Abstract
The European financial crisis has called many of the assumptions of the constitutional structure of the European Union (EU) into question. The market-based model of the European Monetary Union (EMU) led to an improper assessment of the borrowing capacity of the euro-area Member States and a mispricing of their default risk. Another design flaw of the EMU that has been exposed by the crisis was the weakness of the existing framework for economic policy coordination. The factual interdependence of the participating economies in the monetary union was so strong that the denial of some form of assistance to the debt-distressed countries triggered a domino effect in the Eurozone as a whole. The quest for instruments to address the sovereign debt crisis brought a European constitutional crisis to the forefront: the EU did not possess the appropriate mechanisms to help the states in need and to guarantee financial stability in the EMU.
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