III – Changes to Constitutional Law

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Austria | Belgium | Bulgaria | Croatia | Cyprus | Czech Republic | Estonia | Finland | France | Germany | Greece | Hungary | Ireland | Italy | Latvia | Lithuania | Luxembourg | Malta | Netherlands | Poland | Portugal | Romania | Slovakia | Slovenia | Spain | Sweden | United Kingdom |

Austria

Nature national instruments     
III.1
What is the character of the legal instruments adopted at national level to implement Euro-crisis law (constitutional amendment, organic laws, ordinary legislation, etc)?

The relevant treaties were approved through standard ratification process; other measures have been implemented through ordinary laws. A constitutional amendment was necessary in order to guarantee the participation rights of the parliament in the ESM (see question VIII.6).

Constitutional amendment     
III.2 
Have there been any constitutional amendments in response to the Euro-crisis or related to Euro-crisis law? Or have any amendments been proposed?

See question VIII.6 for the ESM related amendment. For the debt ceiling or balanced budget rule, the governing parties tried to achieve a constitutional-amending majority but failed. The balanced budget rule does not stand in constitutional rank (see question IX.5).

Constitutional context
III.3
If national constitutional law already contained relevant elements, such as a balanced budget rule or independent budgetary councils, before the crisis that are now part of Euro-crisis law, what is the background of these rules?

The balanced budget rule (based on the German model) was introduced in Austria in late 2011 (see question IX.5). The background was the overall crisis, the fear of losing the triple A rating. It was also part of the Austrian measures made in response to the excessive deficit procedure that had been launched against Austria in 2009.[1]

Purpose constitutional amendment 
III.4
What is the purpose of the constitutional amendment and what is its position in the constitution?

Austria’s constitution is particular in its form because it is not entirely contained in one “constitutional document”. There is such a “constitutional document”, the Bundes-Verfassungsgesetz (B-VG), but there also other laws of constitutional rank, Bundesverfassungsgesetze (BVG) and there is even the possibility of passing single norms of one law as “constitutional norms” or “norms of constitutional rank” (Verfassungsbestimmungen). There is no hierarchical difference between these different constitutional provisions; all stand on the same level in the Kelsenian pyramid, above them there are only the basic principles of the constitution[2]. Furthermore, until 2007, treaties or single provisions from treaties could be “lifted into constitutional rank”. Although this was abolished, several old treaties still stand in constitutional rank. The same goes for treaties between the federation and the provinces. Because of this, laws in constitutional rank and therefore hierarchically superior laws can be found in many different places. A distinction has to be therefore made also between “material constitutional law” and “formal constitutional law”. In order to pass a law in constitutional rank, at least half of the members of the National Council need to be present and at least 2/3 of those have to vote for it. The same goes for the Federal Council whenever competences of the provinces (Länder) are touched. The purpose of a constitutional “amendment” or a completion of the constitution by passing new provisions in “constitutional rank” is therefore to make them hierarchically superior to ordinary laws. Like this, ordinary laws need to be amended accordingly and can be lifted by the constitutional court if they are not. Additionally, provisions in constitutional rank cannot be changed as easily. There are, however, different degrees of “constitutional amendments” and there are stricter rules for cases in which an amendment would amount to an amendment of the “entire constitution” (Gesamtänderung).[3] For such a Gesamtänderung, a referendum would generally be necessary. The accession to the EU in 1995 for instance amounted to such a “Gesamtänderung”. In the debates of the crisis measures, the FPÖ had brought the argument that the signature of the ESM treaty and its accompanying laws amounted to such a Gesamtänderung. The governing parties and the Greens dismissed such a request. [4]

Relationship with EU law        
III.5
Is the constitutional amendment seen as changing the relationship between national and European constitutional law?

At present it does not appear that the constitutional amendment has changed the relationship between national and European constitutional law.

Organic law      
III.6
Have there been changes to organic laws or other types of legislation that are of a different nature or level than ordinary legislation, in relation to Euro-crisis law or the budgetary process?

No.

Constitutional amendment and ordinary law       
III.7
If ordinary legislation was adopted in conjunction with a constitutional amendment, what is the relationship between the two?

The ordinary legislation specifies what is outlined in the constitutional amendment (see question VIII.6).

Perception source of legal change   
III.8
In the public and political discussions on the adoption of ordinary legislation, what was the perception on the appropriate legal framework? Was the ordinary legislation seen as implementing national constitutional law, or Euro-crisis law?

In the public discussion, the question whether European law and the relevant treaty law is transposed by laws in constitutional rank or “ordinary laws” is almost only relevant in terms durability: As explained in question III.4, a law in constitutional rank is harder to amend. Which law gets to be passed in constitutional rank is a matter of political consensus, or, under the relevant government, a question of whether the coalition parties can get a small party on board in order to get a 2/3 majority in the National Council.

The overall legislative package in response to the Eurocrisis was, however, rather understood as implementing European provisions, no matter whether that happened with laws in constitutional rank or not.

Miscellaneous
III.9
What other information is relevant with regard to Austria and to changes to national (constitutional) law?

No other relevant information.

[1]              Excessive Deficit Procedure Austria 2009-2010, summarized at http://ec.europa.eu/economy_finance/economic_governance/sgp/deficit/countries/austria_en.htm

[2]              The principles are, briefly put, democracy, federalism, republicanism, rule of law, separation of powers & liberalism, for details see Öhlinger, 2009, pp. 54-62.

[3]              Öhlinger, 2009, pp. 25-30.

[4]              Press release on parts of the National Council Session No. 164 from July 4, 2012. http://www.parlament.gv.at/PAKT/PR/JAHR_2012/PK0584/.

Belgium

Nature national instruments  
III.1
What is the character of the legal instruments adopted at national level to implement Euro-crisis law (constitutional amendment, organic laws, ordinary legislation, etc)?

Ordinary law governs changes to the budgetary process.

The transposition of Directive 85/2011 is done through ordinary law (see under VII.2 below).

The execution of the fiscal compact is laid down in a cooperation agreement, which ranks above ordinary law and decree, but lacks jurisdictional protection (see also under IX.4 below). [1]

Following articles 39, 127, 128 and 130 of the Constitution[2], the Special Act on Institutional Reform contains a provision on optional and obligatory cooperation agreements (art. 92bis). Some cooperation, for instance those with financial obligations, require parliamentary approval for each participating level of government. The cooperation agreement implementing the TSCG has obtained parliamentary approval, and takes rank above law and decree, but below special acts, the constitution, and international law with direct effect.[3]

Constitutional amendment          
III.2    
Have there been any constitutional amendments in response to the Euro-crisis or related to Euro-crisis law? Or have any amendments been proposed?

The Euro-crisis coincided with a major reform of the institutional structure of Belgian federalism. Amongst the numerous proposals for constitutional amendments, not one relates to the euro-crisis directly. The amendment to ensure an easier process of ratification of international treaties is a returning issue, but is not inspired by the euro crisis.

The phased process of constitutional change requires a declaration for revision indicating which articles are up for revision and a subsequent election, after which a two-thirds majority may revise those articles. This explains how, though some parties have come out in favour of a constitutional balanced budget requirement (e.g. Open Vld), no real amendment has been proposed.

Constitutional context   
III.3
If national constitutional law already contained relevant elements, such as a balanced budget rule or independent budgetary councils, before the crisis that are now part of Euro-crisis law, what is the background of these rules?

The jurisdiction of the Court of Auditors, reviewing the execution of the budget as approved by Parliament is laid down in article 180.

No other relevant provisions.

Purpose constitutional amendment      
III.4
What is the purpose of the constitutional amendment and what is its position in the constitution?

Not applicable.

Relationship with EU law           
III.5
Is the constitutional amendment seen as changing the relationship between national and European constitutional law?

Not applicable.

Organic law      
III.6
Have there been changes to organic laws or other types of legislation that are of a different nature or level than ordinary legislation, in relation to Euro-crisis law or the budgetary process?

See with respect to the cooperation agreement used for implementation of the Fiscal Compact’s Balanced Budget Rule, section IX.4 on the Fiscal Compact.

Constitutional amendment and ordinary law    
III.7
If ordinary legislation was adopted in conjunction with a constitutional amendment, what is the relationship between the two?

Not applicable.

Perception source of legal change          
III.8
In the public and political discussions on the adoption of ordinary legislation, what was the perception on the appropriate legal framework? Was the ordinary legislation seen as implementing national constitutional law, or Euro-crisis law?

Not applicable.

Miscellaneous
III.9
What other information is relevant with regard to Belgium and to changes to national (constitutional) law?

No other relevant information.

[1] See for an account in English on cooperation agreements and joint decrees: P. Popelier & W. Vandenbruwaene, “Joint decrees” Report for the Osservatorio sulle Fonte, January 2014, http://www.osservatoriosullefonti.it/component/docman/doc_download/660-joint-decrees-between-the-regions-and-communities

[2] Article 39 refers to the Regions, articles 127 and 128 to the Communities, and 130 to the Germanspeaking Community.

[3] Y. Peeters, De plaats van samenwerkingsakkoorden in het constitutioneel kader [The place of cooperation agreements in the constitutional framework] University of Antwerp, doctoral thesis, to be defended 2015, p. 316-320.

Bulgaria

Nature national instruments     
III.1
What is the character of the legal instruments adopted at national level to implement Euro-crisis law (constitutional amendment, organic laws, ordinary legislation, etc)?

The legal instruments adopted in Bulgaria with the view to implement the Euro-crisis law had the character of ordinary laws (LPSB, LPF, etc.) and, to a limited extent, secondary normative acts (the annual Decisions of the Council of Ministers on the budgetary procedure).[1] Due to a possible confusion as to what constitutes an ‘ordinary law’ for different legal systems, the author considers that an explanation on the types of legal instruments used in Bulgaria is necessary.

Within the Bulgarian legal system there are no ‘organic laws’, as there are in Spain and Portugal, for example.[2] The only kind of norms that occupy a position which is between the Constitution and the ordinary laws are international norms.[3] However, the CRB does make, exceptionally, a distinction between two specific laws and the rest of the ordinary laws.[4] Their specialty is expressed in the different procedure that applies for them. One of these two is the annual LSB. Its distinguishing procedural feature lies in the right of initiative. Under Article 87 CRB, it is stated that the legislative initiative lies within the Council of Ministers as well as any member of the National Assembly. However, the same provision limits the right for such initiative only to the Council of Ministers with respect to the LSB. No other procedural differences apply. The other law with specific procedural requirements is the constitutional amendment (see the answer of the next Question). With respect to the international norms (treaties) two other special cases can be identified. These concern the required majority for the ratification of a specific type of international agreements. The first deals with a ratification of an international agreement allowing foreigners and/or foreign legal persons to acquire property rights over pieces of land.[5] The second is the ratification of a treaty conferring powers to the EU.[6]

The Law on Normative Acts (LNA)[7] elaborates further on the types of normative acts that can exist in the Bulgarian legal system. It puts at equal footing the Law and the Code[8] without further distinguishing between other types of laws, such as organic. The LNA then continues to identify various types of secondary (to the Law and the Code) normative acts. Accordingly, all Laws and Codes in the Bulgarian legal system are of equal legal force. The theoretical divisions of the different types of laws (such as formal or material, general or special, organic or ordinary, etc.) is, however, sometimes present in the vocabulary of the BCC, albeit without introducing a hierarchy between them.[9] The BCC refers to two types of non-ordinary laws that are present in the theory – organic (органични) and, for lack of a better translation, constitutive (устройствени). To the best of this author’s knowledge the general constitutional law discourse in other languages refers to organic laws as comprising both of these two types of laws. The specifics of the latter are that such laws regulate the activity of the State organs. One example of such constitutive law is the LPF, which regulates the activity of the State organs in the process of drafting their and the State budgets. This mixture between the use of academic language and official documents, however, may create confusion. For example, the CP of Bulgaria for 2013-2016[10] refers to LPF as a constitutive (устройствен) law and the Commission in its assessment of the NRP and CP of Bulgaria for 2012[11] refers to the LPSB (the pre-LPF law) as Organic. Considering the explanations above, this qualification of the law being Organic does not mean that the law is of higher standing with relation to other laws or that it cannot be amended by a simple majority or that it is entrenched in any other specific way.

Constitutional amendment  
III.2   
Have there been any constitutional amendments in response to the Euro-crisis or related to Euro-crisis law? Or have any amendments been proposed?

The CRB was neither amended in response to the Euro crisis nor in relation to Euro-crisis law. However, an amendment of the CRB was proposed in 2011 but it ultimately failed. Before looking at what happened with the proposed amendment, it is useful to provide a short overview of the process of amending the CRB.

The procedure for amending the Constitution

The rules for amending the CRB or adopting a new Constitution are set out in Chapter IX of the CRB. The regime for amending the CRB can be divided in two – the general and the special regime.[12] The general (default) regime is that the National Assembly has the power to amend any and all constitutional provisions with the exception of the provisions that can be amended only by the Grand National Assembly (GNA).[13] The special (exceptional) regime requires new elections for the GNA which is to adopt the amendments for which it was elected (its mandate). This mandate can, most exceptionally, include the adoption of a new Constitution. Accordingly, the GNA is to be convened only in specific situations when the changes in the constitutional order are of particular significance for the State and the society,[14] which are listed in Article 158 CRB. These situations are (1) adopting a new Constitution; (2) resolving on territorial changes; (3) on changes in the form of state structure or form of government; (4) on any amendment of the direct applicability of the CRB, supremacy of international law, on the irrevocability of fundamental rights, some of which cannot be limited even following a proclamation of war, martial law or a state of emergency; and (5) on any amendments to the rules on constitutional amendment.[15] The adoption of an amendment/new Constitution by the GNA requires two thirds majority (out of 400 members[16]) on three ballots in three different days.[17]

Since the amendment that is the subject of this answer did not fall within the GNA competences, the discussion will focus only on the specifics of the amendment procedure by the National Assembly. The initiative for introducing a draft law for the amendment of the CRB belongs to the President or at least ¼ (that is, 60) of the national representatives.[18] Such a draft law must be debated at the National Assembly “not earlier than one month and not later than three months from the date on which it is introduced”.[19] As with any law, this draft law is also accompanied by explanations for it. When it is submitted to the National Assembly, the draft law is not allocated by the President of the National Assembly to one of the standing Committees. Instead a special ad hoc constitutional Committee is created with a Decision of the National Assembly, which acts as a leading Committee. The National Assembly, while not constitutionally obliged, adopts a Decision with rules of procedure for the Committee, which are drafted by the Committee itself.[20] These rules are, naturally, to a great extent restating the relevant constitutional provisions.[21]

The draft law requires three different readings in three different days and the required majority is ¾ (that is, 180) of the national representatives. If ¾ majority is not gathered but more than ⅔ (that is, 160) is, the draft law can be reintroduced. This must happen not earlier than two months and not later than five months after the ¾ majority was not gathered. In such a reintroduction a ⅔ majority will be considered enough for adoption.[22] This rule of scaling-down majority applies to all three readings. At the first reading the draft law is discussed and voted upon in general and in its totality. The national representatives then have fourteen days (as per Article 80(4) of the Organisational Rules of the National Assembly) to submit written proposals with respect to the adopted at the first reading draft law. These proposals must not go beyond the scope or against the principles of the proposed constitutional amendment. The constitutional Committee then prepares a report including the draft law, the submitted proposals and the Committee’s opinion on them. At the second reading the draft law is discussed and voted upon provision by provision. Following the second reading proposals for amendments of the provisions cannot be made and the Committee may make only editorial changes. At the third reading the draft law is voted upon en bloque. Finally, the adopted amendment is signed and promulgated by the President of the National Assembly within seven days of its adoption.[23]  As such, the President of the Republic is exceptionally excluded from the final stage of the adoption of the constitutional amendment. Having provided an overview of the constitutional framework for amending the CRB, it is now pertinent to examine what happened with the proposed amendment in 2011.

The proposed amendment of the Constitution

The first official record of the idea for constitutional amendment with respect to the public finances can be found in the verbatim record of the meeting of the Council of Ministers of 16 February 2011.[24] There, the Minster of the Finances – Simeon Djankov, in a briefing of the results of the ECOFIN meeting that took place the day before, outlined his idea for a Bulgarian Pact for Financial Stability. In his outline, the Minister stated that this idea included a constitutional amendment which was modelled after the German one.[25] The Minister stated that the envisioned measures will be even stricter than the German ones in order to show that Bulgaria and its current Government have the strictest financial discipline in the EU. The three main elements of the Pact were: (1) limit of 3% for the budgetary deficit; (2) the State’s redistribution role to be maximum 37%; and (3) a requirement of ⅔ majority at the National Assembly for any future increase of taxes. The Prime Minister, in the concluding remarks of the meeting expressed his strong support for the initiative of the Finance Minister.

Eventually, the actual draft law for amending the CRB contained four changes. It was proposed that a new paragraph was included in (1) Article 4 CRB which would read “The Republic of Bulgaria conducts predictable, consistent and balanced fiscal policy”; and (2) Article 81 CRB which would read “Laws providing for new types of taxes on the incomes or the profits or amending the tax rates of the existing taxes on the incomes or the profits shall be adopted with ⅔ majority of all national representatives”. With respect to Article 87(2) CRB, which concerns the right of initiative of the Council of Ministers with respect to the LSB, two amendments were proposed. First, the drafting of the LSB, by the Council of Ministers, must be done “in compliance with the allowable quantities of the budgetary balance that are determined by law”. Second, a new subparagraph was to be added which would read “Laws amending the part of the Law under paragraph 2 dealing with the allowable quantities of the budgetary balance shall be adopted with a ⅔ majority of all national representatives”. The miscellaneous provision envisioned that the constitutional amendment enters into force on 1 January 2012. The explanations to the draft law further elaborate on the proposed amendments.

