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Euro Crisis Responses and the EU Legal Order: Increased Institutional Variation or Constitutional Mutation?

Published online by Cambridge University Press:  01 December 2015


Euro crisis reforms as major example of interstitial institutional change in the EU - Forms of institutional change : unusual sources of law, new tasks for the EU institutions, new organs, competence creep, institutional hybrids, and more differentiated integration - Question whether some or all of this amounts to a ‘constitutional mutation’ of the EU legal order - Reasons to doubt whether the constitutional fundamentals have changed - Alternative thesis: increased institutional variation, deepening the differences between EMU law and the rest of EU law.

Copyright © The Authors 2015 

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Professor of European Union law, Maastricht University and European University Institute in Florence. Earlier versions of this article were presented at a faculty seminar of the EUI’s Law department in May 2015 and at an international conference Constitutional Challenges of the European Economic and Monetary Union – Italian and German Perspectives, organised by Christoph Herrmann and Laura Puccio at Villa Vigoni in June 2015. The author wishes to thank the participants at both those meetings for many stimulating comments.


2 Farrell, H. and Héritier, A. (eds.), Contested Competences in Europe: Incomplete Contracts and Interstitial Institutional Change (Routledge 2007)Google Scholar. Later on, the concept was applied to the euro crisis responses in Karagiannis, Y. and Héritier, A., ‘Interstitial Institutional Change in Europe: Implications of the Financial and Fiscal Crisis’, in B. De Witte et al. (eds.), The Euro Crisis and the State of Democracy (EUI/RSCAS 2013)Google Scholar.

3 A classical account of the overall institutional evolution in that period is by Weiler, J., ‘The Transformation of Europe’, 100 Yale Law Journal (1991) p. 2403CrossRefGoogle Scholar.

4 See the collection of contributions in Cremona, M. and Thies, A. (eds.), The European Court of Justice and External Relations Law – Constitutional Challenges (Hart 2014)Google Scholar; especially as regards the post-Lisbon institutional battlefield: P. Van Elsuwege, ‘The Potential for Inter-Institutional Conflicts before the Court of Justice: Impact of the Lisbon Treaty’ (at p. 115 of the cited volume).

5 See Stacey, J., Integrating Europe – Informal Politics and Institutional Change (Oxford University Press 2010)CrossRefGoogle Scholar Chapters 6 and 7; Driessen, B., Interinstitutional Conventions in EU Law (Cameron May 2007)Google Scholar.

6 There is a rich political science literature on this matter, including: Farrell, H. and Héritier, A., ‘Codecision and Institutional Change’, 30 West European Politics (2007) p. 285CrossRefGoogle Scholar; Rasmussen, A., ȁ20 Years of Co-decision since Maastricht: Inter- and Intrainstitutional Implications’, 34 Journal of European Integration (2012) p. 735CrossRefGoogle Scholar; Stie, A. E., Democratic Decision-Making in the EU: Technocracy in Disguise? (Routledge 2013)Google Scholar.

7 Amtenbrink, F., ‘The Metamorphosis of European Economic and Monetary Union’, in D. Chalmers and A. Arnull (eds.), The Oxford Handbook of EU Law (Oxford University Press 2015)Google Scholar.

8 The one Treaty amendment on EMU matters since Lisbon is the addition of a third paragraph to Art. 136 TFEU, whereby the Euro area states are authorised to set up a permanent stability mechanism under certain conditions. In fact, even this Treaty amendment was declared to be unnecessary by the Court of Justice in the Pringle judgment where it held that the European Stability Mechanism (the body alluded to in Art. 136(3)) had been lawfully established even before Art. 136(3) entered into force (ECJ 27 November 2012, Case C-370/12, Thomas Pringle v Government of Ireland et al., at paras. 184-185).

9 See the distinction made between ‘substantive transformation’ and ‘institutional transformation’, as proposed in Beukers’ literature review: Beukers, T., ‘Legal Writing(s) on the Eurozone Crisis’, EUI Working Papers LAW 2015/11Google Scholar.

10 For a synthetic overview of those legal instruments with references to their source, see Hinarejos, A., The Euro Area Crisis in Constitutional Perspective (Oxford University Press 2015)CrossRefGoogle Scholar Chapter 3.

