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European Journal, Vol. 20, No. 2, March 2014, pp. 164-185. ©2013 John Wiley & Sons Ltd., 9600 Garsington Road, Oxford, 0X4 2DQ, UK and 350 Main Street, Maiden, MA 02148, USA

European Economic Governance and Parliamentary Representation. What Place for the European ?

Cristina Fasone*

Abstract: This article aims to analyse the 's (EP) position in the reform of the European economic governance, in particular after the adoption of the 'six-pack,' the 'two-pack' and the 'fiscal compact.' References are made to the involve­ ment of the EP in the decision-making process that led to the adoption of the new measures as well as to the substantive role assigned to this institution in the new regulatory framework. The article argues that the new provisions, which undermine the budgetary authority of national while, at the same time, designing a limited role for the EP—though strengthened compared to the previous version of the Stability and Growth Pact—can jeopardise the effectiveness of the landmark principle of 'no taxation without parliamentary representation' in the EU.

I Introduction In the aftermath of the entry into force of the , the European Parliament (EP) has witnessed the most significant strengthening of its powers ever, particularly in the legislative process.1 The trend towards an 'indefinite' institutional empowerment of the EP seemed to have become irreversible.2 However, the shadow of the financial crisis has suddenly forced us to reconsider this assumption, at least for the cruciał sector of European economic governance. This has had to be promptly adapted to the new situation that has also fostered a more comprehensive reform of the economic and fiscal policy in the medium to long term.3

* Post-Doc Fellow in Public Law, Department of Political Sciences, LUISS Guido Carli University, . An earlier and lengthier version of this contribution was presented at the EUDO Workshop on The Constitutional Architecture of the Economic Governance in the EU, EUI, Fiesole, 23 March 2012.1 would like to thank Carlos Closa, Olivier Costa, Bruno de Witte, Federico Fabbrini, Katrin Huber, Silvia Illari, Nicola Lupo, Andrea Manželia, Giuseppe Martinico and the anonymous reviewers for their insightful comments on earlier drafts. The usual disclaimer applies. ' See B. de Witte et al., Legislating After Lisbon. Mew Opportunities for the European Parliament, study prepared in the framework of the Democracy Observatory (EUDO, 2010), EUI, Florence, http://www.eui.eu/Projects/EUDO/Documents/EUDO-LegislatingafterLisbon(SD).pdf, at 26-41, and R. Corbett, F. Jacobs and M. Shackleton, The European Parliament (John Harper Publish­ ing, 8th edn, 2011), at 220 et seq. 2 See B. Rittberger, 'Institutionalizing Representative Democracy in the European Union: The Case of the European Parliament', (2012) 50 (1) Journal of Common Market Studies 18, 24-33. 3 See extensively R.M. Lastra and J.-V. Louis, 'European Economic and Monetary Union: History, Trends, and Prospects', (2013) 1 Yearbook of European Law 1-150, forthcoming. March 2014 The European Parliament in the Economic Governance

In a field in which institutional decisions have such a deep impact on the standards of living and on the rights of European citizens, the legitimacy of the EU decision making has been potentially undermined.4 A new is likely to emerge, since the fiscal of national parliaments is put under severe constraints, whereas the EP, in the best hypothesis, is simply informed of the decisions taken by someone else at EU level, without its direct involvement.5 In other words, the enforcement of one of the cornerstones of constitutional states, the principle of 'no taxation without (parliamentary) representation' has been severely challenged. Understood in broad terms here, 'taxation' is referred to all the decisions on fiscal policy, and not only on the revenues. From this viewpoint, the 'power of the purse,' traditionally lying with parliaments, has somewhat shifted in favour of other institutions, of and intergovernmental bodies, both at national and at EU level.6 The new institutional framework of EU economic governance seems affected by a serious lack of legitimacy.7 Indeed, those who have been elected to represent the citizens at national and EU level do not have any chance to bind or to concur directly in European decisions, for instance, on the macroeconomic imbalances or on the excessive deficit procedure.8 Likewise, because of the lack of transparency and demo­ cratic accountability for the decisions taken mainly by the Commission and the

4 J. Habermas, 'Bringing the Integration of Citizens into Line with the Integration of States', (2012) 18 (4) European Law Journal 485, 488 (article originally published in English in RESET—Dialogues on Civi­ lizations, on 12 March 2012) and V.A. Schmidt, 'The Democratic Deficit in : Which Way ?', in Foundation for European Progressive Studies, ItalianiEuropei, Fondation Jean-Jaurès, Friedrich Ebert Stiftung (ed), Renaissance for Europe—A democratic Union of Peace, Prosperity and Progress (FEPS, 2013), at 65. 5 See, eg V. Hatzopoulos, 'Why the Open Method of Coordination is Bad For You: A Letter to the EU', (2007) 13 (3) European Law Journal 309; K. Armstrong, I. Begg and J. Zeitlin, 'JCMS Symposium: EU Governance After Lisbon', (2008) 46 (2) Journal of Common Market Studies 413; and A. Abdallat, 'Contribution', in A. Kocharov (ed), Another Legal Monster? An EUI Debate on the Fiscal Compact Treaty (2012) 09 EUI Working Papers, Department of Law, at 14. 6 On this issue, the German Constitutional Court is erected like the 'guarantor' of the national parliaments in the European economic governance, interpreting the Basic Law (Art 1, 23, 38, 79) aiming at estab­ lishing a general duty to inform the on the part of the federal government before any decision on fiscal matters is taken at EU level and to wait for the Bundestag's assent in several hypotheses. See the decisions on the European Financial Stabililty Facility and related measures, 2 BvR 987/10, 2 BvR 1485/10, 2 BvR 1099/10 (Judgment of 7 September 2011) and 2 BvE 8/11 (Judgment of 28 February 2012 and the previous temporary injunction of 27 October 2011); the decision on the European Stability Mechanism Treaty, 2 BvE 4/11 (Judgment of 19 June 2012), and the latest decision on this matters, 2 BvR 1390/12, 2 BvR 1421/12, 2 BvR 1438/12, 2 BvR 1439/12, 2 BvR 1440/12, 2 BvE 6/12 (Judgment of 12 September 2012). For comments on these decisions, see A. von Ungern-Sternberg, 'Parliaments—Fig Leaf or Heartbeat of Democracy? German Federal Constitutional Court (Judgment of 7 September 2011—European Rescue Package)', (2012) 8 (2) European Constitutional Law Review 304; D. Thym, 'The German Constitutional Court—or: the Emperor's New Clothes', and P.L. Lindseth, 'Karlsruhe Capitulates? Hardly—Understanding the ESM Ruling of September 12', both published on Eutopialaw, http://www.eutopialaw.com, 17 September 2012. 7 F. Scharpf, Governing in Europe: Effective and Democratic? (, 1999), at 7-21 and C. Harlow, Accountability in the European Union (Oxford University Press, 2002), at 108 et seq. 8 M.A. Wilkinson, 'The Specter of Authoritarian Liberalism: Reflections on the Constitutional Crisis of the European Union', (2013) 14 (5) German Law Journal 527, at 548 highlights that we are witnessing^ 'the weakening of Parliamentary bodies, national as well as supranational—with the exception of the Bundestag.'

9 2013 John Wiley & Sons Ltd. 165 European Law Journal Volume 20 intergovernmental institutions, the EP and national parliaments being marginalised, the European citizens are not able to follow and to understand fully the reasons for the adoption of measures inspired by fiscal austerity.9 In this regard, the financial and the socioeconomic crises are likely to produce worrying spillover effects in terms of political crisis and trust in the EU institutions.10 This article focuses on the role of the EP in the procedure for the adoption of the 'six-pack,' the 'two-pack,' and the Treaty on Stability, Co-ordination and Governance in the Economic and Monetary Union (hereinafter TSCGr or 'fiscal compact'), as well as on the position envisaged for the EP by these measures. The legislative acts form part of a package of provisions which aim at reforming the Stability and Growth Pact (Regulation (EU) 1175/2011 and 1177/2011), at preventing and correcting macroeconomic imbalances (Regulation 1176/2011), at the enforcement of measures that correct excessive macroeconomic imbalances in the area (Regulation 1174/2011), at guaranteeing the effective budgetary surveillance in the euro area (Regulation 1173/2011, and at setting the requirements of the budgetary framework for the Member States (Directive 2011/85EU).11 The 'two-pack,'12 composed of the Regulation on common provisions for monitoring and assessing draft budgetary plans and ensuring the correction of excessive deficit of the Member States in the euro area and of Regulation on the strengthening of economic and budgetary surveillance of Member States in the euro area experiencing or threatened with serious difficulties with respect to their financial stability, aims to complement and to strengthen the provisions of the 'six-pack.' The TSCG is a parallel international Treaty to the European treaties, although in theory is not referable to the EU legal frameworks that was signed on 2 March 2012, following complex negotiations amongst Member States and European institutions, and entered into force on 1 January 2013.13 In this article, it is argued that, alongside of national parliaments, the participation of the EP in the 'management' of EU economic governance is fundamental for the

