EU Law - Economic Crisis Flashcards
Pringle v Ireland
Challenged ESM
Fourth stage in european semester
Country-specific recommendations
What is the central body of the ESM?
Board of Governors
Second stage in european semester
European Council decide EU guidelines for national policies
How are EU institutions central to ESM?
Com and ECB assess requests and terms for support, and ECB/NFMs decide terms of assistance through Memoranda of Understanding
Three cases challenging legality of the bailouts
Adedy v Council, Sindicato dos Bancarios and Gauweiler
What was the bailout to Ireland and Portugal provided on the basis of?
EFSM (ESM) using EU budget as collateral
What was the higher lending capacity of the ESM?
500 billion
What mechanism did the EMS create?
Exchange Rate Mechanism
ADEDY v Council case
Collective organisations said they had direct and individual concern, representing their members
What was the idea of the EMU built on?
EMU would complement internal market, as it generates the need for economic integration for the sake of economic rationality
What is the European semester?
A six-month cycle to coordinate and streamline economic/budgetary policies
What kind of geometry has been used in negotiating UK-EU Agreement, leading to ‘special status’ of UK?
Flexible and variable geometry of EU
What does Article 127(2) TFEU allow?
Non-EU countries can participate to some degree, although euro area NCBs play a stronger role
How are the members of the Executive Board appointed?
By European Council via QMV, on recommendation from CoM, after consulting EUP and Governing Council of ECB
What is the single currency part of as a larger political idea?
‘Ever closer union’ (Treaty of Maastricht)
Why was Article 126 TFEU vital?
Giving up right to print money in single currency means Members cannot control interest rates
What is the ECB committed to?
Controlling inflation
What body permits the participation of the Executive Board, without a vote?
General Council
What body in ECB is the ‘third decision-making body’?
General Council
What AG in Gauweiler suggested OMT compatible with Article 123?
AG Cruz Villalon
Why was it argued bailouts against democracy?
Taxpayer exposed to limitless liability against debts
Who suggested UK GDP could be 5.5% smaller by 2020 worst case and 2% by 2020 in more optimistic scenario if Brexit?
CBI
Decision 2011/199
Modified Article 136 TFEU to give Council some power in ESM
Who suggested some of the reforms given as ‘suggestions’ in the Memorandums of Understanding may be in breach of EU law/EU fundamental rights?
Kilipatrick
What is the prudential supervision task of ECB?
Supervise Member banking to make decisions in minimum reserve, risk, liquidity requirements and fines for non-compliance
ADEDY v council judgment
Rejected sufficient concern, and measures potentially in breach actually national rather than demanded by EU
How is there some political participation in ECB?
President of Council and Com can participate but no vote
National programmes under fiscal compact are authorised and monitored by who?
Com and Council
How did the CJEU answer in Pringle?
Economic policy so TFEU not breached, and not writing off debt as it is NEW debt
OMT policy survived German Constitutional Court challenge
OMT Decision
What suggests ECB limited to myopic vision of economy?
Fails to focus on economic growth, just price stability and controlling inflation
What committees can scrutinise supervisory activities of ECB?
EC committees
What two countries want to join Euro despite economic crisis?
Lithuania and Romania
What body is primarily an advisory and reporting body?
General Council
Two Regulations to identify ‘at risk’ Members for macroeconomic imbalances?
Regulation 1176/2011 and Reg 1174/2011
Who recommends members of Executive Board?
CoM
What Council adopted the Report on the EMU in the EC?
Madrid European Council
What is the European Currency Unit anchored in, de facto?
The German Mark
What could sovereign states always do under fiscal compact?
Pull out because international, but then probably failing to comply with other EU commitments that de facto refer to the Compact
Article 136 TFEU
Modified to give, among other things, power for Council to authorise ESM Treaty
When in particular did the ECB as a lender of last resort benefit private institutions and Gs?
2008 and 2012
What two countries negotiated Lisbon Treaty Protocols to opt out of the single currency?
UK and Denmark
Three prescriptions in Report on the EMU in the EC?
Complete liberalisation of capital movements, gradual introduction of single currency, exercise over national budget and coordinating national economic policies
What Treaty was originally set up to get around Article 123 and 125 TFEU?
European Financial Stability Facility
Membership of the General Council?
President and VP of Executive Board + governors of NCBs
What two countries struggled to keep in line with the EMS?
UK and Italy
What is the supreme decision-making body in ECB?
Governing Council
What was the first step towards an EMU?
European Monetary System
What is the Stability Pact now called?
Stability and Growth Pact
How did ECB respond to sovereign debt crisis?
