The constitutional implications of the european responses tothe financialand public debt crisis

Common Market Law Review

Volumn 50, Issue 3, 2013, Pages 683-708

  Chiti, Edoardo ^a   Teixeira, Pedro Gustavo ^b  

^a University of La Tuscia   (Italy)

^b GOETHE UNIVERSITY   (Germany)

Author keywords

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EID: 84881532332     PISSN: 01650750     EISSN: None     Source Type: Journal    
DOI: None     Document Type: Article

References (57)

1. The account provided by the BBC at (last visited 18 March 2013).
2. The political speech "From war to peace:A European tale", Nobel Peace Prize Lecture on behalf of the European Union by Herman Van Rompuy, President of the European Council and José Manuel Durão Barroso, President of the European Commission, Oslo, 10 Dec. 2012.
3. Habermas, The Crisis of the European Union. A Response (Polity Press, 2012), passim.
4. Mario Draghi's article is available at (last visited 18 March 2013).
5. Ruffert, "The European debt crisis and European Union law", 48 CML Rev. (2011), 1777-1806.
6. Speech by Federal Chancellor Angela Merkel at the opening ceremony of the 61st academic year of the College of Europe in Bruges on 2 Nov. 2010, available at (last visited 18 March 2013).
7. The Statement by the Heads of State or Government of the Euro Area, 7 May 2010, available at (last visited 18 March 2013).
8. Conclusions of the Council - Economic and Financial Affairs of 9-10 May 2010, available at (last visited 18 March 2013); and Council Regulation (EU) No 407/2010 of 11 May 2010 establishing a European Financial Stabilization Mechanism, O.J. 2010, L 118/1.
9. The main decisions have been taken with the Statement by the Heads of State or Government of the Euro Area and EU Institutions, 21 July 2011, available at (last visited 18 March 2013).
10. The Conclusions of the European Council of 23 Oct. 2011, the Statement by the EU Heads of State or Government at the informal meeting of members of the European Council of 26 Oct. 2011, the Statement by the Heads of State or Government of the Euro Area, the Euro Summit Statement of 26 Oct. 2011, all available at (last visited 18 March 2013).
11. The Statement by the Euro Area Heads of State or Government, 9 Dec. 2011, available at (last visited 18 March 2013).
12. The Agreed Lines of Communication by the Euro Area Member States, 30 Jan. 2012, available at (last visited 18 March 2013).
13. Regulation 1173/2011 of the European Parliament and of the Council of 16 Nov. 2011 on the effective enforcement of budgetary surveillance in the euro area, O.J. 2011, L 306/1; Regulation 1174/2011 of the European Parliament and of the Council of 16 Nov. 2011 on enforcement measures to correct excessive macroeconomic imbalances in the euro area, O.J. 2011, L 306/8; Regulation 1175/2011 of the European Parliament and of the Council, of 16 Nov. 2011, amending Council Regulation 1466/97 on the strengthening of the surveillance of budgetary positions and the surveillance and coordination of economic policies, O.J. 2011, L 306/12; Regulation 1176/2011 of the European Parliament and of the Council of 16 Nov. 2011 on the prevention and correction of macroeconomic imbalances, O.J. 2011, L 306/25; Council Regulation 1177/2011 of 8 Nov. 2011 amending Regulation 1467/97 on speeding up and clarifying the implementation of the excessive deficit procedure, O.J. 2011, L 306/22.
14. The Two-Pack comprise two Regulations, which were proposed by the Commission in November 2011: Proposal for a Regulation on common provisions for monitoring and assessing draft budgetary plans and ensuring the correction of excessive deficit of the Member States in the euro area - COM(2011)821 final; and Proposal for a Regulation on the strengthening of economic and budgetary surveillance of Member States experiencing or threatened with serious difficulties with respect to their financial stability in the euro area, COM(2011)819 final
15. On this influence see e.g. Cassese, "L'Unione europea e il guinzaglio tedesco", (2009) Giornale di diritto amministrativo, 1003-1007, where it was argued that the judgment of 30 June 2009 would condition both the German and European attitude towards the European integration process, encouraging diffidence and hostility to its further development.
16. Chiti, "Le risposte alla crisi della finanza pubblica e il riequilibrio dei poteri nell'Unione", (2011) Giornale di diritto amministrativo, 311-315.
17. The process of reform of the European architecture for financial supervision was triggered, as it is well known, by the final Report of the de Larosière Group set up by the Commission in November 2008. That Report, published in February 2009, put forward a number of proposals to the Commission on the future of European financial regulation and supervision; available at (last visited 18 March 2013).
18. As for the institutional architecture, it envisaged the reinforcement of the co-operation and co-ordination among national supervisory authorities, through the establishment of new European supervisory authorities. The three European Supervisory Authorities were established in late 2010; see Regulations 1092/2010 and 1096/2010 (concerning the European Systemic Risk Board), Regulations 1093/2010 (European Banking Authority), 1094/2010 (European Insurance and Occupational Pensions Authority), 1095/2010 (European Securities and Markets Authority), all in O.J. 2010, L 331/1-119.