9 M. Hallerberg, B. Marzinotto and G.B. Wolff, 'How Effective and Legitimate is ? Increasing the Role of the European Parliament', (2011) 09 Britegel Working Paper, study conducted for the EP's on economic and monetary affairs, at 9-10. 10 Up to the point to reach a sort of 'democratic default,' as it has been predicted by some scholars. See G. Majone, 'Rethinking After the Debt Crisis', (2012) 03 UCL Working Paper, at 19-21. " These legislative acts have been published on OJ L306/54, 23.11.2011, 1 et seq. 12 Following a long negotiation started in 2011 the two proposals for a Regulation (COM(2011)819 and 821) were finally agreed after the conclusion of the trilogue at the first reading on 13 May 2013 and entered into force on 30 May 2013 (OJ, L140/1, 27.5.2013, 1 et seq). ü L. Azoulai, Opening Statement', in A. Kocharov (ed.) Another Legal Monster? An EUI Debate on the Fiscal Compact Treaty (2012) 09 EUI Working Papers, Department of Law, at 3, and less critically, M. Poiares Maduro, ibid. See further M. Ruffert, 'The and ', (2011) 48 Common Market Law Review 1777; P. Craig, 'The Stability, Coordination and Governance Treaty: Principle, Politics and Pragmatism', (2012) 3 European Law Review 231; Editorial comments, 'Some Thoughts Concerning the Draft Treaty on a Reinforced Economic Union', (2012) 49 Common Market Law Review 1; G. Martinico, The Tangled Complexity of the EU Constitutional Process. The Frustrating Knot of Europe (Routledge, 2012), at 171-176; and F. Fabbrini, 'The Fiscal Compact, the "Golden Rule" and the Paradox of European Federalism', (2013) 36 (1) Boston College International & Comparative Law Review 1, 4-9.

166 © 2013 John Wiley & Sons Ltd. March 2014 The European Parliament in the Economic Governance legitimacy and the effectiveness of the new regulatory framework,14 which appears to be highly fragmented in terms of addressees, authorities and national positions expressed and are thus dangerous for the performance of the European integration process.15 Indeed, one of the major concerns as for the understanding of European integration as a common project, also with regard to the economic governance, lies with the fact that Member States are not equally bound by these measures. For example, four out of eight new legislative acts are specifically addressed only to the 17 Member States of the and the same asymmetry also applies to the other legal instrument examined, the TSCG, which was not signed by the UK and the Czech . It has been drafted outside the revision procedures of the European Treaties of Article 48 TEU precisely because the common agreement required to amend the Treaty—to wit, unanimity16—amongst the Member States was lacking and there were neither political willingness nor enough time for finalising an , albeit this tool in principle could have been used.17 Several concerns were expressed by the EP regarding this Treaty, from the procedure followed for its adoption, to the initial doubts about the inconsistency of some of its provisions with the EU Treaties,18 to the fact that some articles apply in principle to all the contracting parties while others only apply

M The assessment of the role played by the EP varies according to the reasoning followed for legitimising the European integration. Thus, although under different perspectives, G. Majone, 'Europe's Demo­ cratic Deficit: The Question of Standards', (1998) 4 (1) European Law Journal 5 and A. Moravcsik, 'In Defence of the "Democratic Deficit": Reassessing Legitimacy in the European Union', (2002) 40 (4) Journal of Common Market Studies 603 do not see in the EP a fundamental player for enhancing the legitimacy of the European project. By contrast, according to the view, aiming at establishing a political and federal Union, the EP should be further empowered, also revising the provisions of the Treaties on economic and fiscal policies. See, for example, the letter for the European federalism, undersigned by many European legal scholars, politicians, economists and diplomats and published on 9 May 2012 (significantly, the ) in El Pais, Le Monde, La Repubblica and Tageszeitung. According to this letter MEPs should have a leading role in transforming the EU in a federal Union and in reinforcing the parliamentary side of Europe, by involving national parliaments in this process. 15 See M. Poiares Maduro, 'A New Governance for the European Union and the Euro: Democracy and Justice', (2012) 11 RSCAS Policy Paper, EUI, at 6, and Wilkinson n. 8 supra, at 556. 16 C. Closa, 'Moving Away From Unanimity: Ratification of the Treaty on Stability, Coordination and Governance in the Economic and Monetary Union', (2011) 38 RECON Online Working Paper, at 14-17, who focuses on the rules for the entry into force of the TSCG that require the ratification from no less than twelve contacting parties. 17 B. de Witte, 'European Stability Mechanism and Treaty on Stability, Coordination and Governance: Role of the EU Institutions and Consistency with EU Legal Order', in Challenges of Multi-Tier Gov­ ernance in the EU, Workshop organised by the Policy Department of the EP on Citizens' Rights and Constitutional Affairs, 4 October 2012. However, the 'fiscal compact' does not seem to deviate too much from the path of enhanced cooperation, at least because of its Art 10 that refers to Art 136, 326 and 334 TFEU and to Art 20 TEU. On this point, see M. Cremona, 'Opening Statement', in A. Kocharov (ed.) Another Legal Monster?, op cit, at 9. 18 To date, no has been brought before the Court of Justice of the European Union (CJEU) challenging the compliance of the TSCG with EU Treaties, whereas the Court, summoned as Full Court, ruled on 27 November 2012 on a preliminary reference lodged by the of Ireland that the Treaty on the European Stability Mechanism does not infringe EU law. See Case C-370/12, Thomas Pringle v Government of Ireland [2012] OJ C 26, 26.1.2013, 15-16, para 92-182 and the comments by P. Craig, 'Pringle: Legal Reasoning, Text, Purpose and Teleology', (2013) 20 (1) Maastricht Journal of European and Comparative Law 3, 7-11, P.-A. Van Malleghem, 'Pringle: A Paradigm Shift in the European Union's Monetary Constitution', (2013) 14 (1) German Law Journal 141, 149-168 and B. de Witte and T. Beukers, 'The Court of Justice Approves the Creation of the European Stability Mecha­ nism outside the EU Legal Order: Pringle', (2013) 50 (3) Common Market Law Review 805, 814-848.

9 2013 John Wiley & Sons Ltd. 167 European Law Journal Volume 20 to the EU Member States which adopted the euro.19 Because of these asymmetries,20 the involvement of the EP in the enforcement of these new measures is crucial, being the EP the only European institution where different political points of view are represented often regardless of the national origins of parliamentarians (MEPs) and of the opting out of their Member State. The 'federative attitude' of the EP is likely to promote mutual trust amongst people of different nationalities and inclu­ sion since MEPs participate in the EP procedures with , in spite of the multi-speed European economic governance.21 The EP can constitute the place where national cleavages are willing to be pieced through an open debate and mitigated in their most extreme manifesta­ tions.22 At the same time, also the position of national parliaments cannot be disre­ garded. On the one hand, according to the new formulation of Article 12 TEU, national parliaments contribute to the good functioning of the EU; on the other, they are the ultimate authorities entitled with the power of the purse: a prerogative that the EP is exercising with more and more firmness, as the recent rejection of the EU multi-annual financial framework shows23 but that is still considerably constrained by the small size of the EU budget and by the lack of margin for raising andi collecting taxes. The EP and the national parliaments can work in synergy with regard to the new economic governance in order to quiet national rivalries and resentments which are emerging strongly in the present EU context, to the detriment of the genuine spirit of integration and the achievement of the common European good. The EP being a transnational institution, usually acting regardless of national self-interests, and national parliaments, because of their 'ecumenical' vocation, aiming at representing the pluralism existing in the polities, particularly in such divisive scenario, can help to make EU economic governance work. Consequently a suitable 'recipe' for increasing the democratic legitimacy of the economic governance relies with a coordinated enforcement and oversight of the new European provisions on the part of the EP and national parliaments acting toegether.24