With respect to the amendment of Article 4 CRB, the explanations referred to the role of the fiscal policy throughout the years since the changes in 1991. It was noted that the fiscal policy was often abused for achieving political ends without long-term planning and in disregard of the capabilities of the budget. Then, with the economic crisis of 1996[26] the necessity for conducting sound fiscal policy became obvious. The fiscal policy that was consequently formed throughout the beginning of the new century allowed for a significant development in terms of long-term macroeconomic stability and economic growth. The global economic crisis that consequently took place led to insecurity and stalled the economic growth. According to the explanations, there were good prospects for the Bulgarian economy to recover from the crisis and grow by using sound fiscal policy, on which both the Government and the opposition must responsibly unite.

With respect to the amendment of Article 81 CRB, the leitmotif of the explanations was the necessity for predictable and balanced taxation conditions. Such taxation conditions were seen as necessary in order to reduce the insecurity of investors and, consequently, to attract more domestic as well as foreign investments. According to the explanations, the policy with respect to taxation – the progressive decrease of the corporate tax since 1993, as well as the introduction of the flat tax rate for natural persons – has benefitted the economy greatly through an increased level of investments and a decrease in the grey economy.

With respect to the amendment of Article 87 CRB, the explanations stated that they would assist in the endeavour to maintain balanced budget in the long-term. This was going to happen through the introduction in a law of a 2% GDP cap on the budget deficit. This 2% cap will be part of the allowable quantities of the budgetary balance. While this cap is to be changed with a ⅔ majority of all national representatives, the explanations do not state the majority needed for introducing it, implying a simple majority. The 1% difference (from the 3% required at the EU level) is explained as a buffer for securing the compliance with the SGP and avoiding political manipulations.

Finally, with respect to the date of entry into force, no explanation was given but it can be found elsewhere. In the constitutional Committee meeting on 3 June 2011 (see infra), Lyutvi Mestan (DPS), stated that the initial idea (before the draft was proposed) for the constitutional amendment was that it enters into force in the beginning of 2013 (while the mandate of the GERB Government was, normally, to expire in mid-2013). Therefore, he said that as a matter of principle from his party a concern was expressed during the initial consultations that it would not be right for such important constitutional amendments to be addressed to the next Government and National Assembly. Instead, the right course of action was for the Government proposing such amendments to be the first to apply them. Mr Mestan guessed that this concern weighed-in on the change in the proposed date for entry into force.

The discussions on the proposed amendment of the Constitution

The proposal for the amendment of the CRB was officially submitted to the National Assembly on 26 May 2011 by 130 national representatives, the vast majority of which were from GERB.[27] However, as it appears from the debates in the National Assembly and the verbatim records of the Council of Ministers’ meeting discussed above, the unofficial initiator of the proposal was the Finance Minister. The National Assembly adopted a Decision on 1 June 2011 for the formation of the ad hoc Committee for discussing the draft law.[28] According to point 3 of the Decision, the division of the members of the Committee by parties was: 9 for GERB, 3 for Coalition for Bulgaria, 3 for DPS, 2 for ATAKA, 1 for the Blue Coalition and 1 for an independent national representative. On 3 June the Committee convened and agreed on a draft Decision on the rules of procedure, which was adopted by the National Assembly on 8 June.[29] While these Decisions were just formalities, the verbatim records of the National Assembly and the Committee show that the controversies started early on.

On 1 June 2011, in the context of adopting the Decision for the formation of the ad hoc constitutional Committee, several comments were made with respect to the substance of the proposed constitutional amendment. The members of Coalition for Bulgaria that joined the debates were outspoken in their criticisms. The discussion will focus on two of them. First, Luben Kornezov started by saying that there is no Pact for Financial Stability and that with the proposed draft law there is destabilisation of the constitutionalism and of the CRB. He added that the CRB is not a cookbook, allowing for experiments and that the proposed Committee is redundant and that it will not give birth to anything. Second, Georgi Pirinski made two critiques. According to him, the proposed constitutional amendments did not fall within the scope of issues that are to be regulated by a Constitution. Instead, they were issues of financial and tax law as well as issues of budgetary procedure. The other critique was that due to certain alleged vagueness and ambiguities the draft Decision was unsuitable ab initio and should not be adopted. Another comment on the constitutional amendment came from Stanislav Stanilov (ATAKA). While saying in the beginning of his statement that ATAKA will not a prioiri discuss whether the Constitution needs an amendment or not, he did allude to such a position. He said that it was a point for another discussion whether the so-called Pact for Stability can be endured by the spirit of the CRB, which precludes excessive concretisation. 

On 3 June 2011 when the Committee convened for the first time to discuss its rule of procedure a crucial point was discussed – the envisioned time-line of the procedure. Lyutvi Mestan (DPS) asked the President of the Committee, Iskra Fidosova (GERB; also one of the national representatives introducing the amendment) when is the amendment procedure planned to be finalised. Iskra Fidosova answered that it is planned that, considering the periods laid down in the Constitution, by the end of the session in the end of July (before the summer recess) the whole procedure could be completed with all three readings. The idea was that the Committee would convene exactly, or as close as possible to, one month after the date of the introduction of the proposed amendment (26 May). This meant for the Committee to meet on 27 June the earliest. In response, Mr Mestan clarified that this is a timeline applicable only in the case of gathering ¾ majority and he implicitly asked for the plan in the case that such majority is not gathered and the scaling-down majority rule is applied. Iskra Fidosova answered that it is hoped that this does not happen but if does, the procedure would continue after the summer recess, in September or later, during the elections.[30] He responded that, considering the greater probability of applying the scaling-down majority rule,[31] the second and third reading would go right in the midst of the elections campaign. In that regard, Mr Mestan expressed concerns over the appropriateness of the highly politicised environment during elections for debating constitutional amendments. He suggested that the proposal would have a greater chance of success if it was not put for discussion during the elections when it could become a victim of political controversies. Ms Fidosova expressed her hope that it will not get to this and that the procedure could be completed by the end of July.

On 8 June 2011, during the discussions on the adoption of the Decision for the Committee’s rules of procedure, Luben Kornezov (Coalition for Bulgaria) was the only one to make a statement, again, criticising the substance of the proposed constitutional amendment. He said that while Coalition for Bulgaria says ‘yes’ to the financial stability, the stability of the financial and tax laws and keeping the tax rates low, it says ‘no’ to keeping the Constitution hostage to the populism during the elections period. He stressed his opinion, without further elaboration, that the proposed amendment is harmful for the financial stability.

While the one month period prescribed by the Constitution was running, on 15 June 2011, in the context of the debates on the amendment of the LPSB, some comments were also made with respect to the constitutional amendment. Pavel Shopov (ATAKA) stated that the proposed LPSB amendment seems to be a consequence of the shaky political support for the constitutional amendment, that is – to impose limitations with a simple majority instead of a qualified one. He also stated that GERB was relying on DPS for support on the constitutional amendments but this support does not seem to be unconditional and will be a political trade-off. Mr Shopov reiterated that the proposed constitutional amendments seem to be losing ground and it will probably not get to adopting them.

Dimitar Gorov and Mihail Mikov (Coalition for Bulgaria) also made similar comments with respect to the proposed constitutional amendment. Both of them expressed the opinion that the LPSB amendments were being proposed due to the diminishing political support for the constitutional amendments. Qnaki Stoilov (Coalition for Bulgaria), in his less critical comments on the discussed LPSB amendments, stated that the subject matter of fiscal and budgetary discipline must not be elevated to the constitutional level. It must not reach the CRB because, according to him, this would impose undue limitation on the National Assembly and the society in reacting to changing circumstances.

On 28 June 2011 the constitutional Committee convened for the first reading of the draft law for the amendment of the CRB. The Report of the meeting contains a short restatement of the explanations to the draft law for the constitutional amendments as well as a summary of the statements made by some of the Committee members and the external participants.[32] However, after considering the verbatim record[33] of the meeting it becomes clear that some important points were not mentioned in the Report. Therefore, building on the Report, an expanded summary of the statements is provided here.

The meeting started with a presentation of the proposed constitutional amendments, by one of the national representatives that introduced the proposal, which restated the explanations to the draft law. Then the Finance Minister made a short statement in which he stressed on a few points. First, he said that the idea for this Pact for Financial Stability is not completely new and has been present in the general public discourse for some years but has gathered importance with the crisis. Second, he said that at the EU level it had often been discussed that such a Pact was needed EU-wide and proposals in that regard had surfaced. Such an EU-wide Pact was needed to prevent situations such as the ones in Ireland, Greece, Portugal, etc. Third, the Bulgarian Pact, part of which was the proposed constitutional amendment, was going to bring greater economic development, according to the Minister. In his view the Pact is an opportunity to make Bulgaria a richer State.

Qnaki Stoilov (Coalition for Bulgaria), as in his previous comments relating to the constitutional amendments, was very critical and based his critiques on several points. First, he considered that the ability of Bulgaria to implement a “catching-up” economic policy was considerably limited by the proposed amendments. Second, Mr Stoilov said that the proposed amendments would not only fail to lift the Bulgarians out of poverty and solve the social inequality but would actually worsen the situation. Third, Mr Stoilov criticised the treatment of fiscal and budgetary rules as a value in and of themselves. They were only instruments for the achievement of certain social goals. According to him, budgetary and fiscal rules cannot be compared to the fundamental values inscribed in the Constitution – freedom, peace, humanism, equality, justice and tolerance. He even said that, if the proposal was to be eventually adopted, the preamble of the CRB was also to be changed from Bulgaria being a social State to a State with liberal economic policy. Fourth, Mr Stoilov also saw the proposed amendments as contradicting the principle of democracy. According to him, the raison d’être of Constitutions and the democratic election of national representatives is to appoint representatives that will determine the taxes and the allocation of the State resources. He saw this as the main reason for the birth of the contemporary democracy. Mr Stoilov saw this fundamental principle of the democratic governance repealed by the proposed qualified majority rules. In his view, the national representatives that are supported by the majority of the population for a certain period of time would be precluded from conducting independent financial policy. Accordingly, Mr Stoilov called for these proposals to be rejected because they contradicted the principles of democratic governance.

Fifth, Mr Stoilov stated that, while some States are introducing such fiscal and budgetary rules, even in their Constitutions, others are considering to distinguish between, on the one hand, expenses for investment purposes with the aim to solve basic social problems and, on the other hand, expenses that are lost in the upkeep of the State and other things that are not of concern for the society at large. Sixth, Mr Stoilov considered that wider public discussion, which would include even the political parties that will participate in the upcoming elections even though they are not represented in the National Assembly, was to be made. In his view, only after obtaining such wider support the proposed amendments would have the necessary legitimacy. Finally, Mr Stoilov said that it was not clearly explained how was the tax base to be calculated. According to him, the proposed amendment dealt with the tax rates and not the tax bases. Such discrepancy could lead to different results and was seen as counterproductive even for the goals of the ones proposing the amendments.

The next to take the word was Ognian Stoichkov (ATAKA) who also criticised the draft law under discussion. According to him, it did not only propose to elevate certain norms (referring to the taxation provisions) to the constitutional level but also to put a qualified majority on it. This was seen as favouring certain norms over others. Mr Stoichkov stated that he could not accept that the taxation issues deserve to be favoured in such a way. In his view other norms were much more deserving, such as the educational ones or the ones setting out the State monopoly over the railway services etc. However, the drafters of the CRB provided for a qualified majority for a very few fundamental questions and this choice should be respected and not disrupted as proposed in the draft law. Another point Mr Stoichkov made was that the current flat tax rate was itself problematic due to its social implications. In that regard, he said that he could not support a flat tax rate which was once adopted with a simple majority of the present and voting (which according to him was 77 votes) to be entrenched in such a way to require 160 votes to be changed. Mr Stoichkov found this illogical and held that it should only happen after gathering wider public consensus. According to Mr Stoichkov, the only thing that was to be commended was the provision stating the Bulgaria shall conduct consistent and balanced fiscal policy. However, he noted that this was only a good intention with questionable legal significance. Finally, Mr Stoichkov stated that the scope of proposed taxation provision was not clear and that its compatibility with the established case law of the BCC was questionable. However, he did not elaborate in further detail on this point.

Aliosman Imamov (DPS) was the first to express support for the idea behind the proposed amendments – to have the long-term durability of the fiscal stability guaranteed. However, Mr Imamov started by making a procedural proposal. He said that discussing such important issues is not well placed right before elections. Therefore, Mr Imamov proposed that the Committee halts its work on the draft law, together with the discussions on it until after the elections. After making this proposal, Mr Imamov made several substantive comments on the proposed constitutional amendment.

First, Mr Imamov pointed out to certain discrepancies between the budgetary rules proposed in the constitutional amendment and in the amendment of the LPSB and he expressed an expectation that they are clarified. Second, he echoed the concern expressed by Mr Stoilov with regard to the tax base and tax rate discrepancy. Third, Mr Imamov also noted the absence of a provision introducing an exception for force majeure situations. He stated that such text was present in the earlier versions of the draft law. Then Mr Imamov concluded by noting the absence of detailed analysis and evidence supporting the proposed amendments with respect to (1) the “freezing points” of 2% and 40%; (2) the impact on the economic growth during the crisis; and (3) the impact on the income of the population.

Rumen Ovcharov (Coalition for Bulgaria) expressed heavy criticisms towards the draft law. He started by joining Mr Stoilov on the point that fiscal and budgetary rules cannot be treated as a value in and of themselves. Then Mr Ovcharov made a very important point about the consequences of a possible breach of the budgetary rules if they obtain a constitutional status. What was going to be the responsibility for the Government or the Finance Minister if the numerical quantities are not observed? According to Mr Ovcharov these were simply pointless good intentions serving as a political tool before the elections. The other main point that he made was that the flat tax rate was a temporary tool used by smaller economies to catch-up in their development. Being a temporary tool it has no business being constitutionally entrenched.

Ekaterina Mihailova (the Blue Coalition) expressed conditional support for the draft law. She expressed support with respect to defining the budgetary balance. However, she expressed strong discontent with the proposed qualified majority with respect to taxation. She saw this proposal as an example of bad governance due to the limitations it imposed on the freedom of any Government to conduct its policies. According to Ms Mihailova, taxation is a fundamental governance tool without which a ruling majority is dependent on the opposition to conduct its policies. Ms Mihailova stated that if this provision was removed the draft law may enjoy the support of the Blue Coalition as well.

Then, the word was given to the governor of the BNB – Ivan Iskrov. At the very beginning of his statement Mr Iskrov made two preliminary points. First, his statement was to be considered as made by the representative of an expert institution, as the BNB does not have an obligation to present an official statement but has always shown willingness to join discussions on macroeconomic governance when invited to. Second, his statement was not going to deal with whether the discussed rules must be the subject of constitutional or ordinary law regulation. He was only going to discuss the substance of the proposed rules. He started by discussing the balanced budget rules. Interestingly, Mr Iskrov was the only one to put a considerable emphasis on the role of EU law with respect to these rules. He even said that the Bulgarian rules were to be discussed only in the context of EU law and, in particular, the Euro-Plus Pact and the Six Pack that was in the process of creation at that time. Mr Iskrov drew the attention to two other points that were missing from the draft law but should be included: (1) an obligation to accumulate budgetary reserves in times of economic growth and (2) an exception for force majeure situations. With respect to the taxation issues Mr Iskrov only stated that the “catching-up” economies need low flat rate taxes and that Bulgaria had no interest in the harmonisation of the tax base which was being called for at the EU level.

Following these statements the President of the Committee put the procedural proposal of Mr Imamov to vote. The result of the voting was 4 ‘for’, 9 ‘against’ and 3 ‘abstaining’ and the proposal was not adopted. In response, Mr Imamov stated on behalf of DPS that it will not participate in the discussions and the voting of the proposed constitutional amendment until after the elections.

In the end, the word was given to Tsvetan Simeonov – the President of the Bulgarian Chamber of Commerce and Industry, who was an external participant in the meeting. Mr Simeonov expressed support for the draft law and even said that it would have been better if stricter rules were introduced. In particular, he referred to a 35% redistribution role of the State and as much as possible balanced budget – that is, lack of deficits, if possible. He also said that the proposed amendments should have been implemented years ago, when the flat tax rate was introduced. According to Mr Simeonov, it was important that these changes were included in the CRB because this was going to ensure higher observance of the rules. He also stated that the qualified majority was necessary in order to provide stability to the business. With respect to the points on wider public discussion and support, he suggested that the discussion has been wide enough, referring to the support for these proposed amendments given by companies comprising more than half of the GDP and more than 70% of the external trade of Bulgaria.

After Mr Simeonov’s comments the draft law for the amendment of the CRB was put to a vote. The result of the voting was 10 ‘for’, 3 ‘against’ and 1 ‘abstaining’ with which the Committee proposed to the National Assembly to adopt the draft law at first reading. The draft law got to its first reading in the plenary of the National Assembly as late as 28 July 2011 – that is, much later than initially anticipated in the first Committee meeting. The following (procedural) background and contextual recollection is crucial for understanding the first reading discussions.