19. On this development, see Teixeira, "The regulation of the European financial market after the crisis", in della Posta and Talani (Eds.), Europe and the Financial Crisis, (Palgrave Macmillan, 2011), 9-27.
20. Verhelst, Renewed Financial Supervision in Europe - Final or Transitory?, Royal Institute for International Relations Egmont Paper No. 44 (Gent, 2011).
21. Recine and Teixeira, The new financial stability architecture in the EU, available at (last visited 17 March 2013).
22. van Meerten and Ottow, "The proposals for the European supervisory authorities: The right (legal) way forward?", 1 Tijdschrift voor Financieel Recht (2010), 5-16
23. European Council Decision of 25 March 2011 amending Art. 136 of the Treaty on the Functioning of the European Union with regard to a stability mechanism for Member States whose currency is the euro (2011/199/EU), O.J. 2011, L91/1.
24. COM(2012)511 final, and COM(2012)512 final
25. The conclusions of the European Council of 24-25 March 2011 are available at (last visited 18 March 2013).
26. the Statement of the heads of State or Government of the Euro area, 7 May 2010, available at (last visited 18 March 2013).
27. Council Decision (2010/320/EU) of 10 May 2010 addressed to Greece with a view to reinforcing and deepening fiscal surveillance and giving notice to Greece to take measures for the deficit reduction judged necessary to remedy the situation of excessive deficit, in O.J. 2010, L 45/6.
28. For an account see Editorial Comments, "Some thoughts concerning the DraftTreaty on a Reinforced Economic Union", 49 CML Rev. (2012), 1-14, at 1-2 and 13-14.
29. de Witte, "Treaty games - Law as instrument and as constraint in the euro crisis policy", in Allen, Carletti and Simonelli (Eds.), Governance for the Eurozone. Integration or Disintegration?, (FIC Press, 2012), pp. 139-160, in particular at 152 et seq.
30. Hyvärinen, "Opening Statements", in Kocharov (Ed.), Another Legal Monster? An EUI Debate on the Fiscal Compact Treaty, EUI Working Paper LAW 2012/09, 8.
31. For an articulation of this argument see in particular de Witte, "European Stability Mechanism and Treaty on stability, coordination and governance: role of the EU institutions and consistency with EU legal order", paper presented at the workshop Challenges for multi-tier governance in the EU, European Parliament, 4 Oct. 2012, available at (last visited 18 March 2013), § 3.
32. Case C-370/12, Thomas Pringle v. Government of Ireland, Ireland, judgment of 27 Nov. 2012, nyr.; on this case, Borger, "The ESM and the European Court's predicament in Pringle", (2013) German Law Journal, 113-140.
33. Joined Cases C-181/91 & C-248/91, European Parliament v. Council and Commission, [1993] ECR I-3685. See also Court of Justice, Case C-316/91, Parliament v. Council, [1994] ECR I-625.
34. Towards a Genuine Economic and Monetary Union, Report by the President of the European Council in close collaboration with the President of the European Commission, the President of the Eurogroup, and the President of the ECB, 5 Dec. 2012, available at (last visited18 March 2013).
35. COM(2012)777, final/2, "A blueprint for a deep and genuine Economic and Monetary Union: Launching the European Debate", especially at 13-14 and 35-36
36. The European Council Conclusions state that "[t]he process of completing EMU will build on the EU's institutional and legal framework. It will be open and transparent towards Member States not using the single currency. Throughout the process the integrity of the Single Market will be fully respected, including in the different legislative proposals which will be made." European Council Conclusions EUCO 205/12, 14 December 2012, at para 4
37. The continuity between the past practices of differentiated integration and the current developments within the Eurozone is highlighted by several authors: see e.g. Piris, It isTime for the Euro Area to Develop Further Closer Cooperation Among its Members, Jean Monnet Working Paper 05/11, 24 et seq., available at (last visited 18 March 2013).
38. Emmanouilidis, "Which lessons to draw from the past and current differentiated integration?", paper presented at the workshop Challenges for multi-tier governance in the EU, European Parliament, 4 Oct. 2012, available at (last visited 18 March 2013).
39. As is argued, notwithstanding the diversity of views and approaches, by all main theories on the legal nature of the EU; for an account of those theories, and the presentation of a new "theory of constitutional synthesis", see Fossum and Menéndez, The Constitution's Gift. A Constitutional Theory for a Democratic European Union, (Rowman&Littlefield Publishers, 2011), p. 69 et seq.
40. In the Italian legal scholarship, the plural nature of the EU has been particularly highlighted by Cassese, "L'Unione europea come organizzazione pubblica composita", (2000) Rivista italiana di diritto pubblico comunitario, 987-992
41. della Cananea, L'Unione europea. Un ordinamento composito (Laterza, 2003).