" On the increasing asymmetry and differentiation in the economic and monetary Union and its implica­ tions, see F. Snyder, 'Integration and Differentiation: Metaphor for European Union', in P. Craig and G. de Burca (eds), The Evolution of EU Law (Oxford University Press, 2nd edn, 2011), at 687, 715, and, E. Chiti and P.G. Teixeira, 'The Constitutional Implications of the European Responses to the Financial and Public Debt Crisis', (2013) 50 (3) Common Market Law Review 683, 706-707. 20 A further asymmetry has just arisen also in a field that directly concerns taxation, EU budget and solidarity amongst Member States: the introduction of a financial transaction tax. Aware of the impos­ sibility to agree unanimously on the draft regulation presented by the Commission in 2011 (COM(2011) 594), 11 Member States requested to proceed through enhanced cooperation. See the Council Decision of 22 January 2013 authorising enhanced cooperation in the area of financial transaction tax (2013/52/ EU), O.J.E.U., L 22/11, 25 January 2013. 21 On the multi-speed nature of the economic and monetary policy of the EU, see J.-C. Piris, The Future of Europe: Towards a Two-Speed EU? (Cambridge University Press, 2012), at 20-52 and D. Leuffen, B. Rittberger and F. Schimmelfenning, Differentiated Integration. Explaining Variation in the European Union (Palgrave Macmillan, 2013), at 142-183. 22 See C. Joerges, 'A European Union of, by and for the citizens. How can Europe provide better possibilities for the participation of its citizens?', Contribution to the EP—committee on constitutional affairs—Hearing on Citizen Participation, 18 September 2012. 23 After the Treaty of Lisbon, the multi-annual financial framework (MFF) must be adopted as a legal act, in particular a Regulation. The EP rejected the draft MFF Regulation already on 6 July 2011. Later on, the EP rejected the draft MFF Regulation for the period 2014-2020 on 13 March 2013. 24 In fact, the need for a complementary role of the EP and the national parliaments in the EU had been remarked a long time before the reform of the economic governance: see Harlow n. 7 supra, at 80-83.

168 © 2013 John Wiley & Sons Ltd. March 2014 The European Parliament in the Economic Governance

Π The Ongoing Process of Reform of the Economic Governance iin the EU: The Position of the European Parliament The role played by the EP during the process of the reform of the economic govern­ ance has to be assessed in two directions: on the one hand, the EP activism in attempting to amend draft regulations and draft (international) Treaties, namely, the Treaty on the European Stability Mechanism and the TSCG; on the other hand and notwithstanding its commitment, the EP failure to achieve a prominent status—albeit the EP has gained a general oversight role on the whole procedures—and to obtain decision-making power in the daily management of the new European economic governance framework.25

A The European Parliament's Role in the Procedures for the Approval of the New Measures The new measures stem from a very complicated chain of legal provisions, political commitments and soft law procedures. Ten years of 'enforcement' of the Growth and Stability Pact (Regulations (EC) 1466 and 1467/97, although modified in 2005) and the new Protocol 12 to the Treaty of Lisbon on the excessive-deficit procedure have not proved to be as effective as they were expected to be, thanks to the derogations and the deference of the Member States, even when their public accounts were visibly inconsistent with the legal requirements. No automatic sanctions were provided. In this framework, the EP has been ahead of the times, acting before the real consequences of the financial crisis could have been fully understood.26 On 7 October 2009,27 the EP decided to set up a special committee on the financial, economic and social crisis that carried out investigations and hearings until its dissolution on 30 July 2011, following the approval of its final report. In the meantime, the risk of the bankruptcy of and of the general economic downturn had become more evident. In 2010, the European Semester was launched as a six-month (approximately) cycle every year to coordinate the national structural reforms (embedded in the national reform programmes) and the national stability and convergence programmes with a set of priorities, followed by recommendations, issued by the Commission and adopted by the ECOFIN Council and then by the . At that time, this happened outside the framework of the EU legislation, as an initiative of the , which was then endorsed by the Council, but which lacked a binding nature. The second step, given the deterioration of the situation in Greece and in other Member States, was the decision to amend Article 136 TFEU, making the financial bailout of a Member State expressly possible within the EU framework. The EP was formally consulted,28 according to the simplified revision procedure of Article 48 (6) TEU, but its proposed amendments were entirely disregarded, and the text of Article 136 TFEU was adopted by the European Council as it was in the draft version.

25 See Wilkinson n. 8 supra, at 550. 26 See Y. Bertoncini, 'Le Parlements de l'UE et la gouvernance de l'UEM. Quelle dimension parlementaire pour "l'Union politique?"', (2013) Tribune—Notre Europe, 11 April, 1-8, at 3^4·. 27 See the EP decision of 7 October 2009 on the establishment of a special committee on the financial, economic and social crisis (OJ, C230 E, 26 August 2010, at 11). 28 See EP, Resolution of 23 March 2011 on Amendment of the Treaty on the Functioning of the European Union with regard to a stability mechanism for Member States whose currency is the euro.

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Indeed, if accepted, the amendments of the EP would have forced the Commission and the European Council to change the revision procedure: the EP proposed to extend the competences of the EU institutions (something which cannot be accom­ plished by the simplified procedure), and particularly its competences, by submitting the use of the mechanism of financial assistance to the requirements of a new EU regulation to be adopted under the ordinary legislative procedure, the co-decision procedure.29 The same European Council that agreed on the revision of Article 136 TFEU, the European Council summoned on 24-25 March 2011, made the third step before the (binding) reform of the European economic governance and promoted a plan, called the 'Europlus Pact,' containing the political commitments of the governments of the Eurozone Member States and of the others that wished to join to improve the fiscal strength and the competitiveness in their countries. Again, the plan was devoid of legal effects but served as 'route' to be followed for the subsequent binding measures to be adopted. In this regard, the EP already warned that a democratic and. legitimacy problem existed in the way in which the process of reform was supposed to be accomplished and for its prospective results.30 Indeed, the EP emphasised that the new economic governance should have been arranged in compliance with the '' and led by the EU institutions:31 the EP, in particular, should have been fully involved in the process, playing 'a major role as the main voice of the citizens, especially when it comes to providing a forum for public cross-border debates, taking into account the spillover effect of national decisions in fields such as economic and social governance.'32 Throughout the process of adoption of the several measures which form the so-called 'six-pack,' the EP proved to be a crucial player partially rehabilitating its position compared to the initial proposals of the European Commission, in which the EP was not mentioned at all or only en passant. The political directions for adopting these new provisions could be found in the Europlus Pact, but the legal basis in the Treaties, in particular Articles 121 and 126 TFEU, definitely limiting the role of the EP, compared to the Commission and the Council, the former being only consulted and informed by other institutions. Therefore, given the Treaty provisions, the EP tried to solve what could be solved in that situation. Suffering the EP from a struc­ tural limitation of powers in this field, the assignment of decision-making authority to

29 B. de Witte, 'The European Treaty Amendment for the Creation of a Financial Stability Mechanism', (2011) 6 European Policy Analysis, http://www.sieps.se, 7. 30 Editorial comments, n 13 supra, at 10. 31 On intergovernmental and community methods within the European economic governance, see P. Ponzano, 'Méthode intergouvernementale ou méthode communautaire: une querelle sans intérêt?', (2011) 23 Les Brefs the Notre Europe 2-3; R. Dehousse, 'Inter-Institutional Balance in the EU: Is the Community Method Still Relevant?', in Challenges of Multi-Tier Governance in the EU, Workshop organised by the Policy Department of the EP on Citizens' Rights and Constitutional Affairs, 4 October 2012; S. Fabbrini, ' and Its Outcomes: The Implications of the Euro Crisis on the European Union', (2013) 1 LUISS SoG Working Paper Series 9-22; and E. Chiti, A.J. Menendez and P.G. Teixeira, 'The European Rescue of the European Union', in E. Chiti, A.J. Menendez and P.G. Teixeira (eds), The European Rescue of the European Union?: The existential Crisis of the European Political Project—Reconstituting Democracy in Europe Report no. 19, 2012 3 (12) ARENA Report 395, at 417, who talk about 'the rise of executive emergency constitutionalism.' 32 See EP, Resolution of 6 July 2011 on the financial, economic and social crisis: recommendations on the measures and the initiatives to be adopted, , (2010/2242(INI)).

