The Opportunities of Multiple Sovereign Crises: The European Market Phoenix
Luca C.M. Melchionna
Melchionna & Gandolfo LLP
April 12, 2012
Vol 1, 35 N.C. Cent. L. Rev. (2012)
Sovereigns default cyclically. History shows that this is a common path. With the restructuring process, sovereigns can regain access to international market after little time has passed. The Euro and Greek crises, the biggest in terms of default to date, showed various issues: countries have an advantage when borrowing on the international market because they reinforce their status and identity as sovereigns.
This is a missed opportunity to render political leaders accountable for their wrong policy decisions. Accountability can be analyzed under the tort as well as business standards. In addition, not only creditors, but other sovereigns lack the power to control irrational and inefficient decisions adopted by defaulter and that can be economically fatal for taxpayers that are not subject to the jurisdiction of the defaulter.
The EU, as designed, today is politically weak because member states are still leading in creating economic, financial and cultural divisions, and instability among European citizens’ welfare.
This paper intends to show that an economic crisis involving a small (in economic terms) country shows the existence of other major crises within the EU community. Therefore, all the crises must be tackled to regenerate the European (and global) social fabric. As a matter of fact, a cultural or a legal change takes more time and cannot be solved only with economic solutions.
Common problems like corruption, tax evasion, excessive public spending, evolution of legal cardinal concepts like sovereignty, and lack of European identity have a profound meta-economic implication.
These are obstacles not only to a strong Union but also to a responsible global governance, and for the EU institutions this is a missed opportunity to reach a wise federation of states. As long as the EU is not taking a sharp direction, other crises (taking the economic form) are always looming.
Number of Pages in PDF File: 30Accepted Paper Series
Date posted: June 19, 2012
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