France

IX - Fiscal Compact

The Fiscal Compact (Treaty on Stability, Coordination and Governance in the Economic and Monetary Union) was signed on March 2, 2012. Negotiations on this Treaty began between 26 member states of the EU (all but the UK) after the 8/9 December 2011 European Council. 25 contracting parties eventually decided to sign the Treaty (not the Czech Republic).
After ratification by the twelfth Eurozone member state (Finland) in December 2012, the Fiscal Compact entered into force on 1 January 2013. For several contracting parties the ratification is still on-going.
(
http://www.european-council.europa.eu/eurozone-governance/treaty-on-stability?lang=it)

Negotiation
IX.1
What political/legal difficulties
did France encounter in the negotiation of the Fiscal Compact, in particular in relation to the implications of the treaty for (budgetary) sovereignty, constitutional law and the budgetary process.

The Fiscal Compact was arguably the most controversial of the anti-crisis instruments in France.

The discussions linked to the negotiation and ratification of the Fiscal Compact have known two main lines of development in France, as Presidential elections and a change of majority in the Parliament modified the dynamics of adoption of this instrument in between the time of its signature and the time of its ratification. The fact appears to be of particular relevance to the discussions on the Fiscal Compact, as the ratification of this Treaty became an issue in the Presidential elections, taking place between April and May 2012. Left candidate and future President François Hollande (PS) promised to renegotiate the Fiscal Compact if elected against his right-wing opponent (UMP), then- President Nicolas Sarkozy (see also question I.1).  Thus, the discussions of the Treaty should be differentiated as to under which Presidency they took place. During the Sarkozy Presidency, the Fiscal Compact was presented by the government as one of the two pillars of a twofold approach combining, on the one hand, “solidarity” with the ESM, and on the other hand “discipline” and insurance that reforms are made for fiscal consolidation, with the Fiscal Compact[1]. The Fiscal Compact was also presented as a balanced instrument, as it included in its article 9 references to “growth”, “employment” and “competitiveness”.

The Sarkozy Presidency

The right-wing Government favoured the idea of amending the Constitution, in order to introduce the “golden rule” required by the Fiscal Compact, rather than writing it down in an organic law[2] (see also question IX.4). It was also stressed that France was the one that authored the proposition of a golden rule at national level[3]. However, it is likely that France’s endorsement of the idea of a national golden rule was also the result a compromise between, on the one hand, the German position in favour of facilitating sanctions to enforce fiscal discipline as well as a stronger role given to the CJEU; and, on the other hand, the position that President Sarkozy appears to have taken at the European Council, in favour of more intergovernmental solutions, favouring national modes of enforcement of budgetary discipline[4].

Thus, in the discussions and the presentation of the text by the right-wing majority, the emphasis was put on the national dimension of the golden rule: national constitutional courts should be able to review the balance of the national budgets; the European Court of Justice should only be able to review whether or not the golden rule had been introduced into national law[5].

Stricter measures against excessive structural deficit were presented by the right-wing majority as having been proven necessary by the past practices of both France and Germany, which overlooked their commitments under the Stability and Growth Pact[6].

However, the debates on the Fiscal Compact crystalized much of the criticism regarding the handling of the euro-zone crisis so far – especially on the point of the emphasis put on fiscal discipline (“austerity”) in comparison with concerns over growth and stimulation of the economy. In this regard, the refusal of the Fiscal Compact constituted one of the core elements of criticism towards the ESM Treaty as well, because of the “political link” existing between the two treaties (see also Section 5 on the ESM Treaty).

The main points of criticism from the centre-left (PS), when it was still in the opposition, followed these lines. They were set out, in particular, in a proposal for a Parliamentary resolution that was eventually rejected by the then-majority[7]. In the document, the Fiscal Compact was depicted as un-balanced, with insufficient reference to growth and no teeth regarding fiscal and social harmonisation.

The Fiscal Compact was also described as presenting a democratic deficit: an intergovernmental instrument, it was established outside the framework for EU Treaty revision, which provided defined roles to the EU institutions and the national parliaments. Moreover, national parliaments were said to be given an insufficient role as regards the budgetary competences to be governed by common rules. A threat was perceived that intergovernmental instruments constituted a regression, when compared to the existing safeguards to the role of both the European and national parliament(s) set out in the “Six-pack”[8].

Finally, the need for the Fiscal Compact was contested, as a golden rule already existed in the Stability and Growth Pact; and as a Constitutional revision in 2008 already equipped France with Programming Acts setting multiannual guidelines for public finances.

The Hollande Presidency

The election of centre-left-wing François Hollande to the Presidency led to a shift in the interpretation of the Fiscal Compact, which was shouldered by a decision of the Conseil Constitutionnel (Decision n° 2012-653 DC of 9 August 2012[9], see question IX.7) enabling a flexible reading of article 3 of the Fiscal Compact on the “golden rule” requiring balanced budgets. According to this reading, the option was open to write this requirement down in an organic law (“institutional law”), rather than through constitutional amendment (see also question IX.7). Overall, the new majority undertook to set out the elements of the Fiscal Compact allowing for a flexible reading of its requirements of fiscal discipline[10] (see also question IX.3).

Renegotiation of the Fiscal Compact was a promise made by candidate Hollande during the presidential elections. Once elected, he appears to have negotiated with his European partners that the Fiscal Compact be complemented and thus rebalanced with other instruments and measures.  Presented as the outcome of these discussions, four elements of the negotiations at the European Council on 28 and 29 June 2012 were brought forward by the new majority as a more acceptable overall normative setting, allowing for the ratification of the Fiscal Compact – under its new and more flexible interpretation. First, a Growth and Jobs Pact, focusing on stimulating the economy, in particular through the reallocation of unused European structural funds (55bn euros) and a raise of the lending capacity of the European Investment Bank (10bn euros). Second, steps were taken towards the creation of a tax on financial transactions, through an initiative for strengthened cooperation involving several European Member States. Third, progress was made towards the creation of a Banking Union, starting with banking supervision. Finally, President Hollande argued in favour of a more flexible use of the EFSF/EMS in order to aid States and European banks facing financing difficulties, with a view to deepen European solidarity[11].

If the right-wing opposition continued to support the adoption and ratification of the Fiscal Compact, praising especially the absence of competence for the European Court of Justice to control national budgets, it however deplored that the option was taken not to enshrine the “golden rule” in the Constitution, but in an organic law; it also considered as of little actual significance the new developments achieved by the new President at the European Council, considering the Growth and Jobs Pact as an insufficient instrument regarding the stimulation of the economy[12]. This last analysis was shared and held even more strongly by the ecologists and the far left, who voted eventually against the ratification of the Fiscal Compact (see question IX.3).

Ratification
IX.2
How has the Fiscal Compact been ratified in France and on what legal basis/argumentation?

Signed on March 2, 2012 by former President Sarkozy, the Fiscal compact Treaty was submitted to the French Constitutional Council by new President François Hollande on July 13, 2012, on the basis of art.54 of the Constitution.

Art.54 disposes that “if the Constitutional Council, on a referral from the President of the Republic, from the Prime Minister, from the President of one or the other Houses, or from sixty Members of the National Assembly or sixty Senators, has held that an international undertaking contains a clause contrary to the Constitution, authorization to ratify or approve the international undertaking involved may be given only after amending the Constitution.”[13]

French Conseil Constitutionel decision n°2012-653 DC of 9 August 2012 recognises that the ratification of the Fiscal Compact, including the obligation to enshrine the balanced budget rule in national law, does not require the Constitution to be changed [14] (see also question IX.7)

The ratification of the Fiscal Compact was then submitted as an Act, through an “accelerated procedure”, by the President of the Republic to the vote of both Houses of the Parliament. Under article 53 of the Constitution, “Peace Treaties, Trade agreements, treaties or agreements relating to an international organization, those committing the finances of the State, those modifying provisions which are the preserve of statute law, those relating to the status of persons, and those involving the ceding, exchanging or acquiring of territory, may be ratified or approved only by an Act of Parliament”. As the Fiscal Compact modifies provisions “which are the preserve of statute law”, it has to be ratified through an Act of Parliament[15].

An “accelerated procedure” (see annex) was used, which shortens the procedure of adoption of the Act, in particular by limiting the number of readings of the Act to one in each House[16]. Adopted by both Houses after one reading, the Act authorising the ratification of the Fiscal Compact Treaty was published in the Official Journal on October 23, 2012[17].