11 Agreement on the Transfer and Mutualisation of Contributions to the Single Resolution Fund, [2014] Council doc. 8457/14.

12 B. De Witte, ‘Using International Law in the Euro Crisis – Causes and Consequences’, ARENA Working Papers no. 4, June 2013; and see, in the same sense, Merino, A. de Gregorio, ‘Legal Developments in the Economic and Monetary Union During the Debt Crisis: The Mechanisms of Financial Assistance’, 49 Common Market Law Review (2012) p. 1613Google Scholar, esp. at p. 1635-1640.

13 In its press release on the day of the signature of the agreement, the Council enigmatically stated that ‘using an intergovernmental agreement to establish rules on the transfer and mutualisation of contributions is intended to provide maximum legal certainty. The Council decided on this approach in December [2013], given legal and constitutional concerns in certain member states: Council press release [2014] 10088/14. For an articulation of the legal argument against the use of Art. 114 for this part of the banking union project, see Calliess, C. and Schoenfleisch, C., ‘Die Bankenunion, der ESM und die Rekapitalisierung von Banken – Europa- und verfassungsrechtliche Fragen’, Juristenzeitung (2015) p. 113CrossRefGoogle Scholar at p. 119 ff. For criticism of the intergovernmental solution, see Fabbrini, F., ‘On Banks, Courts and International Law – The Intergovernmental Agreement on the Single Resolution Fund in Context’, 21 Maastricht Journal of European and Comparative Law (2014) p. 444CrossRefGoogle Scholar.

14 It seems that the German government sought to ensure that it could stop the Resolution Fund being filled if the resolution rules themselves were to be later modified (under the qualified majority rule obtaining for Art. 114-based measures) in contrast with German interests (for instance, by removing or reducing the bail-in provisions in the SRM regulation).

15 For a more elaborate analysis of the legal room for inter se agreements between groups of EU states, see De Witte, B., ‘Old-Fashioned Flexibility: International Agreements between Member States of the European Union’, in G. de Búrca and J. Scott (eds.), Constitutional Change in the EU – From Uniformity to Flexibility? (Hart 2000) p. 31Google Scholar.

16 See the analysis by Kilpatrick, C., ‘Are the Bailouts Immune to EU Social Challenge Because They Are Not EU Law?’, 10 European Constitutional Law Review (2014) p. 393CrossRefGoogle Scholar at p. 408-415.

17 These words were used in a statement of the Euro Summit of 26 October 2011, <>, para. 32, visited 2 November 2015. On the evolving relationship between the Eurogroup and its parent body the ECOFIN Council, see Puetter, U., The European Council and the Council. New Intergovernmentalism and Institutional Change (Oxford University Press 2014) p. 155-170CrossRefGoogle Scholar.

18 Fasone, C., ‘European Economic Governance and Parliamentary Representation. What Place for the European Parliament?20 European Law Journal (2014) p. 164CrossRefGoogle Scholar at p. 175-177.

19 The EBA was created by Regulation 1093/2010, OJ 2010, L 331/12, and its tasks were adapted in 2013, as a result of the creation of the Single Supervision Mechanism (Regulation 1022/2013, OJ 2013, L 287/5).

20 On the powers of the SRB, see Alexander, K., ‘European Banking Union: A Legal and Institutional Analysis of the Single Supervisory Mechanism and the Single Resolution Mechanism’, 40 European Law Review (2015) p. 154Google Scholar at p. 175 ff.

21 On the emergence of the Euro Summit, see Puetter, supra n. 17, p. 126-133.

22 On which, see Fasone, supra n. 18, p. 179-180.

23 See the discussion of this point by Tuori, K. and Tuori, K., The Eurozone Crisis – A Constitutional Analysis (Cambridge University Press 2014) at p. 168-171Google Scholar; and by Häde, U., ‘Art 136 AEUV – eine neue Generalklausel für die Wirtschafts- und Währungsunion?’, Juristenzeitung (2011) p. 133Google Scholar.

24 Beukers, T., ‘The New ECB and its Relationship with the Member States of the Euro Area: Between Central Bank Independence and Central Bank Intervention’, 50 Common Market Law Review (2013) p. 1579Google Scholar at p. 1591 ff.

