Editorial of March 2018

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 by Tiago Cabral, member of CEDU

Homeopathic Democracy: The European Power Struggle over the Spitzenkandidaten

1. According to article 17(7), TEU “taking into account the elections to the European Parliament and after having held the appropriate consultations, the European Council, acting by a qualified majority, shall propose to the European Parliament a candidate for President of the Commission. This candidate shall be elected by the European Parliament by a majority of its component members”. There are several issues in this article, some of them we even had the opportunity to discuss before.

2. In fact, when talking about the President of the European Commission (EC) it is quite a stretch to state that there is an “election” by the European Parliament (EP). Politically inspired wording notwithstanding, the truth is that the European Council (ECON) holds most of the cards in the selection of EC’s President and the balance of power tends to favour this institution. There are also some notorious similarities between the position of the EP in relation to the ECON in the selection of the President of the EC and the position of the EP in relation to the Council in the consent legislative procedure. While it is possible to argue that there is an “indirectly-indirect election”[i], we believe that it would be more accurate to state that the Parliament approves and has veto power over the ECON’s choice.

3. However, the 2014 elections to the EP brought with them a rather interesting innovation: the Spitzenkandidaten (leading candidate). This procedure aims to give “direct” or at least “quasi-direct” democratic legitimacy to the President of the EC by tying the nomination to the EP’s elections. First the political parties choose their leading candidate, then the people vote, then the ECON and EP obey their will by confirming candidate chosen by the citizens[ii]. There is some debate on who should be nominated by the ECON and approved by the EP, the candidate from the party who won the most seats in the elections or the candidate from the coalition best placed to guarantee a passing majority. Under the current Spitzenkandidaten rules the second choice seems to make the most sense. Nevertheless, it seems likely that in the current European political climate the candidate from the biggest party will also be the best positioned to achieve a solid majority.
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Editorial of October 2016

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by Sophie Perez Fernandes, Junior Editor

Engaging EU liability within the European Stability Mechanism framework

Last September 20th, the European Court of Justice (ECJ) delivered two judgments regarding the role of the European Commission and, to a lesser extent, the European Central Bank, in the negotiation and signing of the Memorandum of Understanding concluded between the Republic of Cyprus and the European Stability Mechanism (ESM) during the 2012-2013 financial crisis, and, in particular, in the restructuring of the banking sector in Cyprus imposed as a condition for the grant of financial assistance.

In Mallis and Malli (Joined Cases C-105/15 P to C-109/15 P), actions were brought against the European Commission and the European Central Bank for the annulment of the Eurogroup’s statement of 25 March 2013 concerning, inter alia, the restructuring of the banking sector in Cyprus. In turn, in Ledra Advertising (Joined Cases C-8/15 P to C-10/15 P), depositors of two large Cypriot banks brought actions against the European Commission and the European Central Bank for the partial annulment of the Memorandum of Understanding of 26 April 2013 adopted jointly by the ESM and the Republic of Cyprus and also for compensation for damages allegedly suffered following the request for financial assistance and the ensuing restructuring of the two banks in question.

The ECJ had already been called upon to rule on judicial protection questions raised by the ESM framework. Created in order to provide, where needed, financial assistance to the Member States whose currency is the euro, the ESM was instituted through an international agreement between euro area Member States – the Treaty establishing the ESM, concluded in Brussels the 2th February 2012, in force since the 27th September 2012. Thus, the ESM Treaty is not part of the EU legal order, as confirmed by the ECJ in the famous Pringle judgment (C-370/12). As a consequence, when creating the ESM, or acting within its framework, Member States do not act within the scope of application of EU law for the purposes, in particular, of Article 51(1) CFREU. Individuals seeking to challenge Member States’ measures adopted pursuant the conditions laid down in a Memorandum of Understanding would not, therefore, find in the preliminary ruling mechanism an indirect means of access to the ECJ in order to assess their compliance with EU law and, in particular, the CFREU as the former was not in question and the latter was hence out of reach.

What the above mentioned judgments, and especially Ledra Advertising, emphasize is the link nonetheless existing between the ESM framework and the EU legal order. Quoting Alicia Hinarejos (EU Law Analysis), in order to carry out its functions, the ESM “borrows” two EU institutions, the European Commission and the European Central Bank, two thirds of the infamously known Troika. The question is whether (and, if so, when) EU institutions’ actions within the ESM framework might be reviewed and, when harmful, give rise to compensation under EU law and, in particular, in light of the CFREU.

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