Last Friday, the Second Annual Conference of the Amsterdam Centre for European Law and Governance (ACELG) took place in the historic Trippenhuis building of the Royal Netherlands Academy of Arts and Sciences (KNAW), not far from the Centre’s home in the heart of Amsterdam. The conference, entitled ‘A New Role for the EU in Economic Governance: Lessons from Emerging and Existing Models’, offered a timely evaluation of the latest developments in the fields of the Economic and Monetary Union (EMU), the financial sector, competition law, and food safety. True to ACELG’s ambitions, this wide range of topics attracted a diverse audience of academics, lawyers, and policy makers.

By Chris Koedooder

The first of two morning sessions focused on the EMU – which was characterized by the organizers as an emerging model of governance. Of course, nowadays, the EMU can hardly be labeled as a nascent EU policy area. After all, the Maastricht Treaty, which set out, among other things, the convergence criteria for the Member States that would adopt the euro as their common currency, was signed twenty years ago. However, the ongoing euro area sovereign debt crisis – more popularly known as the ‘euro crisis’ – has led to an in some respects rigorous overhaul of EMU governance. In particular, an overhaul of the ‘E-part’ of EMU governance: the coordination of the economic policies of the euro area Member States. So it is perhaps more accurate to state that the topic of discussion was the emerging model of the so-called “genuine Economic and Monetary Union” (cf. Van Rompuy’s latest Interim Report). This enhanced version of the EMU is indeed still very much under construction.

It was within this context that prof. Fabian Amtenbrink (Erasmus University Rotterdam), always a charming and inspiring speaker, presented a paper on responsive and responsible European economic governance. On the basis of these two distinct but interconnected notions, he examined the EU’s answers to the euro crisis and the legal challenges it raises. Benjamin Angel (European Commission, DG ECFIN) and prof. René Smits (ACELG) then kicked off the discussion, which was led by prof. Deirdre Curtin (ACELG).

Mr. Angel, an EMU expert who had a hand in drafting many of the measures employed by the EU to counter the Euro Crisis, illustrated why the Member States silently built the world’s largest international financial organisation, the European Stability Mechanism (ESM), outside the EU budget and outside the Treaty framework. Maybe not surprisingly, given the many (constitutional) lawyers in attendance, his modest suggestion that national constitutions might have to be changed to accommodate the new architecture of EMU governance met with quite some resistance. In any event, it was an excellent way of enlivening an already interesting discussion.

The second morning session, which focused on the financial sector, was far from the “massive BlackBerry moment” one discussant, Patrick Pearson (European Commission, DG MARKT), jokingly made it out to be at the start of his presentation. First, prof. Niamh Moloney (London School of Economics), who presented a rich paper, lucidly conveyed, despite the abundance of acronyms and technical terms that are so characteristic of this field, the extent to which the European Supervisory Authorities represent a new form of governance for EU financial markets. Next, prof. Adrienne de Moor-van Vugt (University of Amsterdam) pointed out that the developments described by prof. Moloney might be new to the financial sector, but are certainly not unprecedented in other areas. What is truly new is the speed of the developments in the financial sector, she stated.

Mr. Pearson, well informed and a captivating speaker, then stressed the risks associated with a central counterparty’s (CCP) default. In contrast to the high-profile bailouts of euro area Member States, bailouts in this field remain somewhat obscure to ordinary citizens, but it is them who will be paying when a CCP goes ‘down the drain’, he warned. All in all, the discussion during this second session, led by prof. Pieter Jan Kuijper (ACELG), will certainly have inspired many attendants to read up on ESMA and the like once they got home.

While the afternoon session was definitely as informative as the morning sessions, I will leave it up to my ACELG colleagues who are more well-versed in competition law and/or food safety regulation to blog about its contents. Here it suffices to state that both prof. Imelda Maher (University College Dublin) and prof. Ellen Vos (Maastricht University) gave superb presentations on, respectively, effectiveness and accountability in EU competition law and governance, and EU food safety governance. Subsequently, prof. Luís Domingos Silva Morais (University of Lisbon) and prof. Bernd van der Meulen (Wageningen University) provided further context on both issues for the ensuing discussion, which was led by prof. Rein Wesseling (ACELG). A special mention, furthermore, goes to prof. Jacques Steenbergen (General Belgian Competition Authority / KU Leuven), who wrapped up the various issues discussed during the day and uncovered linkages between the different governance models, both emerging and established, in his concluding remarks.

In addition to these eminent speakers, after each session, two PhD candidates – including yours truly – were given the chance to introduce their research in brief ‘poster presentations’. I would like to use the remainder of this blog post to present my research to a wider audience and welcome any comments on the topic or the approach.

In my research, I examine several external aspects of the Economic and Monetary Union, ranging from the new international agreements that now ‘orbit’ the legal regime set out in the Treaties, to the external representation of the euro area. As most readers of this blog will surely know, over the past few years the Member States have, in their efforts to counter the Euro Crisis, repeatedly made liberal use of what Bruno De Witte has called the ‘toolbox of public international law’ – rather than the ‘toolbox of European Union law’. One should mention, for example, the Greek Loan Facility Agreement, the Treaty Establishing the ESM, and the Treaty on Stability, Coordination and Governance (also known as the ‘Fiscal Compact’). Some might say that, in temporarily stepping outside the confines of the Treaty framework, these Member States have repeatedly – and flagrantly – shunned the obligations that come with EU membership. Of course, the duty of sincere cooperation immediately comes to mind and a closer analysis, as pointed out by prof. Amtenbrink at the conference, reveals further (constitutional) legal challenges.

Most readers will also know that there is as of yet still no unified external representation of the Euro Area, despite the existence of a legal basis in Article 138 TFEU. Apparently, the European Commission planned to submit proposals towards a more consolidated European voice in international financial institutions at the end of last year, but to my knowledge nothing has come of this so far.

As is the case with the above-mentioned international agreements, in this case too Member States rely on a simplistic notion of State sovereignty that is, from an EU law point of view, I would argue, severely out-dated. In the International Monetary Fund (IMF), for example, it is the individual Member States – not the Union – who take part in the IMF’s decision-making process despite the fact that a majority of Member States have now fully transferred the sovereignty to pursue monetary policy to the European Central Bank. Now, this is surely inconsistent with the doctrine of parallelism developed by the European Court of Justice some forty years ago (see the famous ERTA case). Pursuant to this doctrine, the external powers of the Union should mirror its internal competences.

Besides the fact that Article II of the IMF Articles of Agreement limits membership to countries, which arguably is a technical hurdle that can be overcome, the continued presence of the Member States in the IMF is usually justified from the Member State point of view by the incomplete nature of Union competences in the field of the EMU. Because whereas monetary policy for the Euro Area Member States is an exclusive EU competence, the closely related coordination of economic policies is most certainly not.

It is perhaps more than a little ironic then, that the “genuine Economic and Monetary Union” that the Member States are currently developing, partly under public international law, may ultimately lead to the conclusion that the they have permanently limited their sovereign rights also in this respect. It is within this context that my PhD research examines how the ever-closer coordination of economic policies within the Euro Area reveals a new ‘EU actor’ (for lack of a better word), which we may simply call ‘the Seventeen’. That is, the Euro Area Member States acting as a collective. The question is then, what is the place of the Seventeen within the new compound constitution of the Economic and Monetary Union?’ And what are the consequences of its further development for the external representation of the Euro Area?

Chris Koedooder, MA, LLM is a s doctoral researcher at the Amsterdam Centre for European Law and Governance. His personal page can be accessed here.

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