Ratification difficulties  
IX.3
What political/legal difficulties
did France encounter during the ratification of the Fiscal Compact?

The Fiscal Compact was ratified with a view to interpret it in a different way as compared to its initial understanding by former President Sarkozy – that is to say, as obliging France to amend its Constitution in order to constrain financial Acts with binding rules on budgetary balance[18].  As the text itself did not change between the time it was negotiated by the right-wing government and the time it was reinterpreted by the centre-left government, its ratification was adopted by a large majority including both UMP and PS votes.[19]
The interpretation made of the Fiscal Compact by the new government – according to which amending the Constitution was not necessary to comply with the requirements of the Fiscal Compact – was authorized by a judgement of the Conseil Constitutionnel in Decision n° 2012-653 DC of 9 August 2012[20] (see question IX.7) Overall, the new majority undertook a narrow reading of the obligations set by the Fiscal Compact, so as to see how they could be limited in scope (this concerned e.g. the theoretical nature of the risk of CJEU review and sanction, imprecision of the definition of “structural deficit”, a potential broad understanding of “exceptional circumstances”, and possibilities to be given extensions for the reduction of budget a deficit)[21].

Opposition to the ratification included the far left, for which this new interpretation of the Fiscal Compact was not sufficient and which preferred a clear rejection of crisis instruments focused on austerity[22]. The ecologists also voted, in majority, against the ratification, insisting that a more demanding vision of Europe was needed at a time of increasing risk of recession in Europe, and that austerity policies should be reconsidered[23].  Other opponents to the ratification invoked, in particular, the Fiscal Compact as infringing national sovereignty in budgetary matters[24], or as threatening the freedom of administration of local authorities[25].

It should be noted, however, that the centre-left majority started to stress more the merits of the Fiscal Compact once its new interpretation had set aside the idea of a constitutional “golden rule”. It was described as an “opportunity to be seized” to strengthen the powers of the French Parliament on budgetary matters. In particular, the creation of an independent body to assess the economic forecasts of the government, as well as the new duties of information and of justification for economic assessments and previsions in the Budget Acts and Programming Acts, were said to be likely to increase the quality and the independence of the information available to the Parliament to control governmental budget proposals[26].

Moreover, the Fiscal Compact, in line with the Two Pack and the European Semester, would open up a possibility for the French Parliament to expand its role in budgetary matters.  With the European Semester and the continuous production of analyses and recommendations on the public accounts, for the first time, the Parliament would be able to take part in debates preceding budget proposals, whereas its traditional role was to discuss these proposals only once they were formed by the Government[27]. According to the centre-left majority, these euro-crisis instruments’ main effect would be to oblige governments to always give justifications for their choices.

The far left was however sceptic regarding the democratic nature of these developments, arguing in favour of a greater role of the European Parliament in EU economic and political governance, and for a referendum on the Fiscal Compact, so that citizens would have a say on the developments of the EU[28].

Balanced Budget Rule        
IX.4
Article 3(2) Fiscal Compact prescribes that the Balanced Budget Rules shall take effect in national law through “provisions of binding force and permanent character, preferably constitutional, or otherwise guaranteed to be fully respected and adhered to throughout the national budgetary processes.” How is the Balanced Budget Rule (intended to be) implemented in France? Will there be an amendment of the constitution? If not, describe the relation between the law implementing the Balanced Budget Rule and the constitution. If the constitution already contained a Balanced Budget Rule, describe the possible changes made/required, if any.

As confirmed by the Decision n° 2012-653 DC of the Conseil Constitutionnel on August 9, 2012, amendment of the Constitution was not necessary to comply with article 3(2) of the Fiscal Compact[29] (see also question IX.7). The new French Government undertook to implement the Balanced Budget Rule in an Organic Law on the Programming and Governance of Public Finances[30]. Organic laws determine the modalities of application of ordinary laws in areas restrictively determined by the Constitution[31] (see also question II.1).

Following a constitutional amendment in 2008[32], Article 34 of the Constitutions already provided for an “objective of balanced budget”: “The multiannual guidelines for public finances shall be established by Programming Acts. They shall contribute to achieving the objective of balanced accounts for public administrations[33]”. The binding nature of such an objective may however have appeared limited[34].

As confirmed by Decision n° 2012-653 DC of the Conseil Constitutionnel on August 9, 2012, amending the Constitution was not necessary to comply with article 3(2) of the Fiscal Compact[35] (see also question IX.7). The new French Government undertook to implement the Balanced Budget Rule in the Organic law on the Programming and Governance of Public Finances (also hereafter “the Organic law”)[36], completing and leading to modifications to the Organic Law on Budget Acts (hereafter “the LOLF”)[37].

The Organic Law on the Programming and Governance of Public Finances was adopted through an accelerated procedure, which allows for only one reading in both Houses of the Parliament (see also Annex). However, as both Houses provided amendments (the National Assembly on 10 October 2012; the Senate on 30 October 2012), and according to the accelerated procedure, the final draft was transferred to a joint committee (“commission mixte paritaire” – CMP), a commission gathering MPs from both Houses with the objective to harmonise their positions and agree on a common text. Meeting on 8 November 2012[38], the CMP agreed on a final draft that was eventually voted by both Houses (Assemblée Nationale on 19 November 2012, Senate on 22 November 2012).

In accordance with article 46-5 and article 61-1 of the French Constitution, the Constitutional Council reviews the conformity of organic laws before they are given effect, which led the Constitutional Council to issue Decision 2012-658 DC on 13 December 2012[39], recognising the partial conformity of the organic law to the Constitution (see also question IX.7).

In light of the organic law and of this Decision, the role of the Constitutional Council in the control of Budget Acts and Social Security Financing Acts regarding the Balanced Budget Rule could appear as limited.

First, continuous case law of the Constitutional Council indicated that it would not review the conformity of the Budget Acts and Programming Acts with the Fiscal Compact, as it did not view as its task to control the conformity of a French law with the international commitments of the State[40]. Only the conformity of Budget Acts and Programming Acts with organic laws and with the Constitution would be subject to review[41].

Moreover, the Organic Law on the Programming and Governance of Public Finances essentially made Programming Acts the main vehicle in French law of the requirements of fiscal discipline contained in the Fiscal Compact.. Programming Acts were created by the 2008 Constitutional modification, and were made to set multiannual guidelines for public finances, aiming at balanced accounts for public administrations. The Organic law on the Programming and Governance of Public Finances constrained and specified these Programming Acts in accordance to the Fiscal Compact.

 However, Programming Acts were not by themselves binding on Budget Acts and Social Security Financing Acts. This was confirmed by the Constitutional Council in Decision 2012-658 DC, restating that Programming Acts were not positioned higher in the hierarchy of norms than Budget Acts or Social Security Financing Acts. Therefore, the latter could not be reviewed on the basis of the commitments of fiscal discipline made in the Programming Acts, themselves implementing the commitments made in the Fiscal Compact.

In addition, for Programming Acts to be binding on Budget Acts would be contrary to article 20 of the Constitution according to which “the Government shall determine and conduct the policy of the Nation[42]”, granting freedom of appreciation and adaptation to the government; also it would be contrary to the budgetary prerogatives of the Parliament (§12 of the Decision[43]). This position appears to be in line with the principle according to which the legislator cannot bind itself for the future and can always undo a law previously passed[44].

The Constitutional Council could intervene on the basis of the new Organic Law in the event where the Government would set in a Programming Act a Medium Term Budgetary Objective clearly at odds with the requirements of the Organic Law (an event which seemed more theoretical than plausible in the political context of the discussions)[45] ; or in the event where the Government would stay silent, within the mechanism of correction of public deficit, on the gaps existing between its prevision of deficit reduction and public spending, pointed out by an independent authority, the High Council of Public Finance (“Haut Conseil des Finances Publiques”)[46].

Another route for constitutional review of Budget Acts would be through the control of the respect, in the Programming Acts, of the principle of “faithfulness of public accounts” (“principe de sincérité des comptes publics”) by the Government. Thus, a Government that would deliberately publish unrealistic economic assessments and forecasts in order to appear to fulfil its requirements under the Organic Law could see its Programming Acts annulled by the Conseil Constitutionnel[47]. However, it was underlined during the discussions that such control had been exercised loosely until then[48], no Budget Acts having been ever cancelled on this basis, and a strict criterion of “manifest error of appreciation” having been set by the Council to assess it[49].

