Abstract
This chapter studies the current functioning of the economic union. After having analysed the decentralised model of fiscal integration and the concept of governance in EU law, the research will consider the application of European supervisory and corrective instruments on national macroeconomic policies, the introduction of constitutional limits in the national budgetary cycle, the regulatory role of financial markets, the implementation of the conditionality policy in the framework of financial assistance, the development of investment policies in the EU legal framework and the establishment of the banking union.
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Notes
- 1.
See supra Sect. 2.3.5.
- 2.
See Hinarejos (2013), p. 1634.
- 3.
In the White Paper of 2001 on the European Governance, the Commission defined governance as the ‘rules, processes and behaviour that affect the way in which powers are exercised at European level, particularly as regards openness, participation, accountability , effectiveness and coherence’. European Commission Communication (2001), p. 8.
- 4.
- 5.
See Häde (2009).
- 6.
Regulation (EC) No 1466/97 of 7 July 1997 on the strengthening of the surveillance of budgetary positions and the surveillance and coordination of economic policies (1997) OJ L 209/1; Regulation (EC) No 1467/97 of 7 July 1997 on speeding up and clarifying the implementation of the excessive deficit procedure , (1997) OJ L 209/6.
- 7.
Council Regulation (EC) No 1055/05 of 27 June 2005 amending Regulation (EC) No 1466/97 on the strengthening of the surveillance of budgetary positions and the surveillance and coordination of economic policies, (2005) OJ L 174/1, and Council Regulation (EC) No 1056/05 of 27 June 2005 amending Regulation (EC) No 1467/97 on speeding up and clarifying the implementation of the excessive deficit procedure , (2005) OJ L 174/5.
- 8.
Regulation (EU) No 1173/2011 on the effective enforcement of budgetary surveillance in the Euro area, (2011) OJ L 306/1; Regulation (EU) No 1174/2011 on enforcement action to correct excessive macroeconomic imbalances in the Euro area, (2011) OJ L 306/8; Regulation (EU) No 1175/2011 amending Regulation (EC) No 1466/97 on the strengthening of the surveillance of budgetary positions and the surveillance and coordination of economic policies, (2011) OJ L 306/12; Regulation (EU) No 1176/2011 on the prevention and correction of macroeconomic imbalances, (2011), L 306/25; Regulation (EU) No 1177/2011 amending Regulation (EU) No 1467/1997 on speeding up and clarifying the implementation of the excessive deficit procedure , (2011) OJ L 306/33; Council Directive 2011/85/EU on requirements for budgetary frameworks of the Member States, (2011) OJ L 306/41. Regulations have been adopted with the ordinary legislative procedure, except for Regulation (EU) No 1177/2011, which has been approved with the special legislative procedure. Regulation (EU) No 1173/2011 and Regulation (EU) No 1174/2011 apply only to the Eurozone Member States.
- 9.
Regulation (EU) No 472/2013 on the strengthening of economic and budgetary surveillance of Member States in the Euro area experiencing or threatened with serious difficulties with respect to their financial stability , (2013) OJ L 140/1; Regulation (EU) No 473/2013 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, (2013) OJ L 140/11. They apply only to the Eurozone Member States.
- 10.
The Euro plus pact was signed on 11 March 2011 by the Eurozone countries and other six EU Member States (Bulgaria, Denmark, Latvia, Lithuania, Poland and Romania).
- 11.
The Treaty was signed on 2 March 2012 by all the Member States of the euro area.
- 12.
The EU Member States with the exception of the United Kingdom and the Czech Republic signed the Treaty on 2 March 2012.
- 13.
Whereas (11) of Regulation (EU) No 1176/2011 refers to the ‘economic stability’ of the Member States and the euro area, while art. 2(1) to ‘the proper functioning of the economy of a Member State or of the economic and monetary union , or of the Union as a whole.
- 14.
Art. 2(2) of Regulation (EU) No 1176/2011 refers to ‘the proper functioning of the economic and monetary union .’
- 15.