42. The gradual process of legal unification of the EU order has been reconstructed in particular by von Bogdandy, "Founding principles of EU law: A theoretical and doctrinal sketch", 16 ELJ (2010), 95-111, 108 et seq
43. In the same vein, but using partially different arguments, Curtin and Dekker, "The European Union from Maastricht to Lisbon: Institutional and legal unity out of the shadows", in Craig and De Búrca (Eds.), The Evolution of EU Law, 2d ed. (Oxford, 2011), pp. 155-185.
44. Indeed, Art. 2 of the TSCG, in regulating the "consistency" of the new Treaty with EU law, requires the contracting parties to apply and interpret the TSCG "in conformity with" the EU Treaties and EU law, and to apply it "insofar as it is compatible with" the EU Treaties and EU law. On the institutional side, Art. 12 aims at rationalizing the relationships between the Euro Summit meetings, on the one side, and the European Council, the Commission and the European Parliament, on the other. And Art. 8, which gives the ECJ jurisdiction to assess whether national governments have failed to transpose the balanced budget rule within their own legal systems as required by the TSCG, may be considered as justified under EU law by Art. 273 TFEU, according to which the Court of Justice shall have jurisdiction in any dispute between Member States which relates to the subject matter of the Treaties if the dispute is submitted to it under a special agreement between the parties.
45. Maduro, de Witte and Kumm, "The euro crisis and the democratic governance of the euro: Legal and political issues of a fiscal crisis", in Maduro, deWitte and Kumm, (Eds.), The Democratic Governance of the Euro, RSCAS PP 2012/08 (Badia Fiesolana, 2012), 3-11, at 10-11.
46. On the accountability tools made available in the structure of the EU agencies, see Chiti, "L'accountability delle reti di autorità amministrative dell'Unione europea", (2012) Rivista italiana di diritto pubblico comunitario, 29-84
47. This formula was previously used in Chiti, Menéndez and Teixeira, "The European Rescue of the European Union", in Chiti, Menéndez and Teixeira, The European Rescue of the European Union? The Existential Crisis of the European Political Project, Arena Report No. 3/12 and Recon Report No. 19, 2012, 391-427, 422 et seq.
48. This belief was described in a phrase coined by Majone as "the culture of total optimism" that dominated the moves towards further European integration over the years until the crisis; see (last visited 18 March 2013).
49. These developments, moreover, have been accompanied by the gradual elaboration by the ECB of new instruments of monetary policy, such as the Outright Monetary Transactions (OMTs), which require conditionality and imply the involvement of the EFSF/ESM. The programme was worked out by the Governing Council of the ECB on 6 Sept. 2012; see Press Release - Technical features of Outright Monetary Transactions, 6 September 2012 and Monthly Bulletin - Editorial, 13 Sept. 2012.
50. For a survey of the various steps through which the ECB has developed its current monetary policy, see Drudi, Durré and Mongelli, "The interplay of economic reforms and monetary policy: The case of the eurozone", 50 JCMS (2012), 881-898
51. Napolitano and Perassi, "La Banca Centrale Europea e gli interventi per la stabilizzazione finanziaria: Una nuova frontiera della politica monetaria?" in Amato and Gualtieri (Eds.), Le istituzioni europee alla prova della crisi, (Passigli, 2013, forthcoming).
52. For an overviewof the previous context, see Krauskopf and Steven, "The institutional framework of the European Central Bank: Legal issues in the first ten years of its existence", 46 CML Rev. (2009), 1143-1175.
53. The commitment to the direct recapitalization of banks was made at the June 2012 Euro Summit, and repeated at the 13/14 Dec. 2012 European Council. See European Council Conclusions EUCO 205/12, 14 Dec. 2012, at paras.10 and 11.
54. The Conclusions of the 13/14 Dec. 2012 European Council request the European Parliament and national parliaments to "determine together the organization and promotion of a conference of their representatives to discuss EMU related issues". European Council Conclusions EUCO 205/12, 14 Dec. 2012, at para 14.
55. e.g. Rossi, "'Fiscal Compact' e Trattato sul Meccanismo di Stabilità: aspetti istituzionali e conseguenze dell'integrazione differenziata nell'UE", (2012) Il Diritto dell'Unione europea, 293-307, at 299 et seq.
56. The no-bail out clause in Art. 125 of the Treaty encapsulates the concept of the EU single market and the EMU as a "community of benefits", where all can share the increased economic opportunities from the expansion of business activities, the pooling of financial resources, and a single monetary policy. However, it is prohibited to share the associated and increased risks, since this would affect fiscal sovereignty and could give rise to moral hazard problems in the lack of legally binding enforcement of prudent economic behaviour by Member States. This also explains the lack of a genuine European response to the financial crisis, once it erupted in Europe after the collapse of Lehman Brothers.
57. On this point, see in particular Weiler, "Editorial: Integration through fear", 23 EJIL (2012), 1-5