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.
What political/legal difficulties did Greece 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.
No legal and political difficulties concerning the negotiation of the Fiscal Compact were encountered in Greece. The signing of this international treaty was practically debated in Parliament only during the ratification procedure. Indeed, the signing of the Fiscal Compact coincided with discussions at the European level on the conditions of the agreement on the restructuring of the Greek debt with the participation of the private sector (P.S.I.) and of the new loan agreement for Greece. Thus, debates were focused on these matters, as well as the proposition of the German Minister of Finance for the setting of an economic commissioner for Greece. The signing of the Fiscal Compact by Greece was perceived and presented as necessary in order for the Greek State to avoid bankruptcy. In the meeting they had the day before the agreement of the European leaders on the Fiscal Compact, the three political leaders supporting the technocrat government during the negotiations (PA.SO.K., N.D. and LA.O.S.) declared “absolute convergence” concerning the additional obligations and conditions set by the European partners. Thus, the Prime Minister participated in the negotiations following this position. The former PA.SO.K. minister and independent deputy at the time of the ratification, Mariliza Xenogiannakopoulou, said that the Government has made a systematic effort to promote the interests of Greece, through propositions of amendments of the treaty. According to her, it is a success of the negotiations by the Government that in the Preamble of the Treaty there is a special provision concerning the respect of the role of social partners, even though some days later Commission and “troika” imposed the abdication of labor negotiations and labor law in Greece. Furthermore, the Government obtained the restriction of the role of ECJ to the implementation of the Fiscal Compact and not to its application. Finally, it is a success as well the fact that the Fiscal Compact does not alter the economic policy conditions of countries receiving financial assistance.
How has the Fiscal Compact been ratified in Greece and on what legal basis/argumentation?
Things have been complicated as far as the ratification procedure is concerned, the debates for which took place during the campaign for the elections of the 6th May 2012. Greece was the first country to ratify the Fiscal Compact. The ratification of the Fiscal Compact was part of a more general draft bill, which also contained the amendment of the TFEU and the ratification of the ESM treaty. The bill ratifying the ESM treaty was drafted on March 15th, 2012 and was debated and voted in Parliament on March 28th, 2012. It was voted in one day, with a majority of 194 deputies out of the 253 present voting in favor (total of deputies is 300). The deputies of PA.SO.K. and N.D., the two parties of the government coalition at the time, voted in favor. The members of SY.RIZ.A., DIM.AR., LA.O.S., and DI.SY. voted against. It is interesting to note that LA.O.S. had participated in the government at the time of the decision of 9 December 2011 (the political decision leading to the 136 TFEU amendment and the Fiscal Compact).
The statute was voted according to the regular parliamentary procedure of articles 70 f. of the Constitution. The constitutional basis invoked by the Government for the following of this procedure was article 28 paragraph 1 of the Constitution, which states that “The generally recognised rules of international law, as well as international conventions as of the time they are sanctioned by statute and become operative according to their respective conditions, shall be an integral part of domestic Greek law and shall prevail over any contrary provision of the law. The rules of international law and of international conventions shall be applicable to aliens only under the condition of reciprocity.” An interpretive statement added with the constitutional reform of 2001 declares that “Article 28 is the basis for the participation of the Country in the procedures of European integration.” The status of the Fiscal Compact has not been discussed concretely. However, the discussions during the parliamentary debates, give the impression that all the treaties ratified are considered as part of EU primary law, albeit binding only for the contracting Member-States. The article invoked by the Government as a basis for the ratification, however, does not specify the majority required for the vote of the statute ratifying the treaty.
During the parliamentary debates, the deputies of the opposition accused the Government of hiding these treaties from Greek people, through the concise parliamentary procedure mobilized for their ratification. In general, especially the deputies of SY.RIZ.A. and LA.O.S., repeatedly criticized the functioning of the Parliament and the negligence to the parliamentary procedure and monitoring by the Government. In response, the deputies of PA.SO.K. claimed that they were “not acting in absentia of the Greek people because, by voting these treaties, [they were] supporting the basic choice of the Greek people, which is that the country remains in the Eurozone.”