Article 154(2) CRB obliges the National Assembly to discuss a draft law for a constitutional amendment within a certain period following the introduction of the proposal. However, interestingly, the plain wording of the provision does not necessarily imply an obligation for the draft law to be voted upon, although one could say it is logical. Second, the Constitution does not expressly provide for the procedure to be followed if an ordinary law or a constitutional amendment is rejected during its first reading, other than the scaling-down majority rule. That is, it does not state whether a rejected proposal can be reintroduced immediately after its rejection and whether it can be reintroduced without any changes made to it. Article 79 of the Rules of the National Assembly state that

A draft law which is rejected when it is voted upon for the first time can be reintroduced only after substantial changes in its main points which shall be reflected in its explanations and it may not be reintroduced earlier than three months following its rejection”.

The Rules do not differentiate between draft laws for ordinary laws or constitutional amendments. Assuming the constitutionality of this provision with respect to proposals for constitutional amendments, this provision means that if a draft law for a constitutional amendment is rejected during its first vote it can only be introduced after substantive changes are made to it and not earlier than three months following the rejection. Rejection is not defined but it is logical to refer to situations where the required majority is not achieved during the voting itself, that is, when a voting is actually carried out. Conversely, a draft law is not going to be rejected if it never gets to a vote. Accordingly, there is a constitutional obligation to discuss a proposal for a constitutional amendment but not, necessarily, to put it to vote and without the proposal being voted upon, even if it never gets adopted, it is not considered rejected and does not need to be substantially changed in order to be reintroduced. While this clarification seems purely abstract and theoretical, it is the procedural framework within which the proposed in 2011 constitutional amendment perished.

The substantive discussion on 28 July 2011 was preceded by several procedural proposals.[34] These procedural proposals turned into a sort of procedural battle between the representatives of GERB and Coalition for Bulgaria. The battle was for whether the debate should be done on this very day and time or postponed. The day was the last plenary day for legislative activities before the summer recess. The next day was the last day before the summer recess of the National Assembly but it was dedicated to parliamentary control, which does not usually include legislative activity. The time was in the early afternoon just before 14:00, which is usually the end of the plenary sessions according to the Rules of the National Assembly. The attendance of the national representatives was below 50%.

First, Menda Stoqnova (GERB) made a procedural proposal for extending the working time until the conclusion of the discussions on the proposal. Ivan Kostov (the Blue Coalition) criticised this by saying that debates for the amendment of the CRB must be done in normal working time and that this was disrespectful towards the idea of national representation. He also said that a possible explanation for such a move can be that the debate is considered lost beforehand and it was being done only for the record. The procedural proposal was voted and passed with 83 ‘for’ and 24 ‘against’.[35]

Second, Georgi Pirinski (Coalition for Bulgaria) made a procedural proposal for the debate to be postponed until after the summer recess so that it can be properly discussed.  He said that this was an irresponsible approach, especially in light of the fact that two of the most important aspects of the State were to be discussed – the financial stability and the Constitution. Before putting the proposal to a vote the President of the National Assembly referred to Article 154(2) CRB which requires the proposal to be discussed no later than three months after the introduction of the proposed constitutional amendments. If the discussion was postponed until after the recess (which was 28 August 2011 the earliest) this would have been after the three-month period, as the amendments were introduced on 26 May 2011. Thus, the discussion could not have been postponed. Then the procedural proposal was nevertheless put to a vote and failed with 27 ‘for’, 80 ‘against’ and 5 ‘abstaining’.[36]

Third, Maya Manolova (Coalition for Bulgaria) made a procedural request for re-voting of Mr Pirinski’s proposal. She said that, looking at the number of present representatives, it was mathematically impossible to get the draft law passed on first reading with the required 160 votes in favour. She said that what was being done was disrespectful to the CRB. Ironically, Ms Manolova said that not observing the constitutionally prescribed period does not lead to any fatal consequences and requested the debate to be postponed until after the summer recess. The procedural proposal was re-voted and failed again with 23 ‘for’, 75 ‘against’ and 1 ‘abstaining’.[37]

Fourth, Georgi Bozhinov (Coalition for Bulgaria) made yet another procedural proposal to postpone the discussion but for the following day and to put it as a first point in the agenda. He also reiterated the point on the low attendance of national representatives. Mr Bozhinov stated that this was a purely formalistic attitude trying the push forward the debates only for the record. This proposal was voted and failed with 24 ‘for’, 60 ‘against’ and 5 ‘abstaining’.[38] Following these procedural proposals, the President of the constitutional Committee presented the Committee’s Report after which the proposal was presented by one of the national representatives that introduced the proposal. During these two presentations nothing new was added to what has already been discussed above. Consequently, the substantive discussion of the proposed constitutional amendment started.

Aliosman Imamov (DPS) repeated his position from the meeting of the constitutional Committee. He stated that while his political party was supportive of the idea to guarantee the long-term durability of the fiscal stability, it was not going to participate in the discussions and the voting. According to Mr Imamov, this decision was taken in response to the unwillingness of the majority to create more favourable conditions for discussing the proposal, which DPS thought to arise after the upcoming elections.

Pavel Shopov (ATAKA) started by making a preliminary comment on the way the proposed constitutional amendments were to be discussed. He said that it was an absurd to deal with the CRB in such a way. In his opinion, Article 154(2) CRB did not preclude a discussion on the amendment after the recess. He suggested that if a different approach was taken, it was not impossible for the proposed amendments to pass, albeit amended. However, he continued, with the approach taken, it was clear that the proposal was going to fail. Mr Shopov concluded his preliminary remarks by suggesting that what was being done was intentionally aiming at putting the end to the proposed constitutional amendment. In his substantive comments, Mr Shopov focused on several points. First, he said that the proposed amendments were going to give Bulgaria a neoliberal character, in contradiction with the preamble of the CRB, saying that Bulgaria was a social State. Second, he said that legally and systematically the proposed amendments must not be placed in the CRB because they are supposed to be regulated by other types of normative acts, such as laws or other secondary normative acts. Third, Mr Shopov saw the proposed amendments as problematic because they were going to entrench the flat tax rate, which was adopted with a very small majority and clearly representing neoliberal politics, which Bulgaria must abandon. Fourth, the qualified majority that was proposed with respect to taxation was seen as wrong because in this way the strongest lever for influencing and changing the public relations – the taxation – was being removed from the toolset of all future Governments. Adopting the proposed amendments would have meant, according to Mr Shopov, predetermining the actions of all future Finance Ministers, who will not be able to implement the policies for which they were chosen.

Martin Dimitrov (the Blue Coalition) expressed support for the idea that the proposed amendments represent – an idea that, according to Mr Dimitrov, has been applied and have shown fruitful results in other States. He admitted that some of the jurists in the Coalition doubted with good reasons the inclusion of the taxation rules in the Constitution. However, Mr Dimitrov said that, in his opinion, that the flat tax rate must be protected. He said that there was always a risk of somebody like Jean Videnov to reappear (the Prime Minister during the 1996 crisis discussed infra) and such risk had to be controlled as much as possible. Mr Dimitrov invited the Finance Minister and GERB to continue looking for consensus and not to proceed to a vote, which was clearly going to be lost. He said that this is a topic for which national consensus was needed and it was lacking at that moment. According to Mr Dimitrov, consensus could be reached with reasonable proposals and conversations.  

The following three statements were made by national representatives from GERB and the Finance Minister, all in support of the proposed amendments. As they largely restated points that have already been discussed, only a short overview of their statements will be provided here. Dimitar Glavchev (GERB) focused on the notion of trust. He saw the constitutional amendments as addressing the problem of the ‘deficit’ of security and trust and as providing a guarantee that future election results will not undermine the financial stability of the State. Next, the Finance Minister made a rather short statement in which he focused on two points. First, he emphasised that the recent changes in the LPSB, which were corresponding to the constitutional amendments, led to an improved credit rating by Moody’s. Second, the Finance Minister said that it was time for the next step – to impose a qualified majority for the taxation in order to ensure sound fiscal policies in the future. According to him, this was going to lead to more effective and disciplined allocation of taxpayers’ money.

Krasimir Tsipov (GERB) continued the discussion. In his opinion, the proposed constitutional amendments were a logical consequence of the pre-existing goals set by the Government. According to him, these goals included four priorities: (1) maintaining the fiscal and financial stability of the State; (2) good management of the sovereign debt; (3) maintaining the low level of the taxes and increasing the effectiveness of the revenue administrations; and (4) maintaining the stability of the currency board. Mr Tsipov suggested that all of the measures the Government took in that regard – for increasing the stability of the public finances, as well as the Government’s policies for increasing the competitiveness of the economy – were addressing the goals of the Euro-Plus Pact. According to Mr Tsipov, these measures and policies led to the widely debated Bulgarian Pact for Financial Stability, which included the proposed constitutional amendments. Mr Tsipov concluded by calling upon the other national representatives to support the proposed amendments in order to ensure the long-term maintenance of a balanced budget and observance of a strict fiscal discipline.

Luben Kornezov (Coalition for Bulgaria) made a short statement, in which he said that, as a sign of protest to the timing of the discussion, Coalition for Bulgaria was not going to participate in the discussions. Following this statement, the discussion turned towards its end, filled with polemics and interruptions of the speakers. Iskra Fidosova (GERB) started her statement by criticising the abstentions from the debates. She said that there was an obligation to make the debate in the prescribed period and she pointed to the fact that nobody objected to having the discussion on that day when it was being included in the agenda. In her substantive comments, Ms Fidosova stated that adopting the proposed amendments would signal stability and consistency in the fiscal and financial policies of Bulgaria towards the investors and the Bulgarian citizens. Ms Fidosova also saw the amendments as contributing towards limiting public spending, in accordance with the TFEU. Ms Fidosova repeated what was said earlier with respect to the guarantee that the proposed amendments represented. She said that these amendments, before they were even formally introduced, had been widely discussed for four months. There were discussions with all of the political parties in the National Assembly as well as with interested organisations such as the Chamber of Commerce and the BNB. While Ms Fidosova admitted that more conversations and debates were needed, she asked the national representatives to support the proposed amendments.

Then an exchange between Georgi Bozhinov (Coalition for Bulgaria) and Iskra Fidosova took place again on the point of the obvious lack of support and the formalistic attitude towards the discussions. Following these exchanges the debates were closed and a procedural request was made by Ms Fidosova for checking whether there was quorum. This request was objected to by Qnaki Stoilov (Coalition for Bulgaria). The check was nevertheless made and with only 106 national representatives there was no quorum and the constitutional amendment did not proceed to a vote and the session was concluded for the day.

The procedural battle continued on 29 July 2011.[39] In the very beginning of the session, Maya Manolova (Coalition for Bulgaria) made a procedural proposal for carrying a vote on the draft law for the constitutional amendment. It was argued that since there was quorum it was to be voted upon, also in accordance with Article 154 CRB. The President of the National Assembly – Tsetska Tsacheva (GERB), said that she cannot put the procedural proposal to a vote because the agenda included only parliamentary control for that day and no legislative activities were foreseen. Georgi Pirinski (Coalition for Bulgaria) stated that while this was not part of the agenda it was within the powers of the President of the National Assembly, as it has been done before, to propose a legislative vote to be included in the agenda. Ms Tsacheva agreed that she has such power but also said that it was discretionary. The procedure for this constitutional amendment stopped there and was never continued nor restarted. Nevertheless, the ad hoc constitutional Committee was not dissolved and occasional references to amending the Constitution were still made until the Government resigned in the spring of 2013.

On 14 December 2011 two references to an eventual Constitutional amendment were made. The first reference was made in the context of a request for including in the weekly agenda a hearing of the Prime Minister concerning Bulgaria’s position on resolving the Euro crisis. This request did not succeed due to the negative vote of the majority, much to the dislike of certain national representatives, including some from DPS. In his response to the failed vote, Hristo Biserov (DPS) stated that such rejections of hearing requests had been happening for three weeks and that this was damaging the relationship between the political parties. In that regard, Mr Biserov asked how the majority was going to dare inviting DPS and others to talks over possible constitutional amendments if it was acting in such a way. A little later, during a statement on the conclusions of the European Council meeting on 9 December, the Foreign Affairs Minister stated that Bulgaria had included the ‘golden rule’ in the LPSB and that the Government was working towards introducing it in the CRB as well. On 13 January 2012, in the context of the early discussions on the Fiscal Compact, the Prime Minister echoed the statement of the Foreign Affairs Minister. The Prime Minster stated that, while the fiscal rules on the budgetary deficit were already included in the LPSB, the Government was working towards introducing constitutional provisions limiting the increase of the taxes.

On 25 January 2012, in the context of the discussion in the European Affairs Committee on a Decision of the National Assembly on the participation of Bulgaria in the negotiations of the Fiscal Compact, a question was asked by Aliosman Imamov (DPS). The question concerned the faith of the provisions of the Bulgarian version of a fiscal pact, which included a proposal for constitutional amendments. Their faith was questioned because, under the Fiscal Compact, they were not required. In his answer, the Finance Minister stated that the process with respect to the proposed constitutional provisions was intentionally slowed down in order to see the final version of the Fiscal Compact and to decide whether the proposal need to be changed. Two days later, during the discussions of the Decision in the plenary hall of the National Assembly, two other references were made. First, Aliosman Imamov emphasised again the wider scope of the Bulgarian Pact for Financial Stability, compared to the Fiscal Compact, and asked why were the additional (constitutional) rules needed? Second, Plamen Oresharski (Coalition for Bulgaria) noted that the debate at the EU level with respect to fiscal rules developed in a different direction from what had been proposed in 2011 with the constitutional amendments. Mr Oresharski stated that Bulgaria should not have tried to be far ahead of the European leaders because that proved to have been counterproductive. According to Mr Oresharski, it was better that the constitutional amendment failed because a new one would have had to be done, considering the Fiscal Compact. The Finance Minister did not respond to these comments. No other discussions on the constitutional amendment were found.

Constitutional context       
III.3
If national constitutional law already contained relevant elements, such as a balanced budget rule or independent budgetary councils, before the crisis that are now part of Euro-crisis law, what is the background of these rules?

The CRB does not contain such rules on balanced budget or independent budgetary councils. However, it is interesting to mention at this point that there has been a sort of a constitutional convention created with respect to budgetary discipline through the practice of all Governments since the 1996 economic crisis in Bulgaria. This crisis can hardly be described in a sentence and certainly not by this author. However, in order to provide a certain idea of the crisis to the reader two purely indicative quotes from the literature can be placed here.

“The major reason for the adoption of the [Currency Board Arrangement] in Bulgaria was the severe financial destabilisation during the second half of 1996, which culminated in a hyper-inflationary shock at the beginning of 1997. The lead for this was given in early 1996. Expectations of the population for a sharp depreciation of the national currency were present because of the heavy foreign debt servicing obligations which were due in 1996. Meanwhile, the diminishing hard currency reserves of the state prevented the Bulgarian National Bank (BNB) from intervening in the foreign exchange market in support of the national currency (the lev). Soon, confidence in the reliability of the national banking system strongly deteriorated, causing increased demand for hard currency. The population was struck by panic and rushed to the banks, at first to get back lev deposits and turn them straight away into hard currency and, later on, to withdraw hard currency deposits as well in order to lock them up in safe deposit boxes.”[40]

 “The uniqueness of the Bulgarian case lies mainly in the combination of several serious problems that accelerated the crisis and amplified its magnitude. In fact, it was a combination of a fiscal crisis, a banking crisis and a currency crisis, and each of these three problems was so acute that it might have given birth to a major crisis on its own.”[41]

In order to facilitate further inquiries on this topic this author would direct the reader to a certain collection of contributions which can serve as a basis for further in-depth research.[42] The causes and effects of the 1996 crisis have been, and to a certain extent still are, subject of a great deal of controversy in Bulgaria. The collection proposed is purely indicative and does not imply that this author agrees or disagrees with these writings.

In the verbatim records of the National Assembly, during discussions on budgetary discipline, references have been made to a political consensus in Bulgaria, created since 1996.[43] However, it is not clear what are the scope and the deterrence of this political consensus. It is not contained in a legal document (but it probably would have been if the proposed constitutional amendment was adopted). The fact that the proposed constitutional amendment failed due to a lack of broad consensus leads to at least two conclusions. Either the constitutional amendment did not really manage to capture this political consensus or it did manage to capture it but the political forces subscribing to it did not necessarily see the constitutional entrenchment as its correct status. The truth probably lies somewhere in between, considering the answer to Question III.2. Coming back to the essence of this Report, from a legal point of view, considering that the amendment failed and that the BCC has never suggested that constitutional conventions are a source of constitutional law in Bulgaria, the political consensus strictly speaking has no legal force. 

Purpose constitutional amendment 
III.4
What is the purpose of the constitutional amendment and what is its position in the constitution?

Due to the failure of the proposal for a constitutional amendment this question is not relevant to the situation in Bulgaria.

Relationship with EU law        
III.5
Is the constitutional amendment seen as changing the relationship between national and European constitutional law?

Due to the failure of the proposal for a constitutional amendment this question is not relevant to the situation in Bulgaria.

