CYIL 2014

EMIL RUFFER CYIL 5 ȍ2014Ȏ of the EU’s monetary policy was maintaining price stability, the ESM pursued an objective which was clearly distinct, namely to safeguard the stability of the euro area as a whole. That economic policy measure cannot be treated as equivalent to a monetary policy measure for the sole reason that it may have indirect effects on the stability of the euro. Further, the instruments envisaged in order to attain the objective pursued by the ESM, to provide financial assistance to a Member State, clearly do not fall within monetary policy. 25 In the Court’s view the ESM served instead to complement the new regulatory framework for strengthening the Union’s economic governance. That framework established closer coordination and surveillance of the economic and budgetary policies conducted by the Member States and was intended to consolidate macroeconomic stability and the sustainability of public finances. While that framework was essentially preventive , in that its objective was to reduce as far as possible the risk of public debt crises, the objective of establishing the ESMwas the management of financial crises which, notwithstanding such preventive action as might have been taken, might nonetheless arise. Consequently, the ESM clearly belonged within the area of economic policy. 26 Secondly, the CJEU also rejected the assertion that the challenged amendment affected the EU competence (Part One of the TFEU) in the area of the coordination of the economic policies of the Member States. Since the provisions of the TEU and TFEU did not confer any specific power on the EU to establish a stability mechanism of the kind envisaged by Decision 2011/199, the Member States of the Eurozone were entitled to conclude an agreement between themselves for the establishment of an ESM. Further, the granting of financial assistance was made subject to the strict conditionality, in accordance with the challenged Art. 136(3) TFEU, which was intended to ensure that mechanism would operate in compliance with EU law, including the measures adopted by the EU in the context of the coordination of the Member States’ economic policies. 27 The CJEU then turned to the second condition governing use of the simplified revision procedure, namely that the amendment of the TFEU may not increase the competences conferred on the EU in the Treaties. The amendment created no legal basis for the EU to be able to undertake any action which was not previously possible. Even though the ESM makes use of the EU’s institutions, in particular the Commission and the European Central Bank (hereinafter the “ECB”), that fact was not capable of affecting the validity of Decision 2011/199, which in itself provided only for the establishment of a stability mechanism by the Member States and was silent on any possible role for the EU’s institutions in that connection. 28

25 Ibid. , paras. 56-57. 26 Ibid ., para. 59. 27 Ibid ., paras. 68-69. 28 Ibid. , paras. 73-74.

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