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Economic & Monetary Governance in the EU: A Constitutional Perspective

39 important questions on Economic & Monetary Governance in the EU: A Constitutional Perspective

Which article introduces the euro and economic and monetary policy?

Art.119TFEU

What is the idea behinf the economic policy according to art.120,121

U. It is to create a coordination of the MS’s policies. The MS are still in charge, they shall conduct their economic policies, but they have to work towards a common objective, achieving the objectives of the EU in this field. In order to do so in a good way, they must coordinate their policies, they coordinate within the Council. So we are looking at a policy that is MS driven, with MS that will coordinate their economic policies to have a common concern together with the Council

What are the two promps the economic and monetary union has?

A preventive one and a corrective arm. These are the two prompts of Economic and Monetary policy.

What is the preventive arm?

It has set up a system of coordinated exchanges that has not just only coordinated but also steered towards certain types of (inaudible) at national level. The steering is done by what is known as broad guidelines on the economic policies of the MS of the EU. The mechanism that regulates the preventive arm of the economic policy of the EU is set out in article 121 and indeed the first step is that the steering is done by setting broad economic guidelines at European level.

What if there is a risk in the monitoring mechanism from art.121 3 accrdoing to 121 4

the monitoring performed by the commission results in a finding that there is a risk, that the MS are departing from their obligation in the context of the broad economic guidelines. the commission adressed a warning to the ms . The council on reccomendation from the commission can adress the neccessary reccomendations. The council, can on proposal of the commission decide to make it public

When the council votes with a QMV does the concerning state also vote?

No, art.121 4

What is necessary when recomendations are made public and what kind of pressure does it give?

That there are no sanctions under 121, citizen, stakeholder etc.

What is the multisurveilence mechanism?

Now we often refer to this coordination of economic policies (broad economic guidelines, monitoring mostly by the commission with the council in the end reporting, then if there is a risk of breach of the broad economic guidelines or jeopardizing the EMU the possibility of a warning by the commission and even a recommendation possibly even public by the council) this entire mechanism is often referred to as a multilateral surveillance mechanism

What principle is laid down in art.123 tfeu concerning ms debt?

central banks, at national level or EU level, shall not support directly the debts of the MS. This is a rule that is enshrined in art. 123 that is very powerful and that has been particularly debated last spring in a context of a ruling by the German Federal Constitutional court in the Weiss case

What is the s the prohibition of privileged access by public authorities to financial institutions (art. 124 TFEU)

art. 124 prohibits reliance on private sector financial institutions in a way that would treat public authorities different from any other private actor. This is to make sure that the financial market is not distorted in favour of a specific MS.

What is the duty to avoid the duty to avoid excessive government deficits (art. 126(1) TFEU).

The idea is: if you want to belong to an economic and monetary union that is healthy, then each MS has to act responsibly in managing its own economy and to avoid excessive government deficits.

How is the EFSM created and what is it=

European Financial Stabilization Mechanismf art. 122 TFEU in 2010 as response to the crisis in certain MS of the EU.

Allot of mechanism are adopted on the basis of 122 like sure, what is sure?

It’s a support mechanism to mitigate unemployment risk in emergency. SURE has already been used in the past few weeks to assist a number of MS to fight against unemployment and to support people who are losing jobs in the context of the COVID 19 crisis.

Where can we find the corrective arm in the economic polic?

Art.126 tfeu

In 1 and 2 of art.126 tfeu prohibition of excessive deficit is named, what is an excessive deficit accroding to protocol no.12

The Commission will keep an eye on two criteria spelled out in protocol no. 12 on the excessive deficit procedure (EDP), but it is also further flashed out in legislation that we will look at later on. The common figures to indicate what an excessive deficit are: 1. If a MS is exceeding 3% deficit on an annual basis; 2. and it can also be calculated by reference to the overall governmental debt in case of an excess by 60% of governmental debts.

What procedure will be put in place? If there is a deficit? And how is it called?

If these thresholds are overstepped, then a procedure may be put in motion which is set out in §3-14. That procedure is known as the excessive deficit procedure.