Organic Law      
III.6
Have there been changes to organic laws or other types of legislation that are of a different nature or level than ordinary legislation, in relation to Euro-crisis law or the budgetary process?

No. However, keep in mind the answer to Question III.1.

Constitutional Amendment and ordinary law      
III.7
If ordinary legislation was adopted in conjunction with a constitutional amendment, what is the relationship between the two?

As explained in the answer to Question III.2, the proposal for a constitutional amendment failed in 2011. However, as it has been mentioned through this report, the amendment of the LPSB in 2011 was envisaged to be adopted in conjunction with the proposed amendment of the CRB.[44] The two legislative initiatives were part of the Bulgarian Pact for Financial Stability. The Pact was put on the wider political agenda by the Finance Minister in the beginning of 2011 and only partially succeeded. Due to the change in the discourse at the EU level with respect to the Euro-crisis measures and the lack of political consensus at the national level, the proposed constitutional amendments were not formally reintroduced after their controversial end in a procedural maze. The adoption of the LPF includes the LPSB amendments and it has been seen as a natural continuation of the Pact for Financial Stability.[45]

Perception source of legal change  
III.8
In the public and political discussions on the adoption of ordinary legislation, what was the perception on the appropriate legal framework? Was the ordinary legislation seen as implementing national constitutional law, or Euro-crisis law?

The implementation of the Euro-crisis measures, in terms of appropriate legal framework, has not been a point of much discussion. The relevant measures have been seen as implementing the Euro-crisis law and not constitutional law, considering also the failure of the proposed constitutional amendment. The only point of controversy found was with respect to the Euro-Plus Pact. The discussions on the point of the origin of the Government actions that fell within the scope of the Euro-Plus Pact were found to be only in the parliamentary debates (see the answer to Question VI.2) and not in the general public debate.

The problem with the Euro-Plus Pact in Bulgaria originates in the lack of transparency that surrounded it and the controversy about its legal/political character. The Government only mentioned that it will join the Pact in the morning before the Council meeting in Brussels. The Government also did not state clearly what commitments (even if only political) it made under this Pact. The Government stated that the Pact was an important political act that was crucial for (1) managing the Euro crisis and (2) Bulgaria’s role at the EU level. It also said that it did not commit to adopting any measures that it had not planned to adopt anyway. Thus, according to the Government, all of the unpopular measures such as the increase of the retirement age were measures in pursuance of its own policies and not measures required from Brussels. However, the opposition, formed mainly by leftists, insisted that the unpopular measures were adopted in order to fulfil secretive commitments. This was seen as problematic because, in the opinion of the leftists, the state of the Bulgarian economy at that time did not call for such restrictive measures. Thus, the main discussions on the point of implementing Euro-crisis measures focused on whether the measures in the scope of the Euro-Plus Pact were genuinely necessary in Bulgaria and whether they were the consequence of Government’s commitments made in non-transparent ways. 

Miscellaneous
III.9
What other information is relevant with regard to Bulgaria and to changes to national (constitutional) law?

No other relevant information.

[1] See the answer of the next question with respect to the issue of constitutional amendments.

[2] Е Друмева, Конституционно право (4то изд, Сиела, София 2013) 378 [E Drumeva, Constitutional Law 4th edition]. E Drumeva, Constitutional Law 4th edition.

[3] Ibid., 152. The (hierarchal) relationship between the CRB and EU law from the perspective of Bulgarian Constitutional law is not going to be discussed here as it goes beyond the scope of the present question. Suffice it to say that a former judge at the BCC, in her most recent writings, does not give a straight answer to this question. She starts by saying that it is a very charged question and after a short discussion concludes that “the relationship between EU law and national constitutional law is one of constant dynamic, interplay and enrichment where the latter is being “Europeanised” and the former is being enriched with constitutional characteristics.” translation by the author, Ibid., 181.

[4] Ibid., 181.

[5] Constitution of the Republic of Bulgaria, promulgated SG 56 of 13 July 1991, entered into force 13 July 1991, as amended SG 85 of 26 September 2003, SG 18 of 25 February 2005, SG 27 of 31 March 2006, SG 78 of 26 September 2006 – Decision No 7 by the Bulgarian Constitutional Court of 2006, SG 12 of 6 February 2007, art 22(1).

[6] Ibid., art 85(2).

[7] Law on Normative Acts, SG 27 of 3 April 1973, as last amended SG 46 of 12 June 2007.

[8] Ibid., art 4.

[9] Decision № 8 of 2012 in Case № 8 16 of 2011, SG 53 of 13 July 2012.

[10] CP of Bulgaria for 2013-2016, 63.

[11] Commission Staff Working Document, Assessment of the 2012 national reform programme and convergence programme for Bulgaria, SWD(2012) 302 final, 11.

[12] Е Друмева, Конституционно право (4то изд, Сиела, София 2013) 378 [E Drumeva, Constitutional Law 4th edition]. E Drumeva, Constitutional Law 4th edition, 147.

[13] Constitution of the Republic of Bulgaria, art. 153.

[14] Е Друмева, Конституционно право (4то изд, Сиела, София 2013) 378 [E Drumeva, Constitutional Law 4th edition]. E Drumeva, Constitutional Law 4th edition, 148.

[15] See E Tanchev and J Peteva, ‘The Impact of EU Accession on the Legal Orders of Bulgaria’ in A Kellerman and others (ed) The impact of EU accession on the legal orders of new EU member states and (pre-) candidate countries: hopes  and fears (Final Conference MATRA Multi Country Project, TMC Asser Press, The Hague 2006) 41.

[16] Constitution of the Republic of Bulgaria, art. 157.

[17] Ibid., art 161.

[18] Ibid., art 154(1).

[19] Ibid., art 154(2).

[20] See National Assembly, Decision of 25 June 2003, SG 68 of 1 August 2003 (the National Assembly did not adopt a new Decision for the second amendment of the CRB but applied the procedure from its first Decision); National Assembly, Decision of 25 January 2006, SG 11 of 3 February 2006; National Assembly, Decision of 25 November 2006, SG 88 of 31 November 2006.

[21] Only a few additional practicalities were added such as speaking times and time periods for submitting proposals for editing the draft law after its first reading adoption. 

[22] Constitution of the Republic of Bulgaria, art 155.

[23] Ibid., art 156.

[24] Council of Ministers, Stenographic record of the meeting on 16 February 2011.

[25] The Finance Minister also stated that he would present the idea for the Pact to the Council of Ministers in further detail in the next several days but no public record of this has been found. It does not become clear from the short introduction whether the initial idea for the Pact included only a constitutional amendment or also the adoption of an ordinary law.

[26] See the answer to Question III.3.

[27] The rest of the national representatives were independents which were affiliated with RZS (10), DPS (2), ATAKA (1) and the Blue Coalition (1).

[28] National Assembly, Decision of 1 June 2011, SG 43 of 7 June 2011.

[29] National Assembly, Decision of 8 June 2011, SG 45 of 14 June 2011.

[30] The elections referred to here are the 2011 presidential and local elections (see the answer to Question I.1) and this is what Mr Mestan was alluding to.

[31] Mr Mestan seems to have been referring to the level of political support for the constitutional amendment, which has not been very high, as it transpires from the statements of the members of Coalition for Bulgaria on 1 June 2011.

[32] Temporary Committee for Discussing the Draft Law for Amending the Constitution, Report of 28 June 2011.

[33] Temporary Committee for Discussing the Draft Law for Amending the Constitution, Protocol № 2 of 28 June 2011.

[34] National Assembly, Stenographic record of the 261st meeting, 28 July 2011.

[35] In favour – GERB (81), the Blue Coalition (1), ATAKA (1); against Coalition for Bulgaria (14), DPS (1), the Blue Coalition (8) and ATAKA (1).

[36] In favour – GERB (2), Coalition for Bulgaria (14), the Blue Coalition (9), DPS (1) and ATAKA (1); against GERB (79) and Coalition for Bulgaria (1); abstaining GERB (3), ATAKA (2).

[37] In favour – Coalition for Bulgaria (13), the Blue Coalition (6), DPS (1) and ATAKA (3); against GERB (75); abstaining GERB (1).

[38] In favour – GERB (1), Coalition for Bulgaria (11), the Blue Coalition (9), DPS (1) and ATAKA (2); against GERB (60); abstaining GERB (5).

[39] National Assembly, Stenographic record of the 262nd meeting, 29 July 2011.

[40] S Stefanov, ‘Implications of the Currency Board in Bulgaria’ (1999) 2 SEER 139.

[41] R Dobrinsky, ‘The transition crisis in Bulgaria’ (2000) 24 CJE 581, 600.

[42] S Clifford and JR Poirot, ‘Did the Currency Board Resolve Bulgaria’s Financial Crisis of 1996-97?’ (2003) 26 JPKE 27; M Berlemann, K Hristov and N Nenovsky, ‘Lending of Last Resort, Moral Hazard and Twin Crises: Lessons from the Bulgarian Financial Crisis 1996/1997’ (William Davidson Working Paper Number 464, May 2002); Centre for Co-operation with Non-members, OECD Economic Surveys 1998-1999: Bulgaria (OECD, Paris 1999); П Игнатиев, ‘Банковата криза в България през 19961997г.’  (2003) Икономическа мисъл 66 [P Ignatiev, ‘The banking crisis in Bulgaria in 19961997’ (2003) Economic Thought 66]; P Kovatchevska, ‘The Banking and Currency Crises in Bulgaria: 1996-1997’ (Center for Social and Economic Research, Studies & Analyses Number 204, 2000).

[43] See the verbatim records of 4 May 2013 discussed in Question VI.1 and the explanations to the draft law for constitutional amendments.

[44] E.g. National Assembly, Stenographic records of the 242nd meeting, 15 June 2011.

[45] See the verbatim records of the Committee on Legal Affairs, Protocol № 147 of 24 October 2012.

Croatia

Nature national instruments   
III.1
What is the character of the legal instruments adopted at national level to implement Euro-crisis law (constitutional amendment, organic laws, ordinary legislation, etc)?

Croatia has only adopted the Croatian Law on Fiscal Responsibility adopted in 2010 which entered into force on 1 January 2011, which is an ordinary law, i.e. it does not have legal strength of the Constitution or a constitutional law.[1]

Constitutional amendment
III.2    
Have there been any constitutional amendments in response to the Euro-crisis or related to Euro-crisis law? Or have any amendments been proposed?

No, there have not been any. The last changes of Croatian Constitution took place in 2010 when certain provisions of the Croatian Constitution were amended as part of the European integration process of Croatia into the European Union, but none of these amendments was Euro-crisis related.[2]

Constitutional context    
III.3
If national constitutional law already contained relevant elements, such as a balanced budget rule or independent budgetary councils, before the crisis that are now part of Euro-crisis law, what is the background of these rules?

No rules of that kind in Croatian Law.

Purpose constitutional amendment 
III.4
What is the purpose of the constitutional amendment and what is its position in the constitution?

Not applicable.

Relationship with EU law 
III.5
Is the constitutional amendment seen as changing the relationship between national and European constitutional law?

Not applicable.          

Organic law
III.6
Have there been changes to organic laws or other types of legislation that are of a different nature or level than ordinary legislation, in relation to Euro-crisis law or the budgetary process?

No, there have not been changes or adoption of any kind of organic laws or other types of legislation that are of a different nature or level than ordinary legislation, in relation to Euro-crisis law or the budgetary process.

Constitutional amendment and ordinary law      
III.7
If ordinary legislation was adopted in conjunction with a constitutional amendment, what is the relationship between the two?

Not applicable.

Perception source of legal change 
III.8
In the public and political discussions on the adoption of ordinary legislation, what was the perception on the appropriate legal framework? Was the ordinary legislation seen as implementing national constitutional law, or Euro-crisis law?


Not applicable.

Miscellaneous
III.9
What other information is relevant with regard to Croatia and to changes to national (constitutional) law?

Not applicable.


[1]  Official Gazette of Croatia No 139/2010

[2]  Official Gazette of Croatia No 76/2010 and No 85/2010

Cyprus

Nature national instruments   
III.1
What is the character of the legal instruments adopted at national level to implement Euro-crisis law (constitutional amendment, organic laws, ordinary legislation, etc)?

The ‘Euro-crisis’ law was transposed into the national legal order by means of ordinary legislation. The great majority of the instruments was adopted under Art. 169 (2) on ‘treaties, conventions and international agreements’ that requires simple majority at the Parliament, with the exception of the Fiscal Compact which was adopted under Art. 169 (1) (see also questions II.1, VI.2 and VII.2).

For example:  
– the EFSF was implemented in Cyprus through Law 13 (III) of 2010 with the title ‘The law on the participation of the Republic of Cyprus in the European Financial Stability Facility’ (see question IV.2);   
– the amendment of Article 136 TFEU approved by Law 13 (III) of 2012 (see question V.2);
– the “Six-Pack” was implemented through Law 194 (I) of 2012 on the Medium Term Budgetary Framework and the Fiscal Rules (see questions VII.2 and VII.7);
– the ESM Treaty ratified through Law 14 (III) of 2012 (see question IX.2);          
– and the MoU and FFA were ratified through Law 1 (III) of 2013 (see question X.2).

Constitutional amendment
III.2    
Have there been any constitutional amendments in response to the Euro-crisis or related to Euro-crisis law? Or have any amendments been proposed?

So far no constitutional amendments have taken place or have been proposed in relation to the Euro – crisis. Yet constitutional amendments are being discussed in order to implement the ‘golden rule’ of the Fiscal Compact[1] (see also question IX.5).            

Constitutional context    
III.3
If national constitutional law already contained relevant elements, such as a balanced budget rule or independent budgetary councils, before the crisis that are now part of Euro-crisis law, what is the background of these rules?

Prior to the Eurozone crisis Cyprus lacked a solid fiscal framework and it is now in the process of building it. The main provisions in the Constitution of Cyprus that contain elements relating to the fiscal framework of Cyprus are Articles 165-168. These Articles mainly provide that the Minister of Finance is competent to draft the yearly budget, which upon the Cyprus Ministerial Council’s approval is submitted to the Houses of Parliament (Art. 167). No elements of a balanced budget rule or independent budgetary councils exist in the constitution. Elements of the budgetary process and other procedural issues regarding the allocation of expenditures and revenue appear on other provisions of the Constitution such as Art. 80, 81, 91 and 139 which, however, provide only for deadlines and exceptions from the standard procedure.

Purpose constitutional amendment 
III.4
What is the purpose of the constitutional amendment and what is its position in the constitution?

Not applicable.

Relationship with EU law 
III.5
Is the constitutional amendment seen as changing the relationship between national and European constitutional law?

Not applicable.          

Organic law
III.6
Have there been changes to organic laws or other types of legislation that are of a different nature or level than ordinary legislation, in relation to Euro-crisis law or the budgetary process?

No such changes have taken place.

Constitutional amendment and ordinary law      
III.7
If ordinary legislation was adopted in conjunction with a constitutional amendment, what is the relationship between the two?

There is no recent constitutional amendment, relating to the Euro-crisis measures.

Perception source of legal change 
III.8
In the public and political discussions on the adoption of ordinary legislation, what was the perception on the appropriate legal framework? Was the ordinary legislation seen as implementing national constitutional law, or Euro-crisis law?

As there has not been any constitutional amendment, the general perception in both the public and the Parliament was clearly that ordinary legislation was implementing Euro-crisis law. In fact after the receipt of financial assistance, at least the majority of the public perceived the ‘Euro-crisis law’, as ‘austerity law’ imposing the Troika’s demands that further, went against the national sovereignty of Cyprus and the overall constitutional order. Along the same line of argument, the leftish parties of the Parliament, in the famous plenary session of the 30th of April 2013 had argued that the acceptance of the MoU and the FFA would seriously undermine the national sovereignty of Cyprus (see question IX.2).

Miscellaneous
III.9
What other information is relevant with regard to Cyprus and to changes to national (constitutional) law?

Not applicable.

[1] See the report of the Parliamentarian Committee of Finance and Budget :

http://www2.parliament.cy/parliamentgr/008_05e/008_05_3858.htm as well as the debate in the Parliament; 

Czech Republic

III      Changes to national (constitutional) law


Nature national instruments 
III.1
What is the character of the legal instruments adopted at national level to implement Euro-crisis law (constitutional amendment, organic laws, ordinary legislation, etc)?

So far, no implementation laws are in force, apart from those that preceded Euro-crisis law. The intent of the Nečas Government has been to adopt Fiscal Constitution, which would be detailed in ordinary laws. To ensure stability of the new fiscal legislative framework, the Fiscal Constitution Bill requires implementing laws to be adopted by both chambers of Parliament (Art. 14).[1] Certain technical changes (e.g. the European Semester)[2] occurred only in the practice of the Ministry of Finance and the Office of Government.

Constitutional amendment     
III.2     
Have there been any constitutional amendments in response to the Euro-crisis or related to Euro-crisis law? Or have any amendments been proposed?