The EU Treaties refer to the Eurogroup in art. 137 TFEU. Protocol No 14 on the Eurogroup foresees the election of a stable President every two and half years with a renewable mandate and stresses the necessity of stronger cooperation within the Eurozone.
- 16.
Art. 12 TSCG states that the Heads of State or Government of the contracting parties of the Eurozone shall meet informally together with the President of the European Commission and, if invited, the President of the ECB .
- 17.
According to art. 1 the purpose of the regulation is ‘to prevent, at an early stage, the occurrence of excessive general government deficits and to promote the surveillance and coordination of economic policies thereby supporting the achievement of the Union’s objectives for growth and employment’.
- 18.
The SGP demands a structural deficit of maximum 1% GDP as MTO, while the Fiscal Compact has tightened this parameter up to 0.5% of GDP except for the countries presenting a debt level below 60% and where risks in terms of long-term sustainability of public finances are low. The adjustment path toward the MTO shall pursue the annual improvement of its cyclically-adjusted balance with 0.5% of GDP as a benchmark, but if the country faces with a debt level exceeding 60% of GDP or general risks of debt sustainability, the improvement can be higher. Evidently, the tightening of budgetary target in the preventive arm of coordination aims to provide Member States with a safety margin of manoeuvre to deal with normal cyclical fluctuations and keep the government deficit within the reference value of 3% of GDP, while considering also the need for public investment. The MTO shall be updated every 3 years. See art. 2a and art. 5(1) of Regulation (EC) No 1466/1997.
- 19.
Similarly, Member States not participating in the euro area submit a convergence programme, which also takes into consideration price and exchange rate stability, in order to verify if they present the conditions to adopt the single currency.
- 20.
Member States taking part in the Euro Plus Pact shall also explain their progress in the fulfilment of four specific targets: competitiveness and employment, the stability of financial market, the sustainability of public finances and coordination of fiscal policies .
- 21.
The deviation shall be considered significant in accordance with the criteria outlined in art. 6(3) of Regulation (EC) No 1466/1997.
- 22.
Only the euro area Member States can participate in the voting except for the country concerned by the procedure.
- 23.
See art. 4 of Regulation (EU) No 1173/2011. The latter was adopted on the basis of art. 121(6) and art. 136(1) TFEU.
- 24.
This decision shall be deemed to be adopted by the Council unless it decides by a qualified majority to reject the Commission’s recommendation within 10 days of the Commission’s adoption thereof. The interest-bearing deposit amounts to 0.2% of the Member State GDP in the preceding year. The Council, acting by a qualified majority, may amend the Commission’s recommendation and adopt the text so amended as a Council decision.
- 25.
Imbalances are divided in three groups. External Imbalances/Competitiveness Indicators (current account balance as percent of GDP; net international investment position as percent of GDP; export market shares; nominal unit labour cost; real effective exchange rates based on HICP/CPI deflators, relative to 41 other industrial countries); Internal Imbalances Indicators (private sector debt (consolidated) in % of GDP; year-on-year changes in house prices relative to a Eurostat consumption deflator; credit flow (consolidated); general government sector debt in % of GDP with a threshold of 60%; total financial sector liabilities (non-consolidated); unemployment rate), Employment Indicators (activity rate; long-term unemployment rate; youth unemployment rate).
- 26.
In accordance with art. 3(2) of Regulation (EU) No 1176/2011, the Commission shall take into consideration ‘if necessary, on other relevant economic and financial indicators when assessing the evolution of imbalances’.
- 27.
The European Semester was introduced by Regulation (EU) No 1175/2011 amending Regulation (EC) No 1466/97 on multilateral surveillance . For a deeper analysis of the functioning of the European Semester see Costamagna (2015).
- 28.
On this basis, it can decide to conduct IDRs and passes draft recommendation on the economic policy of the euro area.
- 29.
The procedure is disciplined by Regulation (EU) No 473/2013.
- 30.
The draft budgetary plan shall contain a set of information for the forthcoming year specified in art. 6(3) of Regulation (EU) No 473/2013. On 1 July 2013, the European Commission has published the ‘Guidelines on the format and content of draft budgetary plans, economic partnership programmes and debt issuance reports’.