More precisely, deputies from LA.O.S. objected that the statute in question, because of its crucial importance for Greece and for Europe in general, and because of the fact that it attributes constitutional competences concerning fiscal and budgetary policy to organs of international organizations, should be voted according to the procedure defined in paragraph 2 of article 28. According to this paragraph, “Authorities provided by the Constitution may by treaty or agreement be vested in agencies of international organizations, when this serves an important national interest and promotes cooperation with other States. A majority of three-fifths of the total number of Members of Parliament shall be necessary to vote the law sanctioning the treaty or agreement.” (180/300). The members of LA.O.S. argued that it was the Fiscal Compact that imposed a qualified majority for ratification in order to enter into force. They argued that the treaties under ratification change the structure and the decision-making procedure inside the Eurozone, and thus they constitute a concession of constitutional competences to the Eurozone organs. In any case, according to them, the Fiscal Compact and the ESM entail the concession of national sovereignty to international organizations. Thus, in order to preserve the validity of the voting procedure and to prove that the statute had been voted with the qualified majority required, they demanded the procedure of nominal vote, which was followed at the end.
The members of SY.RIZ.A. rejected the competence of Parliament to amend the treaties of the European Union. Reiterating objections already raised during the negotiation of the amendment of article 136 TFEU (see question V.3), they argued that the treaty amendment, the ESM, and especially the Fiscal Compact, because of the commitment for many decades of the national economic and fiscal policy –through the balanced budget rule- that it contained, entailed an amendment of the Constitution. Thus, a constitutional reform or a referendum was required, following the example of other European countries, like Ireland. In order to support the argument, the deputies invoked article 3 paragraph 2 of the Fiscal Compact. Thus, they invited the government to proceed to a referendum for the ratification of these provisions, or, at least, to wait for the elections, which were scheduled for the 6th of May. In any case, they argued that the government did not want to follow the special procedure of article 28 paragraph 2, even though it possessed the qualified majority needed, because it did not want to create a precedent for future voting procedures. Mobilizing these arguments, the deputies of SY.RIZ.A. raised an objection of unconstitutionality before the Parliament, which was rejected by a raising vote, according to article 100 paragraph 2 of the Standing Orders of Parliament.
Finally, the deputies of DIM.AR. emphasized the fact that the majority required was the absolute majority of the total number of deputies (151/300), according to paragraph 3 of article 28. According to this paragraph, “Greece shall freely proceed by law passed by an absolute majority of the total number of Members of Parliament to limit the exercise of national sovereignty, insofar as this is dictated by an important national interest, does not infringe upon the rights of man and the foundations of democratic government and is effected on the basis of the principles of equality and under the condition of reciprocity.” The deputies of DIM.AR. alleged that the paragraph 1, invoked by the government, was only concerning the place of international treaties in relation to domestic law and did not require a specific procedure for the ratification of European treaties, which have been always voted according to the third paragraph of this article. Indeed, according to them, the European Union is not an international organization but a union which they would like to be federal.
The deputies of the governing parties (PA.SO.K. and N.D.) argued, however, that the Treaty amendment, the Fiscal Compact and the ESM do not expand the competences of the European Union. To support their argument they invoked the simplified procedure of Treaty revision followed. In addition, the deputies of N.D. argued that European Union is not an international organization, according to the terms of article 28 paragraph 2 of the Greek Constitution, but a sui generis state organization.
The Greek constitutional scholarship has been divided on the subject. Most scholars, however, before the Eurozone crisis, considered that for the ratification of European Treaties and their amendments in general (and not with the simplified procedure followed), the Constitution requires a combined application of the procedural conditions of paragraph 2 and the substantial conditions of paragraph 3. Nevertheless, they emphasized that “the solution will not become definitive, until the broad until now parliamentary majority for the support of the European course of the country breaks.”
What political/legal difficulties did Greece encounter during the ratification of the Fiscal Compact?
Despite the virulent criticism that the Fiscal Compact provoked from the part of the opposition, there were no major difficulties during its ratification, because of the broad parliamentary majority that supported the Government at the time. The legal statute ratifying the Compact, as well as the amendment of article 136 TFEU and the ESM Treaty, was voted in one day, with a majority of 194 deputies out of the 253 present voting in favor (total of deputies is 300). The deputies of PA.SO.K. and N.D., the two parties of the government coalition at the time, voted in favor. The members of K.K.E., SY.RIZ.A., DIM.AR., LA.O.S., and DI.SY. (a center-right party, which was principally formed by seceded members of N.D. and which supported the latter in the elections of June 2012) voted against. It is interesting to note that LA.O.S. had participated in the Government at the time of the decision of 9 December 2011 (the political decision leading to the 136 TFEU amendment and the Fiscal Compact).
