European Economic Governance and Parliamentary Representation
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Ь European Law 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 Parliament? Cristina Fasone* Abstract: This article aims to analyse the European Parliament'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 parliaments 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 Treaty of Lisbon, 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, Italy. 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 European Union 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 democratic deficit is likely to emerge, since the fiscal sovereignty 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 executive 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 Europe: Which Way Forward?', 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 Bundestag 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? (Oxford University Press, 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 euro 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 the European Semester? Increasing the Role of the European Parliament', (2011) 09 Britegel Working Paper, study conducted for the EP's committee on economic and monetary affairs, at 9-10.