170 Q 2013 John Wiley & Sons Ltd. March 2014 The European Parliament in the Economic Governance the EP in the daily implementation of the regulations and directive could have been achieved only by means of a Treaty revision. However, since 2009, the position of the EP had been improved at least as for the procedure of adoption of legislative acts in the economic and fiscal policy. Four of the five regulations had to be adopted under the ordinary legislative procedure, and thus with the EP as co-. Indeed, Article 121 (6) TFEU (former Article 99 TEC) was reformed by the Treaty of Lisbon, which introduced co-decision for the enact­ ment of secondary law in this field, replacing the old . The same applies to Article 136 TFEU, which was the legal basis, together with Article 121 (6) TFEU, of the two regulations specifically concerning the Eurozone, a brand new article inserted by the Treaty of Lisbon, which provides for the use of the co-decision as well. Thus, the EP could count on the real possibility of amending the draft regulations, being the first institution to act on the Commission's proposals, according to the arrangement of the new co-decision (Article 294 TFEU). Exercising this power, the EP was able to reinforce its position, albeit modestly, from the lack of any role, according to the original proposal of the Commission, to a limited involvement: for instance, within the four regulations, the provisions regarding the 'economic dialogue' have all been included thanks to the EP's amendments. Subsequently, because of the need to adopt the measures as soon as possible, first reading agreements between the EP and the Council were achieved, and thus regulations were adopted as amended by the EP.33 For the two remaining acts, the draft regulation on speeding up and clarifying the implementation of the excessive-deficit procedure, and the draft directive on the requirements for budgetary frameworks of the Member States, the legal basis was different, not allowing to the EP to participate in the procedure as co-legislator. The draft regulation, based upon Article 126 (14), second section, was adopted through a special legislative procedure which requires unanimity in the Council and the consul­ tation of the EP and the ECB, thereby aiming to replace the provisions of the Protocol on the excessive-deficit procedure attached to the Treaty of Lisbon. Although the EP was only consulted, the position adopted on 28 September 2011 emphasised the need to insert specific changes in the text of the regulation, most of them concerning the position of the EP itself in the new procedure, and these were finally introduced in the legal text. In contrast, on the draft directive of the Council providing detailed rules for the application of Protocol 12 and to be approved after the consultation of the EP (Article 126 (14), third section), the role of the EP was definitely marginal even during the adoption procedure. However, on the whole, the EP was very proactive in approving the EU legislation for the new economic governance and contributed, on the one hand, to the imple­ mentation of the regulations, for instance, after Regulation 1176/2011, in defining, together with the Commission, the scoreboard for the surveillance of macroeconomic imbalances; and, on the other hand, even before the entry into force of the 'six-pack,' in proposing how to carry out and improve the European Semester and the economic

33 On first reading agreements, see A. Héritier, 'Institutional Change in Europe: Co-decision and Comi- tology Transformed', (2012) 50 (si) Journal of Common Market Studies 38,41-43, and R. de Ruiter and C. Neuhold, 'Why Is Fast Track the Way to Go? Justifications for Early Agreement in the Codecision Procedure and Their Effects', (2012) 18 (4) European Law Journal 536, 546-552.

9 2013 John Wiley & Sons Ltd. 171 European Law Journal Volume 20 policy coordination in the future,34 departing from the negative experience of the first experimental use of this tool. For example, the EP recommended that any change made by the Council to the country-specific recommendations issued by the· Commis­ sion after the transmission of the national reform programmes and the stability and convergence programmes was explained by the Commission and the Council appear­ ing before the EP. In general, with regard to the Eurozone structure, 'any new or upgraded organization and decision-making process within the Council and/or the Commission must go hand in hand with upgraded democratic legitimacy and appro­ priate accountability to the European Parliament.' By the same token, the EP's attempt to modify the two draft regulations concerning the 'two-pack' (subject to ordinary legislative procedure, too) was successful. The EP adopted several amendments to both proposals on 13 June 2012, aiming at fostering solidarity amongst Member States and protecting growth and social rights. The final texts of the Regulations came out after long negotiations and a trilogue at first reading and reflect, in many regards, the view of the EP, especially for what concerns the 'social side' of the enhanced economic and budgetary surveillance.35 For example, draft macroeconomic adjustment programmes shall be defined in compliance with Article 152 TFEU and Article 28 of the Charter of fundamental rights, on the right of collective bargain and action. In contrast, with regard to the international treaties signed to face the fiscal crisis, although the EP had expressed its concern against the establishment of a purely intergovernmental coordination system of the economic and fiscal policy, its warning went unheard to a large extent. Two Treaties agreed amongst some of the Member States but formally falling outside EU law were negotiated in the 2011 and in the first months of 2012. The two 'international-European' Treaties, TESM and TSCG, the former establishing a permanent system of financial assistance amongst Member States, the latter strengthening fiscal discipline within the EU, definitely differ for the position assigned to the EP both during the negotiations and in the text. Dealing with international agreements, there is no mandatory consultation with the EP. However, while the EP was kept apart from the procedure of adoption of the TESM and is not even mentioned in the text,36 although the enforcement of the TESM is strictly connected to the compliance with the TSCG, it was allowed to appoint four repre­ sentatives (three plus a substitute) who were to participate in the negotiation process for the TSCG. They constantly reported their activity in the ad hoc working group to the EP on constitutional affairs and on economic and monetary affairs and to the plenary.

34 See the Resolution of the EP of 15 December 2011 on the draft scoreboard for the surveillance of macroeconomic imbalances as proposed by the Commission. On the crucial contribution of the EP, see European Commission, Alert Mechanism Report. Report prepared in accordance with Articles 3 and 4 of the Regulation on the prevention and correction of macro-economic imbalances, COM (2012) 68 final, , 14 February, 2012. 35 Other issues, for example, the proposal of the EP to strengthen the relationship between national parliaments and Fiscal Councils, the independent bodies in charge of monitoring ex ante and ex post the fiscal stability and the macroeconomic conditions of the Member States with regard to the provision of the 'six-pack,' the 'two-pack,' and the TSCG, has not succeeded. 36 Nonetheless, the EP asked in vain for its involvement in the negotiations. See the Resolution of the EP of 18 January 2012 on the Conclusions of the European Council of 8-9 December 2011 on a draft international agreement for the fiscal stability in the EU.

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It does not seem excessive to state that the final version of the TSCG, after six revisions, was largely the result of the amendments required by the EP (with the support of the European Commission) which had one main objective: to bring the content of the new Treaty back to EU law, particularly the 'six-pack.' Indeed, the best option for the EP would have not been to adopt such a Treaty, but to include its provisions in EU regulations. However, the EP succeeded not only in limiting the negative consequences of having incoherent provisions between the TSCG and the 'six-pack,'37 but also in obtaining acknowledgements about the importance of the inclusion of all contracting parties—inside or outside the Eurozone—to participate in an integrated economic governance and of the need for more fiscal solidarity and cohesion in the EU.38 In fact, contracting parties whose currency is not the euro shall take part in the euro-summit meetings when dealing with competitiveness, the global architecture of the euro area and the fundamental rules that will apply to it in future.39 By the same token, the EP was able to secure in the TSCG a reference to sustainable growth and social cohesion, finally exploiting its 'federative attitude' and reaching a (fragile) compromise between political groups on this point: however, while left-wing MEPs were in favour of strengthening also the dimension related to employment and growth, right-wing MEPs were mostly committed to the objective of fiscal austerity.

В The Limited Role of European Parliament According to the New Measures The commitment of the EP to promoting the reform of European economic govern­ ance and its successful attempt to amend draft regulations and even the TSCG do not imply per se that the EP has been able to reinforce its position in the new framework. Certainly, the EP tried to improve it, but could not overturn the original content of draft legislative acts or of the draft agreement, primarily because of the abovemen- tioned constraints in the legal basis. Without doubt the EP is stronger now than it was at the time of the previous regime of the Stability and Growth Pact (1997 and reformed in 2005) when the name of this institution was not even mentioned in Regulations 1466/97 and 1467/97. However, at that time, the weak enforcement of the Stability and Growth Pack did not make the lack of involvement on the part of the EP particularly problematic. On the contrary, nowadays, in principle, the mechanism does not admit derogations, except for exceptional circumstances: compared to the past, warnings and sanctions have become semi-automatic because the system is based upon the reverse qualified majority (warnings and sanctions proposed by the Commission are deemed to be adopted unless the qualified majority in the Council rejects it).40 Furthermore, the coordination of

37 The TSCG already recalls the legal basis of the 'six-pack' (Art 121, 126 and 136 TFEU) as well as some of the new EU Regulations and contains the commitment to incorporate its provisions into the EU legal framework within five years (Art 16). 38 See the EP resolution of 2 February 2012 on the informal European Council meeting of 30 January 2012. 39 Indeed, only the provisions of Titles III and IV of the Treaty may be applied to contracting parties whose currency is not the euro. 40 This mechanism aims to contrast the disputable solidarity existing amongst Member States in the Council, in concealing their respective violation of the Pact. On the reverse qualified majority, see

