Going 'Belt and Braces': Domestic Effects of Euro-Crisis Law

Abstract

This paper considers the effect of the recent EU measures relating to strengthened economic governance both at the EU level and the level of national (constitutional) law. We first explain the scope of EU competence in economic policy and its effects on Member State competence. We will then examine how this competence has been exercised during the past few years, in particular from the point of view of the domestic effects of the six-pack and two-pack, which constitute the ‘Belt’ needed to maintain stability in the euro area and thus hold the ‘trousers’ (economic policy decision-making) up. We then turn to the Fiscal Compact and the budgetary framework directive and their effects at national level, constituting the ‘Braces’ intended to ensure healthy national budgetary policies. The relevant question remains to be whether the current 'belt and braces' rules are the appropriate approach for preventing new crises. There are both legal and political reasons for reconsidering some of the solutions made during the crisis. Maybe the trousers are just too loose?