This topic has been broached fairly recently. In the case of an engine failure in a twin, I would be inclined to call mayday and leave it at that, based on the fact that you have no redundancy. Also not all foreign ATC seem to know what a Pan call, including some parts of the US. My rules of thumb for calling an emergency is based on whether there is any system redundancy left, or if there are any questions re performance, be it affected landing distance, climb capability and so on. It seems to me following recent incidents that the onus is on the commander not to put ATC in a position where they have to make the decision. i.e. if you have a no 2 hydraulic failure in 747 and engineering want you to return to base as there is no spare at Barbados, don't tell ATC that you have a hydraulic failure, as that puts ATC in the unenviable position of covering the worst case scenario. In fact it is a minor system and more than covered by the 3 others. Instead its probably best to give the reason for returning as a "minor technical fault" that we want rectified at base.