An analysis of Parliamentary and Congressional Based Governments
Since 2007, the foremost countries of the world have been feverishly searching for a remedy to their crumbling national economies. The two most pertinent of the crises are occurring in the Unites States and Central Europe. The American Recession has stemmed from risky personal lending, while the European Debt Crisis stems from over-borrowing of national governments. Though the scaling of perpetrators is contrary, the effects are equivalent. Struggling economies now make up the lions-share of the world’s economy. As the economic tribulations perpetuate, unemployed factory workers wait anxiously alongside laid off investment bankers for their elected representatives to fix the problems. In each crisis, the citizens are depending on two different forms of government to deliver the seemingly same result: a healthy, stable economy. The processes in which American Congress and European Parliamentary reach this state differ greatly. In analyzing the nature of each crisis and legislative body dealing with them, a clearer picture can be painted of each countries ability to respond in an effective, timely manner, while simultaneously appeasing the public’s general opinion.
Though there are several countries involved in the European Debt Crisis, comprised of differing forms of government, they all fall under a greater authority. The European Union (EU) is considered the sovereign authority over the majority of Europe. Comprised of 27 of the 47 independent countries that make up the continent, the EU has 375 million voting citizens – the second largest body in the world behind the citizens Indian. This group makes up over 5.5% of the worlds population, and accounts for approximately 30% of the nominal gross world product (GWP). Comparably, the United States makes up about 4.5% of the world population and approximately 25% of the GWP (“World Economic & Financial Survey”, 2011). The EU works on the basis of parliamentary legislation, though it differs slightly based on the shear nature of people and countries it represents.
The EU is comprised of four different “Houses”: the European Council, The European Commission, The Council of Ministers, and the EU Parliament. Each house has its own powers and roles. The EU Commission is the sole house that can propose a new law. Each member state elects a commissioner to represent their country. Each commissioner is assigned to commission a field of their expertise i.e. the Commissioner of Research, Innovation and Science or the Commissioner of Financial Programming and Budget. The European Council is comprised of the head of government – generally the prime minister – of each respective member state, and the President of the European Commission. The presidency of the Council rotates every 6 months through the members of the Council. The Council gathers 4 times a year at “summits”, in these summits pressing political matters are discussed. Over the course of a summit the council member will reach a collective agreement on the objectives and guidelines that the collective of the EU should strive for and follow. The Council of Ministers is comprised of the heads of each department of each member state. Since the Treaty of Lisbon, the majority legislative power has been shifted from the Council of Ministers to the EU Parliament. The EU Parliament is composed of 736 members that are elected directly by the votes of EU citizens. Though the EU parliament does not have the ability to purpose new laws they, along with the Council of Ministers, may amend or stop any legislation being pursued by the Commission. They also keep tabs on all of the other Houses of the Union and their members. So is the composition of the European Union. The European council guides the direction of the EU, while the Commission passes laws to head in that direction. The elected members of the EU parliament and the Council of Ministers then regulate the laws put forth by the Commission.
As the European Debt Crisis has unfolded the EU has been the pressing force on the reform taking place in the wake of the crisis. There are many opinions on how the European Debt Crisis came to be; however, most agree that it started in Greece. In 2001, Greece adopted the Euro, along with 16 other nations, as its official currency. In doing so Greece effectively joined an economic sector known as the Eurozone – the collective economies of countries that also adopted the Euro. The economy of Greece was now expected to compete with the likes of Germany and France. As those opposed of the Euro expected Greece could not compete. As a member of the Eurozone their currency was not allowed to inflate during hard times, rather they were forced to take out loans and issue bonds. Endorsed by the Euro, Greece quickly acquired more sovereign debt than it could handle. This happened similarly to the other smaller Eurozone countries of Ireland, Portugal, and Italy. As economic crises play out, the struggling economies of the smaller nations have begun to impact those of the larger more stable countries such as France and Spain. As much as the Euro can be blamed for the initialization of the Debt Crisis, the debt itself and necessity to borrow arose from faulty legislation and lack of austerity.
Currently 17 members of the EU currently trade the Euro. With the majority of member states trading in Euro’s, it is crucial for the European Union’s longevity to resolve the Debt Crisis. To combat the crisis the EU plans to implement much harsher rules for its member countries. At the moment a summit of the European Council is taking place. The Council is planning to accept “ ’a new goal that, except in extraordinary circumstances, no country should run a budget deficit larger than 0.5 percent of GDP excluding debt and interest payments’ ” (Wilson, 2011). This comes as a reaction to what many people finger as a point in which the debt crisis could’ve been adverted, if the previous rules of 3% GDP deficit would have been enforced. Alongside this, in the first hours of the summit “leaders agreed… to adopt tougher fiscal restraints and surrender more power over their national budgets” (Wilson, 2011). However, as explained early, summits are just the first step in a long process to enact these stipulations. These laws must now be formalized by the European Commission and ratified by the Ministers and Parliament.
