Legal Issues of the ‘Fiscal Compact’ - Searching for a Mature Democratic Governance of the Euro
2012 EUDO Dissemination Conference: The Euro Crisis and the State of European Democracy, Florence, Italy, 22-23 November 2012
29 Pages Posted: 6 Jan 2013
Date Written: November 21, 2012
While complementing the EMU with the necessary rules mandating budget discipline at domestic level, the fiscal compact inevitably affects the autonomy both of national parliaments and executive powers, as well as the life of millions of European citizens. A culture of financial stability protects democracy from inter-generational conflicts and it is positive per se. Arguably, however, some provisions of the fiscal compact risk widening the democratic deficiency of the economic governance. Thus, the following legal analysis is carried out with the main aim of assessing the coherence of the fiscal compact with the principle of democracy. As tentatively showed, an issue of democratic legitimacy is indeed raised. The policy-making of the euro zone needs to be improved so as to rely less on national legitimacy inputs and more on its own direct source of democratic accountability – the European Parliament.
The following paper is divided into eight parts. After a brief introduction concerning the general features of the new treaty (section 1), the grounds for adopting an instrument of pure international law, concluded by a limited number of states, outside the architecture of the EU legal order, are described (section 2). As to the core of the fiscal discipline, i.e. the balanced budget rule and the obligation to reduce the public debt, the legal appreciation is multi-faceted (section 3). Then the limited new power to adjudicate attributed to the ECJ, is examined (section 4). The reversed qualified majority principle with regard to the decision-making of the excessive deficit procedure, is relevant, since it implies the Commission being given a significant power to direct the decision-making (section 5). Before evaluating en filigrane the fiscal compact in the light of the principle of democracy (section 7), a synthetic analysis of the rules regarding the economic policy coordination, convergence and governance of the euro area, is carried out (section 6). Finally, some conclusions will be drawn (section 8).
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