Nevertheless, a new element that may hypothetically change this case law appeared in Decision n°2012-658 DC of 13 December 2012: faithfulness of public accounts may be assessed in light (but, as noted by the centre-left-wing majority, not exclusively[50]) of the advice of the High Council of Public Finance[51] (§19 of the Decision)[52].

Debate Balanced Budget Rule
IX.5
Describe the national debate on the implementation of the Fiscal Compact/Balanced Budget Rule, in particular in relation to the implications of the treaty for (budgetary) sovereignty, constitutional law and the budgetary process.

The national debate on the implementation of the Fiscal Compact shared many features with the debate on its ratification (see also question IX.3). The laws launching both processes were proposed to the Parliament by the centre-left-wing government on the same day, 19 September 2012.

In particular, the arguments over the need for a reorientation of the euro-crisis measures could be found in both cases. Discussions over the extent to which the election to the Presidency of socialist François Hollande, who campaigned for a renegotiation of the Fiscal Compact, brought about significant or sufficient change, were also a common feature of both debates.

The main point of opposition, in both cases, consisted in the former right-wing majority and the centre being in favour of a Constitutional amendment for the implementation of the Balanced Budget Rule, whereas the new centre-left-wing majority chose an interpretation of the Fiscal Compact allowing for its ratification without Constitutional modification and a more flexible understanding of its constraints, through organic legislation, as allowed by the Constitutional Council (Decision n° 2012-653 DC of 9 August 2012).

 Regardless of the interpretation of the Treaty, as the text that was open to ratification was the same as the text that was signed, both former and new majorities agreed on the ratification, while the far left and the ecologists voted against, both seeking a clearer disruption with the line of anti-crisis measures adopted so far. The point of disapproval between the new and the former majority thus appears to have rather born on the implementation of the Treaty through an organic law, together with the degree of flexibility with which the new majority interpreted the instrument. In particular, the right wing former majority did not accept easily that the new majority did not entail in the Organic Law implementing the fiscal compact the numbered objectives of deficit reduction provided for by article 4 of the Fiscal Compact. The position of the centre-left-wing new majority was however that a document of constitutional (or, on the matter, organic) norm should not integrate detailed policy aims, but only principles[53].

It should be noted that once the Treaty was ratified, the ecologists rallied the new centre-left-wing majority for the vote of the Organic Law, arguing that the implementing Organic Law was acceptable as far as it did not implement a golden rule; one additional explaining factor being that they were likely to increase their weight in the discussion of the precise content of the law if they were willing to vote in favour of it in the end[54].

Two different assessments of the constraining qualities of the Organic Law were made during the debates. For the new center-left majority and the ecologists, the text was presented as a flexible and useful tool, for rather informational purposes, helping the Government and the Parliament in the process of drafting and adopting the budget. In the same perspective, the newly created independent body in charge of assessing budget proposals under article 3(2) of the Fiscal Compact, the “Haut conseil des finances publiques” (High Council of Public Finance) would only provide analyses and advice that could not bind the decisions made by democratically elected institutions. The Constitutional Council would not be able to annul a budget on the basis of the objectives of budgetary balance of the Organic Law[55]. Indeed, the Organic Law was perceived as constraining the procedures of budgetary legislation rather than its content (see also question IX.4). In particular, the calculation in structural terms of the deficit was said to be such an uncertain economic assessment that it was very unlikely to give ground firm enough for any constitutional review[56]. The looseness of the review exerted until then on the Budget Acts, Social Security Financing Acts and Programming Acts by the Constitutional Council regarding the principle of faithfulness of public accounts, a principle that was recalled in the Organic Law and in both Decisions n° 2012-653 DC and n°2012-658 DC (see also questions IX.4 and IX.7), was also underlined by the majority[57].

However, this last argument seemed to be less definite within the ranks of the majority, as a report authored by this very majority had elsewhere[58] left open the question of whether the Constitutional Council taking into account the advice of the High Council of Public Finance, for the review of the principle of faithfulness of public accounts, would lead to a change in the case-law towards stricter control.

This question had to do with the second, competing assessment of the constraints arising from the Organic Law, defended essentially by the right-wing former majority, the centre, and the far left. In this other perspective, the review of the principle of faithfulness could be interpreted as being part of a constraining system, binding on the budgetary process in a significant manner. The centre thus held that the Conseil Constitutionnel could, on the basis of the principle of faithfulness of public accounts, annul the macroeconomic forecasts of the government[59]. The former right-wing majority added that if the Organic Law was really without effect on the budgetary process, this would constitute a breach of the Treaty and not a mere interpretation of it; therefore, the mechanism of correction of the public deficit should be taken seriously[60]. The far left shared this analysis, but as a reason to vote against the Organic Law, as it was perceived as constraining the budgetary process. To the far left, the main failure of the Organic Law was that the flexibility it sought was only a flexibility of means to achieve an objective that was itself dogmatic, unchallenged and economically dangerous: reducing public deficit without taking into account the specificities of the various public administrations and of the broader economic and social context[61].

Relationship BBR and MTO   
IX.6
What positions, if any, are taken in the national debate about the relationship between the Balanced Budget Rule of article 3(1)(b) Fiscal Compact and the Medium-term Budgetary Objective (MTO) rule in the Six-Pack (section 1A, article 2a Regulation 1466/97, on which see above question VII.10)?

 


The only position found focusing on this relationship was set out in a report[62] from the centre-left-wing majority pertaining to the ratification of the Fiscal Compact. Otherwise, the Organic law on the Programming and Governance of Public Finances could be said as completing the fulfilment of both the requirements of the Fiscal Compact and of the MTO rule of the Six-Pack. The report stated essentially that the main difference between the Fiscal Compact and the Six-Pack as regards the MTO rule relates to the tightening of the Balanced Budget Rule, setting a MTO of 0.5% GDP of structural deficit instead of 1% deficit in the Six-Pack. With the Fiscal Compact, a 1% GDP deficit would only be acceptable for States achieving to have less than 60% of GDP of debt and when risks pertaining to the sustainability of the debt are low.

The centre-left-wing majority praised in this regard two elements of flexibility regarding the MTO: that the debt be understood in “structural” terms allows for taking into account cyclical factors (“variations conjoncturelles”) in the assessment of debt sustainability; and that “exceptional circumstances” may legitimise deviating from the MTO, the Fiscal Compact giving more precision on the matter than the Six-pack[63].

Case law         
IX.7
Is there a (constitutional) court judgment on the Fiscal Compact/implementation of the Balanced Budget Rule?

There are four relevant cases, see below for an analysis of each case:       

Decision n° 2012-653 DC of the Constitutional Council, August 9, 2012[64]
(see also under question IX.4).

1.     Name of the Court

Conseil Constitutionnel de la République Française (Constitutional Council of the French Republic)

2.     Parties

N/A.

3.     Type of action/procedure

Review of conformity with the Constitution of a Treaty before ratification, triggered by the President of the Republic under article 54 of the Constitution, in order to decide whether the Constitution must be amended before ratification of the Treaty on Stability, Coordination and Governance in the Economic and Monetary Union (thereafter “Fiscal Compact”). Article 54 reads:  “If the Constitutional Council, on a referral from the President of the Republic, from the Prime Minister, from the President of one or the other Houses, or from sixty Members of the National Assembly or sixty Senators, has held that an international undertaking contains a clause contrary to the Constitution, authorization to ratify or approve the international undertaking involved may be given only after amending the Constitution”[65]

4.     Admissibility issues

The President is entitled under article 54 of the Constitution to refer to the Constitutional Council in order to determine whether “an international undertaking contains a clause contrary to the Constitution,[in which case] authorization to ratify or approve the international undertaking involved may be given only after amending the Constitution”. The international undertaking at stake is the Fiscal Compact Treaty.

5.     Legally relevant factual situation

France signed the Fiscal Compact Treaty on March 2, 2012. Under article 54 of the French Constitution, the Conseil Constitutionnel decides whether the Constitution must be amended before ratification of the Treaty (see point 3 above).

Article 3(1) and (2) of the Fiscal Compact, in particular, are crucial in the Constitutional Council’s assessment of conformity of the Fiscal Compact with the Constitution.

Article 3(1) of the Fiscal Compact provides that the budget of the States’ public administrations be balanced or positive.

Article 3(2) of the Fiscal Compact provides that the rules for balanced budgets provided for in article 3(1) “take effect in the national law of the Contracting Parties at the latest one year after the entry into force of this Treaty through provisions of binding force and permanent character, preferably constitutional, or otherwise guaranteed to be fully respected and adhered to throughout the national budgetary processes.

