The new governance of EU fiscal discipline

European Law Review

Volumn 38, Issue 5, 2013, Pages 601-617

  Armstrong, Kenneth A ^a  

^a UNIVERSITY OF CAMBRIDGE   (United Kingdom)

Author keywords

EU law; European governance; Eurozone; Financial regulation

Indexed keywords

EID: 85017176902     PISSN: 03075400     EISSN: None     Source Type: Journal    
DOI: None     Document Type: Conference Paper

References (78)

1. Amid the many examples, the President of the European Parliament Martin Schulz's speech to the European Commission in April 2012 typifies the Brussels rhetoric in which strict application of the Community method is the primary legitimate governance response to the crisis: http://www.europarl.europa.eu/the-president/en/press/press-release-speeches/speeches/sp-2012/sp-2012-april/speeches-2012-april-2.html [Accessed August 19, 2013].
2. D. Hodson, Governing the Euro Area in Good Times and Bad (Oxford: Oxford University Press, 2011).
3. For a detailed analysis of the claims and counter-claims made for the Community method see R. Dehousse, "The 'Community Method' at Sixty" in R. Dehousse (ed.), The "Community Method": Obstinate or Obsolete? (Basingstoke: Palgrave Macmillan, 2011), pp. 3-15.
4. For a definition of the "classic Community method" see J. Scott and D. Trubek, "Mind the Gap: Law and New Approaches to Governance in the European Union" (2002) 8 E. L. J. 1.
5. D. Hodson and I. Maher, "The Open Method as a New Mode of Governance: The Case of Soft Economic Policy Co-ordination" (2001) 39 J. C. M. S. 71;
6. W. Schelkle, "EU Fiscal Governance: Hard Law in the Shadow of Soft Law" (2007) 13 Columbia Journal of European Law 70.
7. See, inter alia, M. Buchs, New Governance in European Social Policy: the Open Method of Coordination (Basingstoke: Palgrave Macmillan, 2007);
8. M. Dawson, "The Ambiguity of Social Europe in the Open Method of Coordination" (2009) 34 E. L. Rev. 1;
9. J. Zeitlin, "The Open Method of Coordination and Reform of National Social and Employment Policies: Influences, Mechanisms and Effects" in M. Heidenreich and J. Zeitlin (eds), Changing European Employment and Welfare Regimes: the Influence of the Open Method of Coordination on National Labour Market and Social Welfare Reforms (London: Routledge, 2009), pp. 214-245;
10. K. Armstrong, Governing Social Inclusion: Europeanization through Policy Coordination (Oxford: Oxford University Press, 2010).
11. S. Borrás and K. Jacobsson, "The Open Method of Co-ordination and New Governance Patternsin the EU" (2004) 11 J. E. P. P. 185.
12. Commission, "A Blueprint for a Genuine Economic and Monetary Union" COM (2012) 777.
13. K. Armstrong, "The Character of EU Law and Governance: From 'Community Method' to New Modes of Governance" (2011) 63 C. L. P. 179.
14. This article is not directly concerned with either the wisdom or effects of balanced-budget rules. However, evidence from the experience of other jurisdictions does highlight the problematic nature of such rules, particularly in the absence of a stronger federal budget which can offset the procyclical effects of balanced-budget rules. See R. Henning and M. Kessler, "Fiscal Federalism: US History for Architects of Europe's Fiscal Union", Peterson Institute for International Economics Working Paper No. 2012-1.
15. For an extensive analysis of the background to, and contents of, the TSCG see P. Craig, "The Stability, Coordination and Governance Treaty: Principle, Politics and Pragmatism" (2012) 37 E. L. Rev. 231.
16. See also M. Ruffert, "The European Debt Crisis and European Union Law" (2011) 48 C. M. L. Rev. 1777.
17. Opinion 2/94 on EU accession to the ECHR [1996] E. C. R. I-1759;
18. [1996] 2 C. M. L. R. 265.
19. Resolution of January 24, 2012 (Session 2011-12), http://www.senat.fr/leg/tas11-053.html [Accessed August 19, 2013].
20. Commission, "Common principles on national fiscal correction mechanisms" COM (2012) 342.
21. F. Fabrini, "The Fiscal Compact, The 'Golden Rule' and the Paradox of European Federalism" (2013) 36 Boston College International and Comparative Law Review 1.
22. For an extensive discussion of the use of EU institutions outside of the framework of EU law, see S. Peers, "Towards a New Form of EU Law?: The Use of EU Institutions outside the EU Legal Framework" (2013) 9 European Constitutional Law Review 37.