Two constitutional amendments were submitted by the Government to the Parliament:

  1. Constitutional bill on fiscal responsibility (Fiscal Constitution Bill) setting the BBR, MTO and sanction mechanism for both the state and territorial self-government budgets.
  2. Constitutional bill amending the competences of the Supreme Auditing Office so that it can audit organs of territorial self-government (regions and municipalities) and private companies. The constitutional bill passed in the Chamber of Deputies, but was rejected in the Senate.[3]

The Fiscal Constitution Bill represents a major internal reaction to the Euro-crisis, therefore I shall develop more on its political context, legislative process, content, and implications. The Nečas Government prepared a constitutional amendment on fiscal responsibility (Fiscal Constitution Bill). The constitutional amendment was submitted to the Chamber of Deputies of the Parliament on November 10, 2012;[4] the first reading took place on February 6, 2013 and the second reading on June 11-12, 2013. The political crisis that started in June 2013 and ended with a confidence vote to new government in February 2014 (after early elections in October 2013) stayed the legislative process. An opposition party (TOP 09) resubmitted the original Fiscal Constitution Bill to the Chamber of Deputies. However, the new government is unlikely to accept the Bill in its current version. Despite these uncertainties, let me present the current version of the Fiscal Constitution Bill as it is the only proposal at the moment and has been subject to extensive debate over the past years. It is important to emphasize, that the Fiscal Constitution Bill aimed to implement certain parts of the Council Directive 2011/85/EU, which had to be transposed by December 31, 2013 (that means CR is currently in default on its obligation). One of the problems is that without an amendment to the Constitution, the Government does not dispose of sufficient tools to control fiscal responsibility of regional and municipal self-governments, including an enforcement of medium-term budgetary objectives. The Fiscal Constitution Bill aimed to enter into force on January 1, 2014 with exceptions indicated below.

Draft Fiscal Constitution as amended by the Budgetary Committee of the Chamber of Deputies of the Parliament:[5]

  1. All public institutions must have medium-term budgetary outlook for at least two years beyond the annual budget.
  2. The draft establishes National Fiscal Council – see question VII.5.
  3. Debt brakes: Corrective measures activate on the 15th day of the month following the month in which the debt to GDP ratio was announced. The draft works with two indicators – debt (or level of indebtedness) and public debt – debt (level of indebtedness) is the amount of public debt minus the amount of state debt incurred by an emission of state obligations from which a financial reserve for financing state debt is created.
    1. If the debt is between 45-50% GDP, the Government informs the Chamber of Deputies and submits, after consulting the National Fiscal Council (NFC), measures to slow down the debt raise. New state guarantees may be issued only after agreed to by the absolute majority of the Deputies and the absolute majority of the Senators.
    2. If the debt is between 50-55% GDP the same measures are activated plus, first, the Government shall lower the expenses for the current budget year (this is valid only for the first year, in case the debt over 50% GDP continues to exist) with exceptions enlisted in laws (such laws must be agreed to by both Chambers of the Parliament); second, the Government shall not increase the expenses for the following budget year above the expenses of the current year (with the exception enlisted in laws – such laws must be agreed to by both Chambers of the Parliament); third, the Government shall not submit to the Parliament laws decreasing revenues from taxes and fees, with an exception of international obligations); fourth, the Government shall consent only to balanced budgets of health insurance companies, that provides public insurance (surpluses from previous years may be included); fifth, the base for public officials salaries shall decrease by 20% in the following year.
    3. If the debt is between 55-58% GDP, first, the measures under point a. are activated; second, the Government must lower the expenses for the current budget year (this is valid only for the first year, in case the debt over 50% GDP continues to exist) with exceptions enlisted in laws (such laws must be agreed to by both Chambers of the Parliament); third, the Government shall not submit to the Parliament laws decreasing revenues from taxes and fees, with an exception of international obligations); fourth, the base for public officials salaries shall decrease by 20% in the following year (that is measures under point a. and selected measure under point b.); plus fifth, the Government submits to the Parliament balanced or surplus budget of the state and state funds; and sixth the Government shall consent only to balanced budgets of health insurance companies, that provides public insurance (surpluses from previous years may NOT be included).[6] If the debt of the territorial self-government is higher than 55% GDP, the self-government shall adopt balanced or surplus budget, unless the deficit can be financed from a previous years surplus or returnable financial assistance. If the debt is over 55% GDP, public institutions (state, state funds, health insurance companies, territorial self-governments) shall not take any new long-term liabilities increasing the debt.
    4. If the debt is 58% GDP and above or if the public debt is above 60% GDP, the measures under point c. above activate plus the Government shall return to the Parliament for the vote of confidence without delay.
  4. The exceptions from the corrective measures may be provided by implementing laws in case of, first, significant worsening of the economic development or worsening of security situation of the state; second, state of emergency; third, natural disaster; and fourth, expenses resulting from international obligations.
  5. A territorial self-government’s (TSG) overall debt shall not exceed 60% of its revenue average in the last four years. If a TSG exceeds the limit, it shall correct the debt following the procedure prescribed in the implementing laws. If a TSG does not comply, the state may put on hold the revenues from taxes designated for the TSG, in the level of 5% of the difference between the debt and 60% of its revenue average in the last four years. These revenues can be used for paying the debts incurred before the year the revenues were put on hold. These measures aimed to enter in force on January 1, 2018.

Implementing (ordinary) bills were submitted to the Parliament on June 27, 2013 – Government Bill on the Rules on Fiscal Responsibility[7] and Government Bill Amending Selected Laws in Connection with Adoption of the Law on the Rules on Fiscal Responsibility.[8] The laws aimed to create an independent Committee for budgetary forecasts (Výbor pro rozpočtové prognózy), which would evaluate economic and budgetary forecasts of central government and territorial self-governments. Forecasts evaluated as realistic or conservative would represent the basis for the preparation of an annual budget. The laws would further introduce sanctions for territorial self-government units (regions and municipalities). If a territorial self-government unit exceeds 60% of the average revenues in the last four years, the Ministry of Finance suspends the unit’s share on the revenues from the VAT and income tax in the amount corresponding to the breach of unit’s obligation.[9]

The Fiscal Constitution Bill and implementing bills have not gained support of the then main opposition party, the Social Democrats. Finance Minister Kalousek called the Social Democrats hypocrits for urging the Government to sign the Fiscal Compact on the one hand, but, on the other hand, being unwilling to support the Fiscal Constitution, despite the Government’s will to compromise. Kalousek reiterated that the same text of the Fiscal Constitution would be needed if CR signed the Fiscal Compact; and so, the Fiscal Constitution Bill in fact implements the Fiscal Compact.[10] The opposition (Social Democrats and Public Affairs) criticized that the draft would limit the future government ability to restore economic growth – that it would forbade to lower taxes and increase investments (by endangering a co-financing ability of CR regarding the EU funds and EIB loans and so limit the ability to use these funds and credits; endangering public-private investment projects for the same reason, etc.).[11] In sum, the opposition claimed that such constitutional limitations are unacceptable at this stage of economic cycle. A fraction of Civic Democrats criticized the Fiscal Constitution Bill for taking fiscal and tax sovereignty from the Parliament (by entrenching debt and deficit limits in the Constitution) as well as not preventing that increase in taxes would not be used for further spending, but for lowering the debt.[12] Then opposition leader Bohuslav Sobotka (now PM) further warned that by entrenching the fiscal limits in the Constitution gives new powers to the Constitutional Court to review an annual budget for possible breach of the Constitution. Also, he pointed out that the limits posed by the Fiscal Constitution Bill are not observed by the Government itself – the multiannual budgetary frameworks counts with deficits in the next three years which would lead to reaching the debt limit of 55% of GDP in 2016 with a consequence that for 2017 there would have to be a balanced budget, or else the Constitutional Court will strike down 2017 budget law.[13] At the same time, the current tax reforms lowers the predicted revenues for these years. This puts the future government in double unfavourable position – lowering the revenues, while preventing large investments and obliging the future government to considerably cut expenses between 2016 and 2017 (by around 10%). Also, he emphasized that the debt breaks in the version before the compromise made in the Budgetary Committee are activated when the public debt reaches 40% (the first break), then when it reaches 45% (the second break), and finally when it reaches 50% (the third break), while at the end of 2013, the public debt is predicted to reach already 48%.

Sobotka also made clear the position of Social Democrats towards the Fiscal Compact. CR must accede to the Compact in the future and must implement the debt break on the constitutional level, however, it is CR who must choose proper time for these changes – now the Government needs more flexibility to regain sufficient economic growth.[14] Social Democrats published in February 2013 five conditions under which they were willing to support the Fiscal Constitution Bill: First, ratification of the Fiscal Compact (which goes well beyond the Fiscal Constitution Bill, especially in the enhancing the economic and fiscal cooperation; though in particularities Social Democrats raised objections to the Compact – e.g. that the requirement of structural deficit of 0.5% of GDP is harming in the current stage of economic cycle); second, full implementation of EU legislation into the Fiscal Constitution Bill (current indicators are not compatible with EU standards); third, revelation of hidden debts created by the Nečas Government, so that the future government is fully aware of its limits; fourth, submission of implementing laws (done by the Government in the end of June 2013 only); fifth, change of the limit for debt break activation from 40-50% to 45-55%, given that the public debt have risen from 28,28% in 2006 to 45% at the end of 2012, that is during the conservative governments.[15]

The Communists have not fully rejected the Fiscal Constitution Bill, however they first urged for an exemption of health insurance sector from the public debt and deficit rules (arguing that given the current bad economic situation of the health care sector, deficit financing is necessary and entrenching the fiscal rules on the health insurance sector in the Constitution would soon create a conflict with the constitutional right for accessible and quality health care). Further, the Communists claimed that the fiscal limits set by the Fiscal Compact are unsustainable and that the EU considers changing the course anyway towards more investments, which can be financed under the current situation by increasing the debt only. Also they claimed that fiscal constitutions do not work on their own (e.g. Spain), but need a rational economic policy (that is, it is indifferent whether CR enacts a fiscal constitution or not), nor such institutions as an independent fiscal council proves successful (e.g. Hungary).[16]

MP Paggio (from a junior coalition party LIDEM) pointed to the fact that the criticism of the Fiscal Constitution Bill was in fact a criticism of the Fiscal Compact.[17] He also called for more flexibility and differentiated approach to Member States (one size does not fit all). Also, he stated that the Fiscal Compact was only a message for financial markets and cannot and will not be respected by many MS.[18] MP Šeich (Civic Democrats) reminded the Parliament that balanced budget rule was nothing exotic or atypical, as it could have seemed from the debate, but that proposals for balanced budget rule were made already in 1995 (first Klaus Government; within annual budgeting practice) and again in 2002 (by Klaus as well, this time in the form of constitutional amendment). If CR had adopted the balanced budget constitutional rule in 2002 (rejected by a Social Democratic Government at the time), it would have been one of few countries (after Germany (a weak version of “golden rule” before the 2009 reform), Poland (1997 reform), and Switzerland (2001 reform)) with such rule on a constitutional level; and to have such rule then would have made much more sense and brought results given the growth was about 6% in the subsequent years.

The implementing laws have not been discussed in the Parliament.

Constitutional context  
III.3
If national constitutional law already contained relevant elements, such as a balanced budget rule or independent budgetary councils, before the crisis that are now part of Euro-crisis law, what is the background of these rules?

No, the Czech constitutional order has not contained any of these.

Purpose constitutional amendment       
III.4
What is the purpose of the constitutional amendment and what is its position in the constitution?

In general, the constitutional order of the Czech Republic consists of several constitutional acts – Constitutional Act No. 1/1993 Coll., the Constitution of the Czech Republic in the strict sense, and a number of other constitutional acts and their amendments.[19] The constitutional order forms a referential framework for the Constitutional Court for evaluating constitutionality of all other acts. All constitutional provisions, disregarding in which constitutional act they are to be found, have the same legal status with one exception: the eternity clause in Art. 9(2) of the Constitution grants ‘higher status’ to “the essential requirements for a democratic state governed by the rule of law”, whose changes are impermissible. Intermediate status between constitutional law and ordinary law is assigned to international treaties ratified by the Parliament (which possess application priority over ordinary laws in case of conflict). The European Union law and its interpretation by the EU institutions, to provide a rather simplified answer,[20] is in compliance with the Czech constitutional order as long as it does not breach the “the essential requirements for a democratic state governed by the rule of law” protected by the eternity clause as interpreted by the Constitutional Court. The Constitutional Court reviews the existing EU law and acts of the EU institutions from the point of compliance with the eternity clause.[21] However, in case of ex ante review of international treaties (after they are signed, but before their ratification), the Court reviews their compliance with the entire constitutional order (not only the eternity clause).[22] For more on the constitutional review of international treaties see the answer on questions related to the ratification of the European Council Decision on Art. 136 Amendment below).

Constitutional amendment can take form of a separate constitutional act or a change to existing constitutional act. There is no legal difference in these forms. A constitutional amendment requires adoption by three-fifths of all Deputies and three-fifths of Senators present (Art. 39 (4) of the Constitution).

Constitutionality of a constitutional amendment can be assessed by the Constitutional Court for compliance with the “the essential requirements for a democratic state governed by the rule of law” protected by the eternity clause.[23] The Czech legal order provides for both ex ante (abstract review) and ex post constitutional review (concrete review). Under the ex ante review the Constitutional Court has power to annul statutes or individual provisions thereof if they are in conflict with the constitutional order and to annul other legal enactments or individual provisions thereof if they are in conflict with the constitutional order or a statute. A petition, proposing the annulment of a statute, or individual provisions thereof, may be submitted the President; a group of at least 41 Deputies or a group of at least 17 Senators; a Panel of the Court in connection with deciding a constitutional complaint; the government if an international court finds that an obligation resulting for the Czech Republic from an international treaty has been infringed by the encroachment of a public authority.[24] Under the ex post or concrete review, the Constitutional Court has a jurisdiction over constitutional complaints of natural or legal persons against final decisions or other encroachments by public authorities infringing constitutionally guaranteed fundamental rights and basic freedoms.[25]

Both constitutional bills indicated in the answer to question III.2 were proposed by the Government as part of its programme of fiscal responsibility agreed to after the general elections of 2010. While the Fiscal Constitution Bill aimed to be adopted as a separate constitutional law, the Supreme Auditing Office Constitutional Bill aimed to amend the Constitution. However, this difference is purely technical (all constitutional laws form together a ‘constitutional order’). All constitutional laws have same legal force (with an exception of the eternity clause in Art. 9(2) of the Constitution that grants ‘higher status’ to “the essential requirements for a democratic state governed by the rule of law”, whose changes are impermissible – the self-government is one of such ‘essential requirements’ according to the Constitutional Court). The two constitutional bills neither explicitly regulate their relationship to other constitutional provisions, nor do they directly affect them.. For the relationship with other constitutional provisions and problems it raises (judicial review of annual budgetary laws; affect on economic and social rights, such as affordable healthcare) see the political debate on the Fiscal Constitution Bill in answer to question III.2.

Relationship with EU law           
III.5
Is the constitutional amendment seen as changing the relationship between national and European constitutional law?

No. The draft constitutional law on Fiscal Constitution partly implements the Directive 2011/85 and the Regulations 2275/2011 and 1177/2011. However, the Czech Republic is not party to the Fiscal Compact or the ESM. The second draft constitutional law did not implement any EU or international obligations of CR.[26]

Organic law   
III.6
Have there been changes to organic laws or other types of legislation that are of a different nature or level than ordinary legislation, in relation to Euro-crisis law or the budgetary process?

The concept of organic laws does not exist in the Czech legal order. Intermediate status between constitutional laws (that forms together a constitutional order with ‘essential requirements for a democratic state governed by the rule of law’ having kind of supra-constitutional force) and ordinary laws is assigned to international treaties ratified by the Parliament (which possess application priority over ordinary laws in case of conflict).

Constitutional amendment and ordinary law       
III.7
If ordinary legislation was adopted in conjunction with a constitutional amendment, what is the relationship between the two?

No constitutional amendment has been adopted yet. However, both constitutional bills mentioned above require implementing laws. Two implementing (ordinary) bills to the Fiscal Constitution were drafted. Implementing law must be, of course, in compliance with the constitutional law and other parts of the constitutional order. Especially regarding the obligations imposed on territorial self-governments, it must be restrictive.

Perception source of legal change 
III.8
In the public and political discussions on the adoption of ordinary legislation, what was the perception on the appropriate legal framework? Was the ordinary legislation seen as implementing national constitutional law, or Euro-crisis law?

For thorough analysis see answer to question III.2. So far, no implementation laws are in force. The changes already made (which were mostly realized as part of the Government programme on fiscal responsibility) were not perceived as implementing Euro-crisis law. Given that both constitutional bills mentioned above are not perceived as direct implementation of Euro-crisis law (for political intertwining of the Fiscal Constitution Bill and the Fiscal Compact see answer to question III.2), also the implementing laws would not be perceived as such.

Miscellaneous
III.9
What other information is relevant with regard to the Czech Republic and to changes to national (constitutional) law?

Not applicable.

[1] Under ordinary legislative procedure, the Senate may only veto a bill, which the Chamber of Deputies can overrule with absolute majority,

[2] The annual budgetary timetable is approved by the Chamber of Deputies resolution.

[3] The constitutional amendment had been submitted by the Government already in the previous Parliamentary term in November 2009, but did not pass further than the first reading. See Chamber of Deputies of Parliament Document No. 960, 5th Parliamentary Term. Available at: http://www.psp.cz/sqw/historie.sqw?o=5&t=960.

[4] Chamber of Deputies of the Parliament Document No. 821/0, 6th Parliamentary Term.

[5] The amendment was negotiated between the Government and the main opposition party, Social Democrats, and adopted by the Committee on May 9, 2013. Chamber of Deputies of the Parliament Document No. 821/2, 6th Parliamentary Term.

