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13

This year’s Report on the State of the European Union (2015-16) exam-

ines the delicate political situation currently faced by the EU, a complex

combination of events that has revealed its underlying weakness as a su-

pranational organisation with historic ambitions. After a 20

th

century that

was largely propitious for a European Community that rose from the ash-

es of the two world wars, the start of the 21

st

century has been marked by

an air of frustration and pessimism. Moreover, it is those who were most

strongly in favour of the European project and most firmly convinced of

the importance, benefits and direction of the EU whose ideals have been

hardest hit by the crisis. Yet they are also best equipped to keep fighting

to preserve the values of the world’s most democratic continent.

The contributions to this report examine the reasons why these values,

fundamentally based on the welfare state and the rule of law, have been

and continue to be severely affected by the critical situation facing the EU

in 2016. Firstly, there is the social cost of a financial crisis from which we

have yet to emerge. Three chapters of this report are given over to the

effects of a European Union that has developed with economic, trade and

monetary aspects at its core, focusing on monetary policy in the Eurozone

(Adrian Zelaia), the implementation of economic governance (Maria Joao

Rodrigues) and inequality (Michael Dauderstät).

The financial crisis that began in 2008 is more than just a crisis, it is a

structural problem. This explains why the fiscal (austerity) and monetary

policies deployed by Brussels have been unable to reverse the deflationary

trends of the economy and spiralling levels of debt. In spite of the expan-

sionary nature of ECB monetary policy under Mario Draghi, the underlying

economy remains unchanged and employment has yet to recover. Europe

has not returned to the macroeconomic figures of 2007 and lags far be-

hind the performance of the United States, which has applied a braver,

Introduction. The perfect storm

Diego López Garrido