On lacunae of legitimacy and the contradictions of financial crisis management in the European Union

Abstract:

In matters of economic policy, the institutions of the European Union exercise uncoordinated functions of observer, policeman and pilot. Under normal circumstances the EU institutions act as observer of the economic policies of the Member States. This “soft law” approach contrasts sharply with their role to act as “policemen” and as a pilot, when excessive debts arise in the Member States. The contrast is illustrated by the "friendly advice", given to Greece in 2009 and the peremptory command addressed to this country in 2010/2011. A stable legal framework would require the elimination - or at least, attenuation - of the mismatch between the feeble powers to shape policy and the robustness of the powers to intervene in case of excessive public deficit and to impose policy sanctions. EU action needs to be targeted at an earlier stage in the process, so that ex post facto intervention with sanctions can be avoided. Furthermore, the present rules on EMU place at risk the legitimacy of both the EU and Member States. Neither national parliaments nor the European Parliament are involved in the shaping of and the decision on Recommendations for economic policy. In the longer term, there is no alternative: the EU will have to be granted powers to take binding decisions in the area of economic policy, and, in parallel, to reconfigure the decision-making system so that economic and social policy measures have democratic legitimacy. In any event, the only reliable “pilot” is the “institutional framework” as described in Article 13 of the TEU.