At the time of the decision, and as recalled by the Conseil Constitutionnel, France is already bound by rules for fiscal discipline under EU law (especially article 126 TFEU and Protocol n°12 to the EU Treaties; European regulation of July 7, 1997, modified by two European regulations on June 27, 2005 and November 16, 2011).

6.     Legal questions

The Conseil Constitutionel must determine whether the Fiscal Compact “includes any provision which is anticonstitutional” (§1 of the decision). The CC has to determine in particular whether article 3(2) of the Treaty creates the need for an amendment of the Constitution prior to ratification. The main angle of enquiry consists in deciding whether the Fiscal Compact encroaches upon “essential conditions for the exercise of national sovereignty”.

7.     Arguments of the parties

N/A.

8.     Answer by the Court to the legal questions and legal reasoning of the Court

The Constitutional Council (CC) uses throughout the decision what looks like a form of reservation of interpretation[66] on an international document, to the effect that the provisions of the Fiscal Compact do not run contrary to the Constitution, as long as one out of two options for the fulfilment of its article 3(2) is chosen. The other option is said to encroach upon “essential conditions for the exercise of national sovereignty”. The CC organises its reasoning in five parts.

The first part of the decision (§§1 – 3) states the legal question – whether the Treaty provides a disposition contrary to the Constitution (§1) –, while recalling the commitments of the State in the European construction process (§3). The mention later in §10 of commitments made to that purpose “or which are closely related to this goal” (“ou en étroite coordination avec cette fin”) appears to echo with this reminder, and to imply that while the Fiscal Compact is an international document, the CC considers it in the light of its role in the European legal framework. Moreover, the CC does notice that the Fiscal Compact, under its article 16, is to be integrated in European Law five years after its entry into force (§3 of the decision). 

The second part of the decision (§§4 – 11) deals with the law applicable to the case (“Sur les normes de reference”). France’s commitment towards human rights in its internal order is restated (§4), in particular the principle of national (people’s) sovereignty in article 3 of the French Declaration of the Rights of Man and of the Citizen (DRMC), and the exercise of this sovereignty through representation and referendum, as stated in article 3 of the 1958 French Constitution (§5 of the decision). After mentioning the relationship between French law and international law (§§6 – 7), the CC recalls article 88-1 of the Constitution following which the EU legal order is integrated into the national legal order, and distinct from the international legal order (§8). However, §10 underlines that, in order to ratify commitments signed to the effect of pursuing the goal of European integration and that would “call into question the rights and freedoms guaranteed by the Constitution or run contrary to the essential conditions for the exercise of national sovereignty”, prior amendment of the Constitution is required. Yet, the parts of the Fiscal Compact that are only restating European commitments already made by France are exempt from constitutional review (§11). Commentators of the decision have pointed out, however, that the CC does review “in passing” (§31) the conformity with the Constitution of Regulation 1177/2011 of 8 November 2011, when it assesses that article 4 of the Fiscal Compact (which reproduces in substance the requirements of the Regulation) is not contrary to the Constitution[67].

The third part of the decision (§§12-34, “Sur les stipulations relatives au Pacte Budgétaire”) is the most substantial, and deals with the provisions under Title III of the Treaty on the “Fiscal Compact” – the title that gave the Treaty its common name. The CC starts by stating the provisions of French constitutional and human rights law providing for the prerogatives of the Government and the Parliament in legislative and more specifically budgetary matters (§§12-13). The following question then appears to be whether or not the rules on balanced public finances, especially article 3(1) of the Fiscal Compact, run counter to essential conditions for the exercise of national sovereignty. After taking stock of the already existing EU rules on balanced public finances in §§14-16 (art.120 and 126 TFEU and the annexed Protocol n°12; Regulation of 7 July 1997, amended by Regulations of 27 June 2005 and of 16 November 2011), the CC concludes that the provisions of art.3(1) of the Fiscal Compact only reassert and strengthen commitments already made, that “they do not result in the transfer of any powers over economic or fiscal policy and do not authorise any such transfers”, to the effect that they do not infringe upon these essential conditions (§§14-16).

What is arguably the most complex development of the decision pertains to the scrutiny by the CC of the means by which the rules on balanced public finances of art.3(1) would take effect in French law, through the interpretation of article 3(2) of the Fiscal Compact. After recalling the obligation for the State to abide by the Treaty once ratified, the CC interprets article 3(2) as stipulating an alternative (§19), whereby the rules laid down in article 3(1) “take effect under national law either ‘through provisions of binding force and permanent character, preferably constitutional’ or through provisions ‘otherwise guaranteed to be fully respected and adhered to throughout the national budgetary processes’”. On the one hand, the CC recognises that the first option would require introduction in the national legal order of rules that would be binding on Budget Acts and Social Security Financing Acts (§20); such rules would in turn require constitutional amendment, as they would introduce changes to the prerogatives of the Government and Parliament in budgetary matters, as well as to the principle that Budget Acts are to be enacted annually, as derived from art.34 and 47 of the Constitution (§21). On the other hand, the CC considers that the second option offered by article 3(2) of the Fiscal Compact does not require the introduction of binding provisions within the national legal order, the Member States remaining free to determine the provisions sought to have the effects required in article 3(2), while the rules of article 3(1) would not require a guarantee in the national legal order of a higher force than ordinary legislation (§22). Yet, even under the second option offered by the Fiscal Compact, article 3(1) requires that the rules on balanced public finances must have a permanent character and apply to all government services (§23). Moreover, the CC recalls its own continuing role in the review of the respect of the principle of faithfulness in public accounting (§27, also alluded to in §13), and that it would “tak[e] account”, in doing so, “of the opinions of independent institutions established in advance” – such institutions as referred to  under art.3(2) of the Fiscal Compact[68].

The CC then hints at which norm of the national legal order would fit the purpose of fulfilling the requirements of article 3(2) of the Fiscal Compact if the second option set out above were chosen: Programming Acts (§24 and already mentioned by the CC in §13), which have no binding force over Budget Acts or Social Security Financing Acts, may be used to that end. However, The Conseil Constitutionnel still recognizes the need for these norms to be of a “permanent character” (§23), as art.3(2) of the Fiscal Compact states that mechanisms of deficit control are “guaranteed to be fully respected and adhered to throughout the national budgetary processes”. Thus, the Fiscal Compact requirement for a Medium Term Objective, reduction deficit Trajectory, automatic correction mechanism and independent body may be enshrined in an organic law, providing a permanent framework for the Programming Acts that would in turn set the objectives of the Budget Acts and Social Security Financing Acts.

As such a solution allows for the implementation of the Fiscal Compact without constitutional amendment, the CC does not see a reason under article 8 of the Fiscal Compact to allow for the European Court of Justice to review the correct implementation of the Treaty in French Constitutional law (§30) – which would be a control of conformity of the Constitution with a Treaty by the Court of Justice.

After recognizing in the fourth part of the decision that “the other provisions of the Treaty” are not contrary to the Constitution, the CC concludes in the fifth part that the Treaty does not run counter to the Constitution, under the conditions defined in §§21, 28 and 30.

9.     Legal effects of the judgment/decision

The Constitutional Council decided that the Fiscal Compact can be ratified without need of prior change the French Constitution.

10.  Shortly describe the main outcome of the judgment/decision and its broader political implications.

This Decision enabled the new center-left Government to choose to ratify the Fiscal Compact with an interpretation of its fiscal discipline requirements that was flexible than was originally understood by the previous Government, which signed the Treaty. It thus enabled a political change in France, away from tougher understandings of fiscal discipline as a solution to the crisis.

Decision n° 2012-658 DC of the Constitutional Council, December 13, 2012[69]

1.     Name of the Court

 Constitutional Council of the French Republic (Conseil Constitutionnel de la République Française)

2.     Parties

N/A

3.     Type of action/procedure

Obligatory review of conformity with the Constitution of an organic law (“Institutional Act”), triggered by the Prime Minister under articles 46 and 61 of the Constitution.

Article 46: “Acts of Parliament which are defined by the Constitution as being Institutional Acts shall be enacted and amended as provided for hereinafter […]. Institutional Acts shall not be promulgated until the Constitutional Council has declared their conformity with the Constitution”.