If Members complied with new macroeconomic surveillance system, they would buy their debt
Sindicato dos Bancarios do Norte judgment
Use of prelim ruling procedure was fruitless as CJEU denied jurisdiction
To join the Euro, what does the Member need to satisfy?
Convergence criteria over period of 2 years
What did the OMT policy entail?
Gave ECB unlimited purchasing power of bonds, conditional on Gs complying with ESM programmes, including ‘Memoranda of Understanding’
In what Article was the coordination of national economic policies achieved?
Articles 120 - 121, and 128 TFEU
Three key tasks of ECB
Conduct EU monetary policy, prudential supervision and lender of last resort
What country joined Euro during economic crisis?
Estonia
What does the Stability Pact include?
Commitment to public deficit less than 3% GDP and public debt less than 60%
What two Members opted out of the fiscal compact?
UK and Czech Republic
How does european semester start?
Com annual growth survey for EU priorities
Why are bailouts always outside EU in international treaties?
Article 125 TFEU ban
What Article did Decision 2011/199 modify?
Article 136 TFEU
In what Article was the exercise of control over national budget deficits achieved?
Articles 126 TFEU
OMT decision
Policy survived German Constitutional Court challenge
What did the Single European Act do?
Removed Member vetos in a number of areas
Name for ECB + NCB
European System of CBs
What Article makes it clear ECB role is not to give loans to EU institutions/national Gs?
Article 123 TFEU
What did the European Financial Stability Facility become?
European Stability Mechanism in 2012
What Article provides for the European semester?
Article 121 TFEU
Who suggested terms of some loan agreements agreed ‘under duress’?
Kilipatrick (e.g. in reference to Portugal)
How many chapters are there in Articles 119 - 144 TFEU?
Five
How many members form the Governing Council?
6 of Executive Board + governors of national CBs of euro countries
What can a failure to comply with the ‘six pack’ lead to?
Fines of up to 0.1% GDP
Gauweiler and Others judgment at German Constitutional Court
2 judges refused, 4 hinted to CJEU in reference that ECB exceeded mandate
Regulation 1176/2011 and Reg 1174/2011
Regulations to identify ‘at risk’ Members for macroeconomic imbalances
Three things in Brexit on sovereignty
Not committed to ‘ever closer union’, only for UK as ‘special status’ and reiteration of Protocol 2 Article 6 - 7 on subsidiarity and proportionality
How can ADEDY and Sindicato be explained?
Poorly formulated references and failure to prove ‘agents’ of EU
When does Romania consider joining by?
2019
Article 126 TFEU
Members should avoid excessive G deficits, with monitoring of targets in Stability Pact
When was the European Monetary System?
1979
What are loan agreements conditional on under Financial Assistance Prorgammes?
Approval of Memoranda of Understanding (from ESM)
Why does Article 127(2) TFEU exist?
Some decisions of ECB can affect non-EU countries’ economic and monetary policies
What Article makes monetary policy area of exclusive competence?
Article 282 TFEU
How did Sweden opt out of the single currency?
National referendum, so formal declaration under Article 120 TFEU
What Decision tried to give Council some power in ESM?
Decision 2011/199
What is an Exchange Rate Mechanism?
Commits Members to controling currency fluctuation around +/-2.5% of notional composite unit of account
Where are the powers for the involvement of the EU institutions in the ESM?
Not in TEU or TFEU
What body in ECB sets interest rates, objectives and decisions on liquidity?
Governing Council
How was the OMT policy carried out in practice?
Instead of purchasing directly from G, bought bonds from mostly private credit institutions, then sole on securities market
What two non-EU countries use the Euro?
Montenegro and Kosovo
How do non-participating Members still contribute to Euro?
Pay a small amount to ECB indirectly as NCBs ‘own’ shares
What is the ‘Fiscal compact’
Treaty concluded between Members to balance national budgets and avoid G deficits exceeding 0.5% GDP, with effect in Members state (preferably constitutional)
What do European Council do under Regulation 1176/2011 and Reg 1174/2011?
Make recommendations on the basis of Com proposals for ‘correct action plan’ in six pack
What did the OMT policy mean?
ECB acting as de facto lender of last resort for Euro-area Gs
What is the notional composite unit of account in Exchange Rate Mechanism known as?
European Currency Unit
What was the pain-in capital in ESM?
80 billion euros
What is the Board of Governors comprised of?
Euro-area Members’ Finance Ministers
What suggests political decisions in EU, at least in regard to market, taken by technocrats?
Limited political participation
In what Article was the single currency achieved?
Article 128 TFEU
Gauweiler and Others case
ECB interfering in policy, financing public debts and against democracy
How many Members are part of the Euro?