© 2013 John Wiley & Sons Ltd. 173 European Law Journal Volume 20 economic policy has also become binding by the embedding of the European Semester within the EU legislation. Compared to the strengthening of the Commission's position by the 'six-pack' (and, to some extent, also by the TSCG, as if it was a European Treaty), the EP appears to be very weak: it has to be informed and consulted on specific occasions, it can organise hearings and cooperates with national parliaments, but it is not entitled to take any decision in the framework of European economic governance. Another problem that could undermine the position of the EP regards the fact that many MEPs are elected in Member States which are not affected or are only partially affected by the new measures. When the EP has to examine and decide on a case of enhanced cooperation, all MEPs, regardless of their Member States, participate in the parliamentary activity on equal footing. But in the circumstance of a warning or sanction imposed upon a Member State in the euro area, there could be diverging views in the EP, between MEPs within and outside the Eurozone, or from Member States that have signed and ratified the TSCG or not, on how to oversee those proceedings and on which measures have to be taken. In other words, issues dealing with economic governance are quite likely to increase national interests and sentiments in the EP to the detriment of party discipline.41 Finally, the composition and the balance between national delegations within the committee on economic and monetary affairs (ECON) of the EP, which has become the centre of the EP activity on the economic governance, is also likely to be affected by the new measures de facto attempting to limit, for instance, the membership exclusively to the MEPs of the Eurozone at least for part of its activity (see further section VI). Whatever the potential impact on the functioning of the EP will be, following the implementation of the new measures, one thing should be maintained at all costs: the integrity of the EP has to be preserved, as a collective body in which the national origins of the MEPs is 'merged' or at least 'diluted' as much as possible in favour of the representation of the European citizenship as a whole. Indeed, the EP is the only European institution in which solidarity and mutual trust between Member States and between national citizens can be forged. Consequently, any temptation to use the EP as if it was an intergovernmental body and thus mirroring the differentiated participation of national governments—for instance, providing different compositions of the EP depending on the issue in question and excluding MEPs from the countries not adopting the euro—should be avoided within the new economic governance.

W. Van Aken and L. Artige, 'Reverse Majority Voting in Comparative Perspective: Implications for Fiscal Governance in the EU', in B. de Witte, H. Héritier and A. Trechsel (eds), The Euro Crisis and the State of European Democracy (European University Institute, RSCAS and EUDO, 2013), at 129. 41 The raise of MEPs' conducts oriented to national self-interest appeared quite evidently during the debates held on the occasion of the Interparliamentary Committee Meeting on European Semester for Economic Policy Coordination co-organised in Brussels by the ECON committee of the EP and the relevant committee of the Danish Parliament on 27-28 February 2012, http://www.europarl.europa.eu/ webnp/cms/lang/it/pid/1702. Previously, during the plenary session of the EP in Strasbourg on 13 December 2011, a harsh debate took place between the British MEPs and the MEPs elected in other Member States because of the position taken by the Prime Minister in the European Council of 8-9 December 2011.

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Ш The European Parliament and the So-Called 'Six-Pack': Two Main Paths A The Ambiguous Concept of 'Economic Dialogue' The first direction envisaged for the participation of the EP in the reformed economic governance framework of the EU is the 'economic dialogue,' expressly provided in the five regulations of the 'six-pack.' In point of fact, the concept appears quite question­ able from a legal point of view, and also ambiguous, since it is not clear what happens if the 'economic dialogue' fails or if one of the institutions does not fulfil its obliga­ tions. In many regards, its execution seems to be left to the voluntary commitment of the EP, the Commission, the Council, the President of the European Council and the governments of the Member States. The 'economic dialogue' is the 'new edition' of a format already experimented within the EU. In 1999, the 'monetary dialogue' was launched for the first time, regulated in the (even though this name did not appear in the Treaty), by Article 113 (3) TEC and by Article 15 (3) ESCB Statute. It consists of the presentation of the annual report by the President of the (ECB) to the EP and 'the President of the ECB and the other members of the Executive Board may, at the request of the European Parliament or on their own initiative, be heard by the competent committees of the European Parliament.' Then, it was agreed that the President of the ECB (in addition to the presentation of the annual report) would have appeared four times per year before the EP committee on economic and monetary affairs to be heard (Article 113 of the EP Rules of proce­ dure). Studies show that the experience of the 'monetary dialogue' has been quite successful so far, since most recommendations adopted by the ECON committee of the EP have been taken into account by the ECB.42 In contrast, before the entry into force of Regulation 1176/2011 on macroeconomic imbalances, the EP was excluded by the 'macro-economic dialogue,' firstly established by the Cologne European Council of 3-4 June 1999, in matter of growth, employ­ ment, competitiveness and sustainable development. In fact, the EP has recently requested to become a partner of the 'macroeconomic dialogue,' which has, to date, involved only representatives of the Council, the Commission, the European Central Bank and the social partners.43 The logic behind the newly established 'economic dialogue' is stated in 'photocopy provisions' replicated in the five regulations: to 'enhance the dialogue between the institutions of the Union, in particular the EP, the Commission and the Council'— although the President of European Council and the President of the may also be involved—'and to ensure greater transparency and accountability.' Within the European economic governance framework, the EP becomes the place where the compliance of the Member States with the regulations is (or should be) publicly debated, and where the positions (recommendations, warnings, etc) adopted by the Council, on proposal or recommendation of the Commission, is subject to a political review, on the grounds of the reasons that justified their adoption.

42 S.C.W. Eijffinger and E. Mujagic, 'An Assessment of the Effectiveness of the Monetary Dialogue on the ECB's Accountability and Transparency: A Qualitative Approach', (2004) 39 (4) Intereconomics 190, 201-202. 43 See the resolution of the EP of 1 December 2011 on the European Semester for Economic Policy Coordination (2011/2071 (INI), para 54.

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Three main requirements are common to all the regulations with regard to the 'economic dialogue.'

1. Under specific circumstances, like the adoption of Council decisions on exces­ sive deficit (Article 126.6 TFEU) or on the violation of the medium-term budgetary objective (Regulation 1173/2011), the EP has the power to invite the President of the Council, the Commission, and, where appropriate, the Presi­ dent of the European Council or the President of the Eurogroup, to appear before the committee—the ECON committee—to discuss the actions taken by the Commission and the Council. 2. The second requirement aiming at assuring the effective 'economic dialogue' with the EP is the fulfilling of the obligation, by the Council and the Commis­ sion, to keep the EP 'regularly informed' on the application of these regulations: the two institutions are accountable to the EP for the implementation of these measures. What regular information means is not easy to foresee: however, because all these regulations have the European Semester as the main point of reference, it is likely that the report activity of the Council and the Commission will have to be accomplished at least every European Semester, at the begin­ ning and at the end.

Interestingly, perhaps to counter-balance the previous lack of the 'macroeconomic dialogue,' Regulation 1176/2011 on the prevention and correction of macroeconomic imbalances fixes further informational obligations upon the Commission and the Council, compared to those provided in the other regulations. The EP is considered on an equal footing with the other EU institutions: for example, like the Council, it shall receive from the Commission in timely manner the annual report identifying the Member States that may be affected by economic imbalances. As for the first two requirements of the 'economic dialogue,' it seems unlikely that either the other institutions will refuse the invitation of the EP to appear before its ECON committee or the duty of the Council and the Commission to inform the EP will not be fulfilled. However, in the event of persistent failure of the institutions (in particular the Commission, the Council, and the European Council) to comply with their duties provided by the new regulations, in theory the omissive conduct could be challenged before the Court of Justice of the European Union (CJEU) under the proceedings for failure to act (Article 265 TFEU), although meeting the conditions for the admissibility of such an action is anything but easy. Especially in case of repeated failure of the Council and the Commission to present their reports and the mandatory information to the EP, the generic formulation of the regulation with regard to the schedule for tabling the report and on their form, whether the written form is required or not, is likely to make this provision even less justifiable.

3. The third requirement of the 'economic dialogue' entails a new perspective for the EP, that of the direct dialogue with a Member State. To date, such a bilateral dialogue with a Member State has simply concerned the EP and the six-month presidency of the EU. The President of the Council often appears before the EP. In contrast, the new provisions on the 'economic dialogue' introduce a one-to-one relationship between the EP and the Member State experiencing macroeconomic imbalances, excessive deficits or failing to comply with the Council recommendations or decisions.

