Wednesday, 19 May 2010

Eurozone crisis: Roundup of official information (OJEU)

The eurozone tsunami hit governments of EU member states individually and as a whole, the heads of state or government of the euro area, the Euro Group, the Council of the European Union (Economic and Financial Affairs, ECOFIN), the European Commission, the European Parliament (EP), the European Central Bank (ECB) and the International Monetary Fund (IMF).

Crucial officials and politicians have certainly lived “in interesting times”.

Despite my feelings of empathy, the European Union aspires to take decisions as openly as possible and as closely as possible to the citizen. Democracy and the rule of law are among the founding values of the EU.

We have cause to take a closer look at the crisis management with regard to governance and transparency, given the magnitude of the actions.


Eur-Lex is the legal portal of the EU, and the backbone of legal and major political information is the Official Journal of the European Union (OJEU).

OJEU is where we expect to find all relevant legal information, accessible to the EU citizens in the official languages of the European Union in a timely manner.

Let us start the roundup of OJEU information regarding the eurozone crisis.

Greek debt as collateral

DECISION OF THE EUROPEAN CENTRAL BANK of 6 May 2010 on temporary measures relating to the eligibility of marketable debt instruments issued or guaranteed by the Greek Government (ECB/2010/3) (2010/268/EU); published OJEU 11.5.2010 L 117/102.

Despite junk bond status by rating agencies, the ECB decided that the marketable debt instruments issued by the Greek Government or guaranteed by the Greek Government retain a quality standard sufficient for their continued eligibility as collateral for Eurosystem monetary policy operations, irrespective of any external credit assessment.

European financial stabilisation mechanism

In earlier blog posts we have mentioned and discussed some aspects of the following atypical act (a Council Regulation classified as a non-legislative act):

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

Based on Article 122(2) TFEU, Council Regulation 407/2010 establishes the conditions and procedures under which Union financial assistance may be granted to a Member State which is experiencing, or is seriously threatened with, a severe economic or financial disturbance caused by exceptional occurrences beyond its control.

The preamble argues why, in the view of the Council, exceptional occurrences beyond the control of one or more member states apply.

There is no documentary reference establishing a paper trail to the Commission proposal, and the Council only has the obligation to inform the European Parliament, according to Article 122(2) TFEU.

Financial assistance under the European financial stabilisation mechanism takes the form of a loan or of a credit line granted to the member state concerned. In accordance with a Council decision, the Commission is empowered on behalf of the European Union to contract borrowings on the capital markets or with financial institutions (Article 2).

The existing precedent, at least in part, is the facility providing medium-term financial assistance for non-euro-area Member States’ balances of payments, as established by Council Regulation 332/2002:

COUNCIL REGULATION (EC) No 332/2002 of 18 February 2002 establishing a facility providing medium-term financial assistance for Member States' balances of payments; originally published OJEC 23.2.2002 L 53/1; the link is to latest consolidated version of 28 May 2009.

ECB account for loans to Greece

DECISION OF THE EUROPEAN CENTRAL BANK of 10 May 2010 concerning the management of pooled bilateral loans for the benefit of the Hellenic Republic and amending Decision ECB/2007/7 (ECB/2010/4) (2010/275/EU); published OJEU 13.5.2010 L 119/24.

The ECB Decision 2010/4 lays down provisions concerning the cash account to be opened with the ECB for the operation of the Loan Facility Agreement and the Intercreditor Agreement between Greece and the other euro area states, and it provides for an extension of the categories of persons eligible to be customers of the ECB.

Summing up

By today, 19 May 2010, we have found one major crisis decision – the European financial stabilisation mechanism – published in the Official Journal of the European Union.

The paper trail is thin, and the scope for preceding democratic debate at European and national level has been limited.

In addition, two supporting decisions by the ECB have been published.

The fact is that major parts of the monumental decisions have not been published in accordance with high standards of governance or transparency.

We can only speculate as to the causes. The preparatory work has been done and the decisions have been taken under huge pressure. Publishing the OJEU in all the official languages of the European Union is a challenging task even under normal circumstances.

There may be more in the publishing pipeline.

However, if decisions prepared for and taken ‘de facto’ by member states individually, or as parts of unofficial groups, fall outside the scope of OJEU publishing criteria, we have a serious problem affecting the core values of the European Union: openness, closeness and the rule of law.

Ralf Grahn