25 On the pre-crisis mixture of soft and hard law in economic governance, see Hahn, H. J., ‘The Stability Pact for European Monetary Union: Compliance with Deficit Limit as a Constant Legal Duty’, 35 Common Market Law Review (1998) p. 77CrossRefGoogle Scholar.

26 See the analysis by Armstrong, K., ‘The New Governance of EU Fiscal Discipline’, 38 European Law Review (2013) p. 601Google Scholar at p. 609 ff.

27 On the latter tension, see Moloney, N., ‘European Banking Union: Assessing its Risks and Resilience’, 51 Common Market Law Review (2014) p. 1609Google Scholar at p. 1661-1669.

28 Regulation 472/2013 of 21 May 2013, OJEU 2013, L 140/1; see Ioannidis, M., ‘EU Financial Assistance Conditionality after “Two Pack”’, Zeitschrift für ausländisches öffentliches Recht und Völkerrecht (2014) p. 61Google Scholar at p. 82-89.

29 See Schiavo, G. Lo, ‘From National Banking Supervision to a Centralized Model of Prudential Supervision in Europe?’, 21 Maastricht Journal of European and Comparative Law (2014) p. 110CrossRefGoogle Scholar at p. 135-137.

30 On the uneasy political coexistence between the Eurozone and the EU-28, see Laffan, B., ‘European Union and Eurozone: How to Co-exist?’, in F. Allen et al. (eds.), Governance for the Eurozone: Integration or Disintegration? (European University Institute and Wharton Financial Institutions Center 2012) p. 173Google Scholar.

31 For other, more detailed, categorisations of the legal literature on the euro crisis, see Beukers, supra n. 9; and G. Martinico, ‘EU Crisis and Constitutional Mutations: A Review Article’, STALS Research Paper 3/2014.

32 See a number of national reports on changes of budgetary laws and procedures in Adams, M. et al. (eds.), The Constitutionalization of European Budgetary Constraints (Hart 2014)Google Scholar; and Almendral, V. Ruiz, ‘A Myopic Economic Constitution? Controlling the Debt and the Deficit without Fiscal Integration’, EUI Working Papers LAW 2015/12Google Scholar.

33 Kilpatrick, C., ‘Constitutions, Social Rights and Sovereign Debt States in Europe: A Challenging New Area of Constitutional Inquiry’, EUI Working Papers LAW 2015/34Google Scholar.

34 See, for comparative examinations of those constitutional challenges: Kilpatrick, supra n. 33; Amtenbrink, F., ‘New Economic Governance in the European Union: Another Constitutional Battleground’, in K. Purnhagen and P. Rott (eds.), Varieties of European Economic Law and Regulation – Liber Amicorum for Hans Micklitz (Springer 2014) p. 207Google Scholar at p. 224-232; Fabbrini, F., ‘The Euro-Crisis and the Courts: Judicial Review and the Political Process in Comparative Perspective’, 32 Berkeley Journal of International Law (2014) p. 64Google Scholar; S. Bardutzky and E. Fahey, ‘Who Got to Adjudicate the EU’s Financial Crisis and Why? Judicial Review of the Legal Instruments of the Eurozone’, in Adams et al. supra n. 32; Canotilho, M., Violante, T. and Lanceiro, R., ‘Austerity Measures under Judicial Scrutiny: The Portuguese Constitutional Case-Law’, 11 EuConst (2015) p. 155Google Scholar.

35 For discussion of the limited impact of the Lisbon Treaty on the institutional structure of EMU, see J.V. Louis, ‘Economic Policy under the Lisbon Treaty’, and de Vicuña, A. Sáinz, ‘The Status of the ECB’, both in S. Griller and J. Ziller (eds.), The Lisbon Treaty – EU Constitutionalism without a Constitutional Treaty? (Springer 2008)Google Scholar.

36 Menéndez, A. J., ‘Editorial: A European Union in Constitutional Mutation’, 20 European Law Journal (2014) p. 127CrossRefGoogle Scholar.

37 Tuori, K. and Tuori, K., The Eurozone Crisis – A Constitutional Analysis (Cambridge University Press 2014)Google Scholar.