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The provision seems to create the conditions for the Member State concerned to defend publicly its position and to explain why the situation has occurred: the EP 'may ojfer to opportunity to the Member State (.. .) to participate in an exchange of views.' The meeting will take place preferably within the ECON committee or the committee on employment and social affairs, thus avoiding generalist debates in the plenary session. Moreover, the Member State will accept the invitation upon a vol­ untary basis (national governments are only accountable to their parliaments in the end): if the Member State declines the EP offer, it can neither be accused of infringe­ ment of the regulations, nor of violation of the principle of sincere cooperation between the EU institutions (Article 4 TEU). However, one issue remains to be addressed in this respect. Does the Member State concerned have to be represented only by the government or can the national parlia­ ment also be entitled to represent the Member State in this exchange of views with the EP committees? Indeed, the relationship between the European and national parlia­ ments has been shaped since the end of the 1980s in the EU, and the competent parliamentary committees of the EP and the national parliaments on the same subject matter very frequently hold meetings together. However, if the common nature of the institutions, democratic bodies elected by the citizens, albeit at different levels within the EU constitutional architecture,44 both of which exercise (or are supposed to exercise) budgetary authority in their domain, in principle would lead parliaments to prefer the option of inter-parliamentary meetings in order to enforce this provision, it is quite unlikely that the position of a Member State on its excessive deficit will be represented by the national rather than by the executive branch. Nonethe­ less, the hypothesis of inter-parliamentary meetings cannot be completely disregarded, since what the provisions in the regulations require is that an exchange of views with the EP occurs: there is no need for a sort of diplomatic delegation appearing before the EP acting on a precise mandate of the Member State.

В Inter-parliamentary Cooperation . . . What Is Missing? The second direction—though not clearly envisaged in the new EU legislation—to which the 'six-pack' indicates EP participation in EU economic governance is that of cooperation with national parliaments. This path is only outlined by the regulations, for instance, by the Regulation on the prevention and correction of macroeconomic imbalances, in the whereas clause, by saying: 'The strengthening of economic govern­ ance should include a closer and more timely involvement of the European Parliament and the national Parliaments' without developing this premise further in the text of the Regulation. The only provision that could induce the reader to think of inter-parliamentary cooperation is the abovementioned one about the exchange of views between the competent EP committee and the Member States which infringe the 'six-pack' or Article 121 TFEU. Notwithstanding these very limited references, the need to estab­ lish a sort of permanent channel of communication between the EP and the national parliaments in matters of economic governance is testified by the commitment of the EP to organise inter-parliamentary committee meetings between the committees of the

44 See the theory that considers the EU as a polity based on a multilevel constitution: I. Pernice, 'The Treaty of Lisbon: Multilevel Constitutionalism in Action', (2009) 15 (3) The Columbia Journal of European Law 351, 372-384.

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EP and of national parliaments responsible for the European Semester before and after the European Council in order to discuss the proposed country-specific recommendations of the Commission. Significantly, this intention of the EP was stated in between the approval of the 'six-pack' and its entry into force in the EP Resolution of 1 December 2011.45 The lack of detailed provisions on inter-parliamentary cooperation in the 'six-pack' has probably derived from the absence of agreement between the EP and national parliaments on how to arrange their relationship. Indeed, on the one hand, the EP was willing to use the legal basis offered by Article 9 of the Protocol 1 to the Treaty of Lisbon, on the role of national parliaments, since it reserves to the EP a certain discretion in defining, together with national parliaments, the organisation and pro­ motion of their effective and regular cooperation. On the other hand, there was the 'solution,' provided by Article 10 of the Protocol and preferred by national parlia­ ments, to base inter-parliamentary cooperation in the EU upon the COSAC model, on a series of thematic conferences of the EP and the national parliament committees. But this option is clearly thwarted by the EP, which does not accept to be treated as any other parliament of the Union, in terms of representation and decision-making power.46 Without doubt, the disagreement between the EP and the national parliaments on how to shape their relationship from an organisational point of view does not help the 'cause' of the enhancement of their positions in the EU decision-making process. From an overall assessment of the 'six-pack' provisions on the EP role, it emerges that the European legislator has not been particularly courageous in the institutional design of the new economic governance. Something more could have been done in terms of institutional empowerment, even considering the limited role designed by the European Treaties for the EP in the economic and fiscal policy: for instance, the Annual Growth Survey—not regulated by the European Treaties—could have been defined by the Commission together with the EP, or at least consulting the latter before its adoption; instead of being only informed, the EP could have participated in the assessment of the corrective action plans against macroeconomic imbalances, or the President of the EP could have been associated to the meeting of the Eurogroup or to the meeting of the European Council dealing with the European Semester. Unexpectedly for an international agreement negotiated beyond EU law, some of the concerns expressed about the role of the EP and its possible strengthening, including the issue of the cooperation between the EP and the national parliaments on economic governance, have been addressed by the TSCG, rather than by the EU regulations.

45 See the resolution of the EP of 1 December 2011 on the European Semester for Economic Policy Coordination (2011/2071(INI), points 46 and 47 and the resolution of 4 July 2012 on the Conclusions of the European Council meetings (28-29 June 2012) (2011/2923(RSP), point 9. 46 The aversion of the EP towards the COSAC model is testified by the EP refusal to follow Art 10 of the abovementioned Protocol for setting up the Interparliamentary Conference on the Common Foreign and Security Policy (CFSP) and on the Common Security and Defence Policy (CSDP). Finally, on the occasion of the Conference of the EU Speakers of 20-21 April 2012 the EP and the national parliaments agreed that the EP would have been represented by 16 delegates in this Conference, whereas national parliaments can send six delegates each. Therefore, the EP achieved its objective. See the Presidency Conclusions of the Conference of Speakers of the European Union Parliaments, Warsaw, 21 April 2012, http://www.parl2011.pl/prezydencja.nsf/attachments/DKUS-8SyGLC/%24File/ conclusions_PL_EN_FR.pdf.

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IV The False Problem of the So-Called 'Fiscal Compact' for the European Parliament In spite of the disputable procedure followed for its adoption, the entry into force of the TSCG does not appear to upset the position of the EP within the new economic governance, which was already weak under the 'six-pack.' Rather, the TSCG com­ plements certain aspects of the 'six-pack' as for the EP role: strictly in this regard, the opinion of those who say that the 'Fiscal Compact' does not add much to the regulations adopted after the six-pack can be shared.47 Moreover, the Treaty uses categories and regulates the activity of the EU institutions as if it were part of the EU law. In the light of Article 12 (5) of the TSCG, the President of the EP may be invited to be heard—just as the President of the ECB may—to the meeting of the heads of state and governments of the contracting parties whose currency is the euro, provided in the framework of the Treaty and called '.' This provision, which does not reflect the proposed amendment of the EP representatives, constitutes the main regret of the institution about the outcome of the negotiations. Indeed, the EP expected to participate fully in the informal Euro Summit meetings through its President, while, in the final version of the TSCG, the invitation of the EP President depends on an autonomous decision of the heads of state and governments and on the need to hear him or her. Thus, this represents only half a victory for the EP. By recalling the protocol on the role of national parliaments, attached to the Treaty of Lisbon, Article 13 of the TSCG also settles the issue of inter-parliamentary coop­ eration on fiscal policy, whose mandate is formulated in very broad terms with regard to the discussion of the matters covered by the TSCG. Following the achievement of a difficult compromise between the EP and the national parliaments, the hypothesis initially fostered by the French delegation to set up an inter-parliamentary forum aimed at excluding the EP (because only national parliaments and budgetary policies are put under constraints) has been overcome, and the final version provides for the establishment of a conference of parliamentary committees,48 although the choice for one of the two models of inter-parliamentary cooperation envisaged in Article 9 or 10 of protocol 1 remained unsettled until recently. Indeed, on the one hand, the reference to a conference of parliamentary committees does not imply the mimesis of the COSAC model, where all parliaments, European and national, are equally represented; on the other hand, while able to depart from the COSAC format, the EP and the parliaments of the contracting parties must guarantee that they meet at committee level. In the end, quite a vague compromise was finalised at the Conference of EU Speakers on 23 April 2013.49 As for the setting up of the Conference on CFSP and CSDP, the legal basis was finally found in Article 9 of protocol 1, the EP being in a privileged position compared to national parliaments. However, in contrast with this

47 Craig, n 13 supra, at 236. 48 See A. Manželia, 'Is the EP Legitimate as a Parliamentary Body in EU Multi-Tier Governance?', in Challenges of Multi-Tier Governance in the EU, Workshop organised by the Policy Department of the EP on Citizens' Rights and Constitutional Affairs, 4 October 2012. 49 See Presidency Conclusions of the Conference of Speakers of EU Parliaments, Nicosia, 21-23 April 2013, at 5-6. According to the Speakers, the Conference shall meet twice a year, starting in the second half of 2013 (during the Lithuanian Presidency), and be coordinated with the European Semester cycle.

