Fiscal Compact, ESM and SRF

Transcription

1 EURO-CEFG & CLEER workshop External Representation in EMU 23 June 2015 European Research Centre for Economic and Financial Governance euro-cefg.eu RESEARCH FELLOWS EMU external relations within the EU: Fiscal Compact, ESM and SRF Fabian Amtenbrink Erasmus University Rotterdam (Scientific Director EURO-CEFG) Stefaan van den Bogaert Leiden University Martijn Groenleer Delft University of Technology Matthias Haentjens Leiden University Markus Haverland Erasmus University Rotterdam Klaus Heine Erasmus University Rotterdam Madeleine Hosli Leiden University Alessio M. Pacces Erasmus University Rotterdam René Repasi Erasmus University Rotterdam (Scientific Coordinator EURO-CEFG)

2 Union method Angela Merkel, 2 November 2010 Speech at the Collège d Europe in Bruges A coordinated European position can be arrived at not just by applying the community method; sometimes a coordinated European position can be arrived at by applying the intergovernmental method. The crucial thing is that on important issues we have common positions.

3 Outline of the presentation EU legal framework for inter se agreements The recent use of inter se agreements in EU Economic Governance Assessment of the use of inter se agreements in EU Economic Governance

4 EU legal framework for inter se agreements

5 EU legal framework for inter se agreements Quick introduction into international law framework Capacity of states to conclude Treaties (Art. 6 VCLT) Can there be a self-made limitation of the treaty-making capacity of sovereign states by obligations in other Treaties? Limitation by Treaties constituting international organisations (Art. 5 VCLT)? The present Convention applies to any treaty which is the constituent instrument of an international organization and to any treaty adopted within an international organization without prejudice to any relevant rules of the organization. EU Treaties take precedence over VCLT

6 EU legal framework for inter se agreements Relevant rules of the EU Treaties Modification of Primary law Art. 48 TEU ( limitation of Treaty-making capacity) Subject-matters covered by Union competences ECJ, Case 6/64, Costa/ENEL the Member States have limited their sovereign rights, albeit within limited fields, No limitation of the Treaty-making capacity Pre-emption (use of the Treaty-making capacity) inter se Treaties can be concluded by MS inter se Treaties cannot be enforced because of the supremacy of EU law Positive obligations out of Article 4(3) TEU

7 EU legal framework for inter se agreements Scope of pre-emption Exception ECJ, Case 804/79, Commission/UK Member States as trustees of the common interest in the absence of appropriate action of the Council necessity to adopt measures interim measures to be suspended once Union measures are adopted

8 EU legal framework for inter se agreements Inter se Agreements of a subset of MS Modification of Primary law Article 48 TEU requires all MS Modification of Primary law by a subset of MS is a violation of Article 48 TEU Exception: Strengthening of the European integration (by e.g. transferring a new competence upon the EU) International law: Article 41(1)(b) VCLT Such inter se Agreements of a subset of MS have to be approved by the other MS» Example: Social Agreement and the Social Protocol (Maastricht Treaty) If not: inter se agreement would be valid but has to be cancelled by participating MS in accordance with the principles of state responsibility for internationally wrongful acts

9 EU legal framework for inter se agreements Obligations under Article 4(3) TEU Precedence of legislating under Union law No undermining Union legislative procedures Monopoly of the Commission to initiate legislative procedures Role of the European Parliament Spirit of Article 20(2) TEU Precedence of using Enhanced Cooperation Standstill obligations Special case: Directives after formal entry into force Concerted action (ECJ, Case C-246/07, COM/Sweden) Prohibition to frustrate the legislative procedure formally intiated by a COM proposal

10 EU legal framework for inter se agreements Legal consequences of a violation of Article 4(3) TEU International law: Inter se agreement of all MS: Art. 30(3) VCLT: lex posterior derogat legi priori Inter se agreement of a subset of MS: Art. 30(4) VCLT Inter se agreements concluded in violation of Article 4(3) TEU are valid In case of a conflict with existing Union law, inter se agreements are not applicable

11 EU legal framework for inter se agreements 1. MS have the full Treaty-making capacity also within the scope of application of the EU Treaties 2. Inter se agreements may not modify Primary law if concluded outside of Article 48 TEU 3. Inter se agreements have to be in compliance with existing Primary and Secondary law 4. Inter se agreements of MS are pre-empted within the scope of exclusive Union competences shared Union competences to the extent that the Union has exercised them; in case of directives the pre-emptive effect begins with the entry into force of the directive

12 EU legal framework for inter se agreements 5. Inter se agreements of all MS may only be concluded if a Union legislative procedure failed or is likely to fail 6. Inter se agreements of a subset of MS may only be concluded if an Enhanced Cooperation failed of is likely to fail 7. Inter se agreements may not circumvent Union legislative procedures if there is a Commission proposal on the basis of a shared Union competence 8. Inter se agreements may not affect the enjoyment by the other parties of their rights under the EU Treaties; therefore the use of Union procedures and Union institutions by the inter se cooperation is subject to the approval of all MS

13 The recent use of inter se agreements in EU Economic Governance

14 The recent use of inter se agreements Fiscal Compact (Treaty on Stability, Coordination and Governance in the EMU) Treaty Establishing the European Stability Mechanism (ESM-Treaty) Agreement on the transfer and mutualisation of contributions to the Single Resolution fund (SRF-Treaty)

15 The recent use of inter se agreements Fiscal Compact Conflicting EU law Article 121, 126 TFEU Stability and Growth Pact Regulation (EC) No 1466/97 Regulation (EC) No 1467/97 Six pack Commission proposals for the Two Pack