Article 61: “Institutional Acts, before their promulgation, Private Members’ Bills mentioned in article 11 before they are submitted to referendum, and the rules of procedure of the Houses of Parliament shall, before coming into force, be referred to the Constitutional Council, which shall rule on their conformity with the Constitution.

To the same end, Acts of Parliament may be referred to the Constitutional Council, before their promulgation, by the President of the Republic, the Prime Minister, the President of the National Assembly, the President of the Senate, sixty Members of the National Assembly or sixty Senators.

In the cases provided for in the two foregoing paragraphs, the Constitutional Council must deliver its ruling within one month. However, at the request of the Government, in cases of urgency, this period shall be reduced to eight days.

In these same cases, referral to the Constitutional Council shall suspend the time allotted for promulgation.[70]

4.     Admissibility issues

Organic laws are to be reviewed by the Constitutional Council before promulgation, under articles 46 and 61 of the Constitution (see point 3 above).

5.     Legally relevant factual situation

The Organic Law on the Programming and Governance of Public Finances followed the ratification by France of the Fiscal Compact. It was meant to implement in French law most of its requirements (see also questions IX.4 and IX.5).

6.     Legal questions

The Constitutional Council had to determine whether the Organic Law was compatible with the Constitution.

7.     Arguments of the parties

N/A.

8.     Answer by the Court to the legal questions and legal reasoning of the Court

The Constitutional Council essentially validated the Organic Law, except for three of its provisions that were ruled unconstitutional, and two others on which the Constitutional Council issued a reservation of interpretation[71].

The core of the decision consisted arguably in its reaffirmation of the prerogatives of the Government and of Parliament in budgetary matters. Therefore, the pluri-annual orientations for public finances defined in Programming Acts  – as defined themselves according to the Organic Law – shall not impair the “freedom of appreciation and adaptation [of the Government…] in the determination and conduct of the policy of the Nation”, nor “the prerogatives of Parliament when it examines and votes the proposals of Budget Acts and the proposals of Social Security Financing Acts […][72]”.

Another particularly important aspect of the decision pertained to the respect of the principle of “faithfulness” in public accounts. The Constitutional Council reaffirmed its power to control whether financial Acts comply with this principle of faithfulness, and declared that in this control it would take into account the works of the newly created High Council of Public Finance. However, the High Council would be but one of the sources used by the Constitutional Council as the basis for this control[73]. The doctrine noted that the principle of faithfulness had never led the Constitutional Council to declare a proposal of financial Act unconstitutional so far[74]; it remains to be seen if the new Organic Law and the Constitutional Council Decision will change this practice.

Two of the provisions ruled unconstitutional in Decision n°2012-658 DC regarded the process of nomination of the members of the High Council of Public Finance, the independence of which had to be reinforced in respect to the executive and legislative branches of the State. The third provision ruled unconstitutional pertained to the order in which the advice of the High Council of Public Finance was to be issued, in respect of the moment of issuance of advice by the Council of State, and in respect of the beginning of Parliamentary examination of proposals of financial Acts. The first reservation of interpretation expressed by the Constitutional Council also deals with this last point. The second reservation of interpretation made clear that Parliament would be able to start discussing the texts of the proposals of financial Acts, even when elements of the information required of these proposals by the new Organic Law would be missing. Thus, refusal to put a proposal of financial Act on the agenda of the Parliament, on the sole motive that it does not fulfil such a requirement of the Organic Law, would not be admissible.

9.     Legal effects of the judgment/decision

 

The decision allowed the Organic Law to be promulgated – except for the parts ruled unconstitutional, and under reservation of interpretation for two provisions.

10.  Shortly describe the main outcome of the judgment/decision and its broader political implications.

The decision stood in the continuity of Decision n° 2012-653 DC of 9 August 2012 on the Fiscal Compact, and accepted the changes introduced by the Organic Law in the budgetary process, while reaffirming the prerogatives of the Government and Parliament in budgetary matters.

Decision n°2012-659 DC of the Constitutional Council, December 13, 2012[75]

1.     Name of the Court

Constitutional Council of the French Republic (Conseil Constitutionnel de la République Française)

2.     Parties

N/A.

3.     Type of action/procedure

Prior Reference to the Constitutional Council over the compatibility of the Social Security Financing Act for 2013 with the Constitution, before its promulgation, as provided for under article 61 of the Constitution: “[…] Acts of Parliament may be referred to the Constitutional Council, before their promulgation, by the President of the Republic, the Prime Minister, the President of the National Assembly, the President of the Senate, sixty Members of the National Assembly or sixty Senators. […]”

4.     Admissibility issues

Reference to the Constitutional Council was made by at least sixty deputies and sixty senators – it was therefore admissible under article 61 of the Constitution (see point 3).

5.     Legally relevant factual situation

Decision n°2012-659 DC was adopted a few days after Decision n° 2012-658 DC of 13 December 2012[76] (see above) on the Organic Law on the Programming and Governance of Public Finances (“the Organic Law”)[77], implementing the Fiscal Compact.

On 9 August 2012, the Constitutional Council had authorised the ratification of the Fiscal Compact without amendment of the Constitution, in Decision n°2012-653 DC[78] (see above).  One of the elements developed by the Constitutional Council in this Decision was the reaffirmation of its power to review financial Acts on the basis of the principle of faithfulness.

6.     Legal questions           

The first point made by the referring (centre and right-wing) deputies pertained to what they considered a breach of the principle of faithfulness in public accounts by the new (centre-left-wing) government[79]. The question was thus to determine whether there had been a breach of the principle of faithfulness in the Social Security Financing Act for 2013, in which case it would have to be declared unconstitutional.

7.     Arguments of the parties       

The referring deputies contested in particular the macroeconomic assessment and forecast made by the government in the Social Security Financing Act for 2013, and compared it with other assessments, such as that of the IMF or of the French Court of Auditors (Cour des Comptes). They also reminded the Constitutional Council of its Decision n°2012-653 DC, as a factor in favour of their interpretation regarding the principle of faithfulness. They contended in particular that Decision n°2012-653 DC should lead to a less restrictive definition of the principle of faithfulness. They however acknowledged the long-standing case-law of the Constitutional Council, according to which it does not review the conformity of French law with international treaties such as the Fiscal Compact.

8.     Answer by the Court to the legal questions and legal reasoning of the Court

On the question of the principle of faithfulness, the Constitutional Council first noted that the provisions of the Organic Law had not entered into force yet (§3).

Then, the Constitutional Council reaffirmed its definition of the principle of faithfulness, which would only be breached if there had been the intent to give a wrong assessment of its previsions of budgetary balance (§4)[80].

Yet, the elements brought to the Constitutional Council did not show an intent to give such a wrong assessment (§5). There was therefore no violation of the principle of faithfulness.

9.     Legal effects of the judgment/decision

The Social Security Financing Act did not breach the principle of faithfulness of public accounts.

10.  Shortly describe the main outcome of the judgment/decision and its broader political implications.

The reference showed the readiness of a part of the Members of Parliament to use the new instruments and decisions that followed the ratification of the Fiscal Compact, in order to constitutionally constrain the budgetary process. However, the Constitutional Council did not yet show a change in its interpretation of the tools available to it for review of financial acts – in this case, the principle of faithfulness of public accounts (see also Décision n° 2013-682 below for further developments).

Decision n°2013-682 DC of the Constitutional Council, December 19, 2013[81]

1.       Name of the Court

Constitutional Council of the French Republic (Conseil Constitutionnel de la République Française)

2.       Parties

N/A.

3.       Type of action/procedure

Prior Reference to the Constitutional Council over the compatibility of the Social Security Financing Act for 2014 to the Constitution, before its promulgation, as provided for under article 61 of the Constitution: “[…] Acts of Parliament may be referred to the Constitutional Council, before their promulgation, by the President of the Republic, the Prime Minister, the President of the National Assembly, the President of the Senate, sixty Members of the National Assembly or sixty Senators. […]”

4.       Admissibility issues

Reference to the Constitutional Council was made by at least sixty deputies or sixty senators (in this case both) – it was therefore admissible under article 61 of the Constitution (see point 3).

5.       Legally relevant factual situation

On 9 August 2012, the Constitutional Council had authorised the ratification of the Fiscal Compact without amendment of the Constitution, in Decision n°2012-653 DC[82] (see above).  One of the elements developed by the Constitutional Council in this Decision was the reaffirmation of its power to review financial Acts on the basis of the principle of faithfulness.