[6] This measure was set to come into force as of January 1, 2018.

[7] Chamber of Deputies of the Parliament Document No. 1097/0, 6th Parliamentary Term.

[8] Chamber of Deputies of the Parliament Document No. 1098/0, 6th Parliamentary Term.

[9] Vláda předložila poslancům doprovodné zákony k Finanční ústavě (The Government submitted to the Parliament implementing laws to the Fiscal Constitution), epravo.cz, July 8, 2013, available at: http://www.epravo.cz/zpravodajstvi/vlada-predlozila-poslancum-doprovodne-zakony-k-financni-ustave-91908.html.

[10] Finance Minister Kalousek, stenographic protocol, Chamber of Deputies of the Parliament, June 11, 2013, available at: http://www.psp.cz/eknih/2010ps/stenprot/054schuz/s054024.htm. TOP 09 was for the adoption of the Fiscal Compact.

[11] MP Vít Bárta (Public Affairs), MP Paroubek (former Social Democratic Prime Minister), MP Sobotka (Shadow Prime Minister, Chairman of Social Democrats), stenographic protocol, Chamber of Deputies of the Parliament, June 11, 2013, available at: http://www.psp.cz/eknih/2010ps/stenprot/054schuz/s054025.htm et seq.

[12] MP Doktor (Civic Democrats), stenographic protocol, Chamber of Deputies of the Parliament, June 11, 2013, available at: http://www.psp.cz/eknih/2010ps/stenprot/054schuz/s054027.htm.

[13] The Governing coalition opposed this claim. They negotiated with Social Democrats for half a year their objections and the result was that the deficit has to decrease, in line with SGP, by 0.5% a year. Finance Minister Kalousek, stenographic protocol, Chamber of Deputies of the Parliament, June 12, 2013, available at: http://www.psp.cz/eknih/2010ps/stenprot/054schuz/s054061.htm.

[14] MP Sobotka, stenographic protocol, Chamber of Deputies of the Parliament, June 12, 2013, available at: http://www.psp.cz/eknih/2010ps/stenprot/054schuz/s054028.htm.

[15] Czech Social Democratic Party, Press Release, Feb. 19, 2013. Available at: http://www.cssd.cz/media/tiskove-zpravy/5-podminek-cssd-k-prijeti-fiskalni-ustavy/.

[16] MP Dolejš, stenographic protocol, Chamber of Deputies of the Parliament, June 12, 2013, available at: http://www.psp.cz/eknih/2010ps/stenprot/054schuz/s054056.htm.

[17] He emphasized on the hypocrisy of Social Democrats behaving in that way as fiscal restrictions made in CR by Czech Government are bad and fiscal restrictions made in the EU are good.

[18] MP Paggio, stenographic protocol, Chamber of Deputies of the Parliament, June 12, 2013, available at: http://www.psp.cz/eknih/2010ps/stenprot/054schuz/s054030.htm.

[19] The concept of constitutional order is defined in Art. 112 (1) of the Constitutional Act No. 1/1993 Coll., the Constitution of the Czech Republic: “The constitutional order of the Czech Republic is made up of this Constitution, the Charter of Fundamental Rights and Basic Freedoms, constitutional acts adopted pursuant to this Constitution [e.g. Constitutional Act No. 347/1997 Sb., on the Creation of Higher Territorial Self-Governing Units; Constitutional Act No. 110/1998 Sb., on the Security of the Czech Republic; Constitutional Act No. 515/2002 Sb., on the Referendum on the Czech Republic’s Accession to the European Union] and those constitutional acts of the National Assembly of the Czechoslovak Republic, the Federal Assembly of the Czechoslovak Socialist Republic, and the Czech National Council defining the state borders of the Czech Republic, as well as constitutional acts of the Czech National Council adopted after the sixth of June 1992”.

[20] For analysis of the Czech Constitutional Court’s European doctrine see Tichý, L., Dumbrovský, T., Between Two Legal Orders. A Relativist Doctrine for a Member State Constitutional Court?, in Henning Koch, Karsten Hagel-Sørensen, Ulrich Haltern, and Joseph H.H. Weiler (eds) Europe. The New Legal Realism. Essays in Honour of Hjalte Rasmussen. Copenhagen: DJØF Forlag, 2010, pp. 757-782

[21] Sugar Quotas Regulation II, Pl. ÚS 50/04 [2006] No. 154/2006 Coll., English translation available at http://angl.concourt.cz/angl_verze/ cases.php.

[22] Lisbon Treaty I, Pl. ÚS 19/08 [2008], No. 446/2008 Coll., English translation available at http://angl.concourt.cz/angl_verze/cases.php.

[23] Parliamentary Elections (Case Melčák) Pl. ÚS 27/09 [2009] No. 318/2009 Coll., English translation available at: http://www.concourt.cz/view/726.

[24] Sec. 64 of the Constitutional Court Act. Available in English at http://www.usoud.cz/en/constitutional-court-act/.

[25] Sec. 72 of the Constitutional Court Act. A complainant (under concrete review) may submit, together with his constitutional complaint, a petition proposing the annulment of a statute or some other enactment, or individual provisions thereof, the application of which resulted in the situation which is the subject of the constitutional complaint, if the complainant alleges it to be in conflict with a constitutional act, or with a statute, where the complaint concerns some other enactment. (Sec. 74 of the Constitutional Court Act).

[26] Apart of the INTOSAI Lima Declaration of 1977, that is however, not binding. The limits to audit control of territorial self-government are set by the European Charter of Local Self-Government of the Council of Europe.

Estonia

Nature national instruments 
III.1
What is the character of the legal instruments adopted at national level to implement Euro-crisis law (constitutional amendment, organic laws, ordinary legislation, etc)?

Organic laws:

– The State Budget Act was amended for the implementation of the EFSF (see question IV.3)

– A new State Budget Bill (to replace the State Budget Act) is planned for the implementation of Directive 2011/85/EU (see question VII.2) and the Fiscal Compact (see question IX.4).

Ordinary legislation (acts of ratification):

– The Act on Ratification and Implementation of Treaty Establishing European Stability Mechanism was adopted for the ESM Treaty (see e.g. questions VIII.5-6)

Resolutions of the Parliament:

– Parliament adopted Resolution on ensuring performance of the obligations arising from the European Financial Stability Facility (EFSF) Framework Agreement and amendments thereto’ for the EFSF (see question IV.2).

Constitutional amendment     
III.2     
Have there been any constitutional amendments in response to the Euro-crisis or related to Euro-crisis law? Or have any amendments been proposed?

No.

Constitutional context  
III.3
If national constitutional law already contained relevant elements, such as a balanced budget rule or independent budgetary councils, before the crisis that are now part of Euro-crisis law, what is the background of these rules?

Not applicable.

Purpose constitutional amendment       
III.4
What is the purpose of the constitutional amendment and what is its position in the constitution?

Not applicable.

Relationship with EU law           
III.5
Is the constitutional amendment seen as changing the relationship between national and European constitutional law?

There have not been discussions in the context of constitutional amendments being seen as changing the relationship between national and European constitutional law.

Organic law   
III.6
Have there been changes to organic laws or other types of legislation that are of a different nature or level than ordinary legislation, in relation to Euro-crisis law or the budgetary process?

Yes, the State Budget Act (amendment of which has to take place through a majority of the membership of the Riigikogu, see Article 104 clause 11 of the Constitution and question IV.3) and the Riigikogu Rules of Procedure and Internal Rules Act in reaction to ESM Treaty.

Constitutional amendment and ordinary law       
III.7
If ordinary legislation was adopted in conjunction with a constitutional amendment, what is the relationship between the two?

Not applicable.

Perception source of legal change 
III.8
In the public and political discussions on the adoption of ordinary legislation, what was the perception on the appropriate legal framework? Was the ordinary legislation seen as implementing national constitutional law, or Euro-crisis law?

Euro-crisis law. This becomes apparent from all sources, including the short-hand reports of parliamentary debates. The debates in the parliament as well as in the media invariably focus on managing the euro-crisis.

Miscellaneous
III.9
What other information is relevant with regard to Estonia and to changes to national (constitutional) law?

Not applicable.

Finland

Nature national instruments       
III.1
What is the character of the legal instruments adopted at national level to implement Euro-crisis law (constitutional amendment, organic laws, ordinary legislation, etc)?

In Finland, the implementation of euro crisis law has not required amendments to the Constitution. The level of ordinary legislation has been used.

Constitutional amendment     
III.2    
Have there been any constitutional amendments in response to the Euro-crisis or related to Euro-crisis law? Or have any amendments been proposed?

There have been no proposals by the Government involving amendments to the Constitution. However, the major opposition party has constantly questioned the constitutionality of the proposed Acts used to implement the relevant measures. This is of a particular relevance because the constitutionality of international agreements and implementing laws is in Finland controlled by the Constitutional Law Committee in Parliament. Although the Constitutional Law Committee enjoys a clear judicial function in this respect it is composed of members of Parliament and reflects the power relations in the Parliament. In the statements concerning the constitutionality of the proposals relating to the implementation of euro crisis legislation, the Committee statements always contain a dissenting opinion of the members from the True Finns Party.

It should also be noted that since 2012 when the latest amendment of the Constitution entered into force, the Finnish Constitution includes new provisions explicitly providing that a significant transfer of state powers to the EU or international organization requires the two-thirds majority of the given votes in Parliament (Sec. 94, subsec. 2 and Sec. 95, subsec. 2). This also means that the transfers of ‘insignificant” powers can be decided by simple majority. Whereas for example the EU membership in 1995 was brought into force internally by the use of the institution of exceptive enactment, [1] the current Constitution expresses a constitutional commitment towards the Union and provides a specific provision for transfer of the powers to the Union. Now, only a significant transfer of powers to the EU requires a qualified majority and the application of the Finnish institution of exceptive enactments is no longer needed for such transfer.

Constitutional context
III.3
If national constitutional law already contained relevant elements, such as a balanced budget rule or independent budgetary councils, before the crisis that are now part of Euro-crisis law, what is the background of these rules?

The question is based on a presumption of a strict categorisation and division of national and EU-based rules. In Finland, it had been understood that for example the balanced budget rule has been applicable as a part of EU legislation. Now the Parliamentary Act bringing into force the provisions of legislative nature of Fiscal Compact reiterates this principle (Act No 869/2012) (see also question IX.2). Although, prior to the Fiscal Compact there were no independent budgetary councils, the National Audit Office operating in affiliation with the Parliament as Finland’s Supreme Audit Institution had similar functions. According to Section 90 of the Constitution “[a]n independent body affiliated with the Parliament, the National Audit Office, exists to audit the financial management of the state and compliance with the budget. More detailed provisions on the duties of the National Audit Office are laid down by an Act.” A part of its function has specifically been to audit the state’s finances and evaluate fiscal policy. Its tasks were revisited and specified when implementing the Fiscal Compact and now they clearly include the functions envisaged in the Treaty.

Purpose constitutional amendment   
III.4
What is the purpose of the constitutional amendment and what is its position in the constitution?

As indicated above, no constitutional amendments were made following the Fiscal Compact.

Regarding both stability mechanisms and economic governance, both types of measures have been generally understood to affect Finnish sovereignty. When addressing the European stability mechanisms and Fiscal Compact (see questions VIII.1, VIII.2 and IX.I), the Constitutional Law Committee has shown reluctance but ultimately concluded that the proposed measures have been compatible with the Constitution, and the subsequent amendments to legislation have not been understood as a significant limitation of sovereignty in terms of Section 94.2 and 95.2. Thus in order to approve the measures, a qualified majority in the Parliament – otherwise connected with measures affecting the Constitution – was not deemed necessary nor were there proposals made by the Government to amend the Constitution.

Relationship with EU law          
III.5
Is the constitutional amendment seen as changing the relationship between national and European constitutional law?

Not applicable.

Organic law       
III.6
Have there been changes to organic laws or other types of legislation that are of a different nature or level than ordinary legislation, in relation to Euro-crisis law or the budgetary process?

Finnish constitutional law does not recognise a formal category of organic law, which would be enacted in a different procedure than ordinary legislation and have a higher level in hierarchy than ordinary Parliament laws. There are no organic laws or types of legislation other than the ordinary acts of Parliament and delegated legislation (Government decrees or Ministry decrees or orders). However, the constitutional law doctrine sometimes describes ordinary laws concerning the relationship between the institutions of the state as organic law or in the wider sense as ‘constitutional law’. In this sense, the Act implementing the Fiscal Compact Treaty (No. 869/2012, see question IX.2) contains provisions falling under this category, dealing for example with the responsibilities of the Government towards the Parliament and the tasks of the National Audit Office.

Constitutional amendment and ordinary law 
If ordinary legislation was adopted in conjunction with a constitutional amendment, what is the relationship between the two?

Not applicable.

Perception source of legal change     
III.8

In the public and political discussions on the adoption of ordinary legislation, what was the perception on the appropriate legal framework? Was the ordinary legislation seen as implementing national constitutional law, or Euro-crisis law?

As explained above, there have been views claiming that the new international Treaties on stability mechanisms and economic governance would not be compatible with the Finnish Constitution.

Interestingly and perhaps as an indirect reply to these concerns, the Finnish Constitutional Law Committee of the Parliament stressed in its early statement on the six-pack legislation the need to safeguard the division of competence based on the Treaties, and that the institutional balance at the European Union level should not be altered by secondary Union legislation. This concern has been repeated in several Constitutional Law Committee and Grand Committee Statements (see questions VII.1, VII.6 and VII.8).

Miscellaneous
III.9
What other information is relevant with regard to Finland and to changes to national (constitutional) law?

The euro crisis has caused a clear friction in the Finnish political scene. Finnish European Union politics have traditionally been integration-oriented and provoked little passion in national debates. This is linked to how the membership in the Union generally and participation in the EMU more specifically has been understood in positive and beneficial terms.

In constitutional law the sovereignty doctrine is based on the idea of the specificity of the European Union relationship with the Finnish constitutional order, demonstrating greater tolerance of limitations on sovereignty stemming from EU membership than those derived from other international obligations. This is reflected in the current interpretations of the constitution (by the Constitutional Law Committee and constitutional law experts) too. However, some Finnish positions – for example during the ESM Treaty negotiations insisting on unanimous decision making in the ESM board of governors instead of qualified majority voting, and explaining that other solutions would infringe national sovereignty and the budgetary competence of the Finnish Parliament – do not quite fit into previous line of interpretation and could be understood in reflecting tightening interpretations of the limitations of sovereignty tolerable in the context of the Finnish Union membership.

 

[1] For an introduction to the Constitution of Finland, see e.g. J. Husa, The Constitution of Finland: A Contextual Analysis (Hart Publishing 2011. See also T. Ojanen, ‘The Impact of EU Membership on Finnish Constitutional Law’, Vol 10 European Public Law (2004) p. 531.

France

Nature national instruments  
III.1
What is the character of the legal instruments adopted at national level to implement Euro-crisis law (constitutional amendment, organic laws, ordinary legislation, etc)?

No constitutional amendment has taken place to implement Euro-crisis law in French national law, despite two attempts by the former right-wing government to introduce a “Golden Rule” in the Constitution, either through Constitutional amendment (in March 2011 – see also question III.2) or following the ratification of the Fiscal Compact. Therefore, only ordinary legislation and organic laws were used throughout the period.

 It is to be noted that the main effects of the organic law implementing the requirements of the Fiscal Compact bore on multiannual Programming Acts that are not, by themselves, superior to Budget Acts and Social Security Financing Acts in the hierarchy of norms (see also question II.1).

Constitutional amendment          
III.2    
Have there been any constitutional amendments in response to the Euro-crisis or related to Euro-crisis law? Or have any amendments been proposed?

President Sarkozy proposed to amend the Constitution in order to comply with the Fiscal Compact Treaty. The new majority, however, interpreted the Treaty as not requiring a Constitutional amendment (see section IX).

Constitutional context   
III.3
If national constitutional law already contained relevant elements, such as a balanced budget rule or independent budgetary councils, before the crisis that are now part of Euro-crisis law, what is the background of these rules?

Please see question II.1.

Purpose constitutional amendment      
III.4
What is the purpose of the constitutional amendment and what is its position in the constitution?

Not applicable.

Relationship with EU law           
III.5
Is the constitutional amendment seen as changing the relationship between national and European constitutional law?

Not applicable.

Organic law      
III.6
Have there been changes to organic laws or other types of legislation that are of a different nature or level than ordinary legislation, in relation to Euro-crisis law or the budgetary process?

An Organic Law for the Programming and Governance of Public Finances was adopted pursuant to the ratification of the Fiscal Compact Treaty, as well as relatively minor changes to the Organic Law on Budget Acts (see also question II.1, and section IX on the Fiscal Compact).

Constitutional amendment and ordinary law    
III.7
If ordinary legislation was adopted in conjunction with a constitutional amendment, what is the relationship between the two?

Not applicable.

Perception source of legal change          
III.8
In the public and political discussions on the adoption of ordinary legislation, what was the perception on the appropriate legal framework? Was the ordinary legislation seen as implementing national constitutional law, or Euro-crisis law?

The parliamentary debates tend to show that this question is linked to the perception of the role of France as one of the driving forces of the creation of Euro-crisis law. As long as France is said to have proposed substantial parts of the crisis measures (especially for the EFSF and part of the ESM), the debates do not focus so much on the distinction between Euro-crisis law and national (constitutional) law.