38 Joerges, C., ‘The European Economic Constitution and its Transformation through the Financial Crisis’, ZenTra Working Papers in Transnational Studies No. 47, 2015, at p. 17Google Scholar.

39 This is the opening line of Fabbrini, F., ‘States’ Equality v States’ Power: the Euro-crisis, Inter-state Relations and the Paradox of Domination’, 16 Cambridge Yearbook of European Legal StudiesGoogle Scholar (forthcoming, preview online).

40 Martinico, supra n. 31. Although that paper is a literature review, its author starts from the assumption (at p. 3) that the euro crisis events have indeed produced mutations of the constitutional structure of the Union.

41 Dawson, M. and de Witte, F., ‘Constitutional Balance in the EU after the Euro-Crisis’, 76 Modern Law Review (2013) p. 817CrossRefGoogle Scholar. They argue that the response to the euro crisis ‘significantly alters’ the constitutional balance in the EU in its substantive, institutional and spatial dimensions.

42 Scicluna, N., ‘Politicization without Democratization: How the Eurozone Crisis is Transforming EU Law and Politics’, 12 International Journal of Constitutional Law (2014) p. 545CrossRefGoogle Scholar. For this author, ‘the crisis response measures have superseded, rather than advanced, many elements of the Lisbon Treaty’s constitutional settlement’ (at p. 570).

43 P. Craig, ‘Economic Governance and the Euro Crisis: Constitutional Architecture and Constitutional Implications’, in Adams et al., supra n. 32, p. 40.

44 Chiti, E. and Teixeira, P. G., ‘The Constitutional Implications of the European Responses to the Financial and Public Debt Crisis’, 50 Common Market Law Review (2013) p. 683Google Scholar at p. 684.

45 Lenaerts, K., ‘EMU and the European Union’s Constitutional Framework’, 39 European Law Review (2014) p. 753Google Scholar at p. 753.

46 This substantive transformation is seen to consist, mainly, in an evolution towards strict adherence to the ‘golden rule’ for state budgets, and the rejection of Keynesian deficit-spending policies.

47 Doubts on this point were expressed e.g. by Ruffert, M., ‘The European Debt Crisis and European Union Law’, 48 Common Market Law Review (2011) p. 1777Google Scholar at p. 1787.

48 These claims relating to the conclusion of the ESM Treaty were rejected by the ECJ in the Pringle judgment (supra n. 8), and rightly so in our view (De Witte, B. and Beukers, T., ‘The Court of Justice Approves the Creation of the European Stability Mechanism Outside the EU Legal Order: Pringle’, 50 Common Market Law Review (2013) p. 805Google Scholar).

49 The claim relating to the OMT programme was rejected by the CJEU, upon a preliminary reference by the German Constitutional Court (Case C-62/14, Peter Gauweiler et al. v Deutscher Bundestag).

50 For a comprehensive discussion of the ECB’s programmes to help sovereigns and banks, in which the author finds no violations of the ECB’s constitutional mandate, see Wilsher, D., ‘Ready to Do Whatever it Takes? The Legal Mandate of the European Central Bank and the Economic Crisis’, 15 Cambridge Yearbook of European Legal Studies (2012–3) p. 503CrossRefGoogle Scholar.

51 A point discussed by Wolfers, B. and Voland, T., ‘Level the Playing Field: The New Supervision of Credit Institutions by the European Central Bank’, 51 Common Market Law Review (2014) p. 1463Google Scholar at p. 1486 ff.

52 See Engelen, K. C., ‘Questionable Legality. Is the ECB’s New Bank Supervision Role in Trouble?’, The International Economy, Summer 2014, p. 30Google Scholar.

53 For a balanced discussion of those various allegations of unconstitutionality see Tuori and Tuori, supra n. 37, Chapter 5.

54 See, in particular, Dawson and de Witte, supra n. 41, p. 828-836; Chiti and Teixeira, supra n. 44 Tuori and Tuori, supra n. 37, p. 216 ff.

55 Dawson and de Witte, supra n. 41, p. 830.

56 A. Dimopoulos, ‘The Use of International Law as a Tool for Enhancing Governance in the Eurozone and its Impact on EU Institutional Integrity’, in Adams et al., supra n. 32, p. 47-58.