In Decision n° 2012-658 DC of 13 December 2012[83] (see above) on the Organic Law on the Programming and Governance of Public Finances (“the Organic Law”)[84], which implemented the Fiscal Compact, the Constitutional Council reaffirmed its power to control financial Acts on the basis of the principle of faithfulness of public accounts.

The use of this principle of faithfulness had been tested by referring MPs on the Social Security Financing Act for 2013. They were however unsuccessful, in Decision n°2012-659 DC, in having the Constitutional Council declare that the principle of faithfulness had been breached. At the time, the Organic Law had not yet entered into force  – but at the time of the new referral, it had.

6.       Legal questions

The first point made by the referring (centre and right-wing) deputies pertained to what they considered a breach of the principle of faithfulness in public accounts by the (centre-left-wing) government[85]. The question was thus to determine whether there had been a breach of the principle of faithfulness in the Social Security Financing Act for 2014, in which case it would have to be declared unconstitutional.

This question could have a different answer than in Decision n°2012-659 DC, now that the provisions of the Organic Law had entered into force and that the High Council of Public Finance (HCPF) had been set up. Indeed, the Constitutional Council had stated in Decision n°2012-653 DC of 9 August 2012 that, in its review of financial Acts on the basis of the principle of faithfulness, it would take into account the works of this institution.

7.       Arguments of the parties

The referring MPs considered generally that the Social Security Financing Act for 2014 breached France’s commitments on budgetary balance, especially in the Fiscal Compact. They however acknowledged the long-standing case-law of the Constitutional Council, according to which it does not review the conformity of French law with international treaties.

However, they stressed a publication of the HCPF according to which the forecasts of the government for economic growth were “plausible”, yet showing “weaknesses”. Moreover, the referring MPs argued that the latest measures added by the government to the proposal of Social Security Financing Act (measures evaluated at 0,6 billion euros) had not been transmitted to the HCPF, which impeded its ability to issue a fully informed opinion on the previsions of the government regarding budgetary balance[86].

8.       Answer by the Court to the legal questions and legal reasoning of the Court    

The decision issued by the Constitutional Council was very similar to the one reached in Decision n°2012-659 DC: it did not appear from the elements put forward that there had been intention on the part of the government to provide a wrong economic and budgetary assessment in the Social Security Financing Act for 2014 (§5). On the point of the new measures not transmitted to the HCPF, the Constitutional Council observed that the government had proceeded to adequate modifications in the documents of information associated with the Social Security Financing Act (§6). Therefore, there was no breach of the principle of faithfulness.

9.        Legal effects of the judgment/decision    

The Social Security Financing Act for 2014 did not breach the principle of faithfulness of public accounts.

10.    Shortly describe the main outcome of the judgment/decision and its broader political implications

This new reference confirmed the readiness of a part of the Members of Parliament to use the new instruments and decisions that followed the ratification of the Fiscal Compact, in order to constitutionally constrain the budgetary process. However, the Constitutional Council still did not show a change in its interpretation of the tools available to it for review of financial acts – in this case, the principle of faithfulness of public accounts.

Non-Eurozone and binding force   
IX.8
Has France decided to be bound by parts of the Fiscal Compact on the basis of article 14(5) Fiscal Compact already before joining the Euro area, or has this option been debated?

Not applicable, since France is a member of the Euro Area

Miscellaneous
IX.9
What other information is relevant with regard to France and the Fiscal Compact?

The Fiscal Compact was not the first attempt at introducing a “Golden Rule” in French constitutional law. In March 2011, the right-wing government tried and failed to have the Parliament adopt a law amending the Constitution for the purposes of budgetary balance[87]. A report by Michel Camdessus[88] had been issued in June 2010[89], and argued for a constitutional change, including (but not limited to) the institution of a “Framework Pluriannual Programming Act for Public Finances” (loi-cadre de programmation pluriannuelle des finances publiques), binding on financial Acts[90]  (which is currently not the case for Programming Act set up by the new Organic Law on the Programming and Governance of Public Finances).

On 16 March 2011, the right-wing government presented to Parliament a proposal for constitutional amendment[91], inspired on several accounts from the Camdessus report. Its main features included importantly a “Framework Act for a Balanced Budget” (lois-cadres d’équilibre des finances publiques), with a pluriannual perspective and binding on financial Acts. Two other modifications of the Constitution were proposed: to ensure a monopoly for financial Acts in matters of mandatory levy (prélèvements obligatoires); and to enshrine in the Constitution the principle of systematic transmission of the Stability programmes to the Parliament before their transmission to the European Commission.

One argument in particular, found in the first Report on the project of constitutional amendment at the National Assembly, justified primarily the adoption of constitutional measures of budgetary control because it was not any more possible to use monetary devaluations – because of the common currency –  to help solve budgetary difficulties[92].

The right-wing and its allies from the centre however could not find the qualified majority required by Article 89 of the Constitution for any vote of a Constitutional amendment by the Parliament gathered in Congress[93], especially not when the majority in the Senate had shifted to the left (see also question I.1).  

The Socialist Party, in particular, refused what it called a manoeuvre aiming at presenting the left as lacking a sense of budgetary responsibility. Instead, democratic elections should take place and give to the people the choice of alternative visions of economic and budgetary policies.

The far left considered the “golden rule” presented by the right-wing government as a constitutionalisation of an “austerity straightjacket”, based on an economic orthodoxy shared by the European institutions[94].

[1] Compte rendu de la Commission des Affaires européennes de l’AN, 7 février 2012 : http://www.assemblee-nationale.fr/13/europe/c-rendus/c0239.asp#P20_1253

[2] Idem. The following centre-left-wing Government, however, decided to take the option of an organic law for its implementation.

[3] Idem.

[4] http://www.assemblee-nationale.fr/14/rapports/r0205.asp

[5] http://www.assemblee-nationale.fr/13/europe/c-rendus/c0239.asp#P20_1253.

[6] Idem.

[7] AN, Commission for European Affairs,  « Proposition de resolution europeenne (no 4196) de M. Jean-Marc Ayrault, Mme Elisabeth Guigou et M. Christophe Caresche et les membres du groupe Socialiste, Radical, Citoyen et Divers Gauche et apparentés, sur la relance européenne et le renforcement du contrôle démocratique », 7 February 2012 – http://www.assemblee-nationale.fr/13/rapports/r4328.asp (pdf: http://www.assemblee-nationale.fr/13/pdf/rapports/r4328.pdf)

[8] Idem. Regulation no 1175 of 16 November 2011 is mentioned.

[9] http://www.conseil-constitutionnel.fr/conseil-constitutionnel/francais/les-decisions/acces-par-date/decisions-depuis-1959/2012/2012-653-dc/decision-n-2012-653-dc-du-09-aout-2012.115444.html

[10] http://www.assemblee-nationale.fr/14/rapports/r0205.asp ; http://www.senat.fr/rap/l12-022/l12-022.html

[11] http://www.assemblee-nationale.fr/14/rapports/r0205.asp; see also Conclusions du Conseil européen des 28 et 29 juin 2012 (EUCO 76/12) : http://www.consilium.europa.eu/uedocs/cms_data/docs/pressdata/fr/ec/131408.pdf; see also in the newspapers : http://www.lejdd.fr/International/UE/Actualite/Le-Memorandum-de-Francois-Hollande-a-destination-des-pays-de-l-UE-519938; http://www.lemonde.fr/economie/article/2012/06/28/accord-europeen-pour-un-pacte-croissance-de-120-milliards-d-euros_1726687_3234.html

[12] http://www.assemblee-nationale.fr/14/rapports/r0205.asp

[13] http://www.conseil-constitutionnel.fr/conseil-constitutionnel/root/bank_mm/anglais/constiution_anglais_oct2009.pdf

[14] http://www.legifrance.gouv.fr/affichJuriConst.do?oldAction=rechJuriConst&idTexte=CONSTEXT000026345630&fastReqId=995021034&fastPos=1

[15] http://www.assemblee-nationale.fr/14/projets/pl0197.asp

[16] http://www.assemblee-nationale.fr/connaissance/fiches_synthese/septembre2012/fiche_32.asp

[17] http://www.legifrance.gouv.fr/affichTexte.do;jsessionid=?cidTexte=JORFTEXT000026526229&dateTexte=&oldAction=rechJO&categorieLien=id

[18] http://www.senat.fr/rap/l12-022/l12-022.html

[19] Votes at the AN:  http://www.assemblee-nationale.fr/14/scrutins/jo0030.asp ; votes at the Senate: http://www.senat.fr/scrutin-public/2012/scr2012-3.html

[20] Rapport for the Finances Commission of the Senate, 9 October 2012: http://www.senat.fr/rap/l12-022/l12-0222.html#toc52

[21]Idem. http://www.senat.fr/rap/l12-022/l12-022.html

[22] http://www.assemblee-nationale.fr/14/cri/2012-2013/20130012.asp#P365_75152

[23] Idem.

