CYIL 2014

THE INTERGOVERNMENTAL AVENUES OF EUROPEAN INTEGRATION… The TSCG signatories also agreed under Art. 5, in cases of excessive deficit procedure under the TFEU, to put in place budgetary and economic partnership programmes, subject to endorsement by the Council of the EU and the European Commission (hereinafter as the “Council” and the “Commission”). Further, Art. 6 TSCG stipulates ex-ante coordination of plans to issue new debt (reporting to the Council and the Commission) and Art. 7 TSCG commits Contracting Parties to support “the proposals or recommendations submitted by the European Commission where it considers that a Member State of the European Union whose currency is the euro is in breach of the deficit criterion in the framework of an excessive deficit procedure ”, unless a qualified majority is opposed to the decision proposed or recommended. Art. 9 TSCG then foresees strengthened coordination of economic policy and Art. 11 TSCG provides for discussion of all plans for major economic policy reforms. It is worth mentioning that the Fiscal Treaty also established the jurisdiction of the CJEU, albeit a limited one and based on Art. 273 TFEU (so called ‘arbitration clause’). 16 The CJEU thus has jurisdiction, under Art. 8(1) TSCG, to assess compliance of the Contracting Parties with the obligation to transpose the ‘balanced budget rule’ under Art. 3(2) TSCG into their national legal systems. The action can be brought only by a Contracting Party, based either on its own finding or the report by the Commission. In case of failure of a Contracting Party to comply with the Court’s judgement stating deficiencies in implementation, a second action can follow and the CJEU is entitled, under Art. 8(2) TSCG, to “ impose on it a lump sum or a penalty payment appropriate in the circumstances and that shall not exceed 0,1% of its gross domestic product. ” 17 However, if the implementation of a ‘balanced budget rule’ is correct and the Contracting Party concerned does not follow it in its domestic budgetary procedure, the CJEU has no jurisdiction to review such breach, and other mechanisms (under the TFEU excessive deficit procedure) must be used. Furthermore, as far as the quasi-institutional arrangements are concerned, the signatories agreed in Title V, Art. 12 TSCG to hold at least twice a year informal Euro Summit meetings, which bring together Heads of State or Government of the Eurozone, along with the President of the Commission and the President of the European Central Bank. According to Art. 12(1) TSCG, the President of these summits “shall be appointed by the Heads of State or Government of the Contracting Parties whose currency is the euro by simple majority at the same time as the European Council elects its President and for the same term of office.” The Euro group is responsible for the preparation and follow up of these meetings. As to the agenda of the summits, they should deal with questions relating “to the single currency, other issues concerning the governance of the euro area and the rules that apply to it, and strategic orientations for the conduct of economic policies to increase convergence in the euro area.” It is important 16 Art. 273 TFEU stipulates: “ The Court of Justice shall have jurisdiction in any dispute between Member States which relates to the subject matter of the Treaties if the dispute is submitted to it under a special agreement between the parties .” 17 The lump sum or penalty imposed is payable to the ESM in the case of euro area Member States.

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