Constitutional principles under Europe's new economic governance : limits of their reinterpretation

Abstract

The term `Europe`s New Economic Governance` describes a series of legal measures, introduced since the emerge of the fiscal crisis in Europe since 2010. Under the Treaty Establishing the European Stability Mechanism (ESMT) financial assistance is provided to Euro Member States if indispensable to safeguard the euro as a whole. The Treaty on Stability, Coordination and Governance (TSCG) on the other hand imposes upon Member States rigid rules on its economic governance. Additional Regulations, known under the title `Six-Pack` have been introduced in 2011 in order to foster Member States` budgetary discipline. This New Economic Governance has raised serious concerns regarding its constitutional conformity especially with regards to the democracy principle. Even though, discussions about a democratic deficit of the European Union have been held before, the restrictions on the budgetary sovereignty of Member States through this new governance seem to have exceeded the possible limits of reinterpretation. Europe`s New Economic Governance also questions the Rule of Law principle and reveals constitutional conflicts between Member States` constitutions and the European constitutional system. From the viewpoint of national constitutions, its constitutional identity is to be safeguarded which disallows any significant transgression of powers conferred on the European Union. The Court of Justice, on the other hand, adopts a more extensive interpretation, for example by interpreting Article 125 TFEU beyond its literal meaning.