European Governance: Professor Kenneth Armstrong on Framing Issues

(Professor Kenneth A. Armstrong is  professor of European Law at Queen Mary University, London; this comment was posted in response to KA’s framing questions on European governance, and we are delighted to bring it up to the main page.  We welcome short or long comments on this topic; I’ll choose to bring some to general attention in a separate post; comments can also be emailed to Ken Anderson or, if you post in response on another blog, let me know and I’ll cross link.  Thanks to Professor Armstrong.)

At the risk of creating identity confusion between two Kenneths I thought I might offer some reflections on why the Eurozone crisis deserves to be analyzed as a governance issue and particularly from the perspective of public law.

Why is this a ‘governance’ issue?

A useful starting point is to think about the discourse which has surrounded reforms to EU economic governance in the wake of the crisis. There has been a lot of talk about the need for the ‘Community Method’ to makes its presence felt in this area. Analysts of EU governance have tended to view the last decade as a period of experimentation with modes and styles of governance beyond the traditional model of judicial and legislative governance. Indeed, economic policy coordination – as emulated in the employment and social spheres through the open method of coordination – has largely been understood as a more intergovernmental/transgovernmental form of governance. The mechanisms of monitoring and surveillance associated with economic policy coordination have typically been described as ‘soft’ while the ‘harder’ mechanisms for fiscal surveillance have been viewed as difficult to put in practice.

The emerging new economic governance architecture appears to ascribe a much more central role to supranational institutions like the European Commission and the European Court of Justice in monitoring and enforcing fiscal discipline. The adoption of the ‘six pack’ of legislative measures plays with the metaphor of a more muscular response at EU level in ways that places emphasis not only on the role of the Commission as the initiator of legislative responses but also the alliance between the Commission and the European Parliament in toughening up the legislative bargain.
Yet despite the apparent manifestations of the Community Method as a process for adopting a legislative response, the new economic governance architecture has not abandoned policy coordination as a technique of governance. Indeed, we can see both the diffusion of policy coordination – its use to control macroeconomic imbalances – and increased coordination of coordination – the ‘European Semester’ as a framework for streamlining fiscal and economic policy coordination.

All of which raises important questions as to the extent of the delegation of powers to supranational institutions as envisaged by a model of governance through the Community Method and its relationship to a variety of forms of executive governance given institutional expression in a range of intergovernmental forums – the European Council, the Euro Group, Euro Summits, the Council of Ministers – and infranational structures like the Economic Policy Committee. Not only is the crisis an issue of governance it is about the institutional design of the governance architecture.

What’s Law Got to Do With It?

There are good reasons for public lawyers to analyze EU economic governance.  In the work of public lawyers like Terence Daintith and Tony Prosser there is a rich public law tradition that sought to consider the constitutional position of the executive in domestic economic policy-making. The delegation of powers of budgetary surveillance to the Commission and the sorts of domestic changes being demanded in return for EU and IMF support to countries like Greece, Ireland and Portugal highlights the extent of external influence on what used to be a key sovereign domain of the national executive.

The domestic constitutional level is also a specific site for EU influence with the fiscal compact suggesting that Member States incorporate the kind of constitutional debt brake applied in Germany to other European states.

The domestic constitutional level is also a context shaping the modalities of the European response. The need to reform the treaties to make provision for a permanent European Stability Mechanism was driven by anxieties as to compliance of the temporary mechanism with the conditions laid down by the German Constitutional Court as to the constitutionality of the Lisbon Treaty ratification. The German Constitutional Court has also demanded domestic parliamentary safeguards to control the bailout funds. The European Union Act 2011 creates new requirements for a referendum in the UK on treaty change in a way that casts a shadow over future treaty negotiations.

The issues surrounding the adoption of a new treaty for the EU 27 or EU26 have highlighted the very important role to be played by EU lawyers in looking for potential solutions and raising potential problems with this form of enhanced cooperation between groups of states.

At a more conceptual level, legal scholars interested in new forms of governance or experimental governance have often suggested that there is a transformation in law underway driven by the limits of traditional constitutionalism and instrumental legislative intervention. The emerging economic governance architecture is an important testing ground for these sorts of claims.

The Relationship Between Economic and Social Governance

While there is an apparent intensification of economic governance in the EU, social policy coordination has been left in a state of flux. In the previous decade the EU experimented with the use of the open method of coordination as a means of Europeanizing domestic policies on social protection and social exclusion. The austerity measures adopted by states in the wake of the banking and debt crisis has real social consequences. And yet the EU has no clear vision as to whether there is a need for continuing social policy coordination. The mechanisms for fiscal policy coordination do not appear to be oriented towards any analysis of the social consequences of fiscal contraction. It is perhaps not too dramatic to argue that there is a crisis in EU social governance that is not just at the instrumental level of the future of the social OMC but at a deeper justificatory level – what role can and should the EU play in the social domain and how has its traditional justifications for intervention been affected by the economic crisis?

These are some initial thoughts and reactions to the questions you have posed. I look forward to seeing the discussion develop.