Introduction

Times of transition are often more exciting than those of routine and continuity, but they are typically also disorderly and confusing. Old paradigms fade, but new ones only emerge slowly, and their multiplicity leads to protracted phases of co-existence, competition and conflict. The current ‘disorder of orders’ in the conceptualization of postnational law is a signal of such a transition and an indication of its depth. The ‘Westphalian’ system, with its clear separation between domestic and international levels of law and only relatively thin forms of coordination and cooperation in the latter, has broken down under the weight of Europeanization and globalization, but its successor has not been appointed yet. Several candidates are in the race, and one main dividing line – the one this chapter focuses on – is between constitutionalist and pluralist approaches to postnational order. Both of these come in many guises, but they typically differ in their understanding of central structural traits of the legal and political order. While constitutionalists, drawing on domestic inspirations, generally strive for a common frame to define both the substantive principles of the overall order and the relations between its different parts, pluralists prefer to see the postnational realm as characterized by heterarchy, by an interaction of different suborders that is not subject to common legal rules but takes a more open, political form.

This contrast may seem overdrawn; perhaps one should steer a less conflictive path and work towards reconciling these two visions in some form of ‘constitutional pluralism’. But such a conciliatory move would conceal, rather than bring into relief, the theoretical and practical differences that exist between constitutionalist, unity-oriented and pluralist, heterarchical conceptions. Even if in the current debate some of the positions may be relatively close, highlighting the contrast between the two strands will be useful to probe more deeply into their respective foundations and into the choices we face in the conceptualization and construction of the postnational legal order.

The issue of constitutional authority, and more particularly the plurality of claims to legal and constitutional authority, has been a dominant theme of European Union legal scholarship in recent years. The resonance of the topic is evident in many of the major EU developments of the past decade: the momentous eastwards enlargement; the gambit of the unratified Constitutional Treaty; the growing number of national constitutional court challenges to EU authority claims; the likely EU accession to the European Convention on Human Rights; and finally the rulings of the European Court of Justice on the relationship of EU law to the international legal order.

When we were approached by John Haslam, editor at Cambridge University Press, with the suggestion that we put together a book of essays on the constitutional law of the EU, we embraced the opportunity he offered to invite a small number of the leading scholars in the field to write an in-depth essay on this compelling theme. The book is our second collaborative project, coming ten years after the publication of our first co-edited volume on the European Court of Justice.

Introduction

The idea that constitutionalism is central to the legitimate exercise of public power has dominated the modern liberal imagination since the Enlightenment. The ideal of limited collective self-governance has spawned a rich and highly diverse tradition of hard-fought national constitutions from the time of the Glorious Revolution into the present. Today, however, constitutionalism faces its greatest challenge yet: the question of its continued relevance to modern governance. With the explosion of governance beyond the state, many wonder whether constitutionalism as we know it is being marginalized or altogether undermined.

The dilemma of constitutionalism in the age of global governance has elicited two principal responses – one local and one global. On the one hand, there are those who, alarmed by the threat of global intrusion, have sounded the retreat into local constitutionalism as the only source of legitimate public power. Local constitutionalists (or ‘new sovereigntists’, as they are sometimes called) deny the normative pull of international, transnational and global governance by anchoring all legal authority in local (i.e. national) constitutions. The realm beyond the state is, on this view, pure power politics with resort to legalism as a simple tool of self-interest alone. On the other hand, there are those who view global governance optimistically as overcoming the inherent limitations of local constitutionalism. The strong version of this second response seeks nothing less than to redefine constitutionalism itself by placing the local in the service of the global. These global constitutionalists view the state simply as playing one particular role within a rational design for a comprehensive system of multi-layered governance that spans all issues and all people around the globe.

Joseph H. H. Weiler and Bruno de Witte

JW: I would like to query the revision clause analysis which seems the apex of Section 1.3 of your chapter dealing with the relevance of the practice of the Member States in resolving the issue – international, yes or no.

At its heart the argument seems to flow as follows. In general international treaty law, revision is flexible and subject to a normal default rule of amendment by unanimity of the contracting parties. In concluding a treaty, parties may, however, specify a different revision procedure which, as is often the case, may provide for flexibility such as amendment by majority rather than unanimity. In the EU, by contrast, the revision provisions agreed by the parties are rigidified: not only is unanimity required, but further restrictions apply, such as the involvement of the EU institutions and ratification by each state according to its own constitutional requirements. Further, you correctly point out that, whereas under general international treaty law, the High Contracting Parties of a treaty can effectively amend it by a new treaty, riding roughshod not only over the provisions for conclusion under which the original treaty came into force, but even riding roughshod over the revision provisions in the original treaty. States, as you point out, are Masters of the Treaties they make, both as to form and as to substance. By contrast, you point out, under the EU, the Member States do not have this freedom of form. They must follow the procedural rules in the EU treaties in order to revise them. At least procedurally, they seem to lose something of their ‘mastery of the treaty’.

