Who Got to Adjudicate the EU's Financial Crisis and Why? Judicial Review of the Instruments of a Postnational Legal Order: Adjudicating the Practices of the Eurozone

Abstract

The European Stability Mechanism (“ESM”) is one of a series of law and governance mechanisms designed to finally resolve the Eurozone qua EU’s financial crisis, purporting to create an EU replica of the International Monetary Fund (“IMF”). Recently enacted law and governance mechanisms perform, cumulatively, a radical rebalancing of powers and functions. Whilst on the one hand, they purport to dramatically decrease Member State fiscal sovereignty through non-conventional and sometimes transitional instruments, on the other hand, they increase the capacity to protect the Eurozone through funds derived from the Member States themselves, albeit in shares apportioned relative to the size and financial capacity thereof. The account here argues that the adjudication of the ESM is a rich case study of the character of law in contemporary EU integration and the state of postnationalism. Moreover, the account here contends that it constitutes an example of suboptimal adjudication in the EU courts, plural, rooted in both the character of Eurozone law and a rather flawed procedural matrix for judicial review, in the form of the preliminary reference mechanism, pursuant to Article 267 TFEU. We seek to argue that courts possibly offered a unique forum for participation and contestation for these esoteric mechanisms, which was largely not availed of. Accordingly, in our analysis, first and foremost, we consider the characterization of the ESM, in light of how it was conceived by its framers. Secondly, we consider what happened when it was assessed by several European courts, national and supranational. Thirdly, we examine the preliminary reference mechanism as the tool that could have facilitated a more participatory and orchestrated judicial response, but did so to a very limited extent. We conclude by briefly considering the reasons why this happened, but focus our attention more generally upon the character of the ESM and its adjudication.

Keywords: EU Institutional law, Eurozone law & governance, Preliminary reference, Judicial function, Postnationalism

JEL Classification: K00, K20, K33