Let’s hear it for the European Union. It has reacted impressively to the economic crisis.

In preventing the worst excesses of beggar-thy-neighbour national responses, in fighting to maintain the integrity of the single market, in creating the relatively safe haven of a larger and stronger currency, and in providing assistance to those member states worst affected by the crisis, it has proven invaluable.

This is not, it would seem, a majority view. Numerous observers have roundly criticised what they see as the Union’s inadequate reaction to the economic turmoil sweeping over the continent. Senior American officials joined the clamour for good measure.

The critics, however, have got it all wrong. Of course the Union has not reacted as promptly or as decisively as have the president and Congress of the United States. Why should we have expected it to? It is, after all, merely a club of nation states, rather than a nation state in its own right. And its constituent members have long insisted, as sovereign nation states do, on maintaining control over the key levers of policy. Thus, the European Commission cannot be too forceful for fear of alienating key governments (and its President José Manuel Barroso needs their support to ensure he obtains a second term). Nor do the funds exist at European level for the kind of massive bailouts that have become the norm at the national level.

If we are looking for a comparator against which to judge the Union’s recent performance, perhaps the most appropriate is that of its precursor, the European Community, when confronted with the economic crisis of the 1970s. As stagflation took hold, member states responded by introducing a host of protectionist non-tariff barriers, undermining the common market and, in the process, threatening to bring EC law into disrepute. Large-scale emergency fiscal transfers from rich to poor were not on the agenda. And at meetings of the European Council under the French presidency, France’s President Valéry Giscard d’Estaing took to simply ignoring Commission President Roy Jenkins, when he did his tours de table.

How different is the situation now! Once again, member states find themselves tempted by protectionism. Yet the Commission has held remarkably firm. The French bailout plan for the car industry was allowed to go ahead only once it had satisfied EU state aid criteria. Coordination between national governments prevented individual measures aimed at rescuing banks from spawning massive negative externalities in partner countries. And the member states have agreed to double the ceiling for the Union’s support facility for balance-of-payments assistance to €50 billion.

This level of international cooperation and solidarity is both unique and limited. It also, therefore, presents a rare opportunity for the British government. Labour ministers have hardly excelled themselves in terms of their management of British relations with the U......