27 November 2009

New research from Chatham House indicates EU membership was helpful during crisis

The City of London Corporation today released a paper – Lessons from the Impact of the Economic and Financial Crisis on the EU and the European Neighbourhood – examining the deep and varied impact the global financial crisis has had on the European Union and its member states.

Commissioned by the City and produced by the International Economics Department at Chatham House, the report makes clear that, whilst the single market did not prevent a steep recession, some economies and sectors showed more resilience than others and that services industries generally played an important stabilising role. The European economic downturn now appears to have stabilised, leaving many EU member states in a far better position than non-members.

Echoing last week’s European Bank for Reconstruction and Development Transition Report 2009, this report also finds that international financial integration was generally a positive step for the newest Central and Eastern European members of the EU until the crisis disrupted trade and investment flows. Whilst Emerging Europe was the area worst affected by the crisis, some states coped fairly well with the crisis and parts of Central and Eastern Europe are beginning to see signs of renewed growth, which should accelerate in the coming years.

Stuart Fraser, Policy Chairman at the City of London Corporation, commented:

At the heart of the European Union lies a pan-European desire to promote open markets and free trade between the 27 member states.

The City has always been a vociferous defender of these principles. Our reputation as a leading centre for international finance has long been underpinned by a commitment to excellence, unbeholden to national self-interest.

Whilst we must remain mindful of the differing economic traditions, circumstances and policy priorities that exist within the Union’s diverse membership, we must also recognise our shared common problems and concerns.

Unparalleled levels of international cooperation helped dampen the impact of the financial crisis throughout the European Union and drive the European economy towards recovery.

It is in all of our interests to continue to work together, so that we can guard against future economic crises and further enhance our international competitiveness in an increasingly globalised industry.

A retreat into protectionism is helpful to no-one.

Download the Impact of the Crisis on the EU report

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