National Parliaments and EU Fiscal Integration

• Published date: 01 March 2016
• DOI: http://doi.org/10.1111/eulj.12172
• Date: 01 March 2016

National Parliaments and EU Fiscal

Integration

Davor Jančić*

Abstract: This article analyses the impact of the euro crisis on national parliaments

and examines their response to the deepening of EU fiscal integration and the

correspondent limitation of their budgetary autonomy. It argues that the sovereign

debt crisis has provoked the emergence of new channels of parliamentary involvement

in EU economic governance. National parliaments have acquired various rights of

approval in the European Semester, strengthened the accountability of national

governments, reinforced their scrutiny over budgeting, improved their access to

information, and created domestic and supranational avenues for deliberation and

political contestation of European integration. In these respects, they have undergone

further Europeanisation. While these reforms do not outweigh the centralisation of

EU powers, they represent an embryonic step in the parliamentary adaptation to

the nascent EU fiscal regime. Yet they are unlikely substantially to influence EMU

policy-making processes, because of the democratic disconnect inherent in the EU’s

multilevel constitution.

I Introduction

The euro crisis, culminating in the inability of certain Member States to service their

sovereign debt,

1

has led to emergency EU decisions to prevent further fallout in

*

Senior Researcher in EU Law, T.M.C. Asser Institute The Hague, Faculty of Law, University of

Amsterdam. Previously British Academy Newton Fellow, Department of Law, London School of

Economics and Political Science. Research for this article has been partially funded by the British Academy

through its postdoctoral Newton International Fellowship scheme. An early draft of this article was

presented at the International Conference ‘National Parliaments in the European Integration Process: Finally

“Learning to Play the European Game”in the Aftermath of the Lisbon Treaty Reforms and the EU Economic

Crisis?’, held at the European Parliament Office in Dublin, Ireland, from 6–7 December 2013. A revised ver-

sion of it was presented at the 1

st

Annual Conference of PADEMIA (European Commission Erasmus Net-

work on Parliamentary Democracy in Europe) held in Brussels from 12–13 June 2014. The author wishes

to thank Prof. Damian Chalmers, Dr Floris de Witte, Dr Andrew Lang, the Editor-in-Chief, two anony-

mous reviewers and the conference participants for invaluable and constructive feedback on previous ver-

sions of this article. The author is also grateful to Prof. Carlos Closa Montero, Prof. Nicola Lupo, Dr

Cristina Fasone and Dr Violeta Ruiz Almendral for a very insightful exchange of views on these topics dur-

ing the Summer School on Parliamentary Democracy in Europe, which took place at the LUISS University

School of Government in Rome in July 2014. The author is also thankful to François Sicard and Aude

Bornens for providing first-hand information on the French Parliament.

1

See: A. Hinarejos, ‘Fiscal Federalism in the European Union: Evolution and Future Choices for the EMU’,

(2013) 50 Common Market Law Review, 1621–1642; C. Hofmann, ‘A Legal Analysis of the Euro Zone

Crisis’, (2013) 18 Fordham Journal of Corporate and Financial Law, 519–564.

European Law Journal, Vol. 22, No. 2, March 2016, pp. 225–249.

© 2016 John Wiley & Sons Ltd. 9600 Garsington Road, Oxford, OX4 2DQ, UK

and 350 Main Street, Malden, MA 02148, USA

the Eurozone.

2

The reform of EU economic and financial governance was carried

out by non-EU and EU instruments.

3

The key former instrument is the Fiscal

Compact,

4

whereas the latter were adopted in the form of a ‘Six Pack’

5

of five

regulations and a directive and a ‘Two Pack’

6

of regulations. These instruments

contain only sporadic references to national parliaments (NPs), while instituting a

European Semester procedure of economic policy coordination and requiring

domestic implementation of a balanced budget rule by means of binding and

permanent legal provisions.

7

These reforms of the Economic and Monetary Union (EMU) have resulted, on

the one hand, in increased powers of the Union’s executive branch, primarily the

European Council, the Commission and the Council,

8

and, on the other, in the ex-

acerbation of the problem of their democratic accountability.

