How to Democratize the European Union...and Why Bother?

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Moreover, in light of the multiple, interlinked crises now facing the Eurozone, it can no longer be plausibly argued that the EU only regulates issues of low public salience, that monetary policy is an entirely technocratic matter, or that its complete removal from the realm of national political contestation has not adversely affected democratic quality.

The rapidity with which member states have adopted a series of crisis-response measures stands as a direct challenge to assumptions that EU constitutionalism has stabilized. My analysis will focus on two major initiatives that were adopted in the Fiscal Compact and the European Stability Mechanism.

What is emerging is a more flexible, less democratic, internationalized EU legal order in which member state executives are the key decision makers.

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In May , the euro area heads of state and government agreed the details of just such a financial assistance package. The deal took the form of a series of bilateral loans between Greece and other euro area states, meaning that it formally bypassed the framework of EU law.

Though convenient, the bilateral loan model was only ever envisaged as a temporary solution, especially as the sovereign debt crisis engulfed Ireland and Portugal and threatened to spread to Italy, Spain, and beyond. Therefore, on May 9 and 10, at an extraordinary meeting of the Economic and Financial Affairs Council Ecofin two mechanisms were initiated in order to institutionalize more formally financial assistance arrangements.

The second initiative, undertaken at the same meeting, involved the creation of an additional, and considerably larger, European Financial Stability Facility EFSF to coordinate loans and guarantees from euro area states. Both of these financial assistance mechanisms were on shaky legal ground from the outset. Prima facie , it appears that article was breached, firstly by the Greek bailout of May 2, and later by the creation of the EFSF.

Matthias Ruffert rejected this argument as unconvincing and contrary to the rationale behind article , which was about using the discipline of financial markets to force member states to live within their means.

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Potential justifications aside, the euro rescue packages were controversial because they violated the spirit, if not the letter, of article Similarly, they were not in keeping with public expectations of how the provision ought to be interpreted. Thus, opinion was divided on the legality, not to mention legitimacy, of the temporary stability mechanisms. It was that uncertainty, above all, which prompted euro area states to move to establish a permanent European Stability Mechanism. On this last point the German government was especially insistent, over and above the objections of other national governments, which were reluctant to reopen the treaties so soon after the long and torturous process of constitutional reform that had ended with the Lisbon Treaty.

March Thus continued the pattern of strong Franco-German leadership that had been evident since the beginning of the financial crisis. The new treaty paragraph specifically authorized the establishment of a euro area stability mechanism. This paved the way for the new, permanent mechanism to be established and run along intergovernmental lines, as an institution of the euro area states in which non-euro area member states could participate on an ad hoc basis.

In keeping with this approach, the main decision-making body of the ESM is its Board of Governors, which comprises the Finance Ministers of the euro area member states. Its legal framework leaves little scope for input from supranational institutions, such as the CJEU and the European Parliament, through the channels traditionally provided by EU law. Though, in a curious mixing of jurisdictions, there is provision for internal disputes to be adjudicated by the CJEU.

Therefore, the insertion of this provision clarifies the legal situation somewhat, but still leaves several questions unanswered. Not the least of these questions is what the new, overwhelmingly intergovernmental financial stability regime means for the future of the Community method of decision-making. I have already suggested that one consequence of the sovereign debt crisis is the internationalization of European law. In other words, when confronted with a state of exception, the EU appears less like a sui generis , post-state entity, and more like a traditional international organization, which is dominated by executive actors.

In this way, the crisis is reinforcing the first claim of the standard democratic deficit described by Follesdal and Hix—the preponderance of executive actors and executive power at the European level. In fact, the EP, which generally has been marginalized by the crisis, did recommend some changes to the wording of the draft article amendment. In particular, the EP proposed adding a reference to the effect that rules on conditionality be determined by an EU Regulation, adopted under the co-decision procedure.

It is somewhat ironic, given that the purpose of the amendment was to legitimize the ESM and inoculate it against legal challenges, that it only became operational several months after the permanent bailout fund itself. Though, as noted, the enterprise was undertaken primarily with an eye to Karlsruhe, not the Court in Luxembourg. The other major treaty-based response to the financial crisis was the push to strengthen rules about public debt ratios, budgetary discipline and related matters via a Fiscal Compact. However, the refusal of the Czech Republic and United Kingdom to participate meant that the Compact could not be adopted under the auspices of EU law.

Instead, the new agreement, like the ESM, has taken the form of an international treaty that is formally outside the framework of EU law but intended by its drafters to be compatible with that framework, nonetheless. More than five decades later, it seems that integration via court-led constitutionalization has passed its high point. Just as it was impossible to maintain a separation between economics and politics, 78 so too it has proved with law and politics.

There is also, perhaps, an issue of diminishing returns—legal integration has simply progressed to such a point that it is difficult for the CJEU to break new ground. The onset of the Eurozone crisis has further altered the dynamics of EU constitutionalism. In short, the crisis has created a state of exception in the Eurozone and the EU more broadly. Flexibility and decisiveness are critically important in a situation in which the solvency of countries such as Greece, and the stability of the currency union as a whole, hinge on the reactions of volatile markets. As a result, for the past few years the Community method has been superseded, even disregarded, by new forms of intergovernmental cooperation that are potentially illegal.