23. Council Regulation 407/2010 establishing a European Financial Stabilisation Mechanism [2010] OJ L118/1.
24. As De Witte and Beukers note, the problem with the EFSM was whether art.122 (2) TFEU constituted an adequate legal basis for its operation, whereas the difficulty with the EFSF was whether it violated Member States' EU law obligations under art.125 TFEU (the "no bailout" clause): B. De Witte and T. Beukers, "The Court of Justice approves the Creation of the European Stability Mechanism outside the EU Legal Order: Pringle" (2013) 50 C. M. L. Rev. 805.
25. Decision 2011/199 [2011] OJ L91/1.
26. Pringle v Government of Ireland, Ireland and the Attorney General (C-370/12) [2013] 2 C. M. L. R. 2.
27. For a detailed analysis see De Witte and Beukers, "The Court of Justice approves the Creation of the European Stability Mechanism outside the EU Legal Order: Pringle" (2013) 50 C. M. L. Rev. 805.
28. T. Daintith, "Legal Analysis of Economic Policy" (1982) 9 J. L. S. 191.
29. Regulation 407/2010 [2010] OJ L118/1.
30. Implementing Decision 2011/77 on granting Union financial assistance to Ireland (as amended) [2011] OJ L30/34;
31. Implementing Decision 2011/344 on granting Union financial assistance to Portugal (as amended) [2011] OJ L159/88.
32. J. Weiler, "The Community System: the Dual Character of Supranationalism" (1981) 1 Y. E. L. 267.
33. Regulation 1175/2011 amending Regulation 1466/97 on the strengthening of the surveillance of budgetary positions and the surveillance and coordination of economic policies [2011] OJ L306/12;
34. Regulation 1177/2011 amending Regulation 1467/97 on speeding up and clarifying the implementation of the excessive deficit procedure [2011] OJ L306/33.
35. Regulation 1173/2011 on effective enforcement of budget surveillance in the Euro area [2011] OJ L306/1.
36. Directive 2011/85 on requirements for budgetary frameworks of the Member States [2011] OJ L306/41.
37. Regulation 473/2013 on common provisions for monitoring and assessing draft budgetary plans and ensuring correction of excessive deficits of the Member States in the Euro area [2013] OJ L140/11.
38. Regulation 472/2013 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 [2013] OJ L140/1.
39. H. Wallace, "The Council: an Institutional Chameleon?" (2002) 15 Governance 325.
40. O. Costa, R. Dehousse and A. Trakalovà, "Co-decision and 'Early Agreements': an Improvement or a Subversion of the Legislative Procedure?" (March 9, 2011), http://www.eng.notre-europe.eu/011-2606-Co-decision-and-early-agreements-an-improvement-or-a-subversion-of-the-legislative-procedure.html [Accessed August 19, 2013].
41. F. Hayes-Renshaw, W. Van Aken and H. Wallace, "When and Why the EU Council of Ministers Votes Explicitly" (2006) 44 J. C. M. S. 161.
42. J.-P. Jacqué, "The Principle of Institutional Balance" (2004) 41 C. M. L. Rev. 383;
43. P. Craig, "European Governance: Executive and Administrative Powers under the New Constitutional Settlement" (2005) 3 Int'l J. Const. L. 407.
44. Dehousse, "The 'Community Method' at Sixty" in The 'Community Method' (2011), pp. 3-15;
45. Scott and Trubek, "Mind the Gap" (2002) 8 E. L. J. 1.
46. Armstrong, "The Character of EU Law and Governance" (2011) 63 C. L. P. 179.
47. See G. De Búrca and J. Scott, Law and New Governance in the EU and the US (Oxford and Portland, Oregon: Hart Publishing, 2006);
48. J. Scott, "In Legal Limbo: Post-Legislative Guidance as a Challenge for European Administrative Law" (2011) 48 C. M. L. Rev. 329.
49. D. Hodson and I. Maher, "Soft Law and Sanctions: Economic Policy Co-ordination and Reform of the Stability and Growth Pact" (2004) 11 J. E. P. P. 798;
50. W. Schelkle, "The Contentious Creation of the Regulatory State in Fiscal Surveillance" (2009) 32 W. E. P. 829;
51. Schelkle, "EU Fiscal Governance" (2007) 13 Columbia Journal of European Law 70.
52. P. Copeland and D. Papadimitriou (eds), The EU's Lisbon Strategy: Evaluating Success, Understanding Failure (Basingstoke: Palgrave Macmillan, 2012).
