Thursday, 13 May 2010

Background: European financial stabilisation mechanism

The Council of the European Union has issued COUNCIL REGULATION (EU) No 407/2010 of 11 May 2010 establishing a European financial stabilisation mechanism; published OJEU 12.5.2010 L 118/1.

Once upon a time, I explored the stages leading towards the Lisbon Treaty, writing a number of blog posts about what became Article 122 of the Treaty on the Functioning of the European Union (TFEU).

Now that the EU member states have felt the need to shore up the common currency, it is interesting to see in which terms the provision on financial assistance was discussed at the time. In this blog post we look at the legislative history of Article 122 TFEU.

EU: Economic crisis management I (26 September 2008) noted the extension of qualified majority voting (QMV) from Article 100 of the Treaty establishing the European Community (TEC) to encompass all forms of financial assistance, as described in the Swedish and Finnish ratification bills. The text of joint Declaration 6 was presented.

EU: Economic crisis management II (26 September 2008) recalled Article III-72 of the Draft Constitution proposed by the European Convention, which did not change Article 100 TEC essentially.

EU: Economic crisis management III (27 September 2008) noted that Article III-180 of the Constitutional Treaty remained substantially unchanged.

EU: Economic crisis management IV (27 September 2008) related one of the few cases where the intergovernmental conference (IGC 2007) leading to the Treaty of Lisbon took a fresh look at a provision. These “innovations” resulted in two additions: a spirit of solidarity and the explicit mentioning of the area of energy. (In the reply to a comment, I expressed my subjective view: I am worried that, with or without Lisbon, Europe is not up to taking on our common challenges, be they foreign and security policy or financial meltdown.)

EU: Economic crisis management V (28 September 2008) presented some UK sources about the spirit of solidarity, the distinct mention of energy and QMV in Article 122 TFEU.

EU: Economic crisis management VI (28 September 2008) saw energy supply, severe economic difficulties and solidarity as an interesting testing ground for the European Union in the years ahead. Legislative materials from Sweden and Finland as well as some comments in book form were mentioned.

First conclusions

Qualified majority voting (QMV) was extended to the whole provision. The spirit of solidarity was added. The area of energy was added.

In my view, the legislative history of Article 122 TFEU shows that the governments and commentators did present the changes openly. The ratifying parliaments were not duped.

Further discussion will follow on Grahnlaw.

Ralf Grahn