Effect-Based Analysis in the Court's Jurisprudence on the Euro Crisis

42 European Law Review 255-270 (2017)

35 Pages Posted: 20 Jan 2017 Last revised: 24 Aug 2018

See all articles by Armin Steinbach

Armin Steinbach

Max Planck Institute for Research on Collective Goods; Oxford University - Nuffield College; German Federal Ministry of Finance

Date Written: October 1, 2016

Abstract

Effect-based analysis is genuinely implicit in economic reasoning. The jurisprudence developed throughout the debt crisis reveals frequent recourse to effect-based analysis for the legal assessment of the compatibility of anti-crisis instruments with EU law. The dividing line between the European Court of Justice (ECJ) (in Gauweiler and Pringle) and the German Constitutional Court (in its request for a preliminary ruling on the OMT programme) can be drawn according to whether spillover effects for the purpose of delineating monetary from fiscal policy are recognised or not. This difference inspires the diverging answers the courts give on whether the ECB acted within its mandate. This article examines the scope and nature of the Court’s effects orientation and seeks to analyse the underlying economic rationale guiding the Court’s interpretation of the relevant EU Treaty norms – this analysis led the ECJ to results that conflicted with the analysis of the German Constitutional Court. The different (economic) understandings adopted by the courts are also explored in light of the functionality of interest rates in relation to monetary and fiscal policy.

Keywords: Spillovers, Monetary Policy, Fiscal Policy, Legal Analysis, European Court of Justice

JEL Classification: E52, F34, H63, K33, E61

Suggested Citation

Steinbach, Armin, Effect-Based Analysis in the Court's Jurisprudence on the Euro Crisis (October 1, 2016). 42 European Law Review 255-270 (2017), Available at SSRN: https://ssrn.com/abstract=2901899 or http://dx.doi.org/10.2139/ssrn.2901899

Armin Steinbach (Contact Author)

Max Planck Institute for Research on Collective Goods ( email )

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Bonn, 53113
Germany

Oxford University - Nuffield College ( email )

New Road
Oxford, OX1 1NF
United Kingdom

German Federal Ministry of Finance ( email )

Wilhelmstrasse 13
Berlin, 11019
Germany

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