- 31.
See art. 7 of Regulation (EU) No 473/2013.
- 32.
This happens in exceptional cases, when after consulting the Member State concerned within 1 week of submission of the draft budgetary plan, the Commission identifies particularly serious non-compliance with the budgetary policy obligations laid down in the SGP .
- 33.
At the request of the parliament of the Member State concerned or of the European Parliament, the Commission shall present its opinion to the parliament making the request.
- 34.
Regulation (EC) No 479/2009 of 25 May 2009 on the application of the Protocol on the excessive deficit procedure annexed to the Treaty establishing the European Community, (2009) OJ L 145/1.
- 35.
The introduction of thresholds aims to protect the autonomy of Member States in the management of their fiscal sovereign rights: as long as they don’t violate the stability criteria, national parliaments can make their own choices of budgetary policy. Cloos et al. (1993), p. 193. At the same time, the quantification of these thresholds in numerical values is supposed to facilitate their assessment. Allemand et al. (2016), p. 121.
- 36.
The containment of current public spending is already a target of the preventive arm of coordination . Regulation (EC) No 1466/1997 demands Member States to present a structural deficit within 1% of GDP. See art. 2a Regulation (EC) No 1466/1997, as amended by Regulation (EU) No 1175/2011.
- 37.
The first situation consists normally of natural disasters or terrorist attack that art. 122(2) TFEU already takes into consideration for the activation of the solidarity clause . An economic downturn is considered instead exceptional when the annual GDP volume growth rate is negative or the annual GDP volume growth is very low relative to its potential during a protracted period of time. The relevant factors to be considered in the assessment of the excessive deficit are specified in art. 2(3) of Regulation (EC) No 1467/1997.
- 38.
The values of 3% for deficit and 60% for public debt were chosen because they were the average of level, Member States presented when the Protocol was drafted. Cf. De Grauwe (2016), pp. 148–149.
- 39.
See art. 2 (1a) Regulation (EC) No 1467/1997 as amended by Regulation (EU) No 1177/2011 and art. 4 TSCG. For a Member State that is subject to an EDP and for a period of 3 years from the correction of the excessive deficit, the requirement shall be considered fulfilled if it makes sufficient progress towards compliance as assessed in the opinion adopted by the Council on its stability programme.
- 40.
Cf. Allemand et al. (2016), p. 123.
- 41.
Decisions are adopted by majority vote without the participation of the Member State concerned. The voting rights of States that did not adopt the euro are suspended for the adoption of recommendations to those members whose currency is the euro.
- 42.
The Council decides, on a proposal from the Commission, whether an excessive deficit exists and recommends the concerned Member State, on a recommendation from the Commission, to implement a correction.
- 43.
Qualified majority is calculated ex art. 238(3)b TFEU.
- 44.
This decision can be taken when (i) a Member State has been lodged an interest-bearing deposit with the Commission in accordance with the preventive arm of coordination ; (ii) where the Commission has identified particularly serious non-compliance with the budgetary policy obligations laid down in the SGP . See art. 5 of Reg. (EU) No. 1173/2011.
- 45.
This stage applies only to the Member States of the euro area.
- 46.
The Council can (i) require the Member State to publish additional information before issuing bonds and securities, (ii) invite the EIB to reconsider its lending policy towards the country, (iii) require the government to make a non-interest-bearing deposit of an appropriate size until the excessive deficit has been corrected, which will become a fine if 2 years after the decision the excessive deficit has not been corrected. In order to reduce the margin of discretion of the Council, applicable fines have been quantified in a fixed value of 0.2% of national GDP plus a variable value of 1/10 of the gap from the reference value up to 0.5% of national GDP. Fines applying to Eurozone Member States shall be paid to the ESM. In case of correction of the excessive deficit, the Council abrogates, on recommendation from the Commission, some or all of its decisions taken in advance, including sanctions . If the Council has previously made its recommendations public, it shall make a public statement that the excessive deficit in the Member State concerned has been corrected.
- 47.
