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The Euro-Crisis, EMU and the Perils of Centralisation

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Democracy in the EMU in the Aftermath of the Crisis

Abstract

Since the outburst of the Euro-crisis, legal measures adopted by the Member States and the institutions of the EU have produced a major centralisation of powers in the field of economic governance. Recent proposals to achieve a deeper and more genuine European Economic and Monetary Union—and especially the June 2015 Five Presidents Report on “Completing Europe’s EMU”, and the October 2015 European Commission communication “On Steps towards Completing EMU”—have called for further centralisation of powers in the Eurozone. In particular, both documents have proposed the establishment of so-called independent competitiveness councils which would advise State Governments on what structural reforms to undertake nationally as a way to boost growth. The purpose of this contribution is to shed a critical light on these recent proposals discussing the perils that centralisation poses on the balance of power between the EU and the Member States. The chapter, in particular, questions whether the objective of a full centralisation and control of national economic policy can be effective and legitimate. As an alternative, it considers what advantages would be connected to the creation of a genuine EU fiscal capacity: to this end, the chapter explains how an EU fiscal capacity could support the functioning of EMU without bringing about a full centralisation of national economic policies.

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Notes

  1. 1.

    Fabbrini (2016).

  2. 2.

    President of the European Commission, Report (2015).

  3. 3.

    European Commission Communication (2015b).

  4. 4.

    Kollman (2014).

  5. 5.

    Tuori and Tuori (2014).

  6. 6.

    Regulation (EC) No. 1466/97; Regulation (EC) No. 1467/97.

  7. 7.

    Protocol No. 12 on the Excessive Debt Procedure, OJEU C 115, 9 May 2008, pp. 279 et seqq.

  8. 8.

    Collignon (2004). See also ECJ 13 July 2004, Case C-27/04, Commission v. Council of the EU, (recognising wide discretion to the Council whether to impose sanctions under the SGP or held in abeyance the excessive deficit procedure against two Member States recommended by the Commission).

  9. 9.

    Tosato (2014).

  10. 10.

    Regulation (EU) No. 1173/2011; Regulation (EU) No. 1174/2011; Regulation (EU) No. 1175/2011; Regulation (EU) No. 1176/2011; Regulation (EU) No. 1177/2011; Directive 2011/85/EU.

  11. 11.

    Craig (2014).

  12. 12.

    European Council Conclusions (2010), p. 5.

  13. 13.

    Regulation (EU) No. 473/2013; Regulation (EU) No. 472/2013.

  14. 14.

    de Streel (2015).

  15. 15.

    Hinarejos (2015), p. 32.

  16. 16.

    Art 7, para 2, of Regulation (EU) No. 473/2013 (stating that “where, in exceptional cases, after consulting the Member State concerned within one 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, the Commission shall adopt its opinion within two weeks of submission of the draft budgetary plan. In its opinion, the Commission shall request that a revised draft budgetary plan be submitted as soon as possible and in any event within three weeks of the date of its opinion.”).

  17. 17.

    Craig (2012).

  18. 18.

    Treaty on Stability, Coordination and Governance in the Economic and Monetary Union, 2 March 2012, [hereinafter Fiscal Compact], available at http://www.eurozone.europa.eu/media/304649/st00tscg26_en12.pdf (last visited 1 June 2014).

  19. 19.

    Peers (2012).

  20. 20.

    Article 3, para. 1, of the Fiscal Compact.

  21. 21.

    Article 3, para. 2, of the Fiscal Compact.

  22. 22.

    Article 8 of the Fiscal Compact.

  23. 23.

    Preamble (recital 27) of the Fiscal Compact.

  24. 24.

    Bieber (2015), p. 92 (emphasis in original).

  25. 25.

    Costamagna (2014).

  26. 26.

    Article 3 of the Fiscal Compact.

  27. 27.

    Article 8 of the Fiscal Compact.

  28. 28.

    Article 7 of the Fiscal Compact.

  29. 29.

    Mayer (2015).

  30. 30.

    President of the European Council, Final Report (2012).

  31. 31.

    President of the European Commission, Report (2015).

  32. 32.

    Draghi (2015).

  33. 33.

    European Commission Communication (2012).

  34. 34.

    E.g. European Parliament Resolution (2012, 2013, 2015b).

  35. 35.

    In particular, Member States articulated proposals for the future of EMU in response to the questions raised in an Analytical Note prepared by the President of the European Commission, in close cooperation with the Presidents of the European Council, of the Eurogroup and the ECB. See President of the European Commission, Analytical Note (2015).

  36. 36.

    See infra, sec. 5.

  37. 37.

    President of the European Commission, Report (2015), p. 7.

  38. 38.

    Ibid., p. 8.

  39. 39.

    Ibid.

  40. 40.

