In 2008, the financial crisis erupted and governments were asked to solve it. Only two years later, a sovereign-debt crisis emerged and governments tried to save themselves and to provide financial assistance to one another, based on the solidarity principle. Governments are now facing extraordinary challenges and transformations, but the direction towards which they are moving is difficult to assess. Outputs are not moving in a unilateral direction, as they were in the 1980s and in the 1990s, because distrust in government now comes immediately after a market failure.


Changes both in external and in internal boundaries have affected five fundamental issues, namely the relationships between: 1) national countries and the European Union; 2) the executive branch and parliament; 3) politicians and bureaucrats; 4)central and local governments; 5) public and private sectors. The image of a continuously swinging pendulum is perhaps the one that best reflects the transformations occurring in the public law realm within the European context. But the output in institutional terms is much more difficult to assess. A different idea of public law must be developed to better understand all the transformations.


At the same time, a different idea of private law must be developed. Before the 2008 financial crisis, we thought that the market and private binding contracts were totally autonomous, so that self-regulation was enough. The idea of private law was based on a mark-to-market model: the best regulatory device for situations where no market transactions were available was to mimic a market approach. We now understand that this approach was an ideological output and that, on the contrary, we need a regulatory approach to private transactions when the aggregate effect of these transactions may have relevant effects on the economic cycle. As examples, it is sufficient to think of the normative restrictions on short-selling, or the problem concerning the regulation of private loans.



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