Like in Regulation (EU) No 1173/2011, the RMV under art. 7 TSCG applies only to situations of excessive deficit, not excessive debt. See Calliess (2012), p. 108.
- 48.
Regulation (EU) No 1174/2011 was introduced also on the basis of art. 136 TFEU.
- 49.
Fines can be imposed, in two cases: (a) after the CAP has been qualified insufficient for two successive times, the Council still considers that the Member State has submitted an insufficient CAP; (b) the Council decides for two successive times in the same imbalance procedure that a Member States has not complied with the recommendation listing the corrective actions.
- 50.
The interest-bearing deposit or the annual fine recommended by the Commission shall be 0.1% of the GDP in the preceding year of the Member State concerned.
- 51.
Delors ‘Report on Economic and Monetary Union in the European Community’, 17 April 1989, p. 20.
- 52.
Allemand et al. (2016), p. 114.
- 53.
Delors ‘Report on Economic and Monetary Union in the European Community’, 17 April 1989, p. 20.
- 54.
See Whereas (7) Council Regulation (EC) No 3603/93 of 13 December 1993 specifying definitions for the application of the prohibitions referred to in Articles [123 TFEU] and [125(1) TFEU], (1993) OJ L 332/1.
- 55.
See art. 121(4) TFEU and art. 126(8) TFEU.
- 56.
- 57.
- 58.
Greek Bondholder Act, 4050/12, 23 February 2012.
- 59.
Martinelli (2016), pp. 2–3.
- 60.
The Sub-committee was composed of members from the Member States, the European Commission, the ECB , the EIB and the ESM.
- 61.
More precisely the ‘double-limb CACs’ require two separate majorities to approve a reform of the bond terms: one at the level of each ‘series’ of bond and one at the level of all ‘series’ combined.
- 62.
In the event holdouts refuse to take part in the restructuring, there are two options. Either the state refuses to pay the holdouts, thus accepting the possibility of protracted legal battles and future restriction to issue debt, or it can repay them, thus making more difficult the restoration of debt sustainability. Zettelmeyer (2018), p. 71. The reform of bond obligations by majority represents a derogation to the principle of consent of contract law. Hofmann (2013), p. 548.
- 63.
On the coordination of the ESM with the IMF see Adinolfi (2013), p. 10.
- 64.
Allemand et al. (2016), p. 139.
- 65.
This is an unusual provision for an international treaty, which normally does not specify how international obligation should be implemented in domestic law. See Ruotolo (2012), p. 453.
- 66.
- 67.
The problem is that neither the TSCG, nor EU law provides a definition of ‘unusual event outside the State control’, ‘major impact on the financial position of the general government’ or ‘fiscal sustainability in the medium term’. As a consequence, there is more margin of discretion. See Peers (2012), p. 417.
- 68.
Provided that the Fiscal Compact does not specify what ‘significant’ means, it should apply the definition given by art. 6(3) of Regulation (EC) No 1466/97.
- 69.
Commission Decision (EU) 2015/1937 of 21 October 2015 establishing an independent advisory European Fiscal Board, (2015), OJ L 282/37.
- 70.
This agreement has been necessary as art. 273 TFEU allows only Member States and not the Commission to bring a dispute before the CJEU , making the application of the norm more difficult because of the reluctance of national governments to act against their peers. In the event the Commission’s report confirms a situation of non-compliance, one or more Member States may bring the matter before the CJEU .
- 71.
The financial sanction shall consist of a lump sum or a penalty payment appropriate in the circumstances and shall not exceed 0.1% of its GDP. The amounts imposed on a contracting party whose currency is the euro shall be payable to the ESM.
- 72.
At the same time, the CJEU might receive a preliminary ruling regarding the interpretation of the national rules implementing the golden rule. See Porchia (2013), pp. 607–608.
- 73.
The EFSM was created within the EU legal framework on the basis of the solidarity clause ex art. 122(2) TFEU. It consisted of an emergency funding programme introduced by Regulation (EU) 407/2010 and financed by borrowing secured against the EU Budget up to €60 billions.
- 74.
