Inglorious procrastination is one of the European Union’s standard responses to major crises. This is not merely due to the difficulty of getting 27 prime ministers and presidents to agree on something. It is also because of their motivated tendency to ask themselves the wrong questions, and thus head slowly but inexorably to self-harming policy solutions.
After the demise of Lehman Brothers in 2008, a group of policymakers gathered in Washington to ponder the relevant question: “How do we bail out the bankers to stop them consuming us?” In Brussels, meanwhile, a much larger group mused for years over a toxic version of the same question: “Given that EU rules prohibit bailouts, how do we maintain the pretence we are respecting them as we bail out the bankers anyway?” The result was a costly delay, and policy choices which ensured that, whereas in 2008 European total income exceeded the US’s by 10%, by 2022, Americans were earning 26% more than Europeans.
