Not so long ago, Duty ATCO at my unit received a non-urgent call from the parent ACC concerning a recently departed jet airliner (twin-engined), advising that said airliner was diverting back. Reason given was "Technical Difficulty". No further info was given in initial call, and the ATCO duly declared a Local Standby as per Emergency Orders.
On further investigation (through the ACC), it was discovered that the aircraft was suffering from a hydraulic leak, and as a result did not have full power available in both engines. At no time however, did the crew declare any sort of emergency!
On receiving this information; the ATCO immediately upgraded to a Full Emergency (with all the associated Bells & Whistles!), and from what I hear, the crew were even a bit miffed when they were greeted by the luminous blue welcoming commitee on landing!
The question in all of our minds though: why so reluctant to declare an Emergency?
If assistance may be required, then why not make use of it? Surely the crew couldn't have known for definite that the leak wasn't going to get worse, with all the possible scenarios that could have resulted from that (Control Surface problems; high-speed heavy landing, the aircraft had only recently departed after all! etc.) There are enough historical precedents out there to illustrate what I'm driving at.
Anyway, in the end the flight returned safely, thankfully. The aircraft didn't fly again for quite some time however (draw your own conclusions).
Unrelated as this little anecdote is to the original question with which this thread was started, it is nonetheless very relevant to the topic.
Even if (for whatever reason) you as a pilot should decide not to declare a Pan or Mayday at a time of difficulty or distress, we as ATCO's will decide our level of response to the situation based on the info available to us.
However, were the above scenario slightly different in that the ATCO concerned had not declared an Emergency because the crew had not done so; and the hydraulic leak that was the cause of the problem turned out to be worse than actually occurred, how different would the outcome have been?
I know we'd have preferred it had the crew declared at least a PAN, if for no other reason than to remove any possible ambiguity. At least that way there wouldn't have been any possibility of time being wasted in getting the necessary resources mobilised!