According to the deputies of PA.SO.K. and N.D., the institutionalization of the ESM is an extremely positive development for Greece, even though the conditionality of the application of the ESM Treaty, which presupposes the ratification of the Fiscal Compact, is very strict. The deputies supporting the Government defend that there is a need for economic stability in Europe. Moreover, claiming that Greece will be autonomous only if it does not need to borrow money, they maintain that there is no other way but to ratify the Fiscal Compact. Finally, they admit that Europe is oriented to neoliberal policies and they express hopes that, in case the socialist Hollande wins the French elections, together with other politicians, they will work in order to change this. They emphasize the need for growth in the EU and especially in countries struck by the financial crisis and they criticize the one-sided character of the treaty ratified, focused only on competitiveness.
The Government has also been accused by the opposition parties of hiding the conventions ratified from the Greek people, through the mobilization of opaque procedures. A deputy of the majority responded that “[they] are not acting in absentia of the Greek people because, by voting these treaties, we are supporting the basic choice of the Greek people, which is that the country remains in the Eurozone.”
The Communist Party (K.K.E.) claimed that the treaties under ratification showed the real face of the EU, which is an imperialist organization, against labor and social rights. In response to other parties’ claims on the unconstitutionality of the parliamentary procedure, they defended that the matter is not procedural and that inside the EU there is no possibility of democracy. They emphasized that the treaties ratified are limiting national sovereignty for the benefit of an imperialist organization and that there is no possibility of renegotiation of the Euro-crisis measures; instead, there is a need to exit the Eurozone and the EU, because the crisis is a crisis of capitalism. Concerning the Fiscal Compact in particular, they see it as a continuation of the Maastricht Treaty. They claimed that, at the end, the Fiscal Compact, because of the asymmetry in the EU, benefits strong Germany and serves the capital against the working class. Indeed, the balanced budget rule will lead to the cut of expenses for salaries and pensions, health, education, social security, and infrastructures, in order to save money, which will be used for the profit of business groups and monopolies. The growth for which the Government parties are fighting cannot undo the infringement of labor rights. The Fiscal Compact focuses on competitiveness, and even imposes sanctions to countries with financial difficulties. Thus, it leads to a multi-speed European Union, according to the economic power and interests of each Member State.
The deputies of LA.O.S criticized the time-consuming action of the EU, and expressed their hope that the socialist François Hollande will renegotiate the treaties under ratification, in order for them to contain growth provisions. Concerning the Fiscal Compact in particular, they observe that it is closely connected to the ESM, but that it is impossible for the Greek State to comply with its provisions. Moreover, using a terminology evoking the Second World War, they claim that the Fiscal Compact raises sovereignty problems and provokes an “abdication of the Ministry of Economics”,  in the profit of Germany.
According to SY.RIZ.A., the ESM Treaty, together with the Fiscal Compact, demonstrate the commitment of the Greek Government to the neoliberal policy of Germany, which leads inevitably to economic decline. The Fiscal Compact and the ESM are equivalent to the submission of the country to a controlled default, under conditions which benefit only the creditors and Germany. Indeed, an eventual uncontrolled default would have an immense cost for the European North. SY.RIZ.A. observes that the Fiscal Compact sets asphyxiating, unrealistic goals, which demonstrate the focus of the EU on competitiveness through austerity. They emphasize that, if Europe does not change its policy in order to obtain growth, it will be divided. Finally, they criticize the incoherence of the position of the Government, who is voting a treaty that it would like to see changed some time later, under the influence of the French socialists.
The deputies of DIM.AR. hold a rather moderate position, accepting the ESM and the amendment of article 136 TFEU, but not the conditionality which complements it, that is, austerity and budgetary discipline. They accuse the Government of not negotiating for the profit of Greek people. They criticize the unrealistic character of the goals set by the Fiscal Compact, observing that even Germany was not respecting them under the previous treaties. They emphasize the need for a change of policy in the EU, with the complementation of the provisions concerning fiscal discipline, which they consider necessary, with provisions for growth, given that the Greek people cannot stand any more austerity. They express the hope that things will change after François Hollande wins the elections in France. Moreover, they express their hopes for a political and social union.
