The Financial Crisis, the EU Institutional Order and Constitutional Responsibility

Abstract

The financial crisis is arguably the most significant challenge to the EU since the inception of the EEC. It has generated an array of political, legal and institutional responses the complexity of which is daunting in itself. The current paper considers these developments, and places them within a broader frame of institutional concerns, thereby facilitating thought about their impact on issues that have been debated more generally within the EU. The analysis has two principal themes, institutional design and constitutional responsibility for the choices thus made. These twin themes are considered in temporal perspective.

The discussion begins with the foundational institutional architecture for EU decision-making, and the debates that this has generated about democracy deficit. There has been a further resurgence of these concerns in the light of the crisis. While this is unsurprising, there is nonetheless a surprising lack of discourse as to responsibility for the status quo, and an equally surprising lack of serious discussion as to how we should think of the constitutional responsibility of Member States and not just the EU itself for the current institutional ordering. The paper develops two contrasting senses of constitutional responsibility and the implications of the choice between them for how we conceive of the EU and the role of Member States therein.

The analysis then shifts to the institutional architecture of the EMU laid down in the Maastricht Treaty, with the focus once again on the relationship between the institutional attribution of power, constitutional responsibility for the shaping of these provisions, and the way in which the schema contributed to the subsequent economic malaise. The relationship between this institutional schema and subsidiarity will also be explored.

The penultimate section of the paper considers the institutional schema that was used to deal with the financial crisis while it unfolded and the extent to which this can be properly portrayed in intergovernmental or supranational terms. The focus in the final section of the paper is on the measures that have been put in place thus far, and the institutional implications that this has had for the balance of power, both vertical and horizontal.

Keywords: democratic deficit; constitutional responsibility; subsidiarity; financial crisis; economic and monetary union