53. Tholoniat coined the term "meta-OMC" to describe the integrated economic and employment policy co-ordination process which evolved under the Lisbon strategy. In hindsight, that structure looks more like an embryonic version of the more mature meta-OMC of the European semester: L. Tholoniat, "The Career of the Open Method of Coordination: Lessons from a 'soft' EU Instrument" (2010) 33 W. E. P. 93.
54. K. Armstrong, "The Lisbon Agenda and Europe 2020: From the Governance of Coordination to the Coordination of Governance" in The EU's Lisbon Strategy (2012), pp. 208-228.
55. Regulation 1175/2011 of the European Parliament and the Council amending Council Regulation 1466/97 on the strengthening of the surveillance of budgetary positions and the surveillance and coordination of economic policies [2011] OJ L306/12.
56. See in particular, Schelkle, "EU Fiscal Governance" (2007) 13 Columbia Journal of European Law 70;
57. Hodson and Maher, "Soft Law and Sanctions" (2004) 11 J. E. P. P. 798.
58. It will be recalled that the reluctance of the Council to take action against France and Germany within the framework of the EDP resulted in legal action being brought by the European Commission against the Council: Commission v Council (C-27/04) [2004] E. C. R. I-6649.
59. For a more detailed contextualisation of this litigation see Hodson and Maher, "Soft Law and Sanctions" (2004) 11 J. E. P. P. 798.
60. F. Amtenbrink and J. De Haan "Reforming the Stability and Growth Pact" (2006) 31 E. L. Rev. 402.
61. Schelke, "EU Fiscal Governance" (2007) 13 Columbia Journal of European Law 70;
62. Hodson and Maher, "Soft Law and Sanctions" (2004) 11 J. E. P. P. 798.
63. K. Abbott et al., "The Concept of Legalization" (2000) 54 International Organization 401.
64. For discussions of "hybridity" in EU governance, see especially D. Trubek and L. Trubek, "New Governance and Legal Regulation: Complementarity, Rivalry and Transformation" (2007) 13 Columbia Journal of European Law 53;
65. C. Kilpatrick, "New EU Employment Governance and Constitutionalism" in Law and New Governance in the EU and the US (2006).
66. For a critique of the use of the term "hybridity" in new governance scholarship see K. Armstrong, "New Governance and the European Union: an Empirical and Conceptual Critique" in G. de Búrca, C. Kilpatrick and J. Scott (eds), Critical Legal Perspectives on Global Governance: Liber Amicorum David M Trubek (Oxford: Hart Publishing, 2013).
67. For further analysis see Trubek and Trubek, "New Governance and Legal Regulation" (2007) 13 Columbia Journal of European Law 53.
68. European Commission, Public finances in EMU, 2011 (Office for Official Publications of the European Communities, 2011).
69. 3015th meeting of the Council, May 18, 2010, http://www.consilium.europa.eu/uedocs/cms-data/docs/pressdata/en/ecofin/114506.pdf [Accessed August 19, 2013].
70. European Commission, "Fiscal Frameworks across Member States", European Economy Occasional Paper 91 (February 2012).
71. See http://www.consilium.europa.eu/uedocs/cms-data/docs/pressdata/en/ec/123978.pdf [Accessed August 19, 2013].
72. COM (2012) 761.
73. Policy advice to Estonia: "Fiscal Frameworks across Member States", European Economy Occasional Paper 91(2012), p. 12.
74. Policy advice to the United Kingdom: "Fiscal Frameworks across Member States", European Economy Occasional Paper 91(2012), p. 74.
75. Implementing Decision 2011/344 on granting Union financial assistance to Portugal [2011] OJ L159/88 art.3 (5) (b).
76. Implementing Decision 2011/77 on granting Union financial assistance to Ireland [2011] OJ L30/34 art.3 (7) (e).
77. It is worth noting that in a reasoned opinion, the French Senate raised subsidiarity issues in respect of draft arts 3 and 4 of the Regulation which require "independent" macroeconomic forecasts and "independent" fiscal bodies. The Senate noted that these provisions had to be interpreted as leaving to the Member States a large measure of discretion in the composition and functioning of such bodies; something that was consistent with the original use of a directive in the six pack: Resolution of January 24, 2012 (Session 2011-12), http://www.senat.fr/leg/tas11-053.html [Accessed August 2013].
78. European Commission, "A blueprint for a genuine economic and monetary union" COM (2012) 777.