Balanced Budget Rule
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 Greece? 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.
The Fiscal Compact and the Balanced Budget Rule that it contains have been ratified by a legal statute, which entered into force the 30th of March 2012 and implements them into the Greek legal order. Even though there is a conversation and many propositions by almost all parties for a constitutional amendment in Greece, none of these discussions mentions the inclusion of the Balanced Budget Rule in the Constitution. According to article 28 paragraph 1 of the Greek Constitution, “The generally recognised rules of international law, as well as international conventions as of the time they are sanctioned by statute and become operative according to their respective conditions, shall be an integral part of domestic Greek law and shall prevail over any contrary provision of the law. The rules of international law and of international conventions shall be applicable to aliens only under the condition of reciprocity.” An interpretive statement added with the constitutional reform of 2001 declares that “Article 28 is the basis for the participation of the Country in the procedures of European integration.” The status of the Fiscal Compact has not been discussed concretely during the parliamentary debates. However, the discussions give the impression that all the treaties ratified with the legal statute under consideration were considered as part of EU primary law, albeit binding only for the contracting Member-States. Thus, the relationship between the law implementing the Fiscal Compact and the Balanced Budget Rule and the Constitution raises the well-known debate in the Greek legal doctrine on the possibility of “tacit” or “opaque” constitutional amendment via the provisions of article 28 of the Constitution, deviating from the formal procedure required by article 110. The majority of scholars accepts the possibility of such an amendment, contrary to the traditional dualist doctrine. However, the subject was not discussed during the parliamentary debates on the ratification of the Fiscal Compact.
Nevertheless, things are even more complicated as far as the concrete legal statute is concerned. That is because, even if we accept that a “tacit” amendment of the Constitution is possible, this amendment should be normally done according to the procedure of paragraphs 2 and 3 of article 28, as it is only these paragraphs that are conferred a function of amendment of the Constitution. These paragraphs declare: “2. Authorities provided by the Constitution may by treaty or agreement be vested in agencies of international organizations, when this serves an important national interest and promotes cooperation with other States. A majority of three-fifths of the total number of Members of Parliament shall be necessary to vote the law sanctioning the treaty or agreement. 3. Greece shall freely proceed by law passed by an absolute majority of the total number of Members of Parliament to limit the exercise of national sovereignty, insofar as this is dictated by an important national interest, does not infringe upon the rights of man and the foundations of democratic government and is effected on the basis of the principles of equality and under the condition of reciprocity.” However, the Government, in the ratification procedure of Legal Statute 4063/2012 invoked only the first paragraph of article 28, which does not prescribe any parliamentary majority. The statute was finally voted under the normal parliamentary procedure of articles 70 f. of the Constitution.
According to Petros Stagkos, Professor of European Law, with the ratification of the Fiscal Compact, Parliament has not amended tacitly the Constitution, because it did not follow the required procedure. Instead, the State has assumed the supra-national responsibility to amend the Constitution, in order to comply with the Balanced Budget Rule and the concession to the ECJ of the constitutional competency of scrutinizing its implementation. The author defends that the Greek State does not have the possibility to implement the Balanced Budget Rule via a normal legal statute, as this possibility is only open to States that recognize a supra-legislative force to the law approving the national budget. In the same order of thought are the observations of Panagiotis Mantzoufas, Professor of Constitutional Law, who, nevertheless, raises the question of the compatibility with the Constitution of a legal statute that imposes the obligation to amend it.
In any case, it is important to note that there is no constitutional court, and even more, no constitutional court with the competency to monitor the constitutionality of the procedure of constitutional amendments in Greece. Thus, as Lina Papadopoulou neatly put it, it is the “normative power of the facts themselves” that prevails. The supranational obligations of Greece to respect the Balanced Budget Rule and the tight fiscal surveillance by the European partners prove more effective than any formal amendment of the Constitution would be, even if we accept that it is politically possible.
Statute 4270/2014 established the obligation to set MTO, according to the rules set out in the consolidated Regulation No 1466/97 and according to article 3 of the Fiscal Compact. This statute has the status of ordinary law.
