The Stability, Coordination and Governance Treaty: Principle, Politics and Pragmatism

Abstract

The EU financial crisis has generated a range of economic, political and legal responses. This article focuses on one such response, the Treaty on Stability, Coordination and Governance (the TSCG), which was signed by 25 contracting states in March 2012. The discussion begins with the political background to the TSCG, which is essential in order to understand its legal form and content. This is followed by an outline of its principal provisions. There is then more detailed discussion of the core elements of the TSCG, the “balanced budget” rule and the correction mechanism, in order to determine what they add to the existing rules and assess their efficacy.The focus then shifts to broader issues of principle. The TSCG is of interest not merely for those concerned with economic and monetary union. It raises more fundamental issues of principle concerning the legitimacy of states, together with EU institutions, proceeding outside the confines of the Lisbon Treaty to attain goals that cannot be achieved through normal methods of Treaty amendment. It generates important inquiries concerning the extent to which a Treaty outside the confines of the Lisbon Treaty can confer new powers on EU institutions, and whether existing powers of EU institutions can be used in such a context. It entails significant issues concerning the way in which we interpret provisions of the Lisbon Treaty concerning the European Court of Justice (ECJ) that are directly relevant to the schema of the TSCG. The article concludes by reflecting on some broader legal and political ramifications of the TSCG.

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