The EFSF consisted of special purpose vehicle (SPV) under Luxembourgish law that could guarantee on a pro-rata basis lending up to €440 billion to euro area Member States. Despite having a different legal nature and resources available, both mechanisms could provide financial support under strict conditionality and at an interest premium.
- 75.
The ESM can count on €80 billion paid-in capital, while the rest is callable at any time. Art. 8(5) TESM provides that the liability of each ESM Member shall be limited to its portion of the authorised capital stock. No country shall be liable, by reason of its membership, for obligations of the ESM. The obligations of ESM Members to contribute to the authorised capital stock in accordance with this Treaty are not affected if any such ESM Member becomes eligible for, or is receiving, financial assistance from the ESM. Cf. Ohler (2011), p. 71.
- 76.
In the event a country requests the ESM assistance, its portion of callable capital is shared among the other guarantors (art. 25(2) TESM). The contribution to the ESM is not counted in the public deficit under the SGP .
- 77.
These are Precautionary Conditioned Credit line (PCCL) and the Enhanced Conditions Credit Line (ECCL). The PCCL shall support Member States which have a sound economic and financial situation and are respecting some ex ante eligibility criteria. ECCL should support those countries whose economic and financial situation is still sound but that do not comply with the eligibility criteria for the PCCL.
- 78.
See Board of Governors Resolution No. 4 of 8 December 2014 (SG/BoG/2014/05/04). The resolution was approved under art. 19 of the ESM Treaty.
- 79.
- 80.
The conditions are the following: (i) the institution(s) is, or is likely to be in the near future, in breach of the capital requirements established by the ECB in its capacity as supervisor, is unable to attract sufficient capital from private sector sources to resolve its capital problems and the bail-in is not expected to address fully the capital shortfall; (ii) the institution(s) concerned should have a systemic relevance or pose a serious threat to the financial stability of the euro area as a whole or of the requesting ESM Member; (iii) the requesting ESM Member is unable to provide financial assistance to the institutions in full without very adverse effects on its own fiscal sustainability, including via the instrument of an ESM loan for the recapitalisation of financial institutions; iv) providing financial assistance to the benefit of the requesting ESM Member is indispensable to safeguard the financial stability of the euro area as a whole or of its Member States. Cf. art. 3 of the ESM Guideline on Financial Assistance for the Direct Recapitalisation of Institutions, 8 December 2014.
- 81.
The Board of Governors is the highest decision-making body of the ESM. It comprises the Ministers of Finance of the 19 ESM Member States. Representatives of the European Commission and the ECB may participate in its meetings as observers. The Board of Governors is chaired by the President of the Eurogroup . The Board of Directors consists of representatives from each of the 19 ESM Members. Each Governor appoints one Director and one alternate Director.
- 82.
The German Federal Constitutional Court declared that Germany shall make sure to pay its contribution to the mechanism, otherwise the activation of the ESM, while its voting rights are suspended, would violate the budgetary autonomy of the Bundestag and consequently it would be illegal from the point of view of national constitutional law. German Federal Constitutional Court , Judgment of 18 March 2014 [2 BvR 1390/12], paras. 158–161.
- 83.
The rigorous analysis of debt sustainability should consider several elements including: growth of deficit and debt, development of the primary deficit, maturity of the debt incurred, interest rates paid, prospects of economic growth, political and social range for austerity measures. Ohler (2011), p. 66.
- 84.
The concept of ‘conditionality ’ was unknown in EU law before the financial crisis of 2008. Cf. Estella (2018), p. 204.
- 85.
See ECJ Judgment of 27 November 2012, Case C-370/12, Thomas Pringle v Government of Ireland, ECLI:EU:C:2012:756, para. 111.
- 86.
- 87.
See Whereas (5) TESM; Preamble TSCG.
- 88.
The precautionary assistance provided by the ESM consists of credit lines.
- 89.
The Commission shall conduct regular review missions to verify the progress made in the implementation of these measures. On this basis of the review missions, the Council may recommend to the Member State concerned to adopt precautionary corrective measures or to prepare a draft MAP .
- 90.