Introduction

In a recent essay about legal theory and the European Union, Neil Walker wrote that theoretical inquiries about EU law as a whole – as opposed to studies of specific parts of EU law – ‘cannot but draw upon an arsenal of concepts and theoretical mechanisms developed or refined in an older context in which the national and the international, with the former dominating, were the two sides and the key frames of the world order of states’. This Chapter aims to replace the European Union in the ‘older context’ of international law, by recalling the fact that the European Communities, and the European Union, came into being as creatures of international law, as well as the fact that the many remarkable institutional features of those organisations came out of the existing toolbox of international law. Each of those single features had been experimented with before in other more limited contexts, but both the European Coal and Steel Community Treaty and the European Economic Community Treaty combined them in an unprecedented way. They were true experiments of international law, and the first part of the chapter will highlight some characteristics of that historical experimentation.

The more interesting question, perhaps, for today’s reader is whether this ‘arsenal of concepts and [. . .] mechanisms’ drawn from the toolbox of public international law is still of decisive importance for our understanding of European Union law today. There is no disputing the fact that ‘the EU has successfully expanded its substantive mandate and institutional prerogatives to a level without parallel among international organizations’, but there is some dispute about whether it is still situated ‘among international organizations’ or has ceased to belong to that category. In fact, the dominant strand in the EU law literature takes the view that the European Union, whilst not a federal state, is also no longer an international organization, but rather an ill-defined sui generis legal construct. In this chapter, I will question both the vagueness of the sui generis construction and the view that the EU is no longer an international organization (and thus no longer an ongoing international legal experiment) by wondering, in the second and third parts of the chapter, what could have happened in the course of time, between the 1950s and today, to make EU law cease to be part of international law despite its international treaty pedigree. I will address that question from two points of view. First (that is, in the second part of the chapter), I will examine the practice of the states, and especially the Member States of the EU, to explore whether they have willed, or consented to, such a change in the legal nature of the EU. In the third part of the chapter, I will turn to examine the case-law of the ECJ (European Court of Justice) and the doctrinal interpretations of that same question and consider two possibilities: either that particular novel characteristics of EU law emerged over time which are incompatible with seeing it as an international organization; or that the overall development of the EU, rather than the development of specific characteristics, justifies the view that it must no longer be considered as a living international legal experiment, but as something altogether different.

Global Constitutionalism and Constitutional Pluralism:

Like an infectious virus which simply develops new resistant strains when we think we finally have it under control, so it is with <Constitutional> <kɒnstɪ’tuʃənl>. The most recent academic pandemic, particularly virulent (cerebral indigestion being one of its milder symptoms) is the result of a genetic fusion of the ubiquitous Global Constitutionalism and Constitutional Pluralism strains which dominated the 1990s and 2010s. Global Constitutionalism is already, at least in the eyes of some, a discrete academic discipline, with a soon to be published Journal of Global Constitutionalism, with various masters’ degrees, treatises and the other usual accoutrements. Constitutional Pluralism is today the only party membership card which will guarantee a seat at the high tables of the public law professoriate. From my vantage point of editor-in-chief of the deliciously and ambiguously entitled International Journal of Constitutional Law (I∙CON) I have begun to wonder: Is there anyone out there who is not a constitutional pluralist? Who does not believe that the global space is in some form constitutionalized?

I do not recall ever using constitutional pluralism in my own writing, but like M. Jourdain, I was instructed that I too, apparently, converse in the prose of constitutional pluralism, which, paradoxically makes me (and everyone else) a comfortable Bourgeois gentilhomme. That, of course, is the price of success of a concept/fad: what begins as heterodoxy becomes prevailing orthodoxy, in this case when Constitutional Pluralism (the maverick constitutional pluralism strain) suddenly emerges as hopelessly politically correct.

Introduction

The central role of the European Court of Justice in the process of ‘constitutionalizing’ EU law, whereby the Court has deemed certain provisions of EU law to be an integral and directly enforceable part of the law of the Member States, has long generated animated debate amongst EU law scholars. One part of this story which has not always attracted the same degree of attention is the way in which the Court of Justice extended aspects of its constitutionalization strategy to international legal norms. The relative paucity of EU Treaty provisions governing the status and effect of international law in the new European Communities at the time left considerable room for the Court to shape the answer to these questions. In some of its early case-law, the ECJ (European Court of Justice) adopted what has been called an ‘automatic incorporation’ approach to international agreements, deeming them to be part of the EU legal order and their provisions to be enforceable in domestic and EU courts at the suit of individuals. In this way one of the most important sources of international law – international treaties – were from a relatively early stage treated by the Court as a presumptively integral part of the new European legal order. Even if the dimension of this case-law which generated the most extensive commentary was that which subsequently departed from the basic automatic-incorporation approach, namely the Court’s decision to rule out the direct judicial enforceability of the GATT (General Agreement on Tariffs and Trade) and WTO (World Trade Organization) agreements, the general approach of the ECJ to international treaties was to treat them as fully part of the EU legal order and judicially enforceable at the suit of litigants. Further, this embrace of treaties as a central part of the EU legal order was accompanied by what seemed to be a fairly open approach to customary international law as part of EU law. By developing and using a range of doctrinal devices such as the principle of consistent interpretation and the treatment of international legal principles as part of the general principles of EU law, the ECJ exhibited an attitude of notable openness towards international law. In all, its approach to international legal obligations appeared to be one of engagement and loyalty, with the Court positioned as an agent to ensure compliance on the part of the EU and its Member States with the EU’s international obligations. This picture of the ECJ as a faithful enforcer of international legal obligations meshed well with the more general self-image promoted by the EU of an organization devoted to the international rule of law, whose international profile was defined in significant part by this distinctive commitment to international law and institutions.