What is the excessive deficit procedure art.126 3-14 tfeu

3 - a report is made
5 -The financial committee gives an opinion on this report and the report will then be followed up by some monitoring, which can lead to the Commission considering that there indeed exists, or is likely to occur, an excessive deficit in a MS. In that case the commission will inform the MS and the council.

What happend if the council is informed by a excessive deficit procedure (5)-14

In that case the commission can decide if it finds the situation serious to propose a finding of the existence of a excessive deficit, this will ultimately be observed by the council (paragraph 6). - This lead me to the next step of the procedure paragraph 7: if the council that there is a deficit it will adopt a recommendation which it addresses to the MS in which it specifies what needs to be done as well as the time limit for the MS to align its own policies and to limit the risk or to stop the excessive deficit.

Can the commission start an infringement procedure?

No The infringement action is not available in that field.

What is the primary objective of the monetary union

primary objective in this area is to maintain price stability. To make sure a basic level of stability of the economy of the MS through price stability.

What is one of the keyfeatures of the ecb?

One of the central features of the ECB is that it’s meant to be independent,

In which art can we find the rules about adopting measures specific to ms with a euro?

in the context of these articles 121, 126 the council shall adopt measures, specific to the MS whose currency is the euro. In other words, art. 136 TFEU allows to add EU legislation that is only relevant for euro area MS.

How are decisions regarding 136 eurozone voted?

for eurozone specific instruments only those MS vote. It’s the same if you use the rule of law mechanism against Hungary or Poland, then these countries are not taking part in a vote against themselves, that makes sense.

What is special about the eurogroup

It is informal but in th eprotocol 14 is a formal duty to meet

HOW IS TH e eurogroup composed?

Of ministers of the ms.

Is protocol 14 ot 136 tfeu enchanted cooperation?

protocol 14 on the Euro group and the entire art. 136 TFEU could be understood as a form of enhanced cooperation because it allows a limited number of MS to move forward. But formally it’s not called an enhanced cooperation because the word didn’t exist when art. 136 was shaped

What is enchaned cooperation?

enhanced cooperation is a mechanism made available by EU law to allow a number of MS to move forwards towards more integration together even if not all the MS agree. It’s an empty box, it’s a mechanism that can be used in any area of EU law to push it forward in any area of EU law even if not all the MS agree. So enhanced cooperation was primarily created by the Treaty of Amsterdam and reshaped too what it is today by the Treaty of Lisbon

Whos competence is monetary? And whos economic

Exclusive competence of eu and Whereas art. 5 of the TFEU identifies economic policy as a policy where the Member States shall coordinate their actions. The Council shall adopt broad guidelines and specific provisions apply to the eurozone, art. 5(1)2.

What does the european semester mean?

The European semester is nothing but a more sophisticated version of the monetary mechanism provided for in art. 121(2)(3)(4) of the TFEU. What is a more sophisticated version? Well, there are broad economic guidelines, you remember, that’s what shall take place on the base of art. 121(2). These are complemented with employment guidelines, adopted on the basis of art. 148(2)

What does council regulation 1466 do more?

the Regulation also provides specific requirements for Eurozone Member States. For example, there’s a procedure that consolidates art. 121 for Eurozone Member States

What does art.6 regulation 1466 establish?

(2), it establishes a number of additional means of pressure against a Member State, for example there are time limits, so there is a sort of like clock ticking and there is also what is often referred to in art. 6(2)5, you will see there is a reference to what is often known as reverse majority voting.

Articles where monetary and economic policy is named?

Art.3(4)
art.119

How was the economic and monetray eu established at first which stages?

1: reduce economic diffeences, common market.
2:supervisory,monetary hands ms
3: euro

What is denmarks special status?

It is derigating state but with a special protocl so it can join.

What is multiateral surveillence and does it count fornon third statge emu ms?

Council surveills, it is applicable to all.

What is the stability and growth pact?

Ms have to show each year means of stabilityor convergence programmas that their budgetary situation provids an adequate basis for price stability and sustainble growth or that they are taking adjustments.

What steps are taken towards a banking union

- financial supervision in th form of the European Banking Authority EBA en European securities and markets autorithy ESMA.

Under which system is the monetary policy in emu dtermined?

ESCB the european system of central banks.

How does ECB operate , art.130 tfeu?

ECB and national central baks operate within the ESCB indepently from national or union political authorities.

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