The case of Pringle v.

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Ireland is a good illustration of this. The case arose out of a complaint brought by Thomas Pringle, an independent Irish parliamentarian, contesting the legality of the ESM Treaty. The Irish government, however, had decided that a popular vote on the ESM Treaty was unnecessary, because it was authorized by an EU treaty provision the revised art.

Nevertheless, it referred three questions to the European Court of Justice for a preliminary ruling. Second, was an EU member state, whose currency is the euro, permitted to enter into an international agreement such as the ESM Treaty, having regard to the existing body of EU law? Ireland on November 27, The decision was, therefore, a ringing endorsement of the ESM, though one given a full two months after the permanent bailout fund had already entered into force.

And was there ever any doubt that the Court would rule as it did given the stakes involved? Courts—slow, process-driven and dependent on legal norms—are not capable of deciding on the exception. Jeremy Rabkin summarized these shortcomings eloquently:. Remote, mysterious, essentially bureaucratic, the ECJ is a mirror of the EU, itself: it can process a vast range of technical questions but is not designed to face the supreme crises that may still confront Europeans in the course of human events.

In relation to the second question referred by the Irish Supreme Court, it was submitted to the CJEU that it lacked jurisdiction to interpret provisions of the ESM Treaty, because it is an international treaty to which the EU is not a party. The CJEU circumvented the issue by stating that the real question to be answered was whether EU treaty law supported the creation of a stability mechanism by member states whose currency is the euro. Even where courts did exert their authority in a manner contrary to crisis imperatives, it was unclear how much influence their decisions would have over substantive policy outcomes.

The Commission reiterates that a strong consensus around the programme will contribute to its successful implementation. The diminishing importance of courts and the use of international treaties, rather than the existing framework of EU law, to establish crisis management tools are two examples of how the Community method—and, indeed, even the rule of law—have been bypassed during the debt crisis.

The increasing politicization of the ECB is another manifestation of this trend. The same structural asymmetries that once privileged judicial law making due to the difficulty of taking political action at the European level , 87 now favor a new group of economically focused delegated authorities, including the ECB and the recently inaugurated ESM. EMU represented both the denouement of Franco-German reconciliation, and a bold, new step forward for a post-Cold War European project brimming with confidence and optimism about the future.

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It was also symbolic of the presumed relationship between economic and political integration that has informed much of integration theory. In line with the neofunctionalist concept of spillover, monetary union was regarded as an important step towards economic and political union. However, despite a significant narrowing of bond yields within the Eurozone in the early years of monetary union, the creation of EMU did not lead to real economic convergence amongst national economies, or to greater supranational fiscal coordination amongst Eurozone members.

Socially, in that it is disconnected from the public debates that surround monetary policy in a national context and that require national central banks, though formally independ ent, to operate with some level of responsiveness to public opinion. This lack of embeddedness in a political system is one of several interesting parallels between the ECB and another powerful, though sometimes maligned EU institution: the CJEU. Another similarity is their narrow base of legitimacy, which in both cases relies on the assumption that they are adhering to rules that were negotiated and ratified by member state governments as the democratically elected representatives of European citizens.

As former German Constitutional Justice Paul Kirchhof argued, the perception that institutions such as the ECB are now flouting the rules could destroy that legitimacy, thereby seriously damaging the foundations of the European project. This phenomenon may be illustrated in relation to the ECB by a few specific examples. In May , while member states were initiating the first Greek rescue package and the temporary stability mechanisms, the ECB was also moving to stabilize euro area economies.

However, the move was still highly controversial, especially considering that indirect purchases of government debt instruments—while not strictly prohibited—cannot be used to circumvent the ban on direct financing. Trichet acknowledged as much at a speech in Vienna on May 31, , when he urged euro area governments to live up to their responsibilities. It was put to the ECB President that the very fact that he found it necessary to make such statements suggested an attempt to make up for the failure of politics. The situation in Cyprus in March was an illustration of precisely this danger.

Having asked for financial aid from the troika, an agreement was struck between the Cypriot government and the Eurogroup, whereby Cyprus would receive a ten billion euro bailout, on the condition that it raised a further six billion euro itself, including through the unprecedented move of imposing a one-off levy on bank deposits over 20, euros. This deal fell through when it was voted down by the Cypriot parliament on March 19, , following vociferous opposition within Cyprus and abroad, and amidst fears of a bank run.

What form should it take? How to Democratize the European Union And why bother?

Title: How to Democratize the European Union ISBN: ; Abstract: A contradictory creation indeed, the European Union has most of the institutions of a modern democracy, yet it does not function as one. Moreover, its growing scope of activity and supranational decision making processes are undermining the legitimacy of democracy in its member states.

How to Democratize the European Union...and Why Bother? How to Democratize the European Union...and Why Bother?
How to Democratize the European Union...and Why Bother? How to Democratize the European Union...and Why Bother?
How to Democratize the European Union...and Why Bother? How to Democratize the European Union...and Why Bother?
How to Democratize the European Union...and Why Bother? How to Democratize the European Union...and Why Bother?
How to Democratize the European Union...and Why Bother? How to Democratize the European Union...and Why Bother?
How to Democratize the European Union...and Why Bother? How to Democratize the European Union...and Why Bother?

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