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previous benchmark, the size and the composition of the parliamentary delegations have not been fixed once for all. The EP can send up to 16 MEPs to the Conference, whereas each national parliament can appoint a delegation composed of 1 up to 6 MPs. While this decision leaves the parliaments free to decide on a case by case basis, nonetheless it can produce instability and unpredictability with regard to the composition of the Conference and in particular in the balance between the European and the national delegations. Moreover, the Conference of EU Speakers has addressed a further crucial point stemming from the Article 13: who is entitled to take part in these inter-parliamentary conferences. Indeed, for the first time, and in contrast with the approach adopted within the EP, a strict interpretation of the Article 13 TSCG would have suggested that only the parliaments of the Member States which signed the treaty—-thus exclud­ ing the Czech and the UK Parliaments—were allowed to participate together with the EP. How dialogue, mutual trust amongst Member States and public debate on budg­ etary policies can be fostered in the EU, if some parliaments are marginalised, remains a mystery. In principle the intergovernmental logic does not affect the functioning of the inter-parliamentary cooperation, which follows an inclusive, rather than an exclu­ sive, purpose. In fact, in compliance with this interpretation, the Conference of EU Speakers has agreed that the new Conference consists 'of representatives from all the national parliaments of Member countries of the EU and the EP, in particular from relevant committees.' A last critical aspect of the TSCG regards the position (or, rather, the absence of a recognised position) of the EP in the procedures provided in the international agreement—but not (to date) in the 'six-pack' and the 'two-pack'—and dealing with the introduction of the clause on the balanced budget (the 'golden rule') in national legal systems and the case of failure to comply with this obligation, when an action can be brought before the CJEU. Perhaps, the 'economic dialogue' could be extended to these cases, too: the Commission could inform the EP about the amendments to the national law and the 'golden rule,' as well as its infringement; the EP could have the opportunity to invite the Member State concerned for an 'exchange of views' on this crucial issue, as in the present formula of the 'six-pack' and the 'two-pack.'

V The Adoption of the 'Two-Pack' and the Slight Enhancement of the EP Position The same formula of the 'economic dialogue' provided by the 'six-pack,' in terms of 'exchange of views' and invitation of representatives of other institutions to be heard before the EP is replicated by the 'two-pack.' However, thanks to the amendments adopted first by the EP plenary on 13 June 2012 and subsequently confirmed by the EP position of 12 March 2013, 'economic dialogue' has been extended to a broader variety of hypotheses than in the past, in particular to the recommendations adopted under the enhanced surveillance procedure and during the post-programme surveil­ lance as well as on draft budgetary plans. In fact, as it happened during the legislative procedure for the adoption of the 'six-pack,' also with regard to the two-pack and especially for the draft regulation on common provisions for monitoring and assessing draft budgetary plans, the EP has worked to increase the degree of 'democratic commitment' of the proposal and thus to enhance its position compared to the original text of the Commission.

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For instance, according to the amendments proposed by the EP and then adopted, the Commission is enabled to adopt delegated acts when monitoring the draft budg­ etary plans of the Member States subject to excessive deficit procedure.50 This power of the Commission, which was not provided originally and which is put under severe constraints, is likely to reinforce the EP. Indeed, the EP, as well as the Council, enjoys a veto power against the delegated acts of the Commission and the power to revoke the delegation at any time. Therefore, the EP could have a say in the oversight of draft budgetary plans, at least by blocking the action of the Commission particularly as for the definition of the content of the national reports to be provided by the Member States showing an excessive deficit. Moreover, the Commission is put under new duties of information in favour of the EP. The relevant committee of the EP—the ECON Committee—has to be informed by the Commission on a regular basis about any measure taken under the enhanced surveillance and every quarter on the assessment accomplished on the Member States subject to enhanced surveillance and the progress they have made. The Commission will be also bound to disclose only to the Chair and the Vice-Chairs of the competent EP committee—ECON, but possibly the employment and social affairs (EMPL) committee, too—the (confidential) information about the preparation of draft macr­ oeconomic adjustment programmes on the part of the Member States requesting financial assistance and then the conclusions drawn from the monitoring of such programmes. In spite of the emphasis put on the 'right' of the EP to be informed about the economic and budgetary surveillance and on the oversight power of the EP on national draft budgetary plans, no provisions of the 'two-pack' have been devoted to favour a combined action of the EP and of the national parliaments. Also in the light of the Articles 3(2) and 13 TSCG, which entered into force before the agreement on the 'two-pack,' the new regulations could have introduced new tools for allowing a closer cooperation between the EP and national , underestimating the fact that multilevel budgetary procedures can deemed to be legitimate only if put under the joint scrutiny of the EP and national parliaments.

VI Some Remarks on the (Wrong) Idea to Create a Multi-Speed Parliament The reform of the economic governance will have remarkable effects on the internal procedures and organisation of the EP. Some of these effects are not only predictable but also desirable. For example, the power of the ECON committee (and of its Chair and Vice-Chairs) is likely to increase, being the linchpin of the new procedures of information and consultation of the EP by the other EU institutions and the Member States provided under the new Regulations and the TSCG. Also the activity of inter-parliamentary cooperation on the economic governance in which the EP is now involved seems to rely to a great extent on the ECON committee. There are also

50 On delegated acts in the EU, see R. Schütze, '"Delegated" Legislation in the (new) European Union: A Constitutional Analysis', (2011) 74 (5) Law Review 661, 682-687; S. Peers and M. Costa, 'Accountability for Delegated and Implementing Acts after the Treaty of Lisbon', (2012) 18 (3) European Law Journal 427, 447-455; and J. Mendes, 'Delegated and Implementing Rule Making: Proceduralisa- tion and Constitutional Design', (2013) 19 (1) European Law Journal 22, 31-40. In particular, Héritier, n 33 supra, at 44-49 argues that and delegated acts have gradually made the EP more influential in the EU institutional landscape.

Ό 2013 John Wiley & Sons Ltd. 181 European Law Journal Volume 20 proposal that foresees the establishment of a sort of 'super-committee' of the EP, composed of MEPs from the ECON, the EMPL and the Budget committees of the EP.51 Moreover, it is possible that the number of inter-parliamentary meetings, the hearings of MEPs in national legislatures and the attendance of national MPs at the meetings in the EP will further increase in the near future. However, there is an idea circulating within the EP and seconded also by some scholars, with regard to the current shape of the EP, that seems highly undesirable:52 the creation of a multi-speed EP that debates and decides on the basis of a different composition, according to the subject matter concerned, in particular whether it affects all Member States or only those of the Eurozone. The proposal of setting an EP à la carte, for example allowing the ECON commit­ tee to sit excluding MEPs elected in 'non-Eurozone' constituencies, depending on the matter under debate, is unconceivable under the existing Treaties and is against the nature and the spirit of the EP as a transnational Assembly for Europe, where all EU citizens are represented and, thus, where all MEPs are equipped exactly with the same powers. Once elected, they represent EU citizens (the wording of Article 14 TEU has expressly abandoned the reference to the 'peoples' of the Member States gathered in the European Community) and not the Member State from where they come from (then, again, the country could be different considering the nationality or rather the electoral constituency). If we opt for a differentiated composition of the EP for economic governance, then this format shall be logically extended also for criminal matters, for issues dealing with the , and for all decisions concerning opt outs and enhanced cooperation (eg on the linguistic regime for the European patent, in matter of divorce, on the financial transaction tax). Therefore, we would build up a highly fragmented and dysfunctional institution; not counting the fact that it is always possible for a Member State to reverse its decision and to turn to a full participation and coopera­ tion on a certain matter, thus causing instability and unpredictability with regard to the EP internal organisation and business. Even if, following a revision of the Trea­ ties, a multi-speed EP is established, as for the economic governance, choosing which MEPs are going to participate or to be excluded is not easy at all. Indeed, one can limit the involvement only to MEPs from the Eurozone countries, but the excluded MEPs can be found in rather different positions, some of them coming from States that legally reject euro (the UK and ), others from a State that does not adopt the euro de facto () and then others from States that are very willing to choose the euro as currency, but this is prevented by the lack of compliance with economic and financial standards (, etc.). The same problems arise when looking at the TSCG. Should the involvement of the MEPs be limited only to those elected in the Contracting Parties or only to the Eurozone Contracting Parties? And, finally, with regard to economic governance, there are many other different positions that, if we follow the logic of the EP à la carte, could impose a different treatment and participation in the EP procedures: the Member States that asked and

51 Y. Bertoncini, n. 26 supra, at 4, describes this committee as a 'sub-committee' on the eurozone, which is actually a cross-sectional committee composed of MEPs of the committees on Economic and Monetary Affairs, on Employment and Social Affairs, and on Budget, regardless of the Member State in which they were elected. Thus, the membership would be open to all MEPs. 52 See J.-C. Piris, n. 21 supra, at 106-120; G. Majone, n. 10 supra, at 21-26; and A.J. Menendez, 'The Existential Crisis of the European Union', (2013) 14 (5) German Law Journal 453, 518.