Moreover, the French governments consistently tended to present the need for budgetary balance as national rather than being imposed by European commitments. For instance, the proposal for ratification of the Fiscal Compact only came after President Sarkozy attempted (but failed) to introduce a “golden rule” in the Constitution in 2011. Later, President Hollande would affirm that the reduction of public deficit was not so much a European obligation but rather a national necessity[1].

Alternatively, criticism on crisis management in Europe could be interpreted, in several instances of the discourse of the far left,  along lines of division that are also relevant in the national debate –  in particular, between orthodox and unorthodox economic policies in times of crisis and the relevance of austerity measures.

This entanglement between European and national issues and objectives is most vivid in France on the point of the Fiscal Compact. Indeed, the “golden rule” had been a proposal by former President Sarkozy for a reform of the Constitution as soon as 2011. However, it failed to gather the required majority in Parliament. Thus, with the Fiscal Compact, a Treaty appeared for a time to allow for a circumvention of this lack of majority, and for the introduction of the “golden rule” through another route[2].

Miscellaneous
III.9
What other information is relevant with regard to France and to changes to national (constitutional) law?

Not applicable.

[1] http://discours.vie-publique.fr/notices/127001260.html

[2] Eric Oliva, « Le pacte de stabilité devant les juridictions constitutionnelles », RFDA 2013, p.1043.

Germany

Nature national instruments  
III.1
What is the character of the legal instruments adopted at national level to implement Euro-crisis law (constitutional amendment, organic laws, ordinary legislation, etc)?

Euro-Crisis Law has been implemented on the level of ordinary German legislation. There had been no amendments of the Constitution due to Euro-Crisis measures.

 

Constitutional amendment          
III.2    
Have there been any constitutional amendments in response to the Euro-crisis or related to Euro-crisis law? Or have any amendments been proposed?

There have not been amendments of the German Constitution because of Euro-crisis measures.

 

However, the decisions of the Bundesverfassungsgericht concerning the implementation of Euro-crisis measures have led to rules of constitutional level which were at least not explicitly written in the German Constitution. This is true for example for the term ‘overall budgetary responsibility’, which cannot be found in the Grundgesetz, or for the right to file a constitutional complaint against a German law implementing Euro-crisis law based on the right to vote for the German Bundestag (Art. 38 (1) sentence 1 GG). Nonetheless, there had been no amendments of the text of the German Constitution as a response to Euro-crisis measures.

 

Constitutional context   
III.3
If national constitutional law already contained relevant elements, such as a balanced budget rule or independent budgetary councils, before the crisis that are now part of Euro-crisis law, what is the background of these rules?

Since 2009 the German Constitution contains rules which aim at reducing the public deficit. They are often called ‘debt brake’ and can be found in Art. 109 (3) and Art. 115 (2) GG. These rules were the result of a longer discussion about the increasing German deficit since the German reunification and the downgrade of the New Economy at the beginning of the years 2000s. The effects of the Euro crisis had no or a minor impact on these rules. Nonetheless, EU law in general had an important impact because the discussion around the violation of the Maastricht criteria by Germany in 2005 had been well remembered. However, the German rules on public spending do not completely correlate with the rules for limiting public spending on the European level (see questions IX.4 and IX.5). The most important facts about the German debt brake are as follows:

 

Art. 109 (3) GG lays down the principle that the yearly public deficit must be financed without credits. According to Art. 109 (3) sentence 5 GG the Länder cannot finance any of their spending by credits. For the federal level, Art. 109 (3) sentence 4 GG provides that loans can be arranged up to an amount of 0.35 % of GDP. The Constitution also contains a clause about adaptations to economic circumstances and exceptions when these limits can be overstepped. The adaptation clause provides that when economic developments deviate from normal conditions, effects on the budget in periods of upswing and downswing must be taken into account symmetrically. Deviations of actual borrowing from the credit limits are to be recorded on a control account; debits exceeding the threshold of 1.5 percent in relation to the nominal gross domestic product are to be reduced in accordance with the economic cycle. Under exceptional circumstances, the rules of the debt brake do not have to be respected: Exceptions are natural catastrophes and unusual emergency situations beyond governmental control and substantially harmful to the state’s financial capacity.

 

These rules did not apply immediately from their adoption. There is a norm which sets a transition period. According to Art. 143d (1) GG, the debt brake entered into force for the budgetary year 2011, but the Länder can deviate from it until 31 December 2019 and the federal state until 31 December 2015.

 

Purpose constitutional amendment      
III.4
What is the purpose of the constitutional amendment and what is its position in the constitution?

Not applicable.

 

Relationship with EU law           
III.5
Is the constitutional amendment seen as changing the relationship between national and European constitutional law?

Not applicable.

 

Organic law      
III.6
Have there been changes to organic laws or other types of legislation that are of a different nature or level than ordinary legislation, in relation to Euro-crisis law or the budgetary process?

No.

 

Constitutional amendment and ordinary law    
III.7
If ordinary legislation was adopted in conjunction with a constitutional amendment, what is the relationship between the two?

Not applicable.

 

Perception source of legal change          
III.8
In the public and political discussions on the adoption of ordinary legislation, what was the perception on the appropriate legal framework? Was the ordinary legislation seen as implementing national constitutional law, or Euro-crisis law?

There hadn’t been a major discussion whether ordinary legislation was the appropriate legal framework. The discussion rather focused on the question whether the implementation of a European legal act concerns provisions of the German Constitution or even infringes the German Constitution. Legal discussions examined Article 23 GG and its scope of application, in particular in relation to the limits which Article 23 (1) sentence 3 GG in conjunction with Article 79 (3) GG defines for the implementation of EU law (see question IX.3).

 

Miscellaneous
III.9
What other information is relevant with regard to Germany and to changes to national (constitutional) law?

No other information.

Greece

Nature national instruments     
III.1
What is the character of the legal instruments adopted at national level to implement Euro-crisis law (constitutional amendment, organic laws, ordinary legislation, etc)?

Ordinary legislation is usually employed for the implementation of Euro-crisis law.[1] For the voting of the legislative statutes a normal procedure is mobilized, that is, one that does not require a qualified majority. This has sometimes raised objections of unconstitutionality of the parliamentary procedure from the part of the opposition,[2] as well as before the Council of State.[3] The legislation is subsequently applied through administrative acts and circulars.

Generally, statutes implementing or ratifying Euro-crisis law often comprise broad authorizations to the executive, especially the Minister of Finance, to take all the necessary measures for their application.[4] In certain cases, the Minister of Finance is authorized to sign any relevant international agreements for the application and effectiveness of the Euro-crisis legal instruments, which are operative from their signature and are only introduced to Parliament for “discussion and briefing”.[5] This expansion of executive powers was necessary in order to accommodate the “troika” review missions[6] and has provoked strong reactions in the legal, political and academic world. It was used as an argument for the unconstitutionality of the relevant statutes before the Council of State.[7]

In many cases, legislative measures implementing Euro-crisis law and measures concerning the conditions set by the loan agreements have been voted according to an emergency procedure, which entails abbreviation of deadlines for parliamentary debate and voting of the statute under consideration, both in the competent parliamentary committees and in the plenary session.[8] This has been the case, most importantly, of the first and second MoU, which was discussed and voted in one day in the Plenum of the Parliament. Members of the Government, later, admitted that they had not had the time to read the MoU, a subject that caused strong reactions in Parliament and the media.[9] The employment of this procedure has provoked reactions by the deputies of the opposition, and sometimes even of those supporting the Government coalition.[10]

Especially, Governments during the crisis have made an extensive use of a sui generis legal instrument, the so-called “administrative acts of legislative content”. These are executive administrative acts, normally issued under exceptional circumstances, having a content which normally belongs to the competence of the Parliament. These administrative acts are invested with the status of a legal statute, under the condition that they are ratified by Parliament within a certain time period.[11] More precisely, according to article 44 paragraph 1 of the Greek Constitution: “Under extraordinary circumstances of an urgent and unforeseeable need, the President of the Republic may, upon the proposal of the Cabinet, issue acts of legislative content. Such acts shall be submitted to Parliament for ratification, as specified in the provisions of article 72 paragraph 1, within forty days of their issuance or within forty days from the convocation of a parliamentary session. Should such acts not be submitted to Parliament within the above time-limits or if they should not be ratified by Parliament within three months of their submission, they will henceforth cease to be in force.[12] Administrative acts of legislative content are subject to scrutiny following an action for their annulment before the Council of State. However, after their retroactive ratification by Parliament they are immune from direct judicial scrutiny. Greek courts can still declare their provisions unconstitutional, yet their decisions lack an abrogative effect. What is more, unconstitutionality can only concern the content of these acts, since the fulfillment of procedural conditions is immune from judicial scrutiny, belonging to the interna corporis of Parliament.

The Government has used this instrument in order to approve certain financial assistance instruments and to provide authorization to the executive authorities to sign the relevant agreements.[13] The extended use of this exceptional instrument has sometimes caused the reaction of the parties of the opposition, and even of the Government coalition, as well as of legal scholarship and public opinion in general, who often stress the degradation of the role and functioning of the Parliament as a consequence of the financial crisis.[14] The public television and radio were closed after the issuing of such an act, which led the left party of the Government coalition (DIM.AR., Democratic Left) to stop supporting the Government in June 2013. [15]

Constitutional amendment   
III.2   
Have there been any constitutional amendments in response to the Euro-crisis or related to Euro-crisis law? Or have any amendments been proposed?

No constitutional amendment in response to the Euro-crisis law has been adopted. The need for a constitutional amendment in order to implement the balanced budget rule of the Fiscal Compact is stressed out by some legal scholars, who consider the statute implementing the Fiscal Compact insufficient and incompatible with the exigencies of the treaty.[16]

Nevertheless, especially since Spring  2012, there is a public debate on the need of a constitutional amendment. In their electoral campaigns for the elections of May 2012, the two main political parties of the bipartisan, until then, political system included propositions for an extended amendment of many parts of the Constitution, or even the creation of a new Constitution from the beginning, in order to respond to the new needs of the Greek State, which were mainly a result of the financial crisis. The Constitution of 1975 was considered outdated and related to the deficiencies of the political process and of the institutional functioning of the Greek State by the main political parties. However, after the two consecutive elections in 2012 and the important shock that they bore in the political world, the debate has changed focus. The question is whether the need for a constitutional amendment still persists or if the de facto changes in the functioning of the Constitution make this amendment unnecessary. Except from the debate on the inclusion of the Balanced Budget Rule in the Constitution, which mainly takes place in the academic world, changes proposed concern institutional and fiscal matters that would eliminate corruption phenomena and instability of the taxation system, the separation of powers (increase of powers of the President, restriction of the power of the Prime Minister, independence of the judiciary, establishment of a constitutional court), and the form and functioning of the parliamentary system itself (reduction of the number of parliamentarians, popular legislative initiative, changes in the functioning of political parties, transparency of the financial situation of parties, revision of the immunity of Members of the Government from criminal responsibility).[17] The debate is taking place in public fora for the moment and no official proposal has been submitted to Parliament.

Article 110 of the Constitution sets a rigid procedure of revision of the Constitution:

1. The provisions of the Constitution shall be subject to revision with the exception of those which determine the form of government as a Parliamentary Republic and those of articles 2 paragraph 1, 4 paragraphs 1, 4 and 7 , 5 paragraphs 1 and 3, 13 paragraph 1, and 26.

2. The need for revision of the Constitution shall be ascertained by a resolution of Parliament adopted, on the proposal of not less than fifty Members of Parliament, by a three-fifths majority of the total number of its members in two ballots, held at least one month apart. This resolution shall define specifically the provisions to be revised.        
3. Upon a resolution by Parliament on the revision of the Constitution, the next Parliament shall, in the course of its opening session, decide on the provisions to be revised by an absolute majority of the total number of its members.

4. Should a proposal for revision of the Constitution receive the majority of the votes of the total number of members but not the three-fifths majority specified in paragraph 2, the next Parliament may, in its opening session, decide on the provisions to be revised by a three-fifths majority of the total number of its members.
5. Every duly voted revision of provisions of the Constitution shall be published in the Government Gazette within ten days of its adoption by Parliament and shall come into force through a special parliamentary resolution.

6. Revision of the Constitution is not permitted before the lapse of five years from the completion of a previous revision.[18]

Nevertheless, because of the profundity of the constitutional changes proposed, certain political actors have adopted the narrative of the creation of a new Constitution through the exercise of “constituent power”, which would entail the dispensation from the procedural and substantial requirements of article 110.[19]

Constitutional context
III.3
If national constitutional law already contained relevant elements, such as a balanced budget rule or independent budgetary councils, before the crisis that are now part of Euro-crisis law, what is the background of these rules?

National constitutional law did not contain a balanced budget rule before the Euro-zone crisis. Neither did national constitutional law already contain an independent budgetary council. The drafting of the national budget was a competence of the General Accounting Office of the State, a public service coming under the Ministry of Finance.[20]

Purpose constitutional amendment 
III.4
What is the purpose of the constitutional amendment and what is its position in the constitution?

No formal proposal of constitutional amendment is yet submitted to Parliament. Nevertheless, especially since spring of 2012, there is a public debate on the need of a constitutional amendment. In their electoral campaigns for the elections of May 2012, the two main political parties of the bipartisan, until then, political system included propositions for an extended amendment of many parts of the Constitution, or even the creation of a new Constitution from the beginning, in order to respond to the new needs of the Greek State, which were mainly a result of the financial crisis. The Constitution of 1975 was considered outdated and related to the deficiencies of the political process and of the institutional functioning of the Greek State by the main political parties. However, after the two consecutive elections in 2012 and the important shock that they bore in the political world, the debate has changed focus. The question is whether the need for a constitutional amendment still persists or if the de facto changes in the functioning of the Constitution make this amendment unnecessary. Except from the debate on the inclusion of the Balanced Budget Rule in the Constitution, which mainly takes place in the academic world, changes proposed concern institutional and fiscal matters that would eliminate corruption phenomena and instability of the taxation system, the separation of powers (increase of powers of the President, restriction of the power of the Prime Minister, independence of the judiciary, establishment of a constitutional court), and the form and functioning of the parliamentary system itself (reduction of the number of parliamentarians, popular legislative initiative, changes in the functioning of political parties, transparency of the financial situation of parties, revision of the immunity of Members of the Government from criminal responsibility).  The debate is taking place in public fora for the moment. Because of the profundity of the constitutional changes proposed, certain political actors have adopted the narrative of the creation of a new Constitution through the exercise of “constituent power”, which would entail, among others, the dispensation from the procedural and substantial requirements of article 110.[21]

Relationship with EU law        
III.5
Is the constitutional amendment seen as changing the relationship between national and European constitutional law?

Not applicable. The discussions on an eventual constitutional amendment are for the moment very vague and general and do not take place in Parliament but rather in the media and the public fora.

Organic law      
III.6
Have there been changes to organic laws or other types of legislation that are of a different nature or level than ordinary legislation, in relation to Euro-crisis law or the budgetary process?

After their implementation, Euro-crisis legal instruments have a different status than ordinary legislation. Article 28 of the Constitution states:

1. 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.   
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.”[22]

Thus, the debate on the place of these legal statutes in the normative hierarchy of the Greek legal order is closely connected to the question of their function, that is whether they are ratifying supra-national law or not.[23] Especially concerning the relationship of these statutes to the Constitution, scholars accept the possibility of “tacit” constitutional amendment through the application of article 28, when European treaties are amended. However, according to the majority of scholars, in order for this to happen, the special procedure and the substantial conditions set by paragraphs 2 and 3 of this article must be respected.[24] In the case of the implementation of Euro-crisis law, this procedure has never been applied. In any case, there is no constitutional court in Greece with the competence to monitor the procedure of constitutional amendments.

Constitutional amendment and ordinary law       
III.7
If ordinary legislation was adopted in conjunction with a constitutional amendment, what is the relationship between the two?

Not applicable.

Perception source of legal change   
III.8
In the public and political discussions on the adoption of ordinary legislation, what was the perception on the appropriate legal framework? Was the ordinary legislation seen as implementing national constitutional law, or Euro-crisis law?

Article 28 of the Constitution sets substantial and procedural conditions for legal statutes implementing supra-national agreements that attribute constitutional competences to supra-national institutions and restrict the exercise of national sovereignty.[25] Thus, the appropriate legal framework for the implementation of Euro-crisis legal instruments depends on 1) their character of international/supra-national legally binding agreements, 2) if they attribute constitutional competences to supra-national institutions, or 3) if they restrict the exercise of national sovereignty. Further under the procedural and substantial conditions of this article, scholarship has accepted the possibility of “tacit” constitutional amendment.[26] This would be the case, for example, if the agreements implemented were changing the repartition of constitutional competences.