[24] http://www.senat.fr/amendements/2012-2013/23/Amdt_1.html; http://www.senat.fr/amendements/2012-2013/23/Amdt_2.html

[25] http://www.senat.fr/amendements/2012-2013/23/Amdt_3.html

[26] http://www.assemblee-nationale.fr/14/rapports/r0205.asp#P1210_179797

[27] Idem.

[28] Idem.

[29] http://www.conseil-constitutionnel.fr/conseil-constitutionnel/francais/les-decisions/acces-par-date/decisions-depuis-1959/2012/2012-658-dc/decision-n-2012-658-dc-du-13-decembre-2012.135388.html

[30] http://www.senat.fr/dossier-legislatif/pjl12-043.html

[31] http://www.senat.fr/role/fiche/loi.html

[32] http://www.conseil-constitutionnel.fr/conseil-constitutionnel/francais/la-constitution/les-revisions-constitutionnelles/revision-constitutionnelle-du-23-juillet-2008.16312.html

[33] http://www.conseil-constitutionnel.fr/conseil-constitutionnel/root/bank_mm/anglais/constiution_anglais_oct2009.pdf

[34] Guy Carcassonne, La Constitution, Editions du Seuil, onzième édition (2013), pp.177-178 : « Apparaissent, enfin, des orientations pluriannuelles des finances publiques, définies par des lois de programmation auxquelles est recommandée la vertu : s’inscrire dans le nouvel objectif de valeur constitutionnelle d’équilibre des comptes des administrations publiques. Etrange conception, étrange rédaction. L’on pouvait souhaiter la constitutionnalisation d’une ‘règle d’or budgétaire’ (…). On préféra une formule édulcorée – un simple objectif, non une obligation – et limitée – aux seules administrations publiques plutôt qu’à l’ensemble des charges collectives ».

[35] http://www.conseil-constitutionnel.fr/conseil-constitutionnel/francais/les-decisions/acces-par-date/decisions-depuis-1959/2012/2012-653-dc/decision-n-2012-653-dc-du-09-aout-2012.115444.html

[36] http://www.senat.fr/dossier-legislatif/pjl12-043.html; http://legifrance.gouv.fr/affichTexte.do;jsessionid=880EA47A857F3711785949A673404337.tpdjo13v_2?cidTexte=JORFTEXT000026785259&dateTexte=&oldAction=rechJO&categorieLien=id (pdf : http://legifrance.gouv.fr/jopdf/common/jo_pdf.jsp?numJO=0&dateJO=20121218&numTexte=1&pageDebut=19816&pageFin=19820 )

[37] http://www.legifrance.gouv.fr/affichTexte.do;jsessionid=A66320193C5E585C67BBCC5544239979.tpdjo14v_1?cidTexte=JORFTEXT000000394028&dateTexte=20130616

[38] http://www.senat.fr/rap/l12-115/l12-115.html

[39] http://www.conseil-constitutionnel.fr/conseil-constitutionnel/francais/les-decisions/acces-par-date/decisions-depuis-1959/2012/2012-658-dc/decision-n-2012-658-dc-du-13-decembre-2012.135388.html (pdf: http://www.conseil-constitutionnel.fr/conseil-constitutionnel/root/bank/pdf/conseil-constitutionnel-135388.pdf )

[40] See in particular Decision 54-74 DC of  15 January 1975.

[41] Michel Lascombe, « La nouvelle gouvernance financière », AJDA 2013 p.228, 2013, pp.5-6.

[42] http://www.conseil-constitutionnel.fr/conseil-constitutionnel/english/constitution/constitution-of-4-october-1958.25742.html

[43] http://www.conseil-constitutionnel.fr/conseil-constitutionnel/francais/les-decisions/acces-par-date/decisions-depuis-1959/2012/2012-658-dc/decision-n-2012-658-dc-du-13-decembre-2012.135388.html ; see also Michel Lascombe, op.cit. p.5.

[44] Conseil Constitutionnel Decision 82-142 DC of 27  July 1982, Loi portant réforme de la planification,  §8, cited in Romain Bourrel, « La validation par le Conseil constitutionnel de la « nouvelle Constitution financière » de la France», AJDA 2013 p.478,  2013, p.2.

[45] http://www.assemblee-nationale.fr/14/rapports/r0244.asp

[46] Michel Lascombe, op.cit., p.10

[47] Loi organique TSCG Rapport Com spéciale AN

[48] Idem.

[49] Romain Bourrel, op.cit. pp.2-3.

[50] Rapport AN loi organique, p.39.

[51] Romain Bourreil, idem.

[52] http://www.conseil-constitutionnel.fr/conseil-constitutionnel/francais/les-decisions/acces-par-date/decisions-depuis-1959/2012/2012-658-dc/decision-n-2012-658-dc-du-13-decembre-2012.135388.html

[53] http://www.assemblee-nationale.fr/14/cri/2012-2013/20130014.asp#P465_92105. See in particular the intervention from Pierre-Alain Muet for the position of the new majority. 

[54] http://www.assemblee-nationale.fr/14/scrutins/jo0032.asp#Groupe%C3%A9cologiste ; http://www.senat.fr/scrutin-public/2012/scr2012-12.html

[55] http://www.assemblee-nationale.fr/14/rapports/r0244.asp

[56] Idem.

[57] Idem.

[58] www.assemblee-nationale.fr/14/rapports/r0244.asp

[59] http://www.assemblee-nationale.fr/14/cri/2012-2013/20130014.asp#P465_92105

[60] Idem.

[61] Idem.                                                                                                                         

[62] http://www.assemblee-nationale.fr/14/rapports/r0205.asp#P1210_179797

[63] Idem.

[64] http://www.conseil-constitutionnel.fr/conseil-constitutionnel/francais/les-decisions/acces-par-date/decisions-depuis-1959/2012/2012-653-dc/decision-n-2012-653-dc-du-09-aout-2012.115444.html ; (pdf: http://www.conseil-constitutionnel.fr/conseil-constitutionnel/root/bank/pdf/conseil-constitutionnel-115444.pdf ) (english version : http://www.conseil-constitutionnel.fr/conseil-constitutionnel/english/case-law/decision/decision-no-2012-653-dc-of-9-august-2012.115501.html )

[65] http://www.conseil-constitutionnel.fr/conseil-constitutionnel/english/constitution/constitution-of-4-october-1958.25742.html

[66] The point is made in particular by Jérôme Roux, « Le Conseil constitutionnel et le traité sur la stabilité, la coordination et la gouvernance au sein de l’Union économique et monétaire : Busiris, Rue de Montpensier. Commentaire de la décision n° 2012-653 DC du 9 août 2012 », in Revue trimestrielle de droit européen (2013), pp. 855-876, §24.

[67] Jérôme Roux, op.cit., §9.

[68] Commentators have recognised that the judicial review of the principle of sincerity in public accounting could thus be strengthened – noting, however, that the principle of sincerity was never used by the CC to annul a Budget Act or Social Security Financing Act. See Eric Oliva, « Le pacte de stabilité devant les juridictions constitutionnelles – Décision du Conseil constitutionnel, n° 2012-653 DC, 9 août 2012, Traité sur la stabilité, la coordination et la gouvernance au sein de l’Union économique et monétaire », RFDA, AJDA (2012), pp.1073 and following : « Le juge constitutionnel confère une normativité renforcée aux règles d’équilibre en les liant au principe de sincérité budgétaire lui-même renforcé par l’avis des institutions indépendantes mises en place par la loi organique. Il est ainsi probable qu’à l’avenir les lois de programmation pluriannuelle, les lois de finances et les lois de financement de la sécurité sociale, feront en matière de sincérité l’objet d’un contrôle plus poussé qu’auparavant » ; also footnote (89): « jusqu’à présent le principe de sincérité n’a jamais donné lieu à une annulation ».

[69] http://www.conseil-constitutionnel.fr/conseil-constitutionnel/francais/les-decisions/acces-par-date/decisions-depuis-1959/2012/2012-658-dc/decision-n-2012-658-dc-du-13-decembre-2012.135388.html (pdf: http://www.conseil-constitutionnel.fr/conseil-constitutionnel/root/bank/pdf/conseil-constitutionnel-135388.pdf ).