16 Fiscal Compact Rule EU law Fiscal Compact Medium-term objective Character of implementing rule -1.0 % -0.5 % -1.0 % (where the ratio of government debt is significantly below 60 %) (Art. 2a(2) of Regulation (EC) No 1466/97) (Art. 3(1)(b)) (Art. 3(1)(d)) Member States shall have in place numerical fiscal rules 1/20 rule the ratio of the government debt [ ] shall be considered sufficiently diminishing [ ] if the differential [ ] has decreased over the previous three years at an average rate of one twentieth per year as a benchmark Reversed qualified majority voting preferably constitutional (Art. 5 of Directive 2011/85/EU) (Art. 3(2)) Contracting Parties shall reduce it at an average rate of one twentieth per year as a benchmark (Art. 2(1a) of Regulation (EC) No 1467/97) (Art. 4) The Council shall act by a qualified majority except where the Treaties provide otherwise. Contracting Parties whose currency is the euro commit to support the proposals or recommendations submitted by the European Commission [ ]. This obligation shall not apply where it is established [ ] that a qualified majority of them [ ] is opposed to the decision [ ]. (Art. 16(3) TEU) (Art. 7)

17 Fiscal Compact Use of Union institutions ECJ: Article 8 FP Special agreement in terms of Article 273 TFEI Compliance with Article 3(2) FP: Inclusion of a golden rule into national law ( preferably constitutional ) Commission: Articles 3(1)(b), 3(2), 5, 8 FP Governance of the Euro area Euro Summit Gathering of the Heads of States or Governments Interparliamentary Cooperation (Article 13 FP)

18 European Stability Mechanism Inclusion of Article 136(3) TFEU The Member States whose currency is the euro may establish a stability mechanism to be activated if indispensable to safeguard the stability of the euro area as a whole. The granting of any required financial assistance under the mechanism will be made subject to strict conditionality. Entry into force of ESM-Treaty before entry into force of Article 136(3) TFEU ECJ, Case C-370/12, Pringle Compliance with Articles 122, 123, 125 TFEU Obligations out of Article 4(3) TEU because of existing Union competences

19 European Stability Mechanism Article 352(1) TFEU [64] Secondly, [ ] it must be observed that [ ] the provisions of the EU and FEU Treaties do not confer any specific power on the Union to establish a stability mechanism of the kind envisaged by Decision 2011/199. No specific power to establish the ESM in the Treaties [67] As to whether the Union could establish a stability mechanism comparable to that envisaged by Decision 2011/199 on the basis of Article 352 TFEU, suffice it to say that the Union has not used its powers under that article and that, in any event, that provision does not impose on the Union any obligation to act [ ]. ECJ does not dismiss Article 352(1) TFEU as a legal base for the ESM Art. 352(1) TFEU does not impose an obligation to act

20 European Stability Mechanism [68] Consequently, having regard to Articles 4(1) TEU and 5(2) TEU, the Member States whose currency is the euro are entitled to conclude an agreement between themselves for the establishment of a stability mechanism of the kind envisaged by Article 1 of Decision 2011/199 [ ]. ECJ does not require prior attempt to legislate on the basis of Article 352(1) TFEU Convincing? Article 352(1) TFEU refers to a unanimous vote in the Council (no difference to the conclusion of an inter se agreement) Article 352(1) TFEU refers to the consent of the EP Does this apply to specific powers?

21 SRF Agreement Commission proposal of 10 July 2013 based on Article 114(1) TFEU Rules on a Single Resolution Mechanism Rules on a Single Resolution Fund ECOFIN-Council of 20 December 2013 Outsourcing parts of the original proposal into an IGA transfer of the contributions risen at national level to the SRF gradual mutualisation of national contributions

22 SRF Agreement Problems Council undermines the OLP Monopoly right of the Commission to initiate legislative procedures Co-decision power of the European Parliament Institutional balance Principle of Parliamentary democracy

23 Assessment of the use of inter se agreements in EU Economic Governance

24 Assessment of the use of inter se agreements Inter se agreements that deepen the European integration are admissible Inter se agreements should not undermine the allocation of competences between the Union and Member States Inter se agreements should not undermine the institutional balance at EU level, in particular with regard to the European Parliament

25 Assessment of the use of inter se agreements Inter se agreements in EU Economic Governance are a tool to compensate for the lack of proper legal bases in the area of Economic policy coordination Inter se agreements increase the legitimacy gap at EU level National Parliaments are in an ex post modus to simply ratify without possibility to amend European Parliament is excluded

26 Assessment of the use of inter se agreements Inter se agreements are a tool of International law and should only be used as a last resort Fiscal Compact ESM-Treaty SRF-Treaty

27 Thank you for your attention European Research Centre for Economic and Financial Governance euro-cefg.eu RESEARCH FELLOWS René Repasi European Research Centre for Economic and Financial Governance (EURO-CEFG) Phone: +49(0) (0) Fabian Amtenbrink Erasmus University Rotterdam (Scientific Director EURO-CEFG) Stefaan van den Bogaert Leiden University Martijn Groenleer Delft University of Technology Matthias Haentjens Leiden University Markus Haverland Erasmus University Rotterdam Klaus Heine Erasmus University Rotterdam Madeleine Hosli Leiden University Alessio M. Pacces Erasmus University Rotterdam René Repasi Erasmus University Rotterdam (Scientific Coordinator EURO-CEFG)