9

The hybrid and ex-

ecutive-dominated approach to crisis resolution carries adverse implications for

parliamentary control over fiscal policy making.

10

For the first time, one may speak

of ‘budgetary and economic co-responsibility of Member States’,

11

which means

that this responsibility is no longer fully autonomous but shared to some extent

with the Union. Pernice claims that ‘there is no such thing as budgetary autonomy

2

See: K. Tuori and K. Tuori, The Eurozone Crisis:A Constitutional Analysis (Cambridge University Press,

2014); M. Buti and N. Carnot, ‘The EMU Debt Crisis: Early Lessons and Reforms’, (2012) 50 Journal of

Common Market Studies, 899–911; A.H. Hallett and S.E.H. Jensen, ‘Fiscal Governance in the Euro Area:

Institutions vs. Rules’, (2012) 19 Journal of European Public Policy, 646–664. See also: Special Issues of the

Journal of European Integration on ‘Redefining European Economic Governance’(2013, Vol. 35, No. 3)

and on ‘Coping with Crisis: Europe’s Challenges and Strategies’(2014, Vol. 36, No. 3).

3

J. Ziller, ‘TheReform of the Political and Economic Architecture of the Eurozone’s Governance: A Legal Perspec-

tive’, in F. Allen et al. (eds.), Governance for the Eurozone:Integration or Disintegration? (Financial Institutions

Center at Wharton Press, 2012), 115–138, at 115.

4

Treaty on Stability, Coordination and Governance in the Economic and Monetary Union, available at www.

consilium.europa.eu/european-council/pdf/Treaty-on-Stability-Coordination-and-Governance-TSCG.

5

Regulations Nos. 1173/2011, 1174/2011, 1175/2011, 1176/2011, 1177/2011 and Directive 2011/85/EU, OJ L 306 /1.

6

Regulations Nos. 472/2013 and 473/2013, OJ L 140/1.

7

D. Jančić,‘Parliamentary Involvement in the Economic and Monetary Union after the Euro Crisis’,in

N. Lupo and C. Fasone (eds.), Interparliamentary Cooperation in the Composite European Constitution

(Hart Publishing, 2016), 183–204.

8

U. Puetter, ‘Europe’s Deliberative Intergovernmentalism: The Role of the Council and European Council in

EU Economic Governance’, (2012) 19 Journal of European Public Policy, 161–178, at 161; D. Schwarzer,

‘The Euro Area Crises, Shifting Power Relations and Institutional Change in the European Union’, (2012)

3Global Policy, 28–42, at 39; D. Dinan, ‘Governance and Institutions: Implementingthe Lisbon Treaty in

the Shadow of the Euro Crisis’, (2011) 49 Journal of Common Market Studies, 103–121, at 119; P. de

Schoutheete, ‘The European Council’, in J. Peterson and M. Shackleton (eds.), The Institutions of the

European Union (Oxford University Press, 2012), 43–67, at 56.

9

D.G. Mayes, ‘Governance and the Euro Crisis’,inE.Chitiet al. (eds.), The European Rescue of the

European Union?The Existential Crisis of the European Political Project (2012) 3 ARENA Report,

257–294, at 260. See on the underlying democratic deficit in: C. Joerges, ‘What Is Left of the

European Economic Constitution? A Melancholic Eulogy’, (2005) 30 European Law Review,

461–489, at 476.

10

M.P. Maduro et al.,‘The Euro Crisis and the Democratic Governance of the Euro: Legal and Political

Issues of a Fiscal Crisis’,inThe Democratic Governance of the Euro (2012) 8 RSCAS Policy Paper,

3–12, at 3; R. Bieber, ‘Observer–Policeman–Pilot? On Lacunae of Legitimacy and the Contradictions of

Financial Crisis Management in the European Union’, (2011) 16 EUI Law Working Paper,5.

11

A. de G. Merino, ‘Legal Developments in the Economic and Monetary Union During the Debt

Crisis: The Mechanisms of Financial Assistance’, (2012) 49 Common Market Law Review,

1613–1646, at 1615.

National Parliaments and EU Fiscal IntegrationMarch 2016

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