EU Constitutionalism in Crisis: How the ‘New Economic Governance' Is Transforming European Law and Politics

The Eurozone crisis is also a crisis of EU constitutionalism. It poses a fundamental challenge to both the functional and symbolic dimensions of the Union’s legal edifice, constructed over decades via a process of treaty reform and European Court of Justice jurisprudence. As conceived and executed, the common currency was a political project pursued by economic means and secured by law. In this respect, it mirrored the broader integration project, in which legalised and judicialised modes of governance took precedence over the political. However, law proved inadequate to the task of securing a well-functioning monetary union, as evidenced by repeated and unpunished violations of its rules and regulations. In their efforts to combat the euro crisis, Europe’s leaders have largely bypassed the strictures of EU law and the ‘Community method’ in favour of ‘de-legalised’, executive-driven solutions. This paper focuses on the constitutional implications of the EU’s new economic governance regime, particularly in relation to treaty-based initiatives, such as the European Stability Mechanism and Fiscal Compact, and the changing role of the European Central Bank. I will argue that, although the dynamic between law and politics in the EU has altered, the preference for non-majoritarian, technocratic forms of governance has not. These developments bode ill for the strength and stability of the integration project. The dominance of executive and technocratic bodies exacerbates the EU’s ‘democratic deficit’, at both national and European levels; while compromising the rule of law in order to implement emergency measures harms the Union’s legitimacy.