The Impact of the European Union Current Crisis on Law, Policy and Society

Abstract

The purpose and methodology of this article is as follows: first, to understand the general nature of the current crisis (banking, financial, debt, currency, constitutional, political) from a socio-legal, economic, ideological and political perspective; then, to analyse the complexity of the multiple causes which have led to the current crisis in particular areas of law (financial, banking, securities, contract, competition and corporate law) in which it has manifested itself and the sectors of the economy it has affected; and, finally, to criticise law in action and the management of the crisis through political decision-making (state intrusiveness), that is, the various responses and reactions to the crisis and the effectiveness of the measures implemented by policy-makers and enforcers, and, inter alia, to question the constitutional legitimacy of the TBTF (Too-Big-to-Fail) theory as a predominant doctrine and criterion of state intervention in the economy.

A multi-layered level of economic, social, and political governance is envisaged through insights from microeconomics, by looking at how economic agents have affected individuals such as consumers; from macroeconomics, by looking at how state intervention in the economy has impacted upon taxpayers and the human and social costs of the crisis; and from political economy by looking through the lenses of ideology and policy and reflecting on the role of neoliberalism today.

To conclude, the heavy reliance on the TBTF doctrine became a European ‘Too Big to Crash’ test which signals past memories and fears of an eventual repeat of the 1929 Wall Street crash, which to date has been avoided by all possible methods of political intervention. Unfortunately, competition law could be seen as the scapegoat of this unprecedented restructuring of the banking and financial markets through competition policy’s illegitimate and undeserved but generous state aid to benefit mostly inefficient and unscrupulous financial game players. This last recognition leads us to question the adequate measures of profit-seeking capitalism.

Keywords: competition, banking, corporate, financial, contract, social, crisis, European Union, law, policy, too-big-to-fail

JEL Classification: A10, B22, D18, E00, E44, G00, K00, K12, J00, L40, L43