International Treaties on the Euro and the EU Legal Order BRUNO DE WITTE

Transcription

1 International Treaties on the Euro and the EU Legal Order BRUNO DE WITTE

2 Three Euro Crisis Treaties Decision of the Representatives of the Governments of the Euro Area countries of 10 May 2010 to set up the European Financial Stability Facility (EFSF). Treaty establishing the European Stability Mechanism (ESM Treaty), 1 February 2012, between the 17 euro area countries. Entered into force in October Treaty on Stability, Coordination and Governance in the Economic and Monetary Union (Fiscal Compact), 2 March 2012, between the 17 euro area countries and 8 further EU member states. Entering into force on 1 January 2013.

3 Inter se agreements between EU member states Many separate international treaties between some or all EU member states (Schengen, Benelux, Eurocontrol, etc.) Only if compatible with EU law and if respecting the rights of non-participating EU states Not constrained by EU decision-making rules, but not benefiting from the legal qualities of EU law (democratic participation, effective compliance mechanisms)

4 Decline and revival? Intra-EU enhanced cooperation, invented by Treaty of Amsterdam and now being used, is meant to preclude the need for extra-eu agreements BUT: member states remain states with treaty-making capacity, to be used when necessary Undermining EU legal order or additional instruments of European cooperation?

5 The EFSF A four-stage legal construction: - decision of the Representatives (10 May 2010) - incorporation of the Facility as a private company under Luxembourg law, with 17 euro countries as shareholders - framework agreement (under English law) between the shareholders and the company, defining its governance - national law measures to allow for the funding of EFSF = a private international organization

6 Why the EFSF arrangements? More efficient than a series of bilateral agreements (as used for Greece, at first) Insufficient fire power in EU budget No proper international treaty because of urgency; member states to deal later with the legal and political fall out (legal challenge in Germany; fall of government in Slovakia) = emergency intergovernmentalism

7 ESM Treaty Prepared by amendment of Art 136 TFEU (Eur. Council Decision of 25 March 2011, not yet in force), allowing euro area countries to set up a (permanent) financial stability mechanism. ESM-I (June 2011) and ESM-II (Feb 2012) Creation of a new international organisation with its own hat switching organs (Board of Governors, Board of Directors) Future support only if Fiscal Compact is ratified

8 Why the amendment of Art 136? Why needed? German wish to neutralize the no bail-out clause in Art 125 TFEU by including a permissive provision in TFEU Why addressed to the member states, not to the EU? - path dependency with EFSF - allowing for use of simplified revision (no new EU competences) = deliberate intergovernmentalism

9 Fiscal Compact Treaty containing obligations for the contracting states: harmonization of national budgetary laws Providing for new bodies (Meeting of Heads...), but no separate international organisation Commitment towards re-entry into EU legal order à la Schengen

10 Why the Fiscal Compact? Its content could have been enacted under secondary EU Law (much overlap) German insistence on primary rather than secondary EU law: entrenchment function, and solemnity function Overcoming UK veto of TFEU revision, at the December 2011 summit, by immediate exiting from the EU framework = accidental intergovernmentalism?

11 Consequences Opting into international treaty law Opting out of the EU legal order

12 Into public international law Free choice of participants: enhanced cooperation without permission Signature/ratification sequence: quick first results, but time lag for effective legal change and factor of uncertainty (cf. pending challenges of ESM Treaty in Germany, Ireland, Austria, Belgium) Flexible entry into force options Afterlife under international law

13 Out of EU law Legal conditionality: compliance with EU law (next slide) Institutional consequences: EU decisionmaking and judicial control are by-passed; limited use of EU institutions must be separately provided

14 Compliance with EU law Do Member States have the competence to act (monetary policy as exclusive competence)? Does the ESM breach the no-bail-out clause? Can the Fiscal Compact duplicate and modify prirmary and secondary EU law? Can EU institutions be borrowed? Some answers soon in Pringle judgment of CJEU