57 For an effective defence of this alternative view, see Closa, C., ‘Los cambios institucionales en la gobernanza macroeconómica y fiscal de la UE: Hacia una mutación constitucional europea’, Revista de Estudios Políticos, n. 165 (2014) p. 65Google Scholar.

58 The role played by the EP in the adoption of the six-pack and the two-pack is discussed by Fasone, supra n. 18, p. 169-173.

59 Bickerton, C. J. et al., ‘The New Intergovernmentalism: European Integration in the Post-Maastricht Era’, 53 Journal of Common Market Studies (2015) p. 703CrossRefGoogle Scholar.

60 For a detailed discussion of the growing role, and changing mode of operation, of the European Council, see Puetter, U., The European Council and the Council. New Intergovernmentalism and Institutional Change (Oxford University Press 2014)CrossRefGoogle Scholar Chapter 3. See also, in the legal literature, Curtin, D., ‘Challenging Executive Dominance in European Democracy’, 77 Modern Law Review (2014) p. 1CrossRefGoogle Scholar at p. 7-12.

61 Fabbrini, supra n. 39. See also Dawson and de Witte, supra n. 41, p. 836-842 (finding a shift in the ‘spatial balance’).

62 This point is made by Chiti and Teixeira, supra n. 44, p. 695-697, as well as by Tuori and Tuori, supra n. 37, p. 192-194.

63 An expression used by Everson, M., ‘The Fault of (European) Law in (Political and Social) Economic Crisis’, 24 Law and Critique (2013) p. 107CrossRefGoogle Scholar at p. 124.

64 Joerges, C., ‘Brother, Can You Paradigm?’, 12 International Journal of Constitutional Law (2014) p. 769CrossRefGoogle Scholar at p. 778, who adds that ‘the core concepts used by the new economic governance cannot be defined with any precision, either by lawyers or by economists, and are, therefore, not justiciable. This implies that rule-of-law and legal protection requirements are being suspended’. See also Everson, supra n. 63, p. 124: ‘illegality has followed illegality in response to the current Ausnahmezustand’.

65 Beck, G., ‘The Legal Reasoning of the Court of Justice and the Euro Crisis – The Flexibility of the Court’s Cumulative Approach and the Pringle Case’, 20 Maastricht Journal of European and Comparative Law (2013) p. 635CrossRefGoogle Scholar.

66 Kilpatrick, C., ‘On the Rule of Law and Economic Emergency: The Degradation of Basic Legal Values in Europe’s Bailouts’, 35 Oxford Journal of Legal Studies (2015) p. 325CrossRefGoogle Scholar.

67 Tuori and Tuori, supra n. 37, p. 188-189.

68 ECJ 6 July 1982, Joined Cases 188–190/80, France, Italy and UK v Commission, para. 6.

69 ECJ 30 May 1989, Case 242/87, Commission v Council, para. 13.

70 The reference here is to the well-known article of Deirdre Curtin describing the institutional reforms enacted by the Maastricht Treaty in rather negative terms : Curtin, D., ‘The Constitutional Structure of the Union: A Europe of Bits and Pieces’, 30 Common Market Law Review (1993) p. 17Google Scholar.

71 See Verdun, A., ‘A Historical Institutionalist Explanation of the EU’s Responses to the Euro Area Financial Crisis’, 22 Journal of European Public Policy (2015) p. 219CrossRefGoogle Scholar; Genschel, P. and Jachtenfuchs, M., ‘Alles ganz normal! Eine institutionelle Analyse der Euro-Krise’, Zeitschrift für internationale Beziehungen (2013) p. 75CrossRefGoogle Scholar; and, with specific reference to the adoption of the financial rescue mechanisms, Gocaj, L. and Meunier, S., ‘Time Will Tell: The EFSF, the ESM, and the Euro Crisis’, 35 Journal of European Integration (2013) p. 239CrossRefGoogle Scholar.

72 See for an argument that the creation of a ‘fiscal federalism model’ would be preferable to the current ‘surveillance model’, Hinarejos, A., ‘Fiscal Federalism in the European Union: Evolution and Future Choices for EMU’, 50 Common Market Law Review (2013) p. 1621Google Scholar.