Ioannidis noticed that considering the early experience with MAP conditionality , such programmes may cover the complete spectrum of economic and social relations of the recipient Member States, including labour law and public healthcare. MAPs are not only broad in scope, but also regulate details of economic and social activity in the beneficiary countries. See Ioannidis (2014), p. 18.
- 91.
In case of deviance, the Council, acting by a qualified majority on a proposal from the Commission, may formally declared existing a situation of non-compliance. In this case, the concerned Member State, in close cooperation with the Commission, the ECB and, where appropriate, the IMF, shall take measures aimed at stabilising markets and preserving the good functioning of its financial sector. Evidently the European Union is not provided with any legal means to enforce the adjustment programmes, but it can only exercise a political pressure by threatening to interrupt financial assistance .
- 92.
See Whereas (1) Regulation (EU) No 1017/2015 of the European Parliament and of the Council of 25 June 2015 on the European Fund for Strategic Investments, the European Investment Advisory Hub and the European Investment Project Portal.
- 93.
The resources of the EU budget for the regional cohesion policy are €351.8 billion to be distributed among all 28 EU countries between 2014 and 2020.
- 94.
See Clayes and Leandro (2016).
- 95.
Regulation (EU) No 2015/1017 of the European Parliament and of the Council of 25 June 2015 on the European Fund for Strategic Investments, the European Investment Advisory Hub and the European Investment Project Portal.
- 96.
See Tovo (2016), p. 360.
- 97.
Whereas (13) Regulation (EU) No 1017/2015.
- 98.
That governance structure is composed of a steering board, a managing director and an investment committee. See Whereas (29) Regulation (EU) No 1017/2015. There is also a European Investment Advisory Hub between the European Union and the EIB.
- 99.
EFSI was originally financed with € 16 billion from the EU budget (in particular from Horizon 2020 and innovation and research), combined with € 5 billion provided by the EIB. The plan has been recently extended until 31 December 2020. The investment target has been raised to €500 billion. It can count on €26 billions of EU budget guarantee and €7.5 billion contribution from the EIB.
- 100.
This means that a project should be supported only if it would not have been realised without the contribution of EFSI.
- 101.
ESIF consists of five European funds: the European Regional Development Fund, the European Social Fund, the Cohesion Fund, the European Agricultural Fund for Rural Development and the European Maritime and Fisheries Fund. They are managed together by the European Commission and the Member States. Within the Multiannual Financial Framework 2014–2020, ESIF has been provided with €450 billion. See ‘ESIF/EFSI complementarities. Maximising synergies and complementarities’, 13 October 2015, EGESIF_15-0032-00.
- 102.
Regulation (EU) No 2017/2396 amending Regulations (EU) No 1316/2013 and (EU) 2015/1017 as regards the extension of the duration of the European Fund for Strategic Investments, (2017) OJ L 345/34.
- 103.
- 104.
Council Regulation (EU) No 1024/2013 of 15 October 2013 conferring specific tasks on the European Central Bank concerning policies relating to the prudential supervision of credit institutions, (2013) OJ L 287/63.
- 105.
Art. 25 of Regulation (EU) No 1024/2013 has introduced the formal separation of monetary and supervisory functions within the ECB . The ECB shall carry out the tasks conferred on without prejudice to and separately from its tasks relating to monetary policy and any other tasks. This distinction is ensured in concrete through a number of precautions. First, the decision-making process in the field of supervision is managed by the Supervisory Board, while the Governing Council of the ECB only provides for a formal endorsement of its proposals through the silent assent procedure. In order to keep some distance from monetary issues, the Supervisory Board presents only a limited number of ECB representatives and its members shall act ‘in the interest of the Union as a whole’. Second, during the meeting dedicated to supervisory issues, the Governing Council shall not make decisions regarding monetary tasks. Monetary summits have been therefore formally distinguished from supervisory summits. Third, the ECB has adopted an internal division of its personnel between officers in charge of monetary policy and those responsible for supervisory tasks. The rigid division of work between the two branches of the ECB should prevent conflicts of interests. Cf. Verhelst (2013), p. 17.
- 106.
