Judicial Review of Eurozone Law: The Adjudication of Postnational Norms in EU Courts, Plural - A Casestudy of the European Stability Mechanism

Michigan Journal of International Law, Vol. 34, 2013

Amsterdam Law School Research Paper No. 2013-35

Amsterdam Centre for European Law and Governance Research Paper No. 2013-06

Postnational Rulemaking Working Paper No. 2013-04

16 Pages Posted: 3 Jul 2013 Last revised: 28 Jan 2014

See all articles by Elaine Fahey

Elaine Fahey

City, University of London - City Law School

Samo Bardutzky

University of Ljubljana

Date Written: July 1, 2013

Abstract

The European Stability Mechanism (ESM) is the latest in a series of EU financial crisis legal resolution measures through binding EU law. Various aspects of Euro-zone decision-making take place in the margins of the EU Treaties or are not strictly provided for (Snyder, 2010). The legal form of the ESM Treaty was exceptional but not beyond the letter of the Treaties (De Witte, 2012). However, some suggest that the use of a European Council decision to amend the treaties to create the ESM was intended to avoid referenda in the Member States. Judicial review of the ESM had the capacity to unsettle controversial, fragile and esoteric legal texts.

The ESM has been the subject of constitutional challenges and/or sovereignty analysis in no less than five Member States by courts and parliamentary committee at various levels of the individual legal order (Germany, Ireland, Estonia, Finland and the UK).

Only one of those five bodies – the Supreme Court of Ireland - decided to ask the Court of Justice of the European Union for a preliminary ruling (Pringle v. Ireland, 2012). Some national high courts (the German Bundesverfassungsgericht, the Estonian Riigikohus, seemingly, did not even consider the possibility of referring a question, the two Member States Legislative Committees found that no questions worth referring were raised.

There was little doubt in legal, political or economic circles that the Court of Justice in Pringle would “uphold” the validity of the ESM Treaty, a legal formula which tested the limits of its jurisdiction via the preliminary reference mechanism. An adverse decision would have delivered adverse consequences for markets and lending rates. However, the nature of the EU financial crisis measures appeared to prompt minimal inter-court interaction or “dialogues” with the Court of Justice, less still constitutional crisis or turmoil. The deployment of the preliminary reference tool has been a central one for EU integration. Constitutional dialogues embody the formula du jour to assess integration through EU law. The ESM saga demonstrates how precarious and esoteric arrangements for the euro-zone in law remain. More fundamentally, it demonstrates how the preliminary reference mechanism has structural flaws which adversely affect the unity of EU law.

The paper considers caselaw in five Member States national courts and legislatures hearing challenges to European financial crisis measures. We ask, why did some courts refer and not others? What does this reveal about the structural flaws of the preliminary reference mechanism? More substantively, we ask about the availability of depicting the EU multi-level constitutional legal order within the rubric of dialogue, given this infrastructure? What does the ESM saga indicate about the controversial taxonomy of euro-zone law and its wider impact on the character of postnational law?

Keywords: Postnational law, EMU law, Eurozone law, Adjudication, Courts, Participation, Preliminary reference procedure

JEL Classification: K33, K4, K40, K2, K23

Suggested Citation

Fahey, Elaine and Bardutzky, Samo, Judicial Review of Eurozone Law: The Adjudication of Postnational Norms in EU Courts, Plural - A Casestudy of the European Stability Mechanism (July 1, 2013). Michigan Journal of International Law, Vol. 34, 2013; Amsterdam Law School Research Paper No. 2013-35; Amsterdam Centre for European Law and Governance Research Paper No. 2013-06; Postnational Rulemaking Working Paper No. 2013-04. Available at SSRN: https://ssrn.com/abstract=2287917

Elaine Fahey (Contact Author)

City, University of London - City Law School ( email )

Northampton Square
London, London EC1V OHB
United Kingdom

Samo Bardutzky

University of Ljubljana ( email )

Poljanski nasip 2
Ljubljana, 1000
Slovenia

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