Sovereignty Within The Economic And Monetary Union

Sovereignty Within The Economic And Monetary Union Presented by: Dr. Petr Date: 22 March 2024 Introduction - (Jean Monnet) • I have always believed that Europe would be built through crises, and that it would be the sum of their solutions - Crises redefine the relationship between the EU and Member States - Attempts to preserve sovereignty not necessarily strengthen the position of Member States - EMU as a case-study Ad Introduction - A series of developments in the EMU redefining • The position of Member States • The institutional balance • The system of EU law - After 10 years, no final solution in sight - What is the future of EMU? - What will be the position of Member States in the future EMU? - Is it supported by EU law? - The European Stability Mechanism (ESM) … and the “no-bailout” clause - The Stability, Coordination and Governance Treaty (SCGT) … and avoiding the primary law - The EU Recovery Instrument … and financial redistribution I. The Basics of EMU - Full supranationalization of monetary policy • Art. 3 (1) (a) TFEU: The Union shall have exclusive competence in monetary policy for the Member States whose currency is the euro - Member States retain fiscal and economic policy • Art. 5 (1) TFEU: The Member States shall coordinate their economic policies within the Union. To this end, the Council shall adopt measures, in particular broad guidelines for these policies • Prudent fiscal policies Ad The Basics of EMU - Ad National fiscal policies - Stability Union - Budgetary self-restraint • - - Art. 126 (1) TFEU: Member States shall avoid excessive government deficits Market discipline • 123 TFEU: ban on monetary financing • 124 TFEU: ban on privileged access to financial institutions • 125 TFEU: no-bailout Emergency ad hoc help • Art. 122 TFEU II. ESM: “Permanent” Emergency Help - - New legal basis (Art. 136 (3) TFEU) • To safeguard the stability of the euro area as a whole • 122 (2) TFEU European Financial Stabilization Mechanism? All right according to CJEU (C-370/12 Pringle) Ad ESM: “Permanent” Emergency Help - But still some questions: • Outside of the EU-architecture  ESM Treaty  International organization • In fact, it is a bailout • Is the CJEU interpretation persuasive? • Or should the TFEU be amended? • And should the ESM be governed by EU law? III. Stability, Coordination and Governance Treaty. Why a Treaty? - Paul Craig • Whatever one believes about its desirability or not, this new treaty does raise an issue of principle (...) (The EU law is) being circumvented by a treaty outside the fabric of the Lisbon Treaty in circumstances where the rules as to how change should be undertaken within the Lisbon Treaty are not capable of being met Ad Stability, Coordination and Governance Treaty - Intended TFEU amendment • - UK veto Intended future integration to EU law • Art 16: Within five years, at most (...) steps shall be taken (...) with the aim of incorporating the substance of this Treaty into the legal framework of the European Union. IV. The EU Recovery Instruement - Council Regulation 2020/2094 • Sound legal basis? • Art. 122 (1) TFEU: measures appropriate to the economic situation, in particular if severe difficulties arise in the supply of certain products, notably in the area of energy - Balanced budget? (Art. 310 TFEU) - One-off instrument • But a strong precedent V. Economic Federation? - Single currency - Unprecedented level of coordination of economic policies (EU semester, ...) - Budgetary guarantees for Member Stats - Fiscal expansion, redistribution - BUT • Does it fit with the current EU architecture? • Council is very much dominant, intergovernmental method  But are the states actually in control? • Re-write the EMU rules?  More supranational, but more functional EMU?