have been without ambition at the beginning. With the emergence of the Greek crisis, there was a certain adjustment, and stricter reforms were envisaged. But the complex nature of EU governance structures together with strong national interest and the influence of the finance lobby make reforms inefficient, too slow and too late. The only modus of operandi of the EU is therefore slow and incremental change. In addition, the sovereign debt crisis, which is closely interlinked it the crisis of the finance system, makes reforms even more difficult. As a supra-national state in the making, the EU is not strong and flexible enough to manage extraordinary crises. This is why muddling through can be expected to continue until something dramatic happens.