182 -D 2013 John Wiley & Sons Ltd. March 2014 The European Parliament in the Economic Governance benefit from a rescue package (, Greece, Ireland, and ), the Member States showing an excessive deficit (as it was the case in the past even for and ) or macroeconomic imbalances etc. Given the heterogeneity of the situations, is impossible to define clearly and once for all which MEPs can or cannot participate. Therefore, the idea of a multi-speed EP cannot even be imple­ mented according to a coherent standard in the practice. Finally, as for the voting system, the EP is used to decide by simple majority, and in this institution there is no room for a national delegation to impose its view upon the others by unanimity of by qualified majority. The proposal to create a multi-speed EP would lead to parliamentary decisions taken by national quotas, thus granting a weighted vote to each MEP, according to where s/he was elected, or letting only some MEPs vote, both in committee or in plenary. In other words, the decision making in the EP would resemble that of the Council, the institution representing the Member States and reflecting their different status—basically granting or not the right to vote—as long as an opt out or an enhanced cooperation are concerned, and this would create an inconsistent duplication. By the same token, the EP would be deprived of its 'essence of Parliament,' that is to represent, to debate and to accom­ modate in a democratic way (thus not excluding and marginalising some of the interests at stake and minorities' positions) different points of views.

VII Conclusion. 'No Taxation without (Parliamentary) Representation': An Effective Principle in the EU Legal Order? The process of reform of the European economic governance framework has, in many regards, just begun and is still ongoing.53 The TSCG entered into force on 1 January 2013, following the ratification of more than 12 contracting parties; 2012 was the first year in which the cycle of the European Semester was completed and the 'six-pack' was implemented; two new regulations, which are part of the so-called 'two-pack' have just been agreed, following a long first reading of the ordinary legislative procedure.54 Although the European economic governance is still under reform, and possibly it is too early to draw any ultimate conclusion on the EP status, however, some critical points can be highlighted. First of all, the position of the EP has to be regarded in relation to the new powers acquired by the EU institutions and to the powers 'lost' by national parliaments. Indeed, compared to the framework designed by the previous Stability and Growth Pact, the position of the EP has certainly improved: now the EP has the right to be informed and to be consulted on certain occasions; can invite the Commission, the Council, and, where appropriate, the President of the European Council and of the Eurogroup; can foster an exchange of views within its competent committees with

53 See Y. Mény, 'Conclusion: A Voyage to the Unknown', (2012) 50 (si) Journal of Common Market Studies 154, 163. 54 The adoption of such regulations was urged by the Commission, the Council, the European Council and the European Central Bank (see H. Von Rompuy, in collaboration with J.M. Barroso, J.-C. Juncker and M. Draghi, Towards a Genuine Economic and Monetary Union, 5 December 2012, at 8, and the European Council Conclusions of 14 December 2012, para 5), while many concerns were expressed by the EP. Indeed, these proposals caused disagreement not only amongst Member States, but once again also in the EP: for instance, MEPs from the socialist group decided to abstain in the vote on 13 June 2012, claiming for further amendments that would have made the proposals more socially oriented.

Q 2013 John Wiley & Sons Ltd. 183 European Law Journal Volume 20 the Member States—although it is not clear whether it can refer to the national government or the parliament—affected by a Council decision, recommendation and sanction or by a warning from the Commission. The EP 'dialogues,' but does not enjoy decision-making powers.55 Is this enough in terms of democratic legitimacy and accountability in a system in which the Commission has been significantly strength­ ened by the mechanism of the reversed qualified majority voting in the Council, and where, according to one of the regulations of the 'two-pack,' the Commission can request to amend the draft budgetary plans (the budgets) of the Member States? The EP is involved too late; it neither receives the national reform programmes, the stability and convergence programmes and the draft budgetary plans directly, nor can it concur in fixing the strategic priorities of the fiscal year and the European Semester or review the country-specific recommendations once adopted by the Council. In contrast, the strategic priorities are defined by the European Council, an institution which is not democratically accountable to the EP and only accountable in a limited way to the national parliaments. Not only is the authority over budgetary policy and the decision on the adoption of (or, rather, the authorisation to adopt) structural reforms now demanded at EU level, which undermines the role of national parliaments in these fields, but this power is assigned in Brussels to other institutions than that directly elected by citizens. This situation, which is further complicated by the divergence amongst Member States that participate with different degrees of commitment and of binding effects in EU eco­ nomic governance,56 is susceptible to create a new democratic deficit. This is why it has been argued that the role of the EP could be strengthened, because of its way of working, substantially inclusive of all its different components (political groups, national delegations, intergroups, pro and cons European integra­ tion factions), and although such common consensus amongst political groups has proved to be quite difficult to build up on the proposals of the 'six' and the 'two- packs.' With this regard, the internal divisions of the EP and particularly the perplex­ ity of the socialist group have certainly undermined its capacity to struggle for more incisive powers in the framework of the EU economic governance. The regular and structured cooperation between the EP and national parliaments seems to be the best solution to stress the points of convergence and the shared interests amongst parliamentarians and citizens of different Member States, instead of aiming at achieving exclusively national interests. From this perspective, the EP, acting in coordination with national legislatures, could become the pivot for forging mutual trust amongst European citizens,57 by insuring that every decision on Euro­ pean governance is carefully and publicly debated before it is adopted, also taking into account the positions of national public opinions. The EP cannot act in solitude anyway. Rather, in order to overcome the traditional distrust in their relationship, the EP should push the national parliaments to 'filter' what happens at domestic level through the lens of the European common interest, for instance, in having financial stability and growth.58 This joint commitment on the

55 See The EP Resolution of 23 May 2013 on future legislative proposals on EMU: in response to the Commission communications (2013/2609(RSP)), para 7. 56 See Snyder, n 19 supra, at 715. 57 See Manželia, n 48 supra-, Joerges, n 22 supra, at 9; and Maduro, n 15 supra, at 5-12. 58 As the Treaty of Lisbon and also the case-law of national constitutional Courts show, the role of national parliaments in the construction of the EU architecture and in the use of the tools provided

184 Φ 2013 John Wiley & Sons Ltd. March 2014 The European Parliament in the Economic Governance part of the EP and the national parliaments, preferably under the coordination of the EP, is also required for the democratic scrutiny and oversight of economic govern­ ance. Indeed, the procedures of the European Semester are so complicated, between the national and the European levels and between different institutions at the same level, that at least two disturbing consequences can be envisaged if parliamentary actors are not properly involved: the first is that parliamentary scrutiny is ineffective if it is not carried out as multilevel parliamentary scrutiny,59 based upon strong coordination between the EP and national parliaments.60 The second consequence is that, in the EU economic governance, there is confusion about who decides what on behalf of whom: the 'chain of responsibility' is quite clearly depicted within the Member States, becomes less precise in the EU institutional framework, and almost non-understandable in the relations settled between national and EU institutions on budgetary and economic policy. Since the American Revolution, it has been widely acknowledged that political responsibility, parliamentary representation and fiscal policy are inherently interre­ lated: 'no taxation without representation' the motto recites. This is one of the basic assumptions of the modern theory of representation and of the legitimacy of parlia­ ments. However, the risk within EU economic governance is that fiscal austerity is put in place and pursued, or, at least, is perceived as being pursued by an authority which is lacking in representative credentials according to democratic standards, and by marginalising the institutions which directly represent the citizens affected by these policies, to wit the EP and the national parliaments.

First submission: January 2013 Final draft accepted: June 2013

by the reform of the economic governance cannot be underestimated: see n 6 supra and, in detail, P.L. Lindseth, Power and Legitimacy. Reconciling Europe and the Nation-State (Oxford University Press, 2010), at 198-249. 5' B. Crum and J.E. Fossum, 'The Multilevel Parliamentary Field: A Framework for Theorizing Repre­ sentative Democracy in the EU\ (2009) 1 (2) European Political Science Review 249. 60 See the interventions of the President of the EP, , to the European Council of 30 January 2012 and of 13 December 2012.

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