19
Three examples of Financial Assistance Programmes concluded for Members worst affected (bailouts)
Greece, Ireland and Portugal
What measure of macroeconomic surveillance is an example of ‘mutual trust’ principle?
Fiscal compact
How much of ECB capital approx. do BoE subscribe to?
14%
When does Lithuania consider joining by?
2015
How is the fiscal compact an example of mutual trust principle?
Trust economic policy in other Members is in line with EU objectives
What is the main area of economic governance in the EU?
Functioning of the Economic and Monetary Union
What case suggested OMT compatible with Article 123 TFEU?
Gauweiler and Others
What Article shows ECB is independent?
Article 130 TFEU
Gauweiler and Others judgment at CJEU
Although might affect economic policy, not economic policy - transmitting signals about appropriate interest rate, so purchase of bonds is only due to interference with transmission by high interest of Member
What shows that creation of the Euro is both an economic and political project?
Countries still wish to join even whilst Euro suffering economic crisis (e.g. Estonia, Lithuania and Romanis)
What did the Report on the EMU in the EC prescribe?
Further economic and monetary integration
What Treaty enshrined the ‘Stability Pact’?
Treaty of Maastricht
How was there a rescue of EU from ‘Eurosclerosis’?
Delores Single European Act
What Article prohibits public bailouts?
Article 125 TFEU
Three examples of non-Eurozone bailouts?
Hungary, Latvia and Romania
Why was there optimism in the 1990s?
Rescue of EU from ‘Eurosclerosis’
Who do the CoM consult in deciding recommendations for Executive Board?
EUP and Governing Council
Example showing flexible and variable geometry in Report on EMU in the EC?
UK and Denmark Lisbon Treaty Protocols; Sweden formal declaration
Articles 120 - 121, and 128 TFEU
Coordination of national economic policies
Two examples of non-EU/participating Members affected by Euro
Non-participating ‘own’ shares in ECB, and Montenegro and Kosovo use the Euro
What Article governs Governing Council?
Article 283 TFEU
What was the idea behind ESM?
Financial assistance through money market instruments and debt w/ medium/long term maturities
What is the membership of the Executive Board?
President, VP + 4 members
Who highlighted how the solution to the Eurozone crisis is simple, but hard to implement because sensitive?
Jean-Claude Juncker
Two things in Brexit on social benefits
Can deny charitable benefits to workers and benefits with a dual function if worker just here for work and can restrict in-work benefits to newly-arriving EU for up to 4 years, with 7 year limitation period
What Articles in TFEU cover functioning of the EMU?
Articles 119 - 144 TFEU
Fifth stage in European semester
ECOFIN Council decide upon country-specific recommendations for Members
Article 121 TFEU
Members coordinate economic policies, surveillance
What is the independence of the ECB based in part on?
Independence of German federal bank
Who highlighted Welsh benefits from EU?
Welsh First Minister
What is surprising about sanctions under the Fiscal Compact and why?
CJEU can impose financial sanctions despite international treaty
What were the ‘bail outs’ to Latvia, Hungary and Romania introduced on the basis of?
Article 143 TFEU
Power for Council to authorise ESM Treaty
Article 136 TFEU
Who is the single currency exclusively issued by?
ECB
What are the three main bodies in the ECB?
Governing Council, Executive Board and General Council
In what Article was the complete liberalisation of capital movements achieved?
Article 63 TFEU
Third stage in european semester
Members submit budgets and reform plans
How many stages are in the european semester?
5
What case challenged ESM validity?
Pringle v Ireland
What was argued in Pringle v Ireland?
Monetary policy, so exclusively competence of ECB, and breaching TFEU
Why was it argued that suggestions in Memoranda of Understanding could not be challenged under EU law?
From ESM, which is an international treaty
What Article governs General Council of ECB?
Article 44 TFEU
What enshrined the Stability Pact?
Protocol 12 TFEU
What body in ECB is responsible for day-to-day running?
Executive Board
Problem in Gauweiler with Pringle judgment
Unlike Pringle, ECB said this policy WAS monetary
Gauweiler and Others on OMT policy
AG Cruz Villalon Op suggested OMT compatible with Article 123 TFEU
What two countries have constitutionally enacted the fiscal compact?
Spain and Slovenia
What was adopted in 2012?
Outright Monetary Transactions policy
What does the ‘six pack’ refer to?
Six acts reforming Pact for Stability and Growth
How were the suggestions in the Report on the EMU in the EC brought to life?
Through treaty reforms from Maastricht to Lisbon
Three elements to the new macroeconomic surveillance system
European semester, six pack and fiscal compact
