After the $700 billion bailout in the US, Germany, Greece and Ireland moved quickly to guarantee the value of all the deposits in their banks and shore up confidence. Critics of this action have pointed out that such responses undermine a pan-European response.
 
What should the EU do?
 
The Chair of Parliament's Economics and Monetary Affairs Committee is French Socialist MEP Pervenche Berès: “There is real need for an EU initiative. We will face a lack of investment in the EU. The Parliament is the right place to discuss the EU proposal”.
 
Greek MEP Margaritis Schinas (EPP-ED) feels opinion is divided on the state of the economy: “We need new rules for the new economy. There is one school of thought that says this is the end of the free market, the end of capitalism. I don't agree. There is a second school of thought that says this is an opportunity to set up new rules for the new economy. The party is over, but not for the private economies”.
 
German Green MEP Heide Rühle feels a mere quick fix is not the answer: “A financial system bail-out is far from enough. We need structural policy changes, among which tighter financial regulation. So much risk is hidden in the market by complex financial systems that it becomes increasingly hard for national market supervisors to really assess the situation”.
 
Bulgarian Liberal MEP Mariela Velichkova Baeva said “we cannot expect that EU will influence the trend of economic events. When the decisions of business are so laden with social consequences, intervention is called for”.
 
How will it impact on us?
 
Pervenche Berès said that “we see some EU economies entering recession. Ordinary citizens will certainly be affected by that regarding their purchasing power, their jobs, and so on”.
 
Margaritis Schinas (EPP-ED) believes the impact will be considerable as it “affects the global economic climate and the global economic psychology. Europeans have been used to the relative stability of the eurozone with its low interest rates, so all this comes as a surprise after 5 to 6 years of calm”.
 
Heide Rühle told us “the financial crisis will impede the fulfilment of the objectives of the Lisbon growth and jobs strategy, since this financial turmoil will hit the ”real economy“.
 
Mariela Velichkova Baeva was worried that ”when the outlook for the future is blurred by the circumstances we have, investment plans can drop dramatically - slowing - down consumer spending“.
 
Who is to blame for the current mess?
 
Pervenche Berès told us that ”the situation in Europe is coupled with the U.S.  The measures taken so far only really tackle the problem of liquidity. The situation now goes beyond that to the financial markets and the real underlying economies“.
 
Margaritis Schinas is a firm believer that the position in America is worse than that of Europe. ”In the States, for every dollar of real investment banks lend something like 32 dollars, whereas in Europe for one dollar of real deposit we lend 12“, he told us.
 
Heide Rühle boiled down the problem to one of ”the emergence of innovative financial products, which boil down to variants of debt secured on real assets has played a key role in the contagion of the risk“.
 
Mariela Velichkova Baeva the cause is ”the quest for profits; the lack of knowledge for the real state of the market and its potential to face a cataclysm“.