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The EU after Lisbon pp 21–35Cite as

Parameters of Constitutional Development: The Fiscal Compact In Between EU and Member State Constitutions

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Abstract

The answer to the questions whether the Lisbon Treaty is a quasi-constitutional framework to be revised, and whether the crisis is a matter for amending or just completing the Lisbon Treaty, depends on our understanding of what constitutional change is and entails. In this chapter, the boundaries of constitutional development are drawn broadly to encompass both the EU and the Member States constitutional orders. Also, not only the formal constitution, but also the substantive constitution is taken on board. This enables an analysis of one major response to the crisis, the Fiscal Compact contained in the Treaty on Stability, Coordination and Governance in the Economic and Monetary Union. This instrument is constitutionally located ‘in between’ the EU and the Member States, and is an excellent object for the type of study proposed. The chapter concludes that we are in the middle of constitutional change, which—once the dust has settled—may be codified and consolidated in the EU constitutional documents proper, in the style of ‘evolutionary constitutions’.

Keywords

  • Constitutional amendment
  • EU law
  • EU Member States
  • Fiscal Compact
  • Lisbon Treaty
  • Treaty on Stability Coordination and Governance

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Notes

  1. 1.

    I elaborate my views on this concept and its relevance to European constitutional law in Besselink 2007.

  2. 2.

    One of the few studies which takes a broader look at constitutional development in the EU, is Christiansen and Reh (2009).

  3. 3.

    E.g. Cohn-Bendit and Verhofstadt (2012), simultaneously published in Dutch, English, German, Italian and Spanish, of which the titles all resemble the Dutch version (English: For Europe!—Manifesto for Postnational Revolution in Europe, interestingly not published in the UK but in München by Carl Hanser Verlag, 2012).

  4. 4.

    Articles 115 and 109, 109a Grundgesetz, introduced in 2009.

  5. 5.

    E.g. Article 20 Polish constitution: ‘A social market economy, based on the freedom of economic activity, private ownership, and solidarity, dialogue and cooperation between social partners, shall be the basis of the economic system of the Republic of Poland.’ Article 19 Bulgarian constitution: ‘(1) The economy of the Republic of Bulgaria shall be based on free economic initiative. (2) The state shall establish and guarantee equal legal conditions for economic activity to all persons and legal entities by preventing any abuse of a monopoly status and unfair competition, and by protecting the consumer. (3) All investments and economic activity by persons and legal entities shall enjoy the protection of the law. (4) The law shall establish conditions conducive to the setting up of cooperatives and other forms of association of persons and legal entities in the pursuit of economic and social prosperity.’ Article 55 Slovak constitution: ‘(1) The economy of the Slovak Republic is based on the principles of a socially and ecologically oriented market economy. (2) The Slovak Republic protects and promotes economic competition. Details will be set out in a law.’

  6. 6.

    Articles 3 TEU and 119, 120, 127 TFEU.

  7. 7.

    Article 14 TFEU and Protocol No 26 on services of general interest to the Lisbon Treaty (OJ 2012 C 326/308).

  8. 8.

    See the Council Decision 2011/734/EU of 12 July 2011, 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, OJ 2011 L 296/38, and Council Decision 2012/211/EU of 13 March 2012 amending it, OJ 2012 L 113/8.

  9. 9.

    OJ 2011 L 306, comprising Regulation (EU) No 1173/2011 of the European Parliament and of the Council on the effective enforcement of budgetary surveillance in the euro area, Regulation (EU) No 1174/2011 of the European Parliament and of the Council on enforcement measures to correct excessive macroeconomic imbalances in the euro area, Regulation (EU) No 1175/2011 of the European Parliament and of the Council amending Council Regulation (EC) No 1466/97 on the strengthening of the surveillance of budgetary positions and the surveillance and coordination of economic policies, Regulation (EU) No 1176/2011 of the European Parliament and of the Council on the prevention and correction of macroeconomic imbalances, Council Regulation (EU) No 1177/2011 amending Regulation (EC) No 1467/97 on speeding up and clarifying the implementation of the excessive deficit procedure, and Council Directive 2011/85/EU on requirements for budgetary frameworks of the Member States.

  10. 10.

    OJ 2013 L 140, comprising the Regulation (EU) No 472/2013 of the European Parliament and of the Council 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; and Regulation (EU) No 473/2013 of the European Parliament and of the Council 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.

  11. 11.

    Regulation 1175/2011 of the European Parliament and of the Council on the strengthening of the surveillance of budgetary positions and the surveillance and coordination of economic policies, OJ 2011 L 306/12, which had a long trajectory already before the crisis, in practice means for a number of Member States that they have to change their procedure for adopting the yearly national budget. The IPEX website indicates that 14 Member States (of which 6 do not belong to the eurozone) have scrutinized it under the Subsidiarity Protocol. Of course, this is only a very rough indicator, but nevertheless suggests that national parliaments have not been quite on the ball on every possible occasion and opportunity to follow the legislative steps on a measure that at least potentially touches on their most important constitutional prerogative, the power of the purse. See http://www.ipex.eu/IPEXL-WEB/dossier/document/COM20100526FIN.do#dossier-COD20100280.

  12. 12.

    Treaty Establishing the European Stability Mechanism, Brussels 2 February 2012.

  13. 13.

    Treaty on Stability, Coordination and Governance in the Economic and Monetary Union, Brussels 2 March 2012.

  14. 14.

    BVerfG, 2 BvE 4/11, 19 June 2012.

  15. 15.

    At the moment this text is submitted for publication, the judgment on the merits is still pending.

  16. 16.