Debate Balanced Budget Rule
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 Balanced Budget Rule and, in general, fiscal discipline and austerity, have been presented from the beginning by the press as an obsession of the German Government. Debates on the substantial legal problems raised by the implementation of the Balanced Budget Rule and the Fiscal Compact at a supra-legislative level, mainly took place during the parliamentary session of the ratification of the Fiscal Compact, on the 28th of March 2012. During this procedure, the parties of the opposition (mainly LA.O.S., SY.RIZ.A., DIM.AR., and K.K.E.) objected that the Fiscal Compact binds the economic policy of the Government for decades, and puts at stake the national sovereignty. This was one of the reasons for which they demanded the following of a special procedure with a qualified majority for the ratification of the Treaty. The parties of the opposition also alleged that, by imposing balanced and exceeding budgets and sanctions in case of noncompliance, the Fiscal Compact was imposing neoliberal policies which entail austerity, infringement of labor and social rights, and cuts on public services, for the profit of business groups and the capital in general. The Government, invoking the employment of the simplified procedure of Treaty revision at the European level (which proves that the competences of the Union are not extended) responded that the Fiscal Compact does not further restrict national sovereignty and that it does not extend the competences of the European institutions.
The implementation of the Fiscal Compact and of the Balanced Budget Rule has not been further discussed in following parliamentary debates. This can be explained by the fact that Greece had already assumed the international obligation of fiscal discipline before the signing of the Fiscal Compact, in the Memoranda of Understanding determining the conditions of the loan agreements to Greece, as well as in the Medium term budgetary frameworks required according to the Stability and Growth Pact. Besides, the Preamble of the Fiscal Compact stipulates that the Treaty does not alter the obligations of countries receiving financial assistance, according to the stabilization programs of each. The only additional element brought by the Fiscal Compact provisions, and criticized by the opposition, is the fact that it imposes policies of balanced or exceeding budgets at a constitutional level, thus binding future parliamentary majorities on the long term. Therefore, in the parliamentary debates, but also in the public discussions, it is usually the Memoranda of Understanding and implementing laws that are perceived as imposing fiscal discipline and restricting the economic sovereignty of the Greek State.
As far as it concerns fiscal discipline and stability in general, Government officials and deputies supporting the Government emphasize that it is the only solution in order for the State to remain in the Eurozone and to respect its international obligations, to preserve its sovereignty and to obtain competitiveness and economic growth.
Despite the lack of interest by the political world, the implementation of the Balanced Budget Rule at a constitutional level has provoked an interesting academic debate. There are some members of the doctrine who defend the implementation of the “golden rule” in the Greek Constitution as the only way for Greece to respect its international obligations and to obtain a “fiscal civilization” that would counter populist and clientelist practices of the political world. Nevertheless, most scholars reject the inclusion of such a rule in the Greek Constitution in particular, even though they do not reject its opportunity in general. The main arguments advanced are that the adoption of the Balanced Budget Rule is a purely political choice of economic governance that neglects the asymmetries and inequalities within the Eurozone and the European Union, and limits the sovereignty of the Member States and the margin of manoeuver of the democratically elected parliamentary majorities. Most scholars stress that the rigid respect of such a rule is difficult and sometimes even inopportune, especially in times of economic crises, and would thus undermine the normative power of the Constitution. The Balanced Budget Rule is equivalent to the imposition of a specific model of economic governance and symbolizes the prevalence of economics over politics. Moreover, scholars express their fear that such a rule would constitute a constitutional base for the restriction of fundamental rights, and especially social rights, and would excessively extend the powers of the technocrat executive. Some scholars defend that the insertion of this rule in the Constitution would thus lead to an amendment of principles concerning the foundations and the form of the polity, which is forbidden by article 110 paragraph 1 of the Constitution. Finally, certain members of the doctrine underline that the adoption of such a rule via constitutional amendment would be impossible under the current political situation in Greece, provided that a qualified majority in parliament is required for such an amendment. It would be unnecessary as well, given that fiscal discipline is de facto imposed, without a constitutional change. Besides, such a change would add nothing to the justiciability of the Balanced Budget Rule, because of the absence of constitutional court in Greece.
Relationship BBR and MTO
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)?
