Commission spokesperson Johannes Laitenberger described the vote as a "disappointment" and stressed that the US had a "special responsibility" to manage the global crisis because "the turmoil that we are facing originated in the United States".
Indeed, it was the collapse of several top US financial institutions in recent weeks - among which Lehman Brothers (EurActiv 15/09/08), Washington Mutual and American International Group (AIG) - that shook European financial markets, prompting a range of emergency rescue measures this week.
The European response has so far been carried out at national level for national financial institutions, such as Hypo Real Estate in Germany and B&B in Britain. For groups with a significant cross-border presence, a transnational approach has been favoured, as was the case this weekend for Fortis (EurActiv 29/09/08) and Dexia, which yesterday received a €6.4 billion cash injection from the Belgian, French and Luxembourg governments.
Amid criticism that the EU lacks the tools to respond to the crisis in swift and coordinated manner, the Commission stressed that the above examples demonstrated European authorities' ability to respond effectively to the turmoil.
Nevertheless, the fact remains that a truly comprehensive European approach is still lacking in the event of widespread failure of the banking system. If the crisis deepens, other large transnational banks may find themselves in need of rescue. Yet there is no agreement over who should pay for the bail-out in such collapses and it is far from certain whether EU governments are in a position to save everybody.
Without a coordinated European approach agreed in advance, many fear that a crisis similar to that which emerged in the US following the government's refusal to bail out Lehman Brothers could be looming, and that a 'new Fortis' could be left to collapse.
To address the issue, French President and EU presidency holder Nicolas Sarkozy on Monday called for a meeting to be held in Paris before the end of the week, bringing together European leaders from the G8 countries (Germany, France, Italy and Britain), Commission President José Manuel Barroso, Eurogroup President Jean-Claude Juncker and the European Central Bank (ECB) President Jean-Claude Trichet. The meeting should precede a special G8 conference in the autumn to address the crisis, as called for by Sarkozy. In any case, European leaders will meet in Brussels on 16-17 October for the scheduled autumn European Council, while EU finance ministers will gather in Luxembourg next week for the monthly Eurogroup and Ecofin meetings.
Barroso confirmed the need for a "structured European response" to the crisis, but details are still missing. All that is certain is that today (1 October), the Commission will go ahead with its long foreseen plan to strengthen the rules on banks' capital requirements. The main aim of this is to ensure that banks have sufficient capital to cover risky operations in the future, especially in light of the current turmoil. Subsequently, and likely in November, the Commission will also propose tighter rules for credit rating agencies, considered to be among those most responsible for the crisis (EurActiv 31/07/08).
European banks have also reiterated their call for a "coordinated supervisory approach," which was the main issue dealt with at the last informal Ecofin meeting in Nice, but any agreement is still a long way off (EurActiv 15/09/08). European insurers echoed these comments and called for group supervision in the insurance sector (EurActiv 17/09/08).The Socialists are calling for the ECB's role to be beefed up to that of a common European supervisory body.
In the meantime, eurozone inflation fell for the second month in a row to 3.6%, according to Eurostat estimates, confirming hopes that a peak was reached in July when it hit 4%. Nevertheless, many fear that the heavy injection of fresh money into the market, decided upon by the ECB on Monday, could have an inflationary effect in October.