[70] http://www.conseil-constitutionnel.fr/conseil-constitutionnel/english/constitution/constitution-of-4-october-1958.25742.html

[71] See also Romain Bourrel, “La validation par le Conseil constitutionnel de la « nouvelle Constitution financière» de la France”, AJDA 2013, p.478

[72] Decision n°2012-658 DC, §12 : « Considérant que les orientations pluriannuelles ainsi définies par la loi de programmation des finances publiques n’ont pas pour effet de porter atteinte à la liberté d’appréciation et d’adaptation que le Gouvernement tient de l’article 20 de la Constitution dans la détermination et la conduite de la politique de la Nation ; qu’elles n’ont pas davantage pour effet de porter atteinte aux prérogatives du Parlement lors de l’examen et du vote des projets de loi de finances et des projets de loi de financement de la sécurité sociale ou de tout autre projet ou proposition de loi […] ».

[73] Ibid, §19 : « Considérant que l’article 6 de la loi organique énonce le principe de sincérité des lois de programmation des finances publiques, en précisant : « Sa sincérité s’apprécie compte tenu des informations disponibles et des prévisions qui peuvent raisonnablement en découler » ; qu’il est notamment prévu à l’article 13 que le Haut Conseil des finances publiques rend un avis sur les prévisions macroéconomiques sur lesquelles repose le projet de loi de programmation des finances publiques ; que la sincérité de la loi de programmation devra être appréciée notamment en prenant en compte cet avis » (emphasis by us).

[74] Romain Bourrel, op. cit.

[75] http://www.conseil-constitutionnel.fr/conseil-constitutionnel/francais/les-decisions/acces-par-date/decisions-depuis-1959/2012/2012-659-dc/decision-n-2012-659-dc-du-13-decembre-2012.135375.html ; (pdf: www.conseil-constitutionnel.fr/conseil-constitutionnel/root/bank/pdf/conseil-constitutionnel-135375.pdf )

[76] http://www.conseil-constitutionnel.fr/conseil-constitutionnel/francais/les-decisions/acces-par-date/decisions-depuis-1959/2012/2012-658-dc/decision-n-2012-658-dc-du-13-decembre-2012.135388.html (pdf: http://www.conseil-constitutionnel.fr/conseil-constitutionnel/root/bank/pdf/conseil-constitutionnel-135388.pdf ). See also: http://www.conseil-constitutionnel.fr/conseil-constitutionnel/francais/les-decisions/acces-par-date/decisions-depuis-1959/2012/2012-658-dc/communique-de-presse.135389.html

[77] http://www.senat.fr/dossier-legislatif/pjl12-043.html; http://legifrance.gouv.fr/affichTexte.do;jsessionid=880EA47A857F3711785949A673404337.tpdjo13v_2?cidTexte=JORFTEXT000026785259&dateTexte=&oldAction=rechJO&categorieLien=id (pdf : http://legifrance.gouv.fr/jopdf/common/jo_pdf.jsp?numJO=0&dateJO=20121218&numTexte=1&pageDebut=19816&pageFin=19820 )

[78] http://www.conseil-constitutionnel.fr/conseil-constitutionnel/francais/les-decisions/acces-par-date/decisions-depuis-1959/2012/2012-653-dc/decision-n-2012-653-dc-du-09-aout-2012.115444.html ; (english version : http://www.conseil-constitutionnel.fr/conseil-constitutionnel/english/case-law/decision/decision-no-2012-653-dc-of-9-august-2012.115501.html )

[79] http://www.conseil-constitutionnel.fr/conseil-constitutionnel/francais/les-decisions/acces-par-date/decisions-depuis-1959/2012/2012-659-dc/saisine-par-60-deputes.135380.html

[80] §4 of the Decision : « Considérant, en second lieu, qu’aux termes de la première phrase du 2° du C du paragraphe I de l’article L.O. 111-3 du code de la sécurité sociale, la loi de financement de la sécurité sociale « détermine, pour l’année à venir, de manière sincère, les conditions générales de l’équilibre financier de la sécurité sociale compte tenu notamment des conditions économiques générales et de leur évolution prévisible » ; qu’il en résulte que la sincérité de la loi de financement de la sécurité sociale de l’année se caractérise par l’absence d’intention de fausser les grandes lignes de l’équilibre qu’elle détermine»  (we emphasize).

[81] http://www.conseil-constitutionnel.fr/conseil-constitutionnel/francais/les-decisions/acces-par-date/decisions-depuis-1959/2013/2013-682-dc/decision-n-2013-682-dc-du-19-decembre-2013.138972.html  ; (pdf: http://www.conseil-constitutionnel.fr/conseil-constitutionnel/francais/les-decisions/acces-par-date/decisions-depuis-1959/2013/2013-682-dc/decision-n-2013-682-dc-du-19-decembre-2013.138972.html )

[82] http://www.conseil-constitutionnel.fr/conseil-constitutionnel/francais/les-decisions/acces-par-date/decisions-depuis-1959/2012/2012-653-dc/decision-n-2012-653-dc-du-09-aout-2012.115444.html ; (english version : http://www.conseil-constitutionnel.fr/conseil-constitutionnel/english/case-law/decision/decision-no-2012-653-dc-of-9-august-2012.115501.html )

[83] http://www.conseil-constitutionnel.fr/conseil-constitutionnel/francais/les-decisions/acces-par-date/decisions-depuis-1959/2012/2012-658-dc/decision-n-2012-658-dc-du-13-decembre-2012.135388.html (pdf: http://www.conseil-constitutionnel.fr/conseil-constitutionnel/root/bank/pdf/conseil-constitutionnel-135388.pdf ). See also: http://www.conseil-constitutionnel.fr/conseil-constitutionnel/francais/les-decisions/acces-par-date/decisions-depuis-1959/2012/2012-658-dc/communique-de-presse.135389.html

[84] http://www.senat.fr/dossier-legislatif/pjl12-043.html; http://legifrance.gouv.fr/affichTexte.do;jsessionid=880EA47A857F3711785949A673404337.tpdjo13v_2?cidTexte=JORFTEXT000026785259&dateTexte=&oldAction=rechJO&categorieLien=id (pdf : http://legifrance.gouv.fr/jopdf/common/jo_pdf.jsp?numJO=0&dateJO=20121218&numTexte=1&pageDebut=19816&pageFin=19820 )

[85] http://www.conseil-constitutionnel.fr/conseil-constitutionnel/francais/les-decisions/acces-par-date/decisions-depuis-1959/2012/2012-659-dc/saisine-par-60-deputes.135380.html

[86] http://www.conseil-constitutionnel.fr/conseil-constitutionnel/francais/les-decisions/acces-par-date/decisions-depuis-1959/2013/2013-682-dc/saisine-par-60-deputes.138979.html : « (…) se prononçant sur les hypothèses macroéconomiques pour 2014 retenues par le gouvernement, le Haut Conseil a considéré que si « les prévisions de croissance sont plausibles (. . .) le scénario macroéconomique présente des éléments de fragilité ». Il a, en outre, spécialement noté que « les mesures nouvelles inscrites dans le projet de loi de financement de la sécurité sociale (0,6 Md€) » n’avaient pas été portées à sa connaissance, ne lui permettant ainsi pas de rendre un avis parfaitement éclairé. »

 

[87] http://www.senat.fr/dossier-legislatif/pjl10-499.html

[88] While his report was discussed in Parliament, MPs from the far left criticised Michel Camdessus’ past role as Director of the IMF between 1987 and 2000, in particular the way he dealt with the Argentinian crisis. He is now honorary governor of Bank of France.  http://www.assemblee-nationale.fr/13/cri/2009-2010/20100206.asp (pdf: http://www.assemblee-nationale.fr/13/pdf/cri/2009-2010/20100206.pdf )

[89] http://www.ladocumentationfrancaise.fr/rapports-publics/104000330/index.shtml

[90] Idem.

[91] http://www.senat.fr/dossier-legislatif/pjl10-499.html

[92] http://www.assemblee-nationale.fr/13/rapports/r3333.asp

[93] http://www.assemblee-nationale.fr/connaissance/fiches_synthese/septembre2012/fiche_43.asp

[94] http://www.senat.fr/seances/s201106/s20110615/s20110615011.html#section1675