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The global financial and economic crisis that exploded in 2007 can be compared in scope and economic consequences to the Great Depression of 1929. As it extended in the European area, the Member States of the European Union have experienced different levels of indebtedness and crisis severity. Its effects on their financial, economic and banking sectors have highlighted the limits and shortcomings of the project of the Economic and Monetary Union (EMU) post Lisbon.A Blog Article by Dimitrios Koumparoulis.The EMU has proved to be unprepared to handle a similar crisis — which is perhaps in some respects predictable — because it lacks mechanisms capable of safeguarding the stability and economic and financial solidity of the European Union (EU).The EMU, as amended by the Treaty of Lisbon, does not provide tools to support EU Member States in liquidity crisis situations. On the contrary, the Treaty on the Functioning of the  European Union (TFEU) imposes a rescue and rescue ban, known as the Article 125, and requires Member States to respect the prohibition of have excessive public deficits (Article 126). The Article 123 of the TFEU also prohibits the European Central Bank (ECB) and the national central banks from granting overdrafts, or any other form of facilitation credit, to financial institutions, public institutions and bodies of the Union or Member States. It also prohibits them from the direct purchase of securities or their debt.The only exception to this scheme is provided for by the Article 122 of the TFEU, ​​which allows for the possibility of financial assistance by the European Union to states in crisis situations, but only to certain conditions, and, in extraordinary cases. The latter coincide with situations of serious economic difficulties caused by natural disasters or by exceptional circumstances beyond the control of the EU Member States. This provision concerning financial aid procedures with regard to Member States has formed one of the main legal problems which Europeans institutions have faced in emergency situations deriving from the financial crisis.The need to deal with the debt crisis of sovereign states and the default risk of some national economies have forced the European institutions to urgently approve anti-crisis measures that have led to a reconstruction of European governance on a new and more solid foundation (Bertoncini and Vitorino, 2014). The reforms approved for this purpose can be characterized, on the whole, as a largely  fragmented for the following reasons: 1) the absence of a unitary design; 2) a marked experimentalism; 3) a wide flexibility in the contents; and 4) the different preventive (ex ante) or corrective (ex post) effectiveness of the measures adopted (Draghi, 2018).The difficulty of trying to analyze the new reforms, set objectives and results achieved indicates that it is a phenomenon of coping with situations of a mainly cyclical and emergency nature. An overview of these reforms allows us to observe how these are oriented, on the one hand, to strengthen the coordination and supervision of the budgetary and macroeconomic policies of the Member States, and, on the other hand, to establish a stronger legal framework to strengthen the resilience of the financial sector, while improving prevention, management and resolution of financial and banking crises. In order to pursue these purposes, a series of reforms have been implemented since 2010.Regulations at supranational, international and national levels have redesigned the architecture and functioning of economic and financial governance in the EU, significantly changing pre-existing regulatory and institutional frameworks (Bertoncini and Vitorino, 2014). This group of reforms of economic and financial governance included measures that have strengthened the coordination and  surveillance of the economic and budgetary policies of the Member States by the European Union under the Stability and Growth Pact (SGP).The European institutional framework is a  characterized by  the dynamics of cooperation and competition between the institutions. The institutional framework established by the Lisbon Treaty favors intergovernmental mechanisms. In particular, the broadening of the functions of the European Council has led to a repositioning of the rest of the EU institutions in this new institutional context.Written by Dimitrios KoumparoulisEdited by Pablo MarkinReferencesBertoncini, Y. and Vitorino, A. (2014). Reforming Europe’s Governance: For a more legitimate and effective federation of nation states. Paris: Notre Europe, Jacques Delors Institute.Draghi, M. (2018). Europe and the euro 20 years on. Retrieved from https://www.ecb.europa.eu/press/key/date/2018/html/ecb.sp181215.en.html.Featured Image Credits: EP-085982B_Article17_Panel_2, Brussels, Belgium, March 19, 2019 | © Courtesy of European Parliament Article 17 TFEU/Flickr.[cite]