See art. 1 of Regulation (EU) No 1024/2013.
- 107.
A bank is considered ‘significant’: (i) if the total value of its assets exceeds €30 billion; (ii) if the ratio of its total assets over the GDP of the five participating home Member State exceeds 20% (unless the total value of its assets is below €5 billion); (iii) if national authorities notify the ECB , they consider a bank to be of significant relevance with regard to the domestic economy; (iv) if the ECB decides on its own initiative that a bank is significant, taking into consideration that it has banking subsidiaries in more than one participating Member States and its cross-border assets or liabilities represent a significant part of its total assets or liabilities; (v) if the bank has granted financial support from the EFSF or the ESM; (vi) if the bank is one of the three most significant credit institutions in each of the participating Member States, unless justified by particular circumstances.
- 108.
The ECB can still exercise an indirect supervision on them, by instructing national authorities, which have to report to the ECB on the implementation of their tasks.
- 109.
Mersch (2013).
- 110.
See Hennessy (2014), p. 164.
- 111.
Regulation (EU) No 806/2014 of the European Parliament and of the Council of 15 July 2014 establishing uniform rules and a uniform procedure for the resolution of credit institutions and certain investment firms in the framework of a Single Resolution Mechanism and a Single Resolution Fund and amending Regulation (EU) No 1093/2010, (2014) OJ L 225/1.
- 112.
The Intergovernmental Agreement signed in Brussels on 21 May 2014.
- 113.
The IGA disciplines the transfer and mutualisation of contributions to the Single Resolution Fund (SRF). The fund will be built up in 8 years on the basis of bank contributions. The SRF will be filled in 10 years through bank levies of 1%. National resources will be required in the transition period in order to ensure the effectiveness of the mechanism. On the financing of the SRF cf. Clauss (2013), p. 73.
- 114.
The purpose of the bail in instrument is to make the shareholders and private sector creditors share the costs of a bank rescue or recapitalisation. In a way, shareholders, creditors, bondholders and uncovered depositors are punished for the losses suffered by the financial institution, where they invested. Lo Schiavo (2017), p. 239.
- 115.
Regulation (EU) No 575/2013 of the European Parliament and of the Council of 26 June 2013 on prudential requirements for credit institutions and investment firms and amending Regulation (EU) No 648/2012, (2013) OJ L 176/1; Directive 2013/36/EU of the European Parliament and of the Council of 26 June 2013 on access to the activity of credit institutions and the prudential supervision of credit institutions and investment firms, amending Directive 2002/87/EC and repealing Directives 2006/48/EC and 2006/49, (2013) OJ L 176/338; Directive 2014/17/EU of the European Parliament and of the Council of 4 February 2014 on credit agreements for consumers relating to residential immovable property and amending Directives 2008/48/EC and 2013/36/EU and Regulation (EU) No 1093/2010, (2014) OJ L 60/34; Directive 2014/59/EU of the European Parliament and of the Council of 15 May 2014 establishing a framework for the recovery and resolution of credit institutions and investment firms and amending Council Directive 82/891/EEC, and Directives 2001/24/EC, 2002/47/EC, 2004/25/EC, 2005/56/EC, 2007/36/EC, 2011/35/EU, 2012/30/EU and 2013/36/EU, and Regulations (EU) No 1093/2010 and (EU) No 648/2012, of the European Parliament and of the Council, (2014) OJ L 173/190; Directive (EU) 2015/2366 of the European Parliament and of the Council of 25 November 2015 on payment services in the internal market, amending Directives 2002/65/EC, 2009/110/EC and 2013/36/EU and Regulation (EU) No 1093/2010, and repealing Directive 2007/64/EC, (2015) OJ L337/35.
- 116.
For a deeper analysis of the project of Single Rulebook see Alexander (2015).
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Lionello, L. (2020). The Instruments Available to Achieve Stability in the Euro Area: The Current Functioning of the Economic Governance. In: The Pursuit of Stability of the Euro Area as a Whole. Studies in European Economic Law and Regulation, vol 18. Springer, Cham. https://doi.org/10.1007/978-3-030-28045-1_3
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