The Fiscal Compact and budgetary discipline

Abstract

This chapter contains a reconstruction of the political and legal process leading up to the adoption of the Fiscal Compact Treaty and its subsequent review by several national courts. The purpose of this reconstruction is to show how interaction between national courts and the European-level political process functions. Furthermore, the reconstruction also showcases how political motivations and legal frameworks affected the process. Then, the constitutional significance of the Fiscal Compact is discussed. This analysis centres on the asymmetrical structure of the Economic and Monetary Union and how this is visible in the Fiscal Compact. Furthermore, the links between the Fiscal Compact and the other crisis response mechanisms are discussed. It is argued that establishing the Fiscal Compact through international law made possible the extended judicial review by national courts, which, subsequently, leads to the inequality thesis. The reconstruction of the events reveals differences in when national courts were able to participate. Courts that were able to review the Fiscal Compact at an earlier stage of the political process had the possibility to affect its course, whereas courts that reviewed it at a later stage faced the ungrateful task of accepting it due to the predicament that the political significance of the issue created.