There is no important 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). Actually, article 14 of statute 4270/2014, implementing the “six-pack” rules, defines the MTO as synonymous to the rules set out in article 3 paragraph 1 of the Fiscal Compact. During the debates for the implementation of the MTO, however, Tsakalotos, an MP of SY.RIZ.A. (at the time in the opposition) implied that the “golden rule” implemented in Spain, Portugal or Italy was less restrictive than the MTO: contrary to the MTO, the “golden rule” allows the states in question to spend in investments and education, which will later lead to the growth of the GDP, whereas the MTO does not take this factor into account.
Is there a (constitutional) court judgment on the Fiscal Compact/implementation of the Balanced Budget Rule?
No, there is no court judgment on the Fiscal Compact. Indeed, in Greece there is no general possibility to directly attack legal statutes before the court. Instead, judicial review of the legislator is diffused among all jurisdictions of the civil and administrative order, and is finally concentrated in the Supreme Administrative and Judiciary Courts (Council of State – “Symvoulio tis Epikrateias” and Areios Pagos respectively). Each justiciable possessing a legitimate interest, in the occasion of a litigation before a judge, can raise an objection of unconstitutionality of a legal statute applied in the case, both in case this statute is applied directly, and in case it is the legal basis of another act. According to article 93 paragraph 4 of the Constitution, “The courts shall be bound not to apply a statute whose content is contrary to the Constitution.” Courts apply the same constitutional basis, in combination with article 28 paragraph 1, in order to monitor the compatibility with international conventions of ordinary law. Indeed, article 28 paragraph 1 declares: “The generally recognised rules of international law, as well as international conventions as of the time they are sanctioned by statute and become operative according to their respective conditions, shall be an integral part of domestic Greek law and shall prevail over any contrary provision of the law. The rules of international law and of international conventions shall be applicable to aliens only under the condition of reciprocity.” The result of unconstitutionality/unconventionality is the non-application of the statute in the concrete case before the judge. Courts in general refuse to examine the respect of the rules of parliamentary procedure, which is considered interna corporis of the legislator. In any case, given that the Fiscal Compact was ratified in 2012 and given the time-consuming character of Greek judicial procedures, there is no court judgment on the Fiscal Compact.
Non-Eurozone and binding force
Has Greece 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 Greece is a Euro area member state.
What other information is relevant with regard to Greece and the Fiscal Compact?
It is interesting to note that, according to the Preamble of the Fiscal Compact, “no provision of this Treaty is to be interpreted as altering in any way the economic policy conditions under which financial assistance has been granted to a Contracting Party in a stabilisation programme involving the European Union, its Member States or the International Monetary Fund;”
Concerning the European Commission proposal on the coordination of major economic policy reforms, it was discussed in the Greek Parliament together with the evolutions concerning the Banking Union, and the Convergence and Competitiveness Instrument. The Minister of Finance, on the 15th of May 2013, informed the Permanent Commission of Financial Affairs of the Parliament on the Eurogroup meeting where the Commission proposal was discussed.
In this information meeting, the matters discussed concerned essentially the structural deficiencies of the EMU and of the EU. Namely, the parties of the opposition (SY.RIZ.A. and AN.EL.), as well as certain deputies of parties supporting the Government (N.D., PA.SO.K., and DIM.AR.) emphasized that the extended competences of the European Commission on the economic policy of Member States raise the problem of its democratic deficit. Many deputies of the opposition exercised general criticism to the structure and the inertia of EU and EMU institutions. They emphasized that the new propositions, together with the strict financial policy imposed by the Eurozone partners in general, degraded the role of national parliaments. According to them, this lack of political union makes any effort of coordination ineffective. Moreover, they claimed that further convergence in economic policy would be in contrast with the important economic and social differences characterizing the various Member States. They objected that any further union between Eurozone Member States would be one-dimensional, and would undermine the equality between States, as it would neglect the needs of countries facing economic difficulties. They also criticized the focus on competitiveness and the absence of provisions on social cohesion and the environment.
The Minister of Finance admitted that EMU has important structural disadvantages, and that there is a need to change the one-sided emphasis of European leaders on competitiveness, in order to obtain a political union. He emphasized that in the discussions at the European level concerning this subject, the opinion of Greek officials is heard.