Non-EU Legal Instruments (EFSF, ESM, AND Fiscal Compact)

Abstract

Abstract ‘Another Legal Monster?’ That was the question asked by the Law Department of the European University Institute on 16 February 2012 in a debate about the Treaty on Stability, Coordination and Governance in the Economic and Monetary Union (TSCG), also known as the Fiscal Compact Treaty. On 2 March 2012, twenty-five Member States of the European Union minus the United Kingdom and the Czech Republic signed the TSCG. A month before, on 2 February 2012, the euro area Member States signed the Treaty Establishing the European Stability Mechanism (ESM Treaty), another legal monster. In both cases, the monstrosity lies in the fact that Member States have preferred to conclude an international treaty, rather than to use the European Union (EU) institutional system. Why did the European Commission not propose a legislative act to establish a financial assistance mechanism in the Eurozone and strengthen the fiscal discipline in the EU? Does this mean the end of community method and a victory for the intergovernmental method? As Herman Van Rompuy commented about the crisis; ‘often the choice is not between the community method and the intergovernmental method, but between a co-ordinated European position and nothing at all’. In 2010, Angela Merkel defended her vision of a new ‘Union Method’ in a speech held at the College of Europe. This approach can be defined by the following description: ‘co-ordinated action in a spirit of solidarity–each of us in the area for which we are responsible but all working towards the same goal’. Each of us means the European institutions and Member States. The new ‘Euro-international’ treaties (or inter se treaties) raise a number of questions regarding their compatibility with EU law, implications for the Union legal system, institutional balance, national sovereignty and democratic accountability. These questions are all the more important because international treaties raise a number of questions on their compatibility with EU law, implications for the Union legal system and institutional balance.