    European Commission Communication (2015b).

  41. 41.

    Ibid., p. 10.

  42. 42.

    Ibid.

  43. 43.

    Dijsselbloem (2015), p. 3.

  44. 44.

    President of the European Commission, Report (2015), p. 7.

  45. 45.

    European Commission Communication (2015b), p. 11.

  46. 46.

    Ibid.

  47. 47.

    Besselink and Reestman (2012).

  48. 48.

    Schäuble (2014) (speaking in favor of a “European budget commissioner, who would be able to reject national budgets if they don’t correspond to the rules we have jointly agreed.”).

  49. 49.

    Weidman (2016).

  50. 50.

    Ibid.

  51. 51.

    Wyplosz (2005) (emphasising restrictions which fiscal councils would put on parliamentary sovereignty).

  52. 52.

    European Commission Communication (2015a).

  53. 53.

    Pernice et al. (2012).

  54. 54.

    Herzog and Hengstermann (2013).

  55. 55.

    Schelke (2007).

  56. 56.

    Tuori and Tuori (2014), p. 109.

  57. 57.

    Antoš (2014) citing Elster (1979).

  58. 58.

    Kollman (2014), p. 13.

  59. 59.

    Ibid., p. 15.

  60. 60.

    Ibid., pp. 8–9.

  61. 61.

    Buti and Carnot (2012).

  62. 62.

    de Streel (2013).

  63. 63.

    Delledonne (2014).

  64. 64.

    Van Malleghem (2014).

  65. 65.

    Rodriguez-Tejedo and Wallis (2012). See ceteris paribus also New State Ice Co. v. Liebmann, 285 U.S. 262, 311 (1932) (J. Brandeis dissenting, defining as “one of the happy incidents of the federal system [the fact] that a single courageous State may, if its citizens choose, serve as a laboratory; and try novel social and economic experiments without risk to the rest of the country.”).

  66. 66.

    Costamagna (2014).

  67. 67.

    President of the European Council, Final Report (2012), p. 16.

  68. 68.

    Lindseth (2014).

  69. 69.

    Dixon (2015).

  70. 70.

    Fabbrini (2013).

  71. 71.

    Rodden (2006).

  72. 72.

    Henning and Kessler (2012).

  73. 73.

    Super (2015).

  74. 74.

    IMF (2013).

  75. 75.

    Hinarejos (2013).

  76. 76.

    Enderlein et al. (2005).

  77. 77.

    President of the European Council, Final Report (2012), p. 5.

  78. 78.

    Ibid., p. 10.

  79. 79.

    Ibid., p. 11.

  80. 80.

    Ibid., p. 10.

  81. 81.

    European Parliament Resolution (2012, 2015b).

  82. 82.

    European Commission Communication (2012).

  83. 83.

    Hollande (2013), p. 7 (speaking in favour of “une nouvelle étape d’intégration avec une capacité budgétaire qui serait attribuée à la zone euro”) and Hollande (2015) (speaking for “un budget de la zone euro, pour pouvoir agir en termes d’investissements, y compris pour les pays qui sont le plus en retard”).

  84. 84.

    Letta (2013), p. 5 (arguing that “there is room to reflect on a fiscal capacity for the euro area.”) and Padoan (2015) (stating that “L’Unione monetaria deve essere affiancata da [...] una autentica unione economica e fiscale, dove al rispetto delle regole si accompagni una altrettanto necessaria condivisione del rischio, necessaria e sostenuta da una adeguata mutualizzazione delle risorse. Il Governo italiano si sta impegnando per portare avanti questa linea”).

  85. 85.

    Fabbrini (2014b).

  86. 86.

    Traversa and de la Motte (2015).

  87. 87.

    Commission Proposal (2011a).

  88. 88.

    Ibid.

  89. 89.

    Commission Proposal (2011b).

  90. 90.

    Ibid.

  91. 91.

    European Parliament Legislative Resolution (2012).

  92. 92.

    Council Decision 2013/52/EU.

  93. 93.

    ECJ 22 January 2014, Case C-270/12, United Kingdom v. Council.

  94. 94.

    Fabbrini (2014a).

  95. 95.

    European Parliament Legislative Resolution (2013).

  96. 96.

    Fabbrini (2015).

  97. 97.

    Hinarejos (2013), p. 1621.

  98. 98.

    High Level Group on Own Resources (2014).

  99. 99.

    European Parliament Resolution (2015a).

  100. 100.

    Maduro (2012), p. 19.

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Fabbrini, F. (2017). The Euro-Crisis, EMU and the Perils of Centralisation. In: Daniele, L., Simone, P., Cisotta, R. (eds) Democracy in the EMU in the Aftermath of the Crisis. Springer, Cham. https://doi.org/10.1007/978-3-319-53895-2_6

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