Introduction

Ireland is in the midst of a severe crisis. While the global financial crisis has affected all economies to varying degrees, it has been especially severe in Ireland with a cumulative nominal GDP decline of 21 per cent from 2007Q4 to 2010Q3. This ranks Ireland among the worst-affected countries in terms of output performance during this period (Lane and Milesi-Ferretti, 2011).

Allied to this economic shock, Ireland has also experienced a severe fiscal deterioration. After a long period of running surpluses, the fiscal balance shifted from positive territory in 2007 to baseline deficits of 11–12 per cent of GDP in 2009 and 2010. Much of this fiscal deficit is structural in nature, such that the resumption of economic growth on its own is not sufficient to restore fiscal sustainability. In addition, the one-off cost of recapitalising the banking system pushed the overall general government deficit to 14.5 per cent of GDP in 2009 and 32 per cent of GDP in 2010, leading to rapid growth in the overall level of public debt.

As crises often do, the global financial crisis we have been experiencing has highlighted key policy challenges that were insufficiently attended to in the past and has focused minds on needed improvements. In Europe, the crisis has exposed fault lines in governance and deficiencies in the architecture of the financial supervisory and regulatory framework. The need for more effective micro- and macro-prudential regulation and supervision, but also for better coordination between the two as well as among regulators, has been underlined. The crisis has confirmed that central banks can play an important role in safeguarding financial stability, but also demonstrated that a mandate to maintain price stability is not sufficient to ensure financial stability, strengthening the case that central banks need to be armed with the appropriate policy tools to enhance their contribution to financial stability.

The crisis has prompted critical thinking about the EU economic and financial policy frameworks and the need for a new supervisory architecture. The severe economic cost suffered as a result of the crisis, and the acknowledgement of the need to limit the likelihood of future costly occurrences, has provided an important opportunity for the development of an improved financial stability framework for Europe and highlighted the urgency of the need for a comprehensive crisis management regime. Not that this was not understood earlier. The lack of harmonisation in the European legal and supervisory framework and its potential cost in managing crises were known. Nevertheless, perhaps due to the complications and political sensitivities involved in addressing crisis management, and perhaps owing to other policy priorities, undue reliance was arguably given to the role of crisis prevention, avoiding prickly issues such as how potential losses associated with the efficient resolution of a cross-border financial institution were allocated.

Introduction

There is widespread recognition among academics and policy-makers that monetary policy should aim at price stability. A large number of economies have adopted inflation targeting (IT) as the main objective of monetary policy, aiming at maintaining low and predictable inflation rates as a way of preserving the purchasing power of money. Evidence abounds that targeting inflation has been successful in anchoring and stabilising inflation rates and inflation expectations, with no apparent increase in output volatility, from the end of the 1980s to the beginning of this century (Mishkin and Schmidt-Hebbel, 2001, 2007). Moreover, there is mounting evidence that inflation targeting contributes to keeping inflation low and predictable (Fatás, Mihov and Rose, 2006; Angeris and Arestis, 2008; Benati, 2008; Calderón and Schmidt-Hebbel, 2008).

Nonetheless, current monetary policy frameworks have been brought into question by the frequency with which deflation has taken hold of or threatened OECD economies. Japan went through a period of deflation in 2000–6 while the US was perceived to be exposed to a deflation risk in 2001 and again in 2003. A consequence of the current financial and economic crisis is that deflation has once more emerged as a risk, this time in many OECD countries, while it has taken hold of Japan again. While monetary policy frameworks may need to be reassessed with a view to reducing deflation risk, any changes should occur only once current objectives are attained, for fear of undermining confidence in central banks. Against this background an alternative interpretation of price stability has attracted increasing attention from policy-makers in the recent past (Ambler, 2009; Parkin, 2009): it is the notion of price-level stability, where the monetary authority aims at stabilising an aggregate price level around a pre-specified path, instead of its rate of change. A principal advantage of price-level targeting is that it is more consistent with the objective of preserving the long-run purchasing power of money. For instance, following a temporary inflation spike, such as that observed in 2005–7, inflation targeting regimes will leave the purchasing power of money permanently below what would have transpired if inflation targets had been met. A successful price-level-based framework would also avoid a permanent increase in the real value of debt after a period of deflation. Practical experience of price-level targeting is, however, restricted to one historical episode, in Sweden during the 1930s (discussed on p. 312).