This week, the European Bank of Reconstruction and Development warned that the crisis “is threatening to throw nearly 20 years of economic reform into reverse.”
Amid the warning signs, the Continent is now scrambling to respond. On Sunday, nine East European states will hold an “emergency” summit, ahead of an “extraordinary” EU summit later in the day.
A basic question for both gatherings is how much “solidarity” EU leaders will show. Will the crisis be managed within the EU’s formal channels, including using measures like an IMF bailout? That would be the go-slow approach. Or will the crisis be viewed as so potentially dangerous that leaders will unveil a host of major US-style initiatives to recapitalize banks and assist states with stimulus packages? That’s the go-fast approach.
Economist Eloi Laurent, of Sciences Po in Paris, says the issue is one of political will. “We behave like there is still a wall dividing Europe ... but if the US can bulk up 2 thousand billion in the next months, can’t the EU do something for a small Baltic state?”
What started as an ugly economic crisis across Europe – not only in the East – is now shaping into a crisis over the EU’s identity and character, say political economists. Fragile notions of European “unity” are smashing against national interests and an often hidden discourse of “strong” and “weak.”