    This is in line with an earlier judgment of the BVerfG, 2 BvE 8/11, 28 January 2012, in which it considered for the most part well-founded the application made by two Members of the Bundestag against the new legislation, adopted in connection with the extension of the instruments of the European Financial Stability Facility (EFSF), concerning the transfer of competences of the German Bundestag to a special committee: parliament as a whole, i.e. all member of parliament, must be able to participate in major decisions within its budgetary powers.

  17. 17.

    Jančić 2010, neatly delineates the development of the BVerfG’s stance as follows: ‘let there be a European Parliament’ (the Solange I case), ‘… unless there is already one’ (the Solange II case), ‘… which may not supplant the national parliament’ (the Maastricht Treaty case), ‘and may not affect its duty of transposition’ (the European Arrest Warrant case), ‘and is not and need not be like the national parliament’ (the Lisbon Treaty case).

  18. 18.

    BVerfG, 2 BvE 2/08, 30 June 2009, para 246: ‘The election of the Members of the German Bundestag by the people only fulfils its central role in the system of the federal and supranational intertwining of power if the German Bundestag, which represents the people, and the Federal Government borne by it, retain a formative influence on the political development in Germany. This is the case if the German Bundestag retains responsibilities and competences of its own of substantial political importance or if the Federal Government, which is answerable to it politically, is in a position to exert a decisive influence on European decision-making procedures (see BVerfGE 89, 155 <207>).’ (‘Die Wahl der Abgeordneten des Deutschen Bundestages durch das Volk erfüllt nur dann ihre tragende Rolle im System föderaler und supranationaler Herrschaftsverflechtung, wenn der das Volk repräsentierende Deutsche Bundestag und die von ihm getragene Bundesregierung einen gestaltenden Einfluss auf die politische Entwicklung in Deutschland behalten. Das ist dann der Fall, wenn der Deutsche Bundestag eigene Aufgaben und Befugnisse von substantiellem politischem Gewicht behält oder die ihm politisch verantwortliche Bundesregierung maßgeblichen Einfluss auf europäische Entscheidungsverfahren auszuüben vermag (vgl. BVerfGE 89, 155 <207>)’); and ibid., para 249: ‘Essential areas of democratic formative action comprise, inter alia, […] revenue and expenditure including external financing’ (‘Zu wesentlichen Bereichen demokratischer Gestaltung gehören unter anderem […] Einnahmen und Ausgaben einschließlich der Kreditaufnahme’).

  19. 19.

    Title III, Articles 3–8 of the Treaty on Stability, Coordination and Governance in the Economic and Monetary Union; the term ‘Fiscal Compact’ is used either to refer to these particular provisions in this Treaty, or to this Treaty itself.

  20. 20.

    ‘Jetzt auf einmal wird in Europa deutsch gesprochen—nicht in der Sprache, aber in der Akzeptanz der Instrumente, für die Angela Merkel so lange und dann erfolgreich gekämpft hat [… Hailing the feat and achievement that the French, who did not want to know the word, have now even recognized the Schuldenbremse, albeit under the more elegant term ‘the golden rule’.] Ausgangspunkt der Krise sind nicht die Spekulanten sondern dass wir uns nicht Haushaltdisziplin gehalten haben in Europa.’ Volker Kauder spoke at a party meeting in Leipzig on 14 November 2011, when the foundations for the Fiscal Compact had been laid. The entire speech is available at http://www.youtube.com/watch?v=eUeuCIe9vkQ; the quoted phrases are pronounced at 4:52 to 5:07 min and 5:47 to 6:01 min.

  21. 21.

    Council Directive 2011/85/EU of 8 November 2011 on requirements for budgetary frameworks of the Member States (OJ 2011 L 306/41), Articles 5–7.

  22. 22.

    Article 4(1) of the Proposal for a Regulation of the European Parliament and of the Council 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, 23 November 2011.

  23. 23.

    For a textual history of the various versions of the Fiscal Compact, see Schorkopf (2012).

  24. 24.

    This is not deny the greatly increased role of the Commission, the most supranational of EU institutions.

  25. 25.

    Fiscal Compact, Article 3(1), which also provides a further definition of what a budget ‘in balance or in surplus’ means, and Article 3(2).

  26. 26.

    For an overview of the various views and possible interpretations, Besselink and Reestman (2012) and Reestman (2013).

  27. 27.

    See Ruiz Almendral (2013); Ciolli (2013).

  28. 28.

    This is the view of Craig (2012), p. 237.

  29. 29.

    Fiscal Compact, Article 13: ‘As provided for in Title II of Protocol (No 1) on the role of national Parliaments in the European Union annexed to the European Union Treaties, the European Parliament and the national Parliaments of the Contracting Parties will together determine the organisation and promotion of a conference of representatives of the relevant committees of the European Parliament and representatives of the relevant committees of national Parliaments in order to discuss budgetary policies and other issues covered by this Treaty.’

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Acknowledgments

I owe a special debt to Jan Herman Reestman, with whom, in the course of time, I discussed various aspects of the Fiscal Compact (and many other things); among his writings on the Compact, see particularly Besselink and Reestman (2012) and Reestman (2013).

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  1. Faculty of Law, University of Amsterdam, Oudemanhuispoort 4-6, 1012 CN, Amsterdam, The Netherlands

    Leonard F. M. Besselink

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Correspondence to Leonard F. M. Besselink .

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Editors and Affiliations

  1. Department of Legal Studies, Alma Mater Studiorum - University of Bologna, Bologna, Italy

    Lucia Serena Rossi

  2. Department of Legal Studies, Alma Mater Studiorum - University of Bologna, Bologna, Italy

    Federico Casolari

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Besselink, L.F.M. (2014). Parameters of Constitutional Development: The Fiscal Compact In Between EU and Member State Constitutions. In: Rossi, L., Casolari, F. (eds) The EU after Lisbon. Springer, Cham. https://doi.org/10.1007/978-3-319-04591-7_2

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