The large immediate reform that is being purposed is the first of its kind for the EU in its sixty plus years of activity. Much of the pervious action that took place earlier in the debt crisis was centralized towards Greece and their faltering economy. First accounts of the crisis were based on the idea that Greece was in an Economic slump. Rather then analyzing the sources of the downturn, the European Union, International Monetary Fund (IMF), and European Financial Stability Facility (EFSF) threw money at Greece to “weather the storm”. This only slowed the bleeding, and now Greece is on the verge having nearly two times its GDP – almost $6.4 billion – in debt. The EU’s, IMF’s, and EFSF’s route were very similar to the one the United States took during the beginning of the American Recession.
The American Recession for all intensive proposes began in 2007 when the so-called “housing bubble” burst. The beginning of the end commenced in the 90’s when a housing boom occurred. The boom was the result of banks and mortgage brokers pressing subprime and adjustable rate mortgages (ARM’s) on prospective homebuyers. Most of the people taking out the loans were considered “risky investments”, meaning they were likely to default. As rates adjusted and the economy slowed, thousands of people with subprime and adjust rate mortgages began defaulting. For most people the only way to escape their debt was to declare bankruptcy, this meant the banks were never going to see their loaned money again. The mass exodus of borrows pushed many of the nation’s largest banks and lenders to the brink. So in stepped Uncle Sam to bail out the banks and “save the economy”. However, like Greece and the Eurozone, the inevitable was only delayed and the repercussion have perpetuated. Though the US’s problem began as small privatized debt, it’s now escalated nationally to a point comparable to that of the Eurozone. So here we are; Europe and the United States, sitting in the same sinking boat, trying to figure out how to plug the holes.
The method in which each government has approached the matter has differed greatly. America has looked to recover the same way we did during the Great Depression, by creating jobs. The American Recovery Reinvestment and Recovery Act (ARRA) is, as described in the statute description, “Making supplemental appropriations for job preservation and creation, infrastructure investment, energy efficiency and science, assistance to the unemployed, and State and local fiscal stabilization, for the fiscal year ending September 30, 2009, and for other purposes” (111th Congress, p. 1). The implementation of stimuli like the ARRA and the bailout package has caused a large rift between the two major political parties of the US. Bipartisanship is nothing new; it has always been the thorn is the side of American legislature. As of late, party interests have seemed to trump the urgency needed for the current economic predicament. 435 elected voting members of the House of Representatives and 100 members the Senate comprise the legislative body that purpose, amend, approve and veto prospective laws. The House of Representatives is often considered the more partisan of the two houses. This happens because of the power associated with the third in-line role that the Speaker of the House assumes. The Speaker is the presiding member of the House, he or she is elected by the other representatives. Because the speaker is traditionally of the majority party, they generally spend their time pursuing their party’s agenda. Snags in the legislative process occur when the President and the Speaker/majority are of conflicting parties; such is the current status of our government with President Obama (D) and Speaker of the House John Boehner (R). With 736 members from 27 nations, the European Parliament (EP) has over eight political factions. Similar to the House of Representatives, the European Parliament has an in-house elected majority leader, the President. The Presidents role mimics that of the Speakers.
Though structured similarly in certain aspects, the shear nature and volume of the EP severely affects its decision-making ability. With over eight parties representing 375 million people, bipartisanship seems like child’s play, try octpartisanship. On top of this, every decision made in Parliament is impacts the Union as a whole. This sets the stage for some very fierce nationalism. As is the nature of having 27 separate nations and cultures being governed by one entity, there are very conflicting public opinions of the EU. A polling of citizens in each member state, referring to the outlook of the economy, by the European Commission “found the proportion of optimistic respondents varies from 15% to 68%” (“Eurobarometer 75”, p.7). This report shows that member states are in fact very divergent in their opinions of the EU.
This divergence is a direct representation of the bipartisanship and nationalistic ideologies that plague the European Union. Furthermore, ill-gotten political ideologies additionally impact the timeliness of legislation while each of the four houses of the Union deliberates. Though our government was founded on the basis of “checks and balances”, there comes a time and a place when there’s too much checking and too much balancing. The United States has effectively 568 officials to regulate the laws protecting approximately 307 million citizens, while the EU has approximately 1300 officials representing about 375 million people. That’s more than two times the number of officials to represent only a 23% larger population. A bloated government like this takes far too long to deliberate for crises of this nature. I believe these poor traits of the EU lend support to the superiority of the United States bicameral Congress. Taking all factor into account, I think the legislative process of United States is much more capable to handle their economic crisis than that of the European Union.
- Eurobarometer 75. Rep. no. 75. 1st ed. Vol. 74. Brussels: European Commission, 2011.
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- American Recovery and Reinvestment Act of 2009, Pub. L. No. 111-5, § 1, 115 Stat. 1 (2009).