Most of the Euro-crisis legal instruments have been perceived as part of European law in public debates, and this, despite their intergovernmental character in some cases.[27]

However, the Memoranda of Understanding (MoUs) for the loan agreements have been argued to constitute the political programme of the Government, albeit in the form “staff-level” agreements. Thus, they have not been ratified, nor have the Loan Agreements themselves.[28]  Moreover, virtually all statutes containing austerity measures have been perceived as implementing exigencies of the creditors, either they are formally mentioned in a Euro-crisis legal instrument, or they are required by the “troika”, as a precondition for the disbursement of the tranches of the loan.[29] Yet, by virtue of subsequent Council Decisions in the context of the excessive deficit procedure, which reiterate the measures of MoU, the latter also acquire European “garb”. The European nature of the financial assistance instruments has been stressed by many academics. However, the Council of State explicitly negated the formal connection of the MoU to EU law in its decision 1285/2012.[30]

Subsequently, in decision 1507/2014,[31] the Council of State refused to introduce a preliminary reference to the ECJ concerning the PSI procedure. The majority of the judges found that, even though the statute determining the PSI conditions was drafted after deliberations between the Greek authorities and EU institutions, the latter had only a consulting function in the “political or technocratic” decisions on the PSI. The relevant statute and the implementing measures were thus sovereignly decided by the constitutionally competent Greek authorities and no application of EU law was at issue. Relevant statements by the Eurogroup or the Euro-area MS’ Heads of State and Government only had a political character (point 19).

In the same paragraph, the Council of State clarified that the EFSF is not an EU institutional authority but a legal entity under private law, constituted by the Eurozone MS for providing financial assistance to the countries that need it and for ensuring financial stability in the Eurozone (point 19).

There has been a heated political debate, inside and outside Parliament, on the appropriate legal framework for the implementation of Euro-crisis law. The public debate in the media has been mainly concentrated on the implementation of the MoU setting the conditions, usually austerity plans, for providing financial assistance to Greece. Political actors from the opposition and public actors,[32] trade unions,[33] bar associations,[34] academics,[35] journalists, NGOs, artists,[36] and even the Scientific Service of the Parliament[37] have objected that statutes voted in application of Euro-crisis law were formally and substantially violating the Greek Constitution. Especially in the relevant parliamentary debates, the opposition constantly repeated that a special procedure for the voting of the relevant legal statutes or a constitutional amendment was needed.[38] What is more, many public and political actors have objected to the adoption of this legislation through emergency procedures, and through the sui generis legal instrument of the “acts of legislative content”. Also, they have accused the Government of deliberately following opaque nondemocratic procedures.[39]

Many statutes and administrative acts implementing Euro-crisis law, and especially the MoU, have been brought before the Supreme Administrative Court (the Council of State) and other courts, in the context of the diffused constitutionality review. Also, many of the relevant legal statutes have been attacked before international institutions, such as the ECHR, the European Committee of Social Rights and the International Labor Organization.[40] The various recourses have been introduced by trade unions, judges, University professors, bar associations, and private persons.[41] However, despite the almost commonsensical character of the unconstitutionality of at least some of the statutes implementing Euro-crisis law, and the encouraging decisions of certain international institutions,[42] in Greece there is no strong and independent constitutional court that could annul these acts.[43] Nevertheless, some court decisions sanction the unconstitutionality, formal or substantial, of certain specific provisions mainly concerning taxes, collective and individual labor rights, and social security.[44]

Often, when facing legal-procedural arguments of the opposition, the Government has invoked the political and moral responsibility to save the economy of the country, which does not allow for formalism.[45] 

When not using moral-political argumentation, people supporting the Government and the austerity policies required by the Eurozone partners, the EU and the IMF, have repeatedly answered that the statutes related to Euro-crisis law are also implementing, and not violating, national constitutional law. More precisely, the main legal argument has been that article 28 of the Constitution provides for European integration. Moreover, the loan agreements, austerity policies, and budgetary discipline are necessary for the reform of the Public Administration, for the efficacious functioning of the State, for the fight against corruption, clientelism, and tax evasion, and for the fulfillment of the country’s budgetary needs, so that it can regain its sovereignty, which is lost because of the debt crisis. Thus, the defenders of the Government policies have underlined that the implementation of Euro-crisis law does not restrict the exercise of national sovereignty and does not entail the concession of any constitutional competences to institutions of supra-national organizations.[46] Besides, in the public debate, which is characterized by a constant prediction of impeding calamities, it has usually been argued that there is no alternative to the implementation of these measures, if one wants the State and the economy to function. Indeed the non-implementation is presented as a synonym to the exit of the country from the Euro and its bankruptcy which will burden the citizens.[47]

Decision no. 668/2012, 20 February 2012, of the Greek Council of State, concerning the legal statute implementing the first MoU, is characteristic of this argumentation.[48] Indeed, the Council of State argued that, even though it is a result of negotiations and agreement between Greece and certain international authorities, the Memorandum does not constitute an international treaty which is legally binding the Greek Government, but only the governmental program for the confrontation of the economic problems of the country, a compelling public interest and a common interest of Greece’s Eurozone partners. Therefore, as a political program, the Memorandum does not result in the transfer of competences to international authorities, it does not create legal norms and it does not possess a direct effect in the domestic legal order, given that, for its application, the constitutionally competent organs have to enact some implementing measures. Thus, no special procedure or constitutional amendment was needed for its enactment.[49]

However, generally the need for a constitutional amendment in order to accommodate the changes brought about by the Euro-crisis has been affirmed by all parties of the political world.[50] Especially since the spring of 2012, there has been a public debate on the need for such an amendment. In their electoral campaigns in May 2012, the two main political parties of the bipartisan, until then, political system included propositions for an extended amendment of many parts of the Constitution, or even the creation of a new Constitution from the beginning, in order to respond to the new needs of the Greek State, which were mainly a result of the financial crisis.[51] The Constitution of 1975 was considered outdated and related to the deficiencies of the political process and of the institutional functioning of the Greek State by the main political parties. Because of the profundity of the constitutional changes proposed, certain political actors have adopted the narrative of the creation of a new Constitution through the exercise of “constituent power”, which would entail the dispensation from the procedural and substantial requirements of article 110.[52]

After the two consecutive elections in 2012 and the important shock that they bore in the political world, the debate has changed focus. The question is whether the need for a constitutional amendment still persists or if the de facto changes in the functioning of the Constitution make this amendment unnecessary. Except from the debate on the inclusion of the Balanced Budget Rule in the Constitution, which mainly takes place in the academic world,[53] changes proposed concern institutional and fiscal matters that would eliminate corruption phenomena and instability of the taxation system, the separation of powers (increase of powers of the President, restriction of the power of the Prime Minister, independence of the judiciary, establishment of a constitutional court), and the form and functioning of the parliamentary system itself (reduction of the number of parliamentarians, popular legislative initiative, changes in the functioning of political parties, transparency of the financial situation of parties, revision of the immunity of Members of the Government from criminal responsibility).[54] The debate is taking place in public fora for the moment and no official proposal has been submitted to Parliament.[55]

Miscellaneous
III.9
What other information is relevant with regard to Greece and to changes to national (constitutional) law?

Even though the Constitution has not been formally amended, one can easily observe the dramatic change of the way the Constitution is applied since the burst of the Euro-zone crisis. In an academic article, Giannis Drosos argues that the first Memorandum constitutes a “turning point” of the Greek political regime, because it imposes the exercise of some of the most important political powers in cooperation with organs that have an international nature, like the “troika”.[56] Also, Lina Papadopoulou refers to the “normative power of the facts themselves” that overrules the formal Constitution.[57] Kostas Giannakopoulos argues that the Memorandum has completely substituted the [constitutionally] imposed balancing of constitutional rules and principles” and has fixed the interpretation of the flexible domestic economic constitution as pursuing the EU economic policy.[58] It is true that the interpretation of constitutional rules and rights has importantly changed during the last years, and, in the context of austerity policies implemented by Governments, it has legitimized restrictions in constitutional rights and practices of the executive that would be unthinkable some years earlier.[59] What is more, the upheaval of the political correlations after the elections of 2012, as well as the configuration of the coalition government between left and right pro-European parties, have importantly changed the functioning of Government and has led Antonis Manitakis to speak about the “collapse” of the post-junta political-institutional regime.[60] These substantial changes, without a formal corroboration, are in deep contrast with the superficial constitutional amendments which have been the practice of past Governments.[61]

[1] Cf. for example Legal Statute 3845/2010, ΦΕΚ Α 65/6.5.2010 (1st bailout agreement), Legal Statute 3985/2011, ΦΕΚ Α 151/1.7.2011 (Medium term budgetary framework 2012-2015), Legal Statute 4021/2011, ΦΕΚ Α 218/3.10.2011 (EFSF Treaty), Legal Statute 4024/2011, ΦΕΚ 226 Α/27.10.2011 (austerity measures for the application of the Medium term budgetary framework), Legal Statute 4046/2012 (2nd bail out agreement), Legal Statute 4063/2012, ΦΕΚ Α 71/30.3.2012 (136 TFEU amendment, ESM, and Fiscal Compact), Legal Statute 4093/2012, ΦΕΚ Α 222/12.11.2012 (Medium term budgetary framework 2013-2016).

[2] Cf. for example the section concerning the financial assistance instruments (section X) and the question concerning the approval of the 136 TFEU amendment (question V.2), the ESM Treaty (question VIII.2), and the Fiscal Compact (Legal Statute 4063/2012) (question IX.2).

[3] See the decision 668/2012, 20 February 2012, of the Greek Council of State, on the procedure of ratification of the first bailout agreement, in the official site of the Bar Association of Athens, www.dsanet.gr/Epikairothta/Nomologia/668.htm. See also the relevant question in the section “Member States receiving financial assistance” (question X.8).

[4] See for example article 2 of the statute 3845/2010.

[5] See for example article 1 paragraph 4 of the statute 3845/2010, as amended by the statute 3847/2010. See also article 93 of the statute 3862/2010. Cf. the section concerning the financial assistance instruments and the EFSF/M.

[6] Cf. question X.7.

[7] See questions IV.2 and IV.6 concerning the EFSF agreement, as well as the questions concerning financial assistance to Greece (question X.1 and following).

[8] Article 76 paragraphs 4 and 5 of the Constitution: “4. A Bill designated as very urgent by the Government shall be introduced for voting after a limited debate among the rapporteurs involved, the Prime Minister or the competent Minister, the leaders of parties represented in Parliament and one spokesman for each party. The duration of speeches and the time for the debate may be limited by the Standing Orders. 5. The Government may request that a Bill of particular importance or of an urgent nature be debated in a specific number of sittings, not to exceed three. Parliament may prolong the debate through two additional sittings on the proposal of one-tenth of the total number of Members of Parliament. The duration of each speech shall be specified by the Standing Orders.” Source of translation: http://www.hellenicparliament.gr/UserFiles/f3c70a23-7696-49db-9148-f24dce6a27c8/001-156%20aggliko.pdf

[9] See questions X.1 and following, especially question X.5.

[10] The first and the second Memoranda (Legal Statutes 3825/2010 and 4046/2012) have been voted under this procedure, on the 6th of May 2010 and on the 12th of February 2012 respectively. See the Minutes of the Greek Parliament on the 6th of May 2010, http://www.hellenicparliament.gr/UserFiles/a08fc2dd-61a9-4a83-b09a-09f4c564609d/es20100506_1.pdf and on the 12th of February 2012, http://www.hellenicparliament.gr/UserFiles/a08fc2dd-61a9-4a83-b09a-09f4c564609d/es20120212.pdf, where the reactions of the opposition. Also, the Medium term budgetary framework 2013-2016 (Legal Statute 4093/2012) has been voted following this procedure. See the parliamentary debates on the 7th of November 2012, where the reactions of the opposition, available at http://www.hellenicparliament.gr/UserFiles/a08fc2dd-61a9-4a83-b09a-09f4c564609d/es20121107.pdf . For example, the Government tried to insert certain measures concerning over-debited citizens to the Parliament according to the emergency procedure, but finally followed the normal procedure, after reactions of the opposition and of the parties of the Government coalition. See “The Government yielded concerning the urgent character of the Government bill on the loans” [in Greek], http://tvxs.gr/news/%CE%B5%CE%BB%CE%BB%CE%AC%CE%B4%CE%B1/%CE%BF%CE%BC%CE%B1%CE%B4%CE%B9%CE%BA%CF%8C-%C2%AB%CF%8C%CF%87%CE%B9%C2%BB-%CF%83%CF%84%CE%BF-%C2%AB%CE%BA%CE%B1%CF%84%CE%B5%CF%80%CE%B5%CE%AF%CE%B3%CE%BF%CE%BD%C2%BB-%CF%84%CE%BF%CF%85-%CE%BD%CF%83-%CE%B3%CE%B9%CE%B1-%CF%84%CE%B1-%CE%B4%CE%AC%CE%BD%CE%B5%CE%B9%CE%B1.

[11] Cf. for example legal statutes 4047/2012, ΦΕΚ 31 Α/23.2.2012, and 4147/2013, ΦΕΚ 98 Α/26.04.2013. It is interesting to note that the public television and radio has been shut down after an act of legislative content, extending the legislative authorization to the administration on the matter.  Cf. ΠΝΠ ΦΕΚ Α’ 139/11.6.2013, available at http://www.dsanet.gr/Epikairothta/Nomothesia/pnp11_6.htm. This act was the legal basis of the Decision 02/11.6.2013, “Suppression of the public enterprise Greek Radio – Television, A.E. (ERT-A.E.)”, ΦΕΚ B 1414/11.6.2013 issued the same day. This measure was presented by the Government as satisfying the exigency of the “troika” for the reducing the number of public employees. However, the Commission denied that they demanded the closure of the public radio and television organization. The act of legislative content was never ratified by Parliament and thus is not valid anymore.  However, this has not any de facto consequences.

[12] Source of translation: http://www.hellenicparliament.gr/UserFiles/f3c70a23-7696-49db-9148-f24dce6a27c8/001-156%20aggliko.pdf

[13] Cf. the question on the implementation of the financial assistance instruments (section X).

[14] See, for example, the article “They bring emergency bill following pressures by the creditors” [in Greek], Eleftherotypia, 12 January 2013, http://www.enet.gr/?i=news.el.article&id=335156. See the reaction of political leaders to the closure of ERT, “Virulent reactions of the parties to the closure of ERT” [in Greek], Ta Nea, 11 June 2013, http://www.tanea.gr/news/politics/article/5023292/sfodres-antidraseis-twn-kommatwn-gia-to-loyketo-sthn-ert/. See also the reaction of the unions of Administrative Judges and of the Court of Audit for the closure of ERT, “The rule of law is not established through acts of legislative content” [in Greek], Eleftherotypia, 14 June 2013, http://www.enet.gr/?i=news.el.article&id=369551.

[15] Cf.  Act  OJ  Α’  139/11.6.2013,  available  at http://www.dsanet.gr/Epikairothta/Nomothesia/

pnp11_6.htm. This act was the legal basis of the Decision 02/11.6.2013, “Suppression of the public

enterprise Greek Radio – Television, A.E. (ERT-A.E.)”, OJ B’ 1414/11.6.2013, issued the next day. Cf. http://www.reuters.com/article/2013/06/21/us-greece-idUSBRE95K0IJ20130621, http://www.lemonde.fr/europe/article/2013/06/25/nouveau-gouvernement-de-coalition-en-grece-pour-garantir-la-stabilite_3436423_3214.html .

[16] See the question concerning the implementation of the balanced budget rule in the section “Fiscal Compact” (question IX.4).

[17] Xenophon Contiades and Ioannis Tassopoulos, “The Impact of the Financial Crisis on the Greek Constitution”, in Xenophon Contiades (ed.), Constitutions in the Global Financial Crisis (Ashgate 2013),  chapter 7, 195.

[18] The last Constitutional revision took place in 2008, 8th Revisionary Parliament, Resolution of the 27th of May 2008, ΦΕΚ Α 102/2.6.2008. Source of translation: http://www.hellenicparliament.gr/UserFiles/f3c70a23-7696-49db-9148-f24dce6a27c8/001-156%20aggliko.pdf

[19] Xenophon Contiades and Ioannis Tassopoulos, op.cit.

[20] Cf. the relevant question II.1 in the section “Changes to the budgetary process”.

[21] Xenophon Contiades and Ioannis Tassopoulos, “The Impact of the Financial Crisis on the Greek Constitution”, in Xenophon Contiades (ed.), Constitutions in the Global Financial Crisis (Ashgate 2013),  chapter 7, 195.

[22] Source of translation: http://www.hellenicparliament.gr/UserFiles/f3c70a23-7696-49db-9148-f24dce6a27c8/001-156%20aggliko.pdf

[23] For this question, see question III.8.

[24] On this matter, see question IX.4.

[25] See question III.6.

[26] See question IX.4.

[27] For example, the Fiscal Compact is perceived as a part of European law in the relevant parliamentary debates, and even by academics. Cf. the debates on the 28th of March 2012, during the ratification of the Fiscal Compact, Πρακτικά Βουλής (Ολομέλεια), Συνεδρίαση ΡΙΣΤ’, Τετάρτη, 28 Μαρτίου 2012, 8004 available at http://www.hellenicparliament.gr/Praktika/Synedriaseis-Olomeleias?search=on&DateFrom=28%2F03%2F2012&DateTo=28%2F03%2F2012, 8030. See also the newspaper article by Petros Stagkos, Professor of European Law in the University of Thessaloniki, “Constitution and “golden rule”” [in Greek], Ta Nea, 19 February 2013, http://www.tanea.gr/opinions/all-opinions/article/5001990/syntagma-kai-xrysos-kanonas/.

[28] Though the Government approves and delegates their signature by the Minister of Finance and other executive authorities through administrative acts of legislative content, which subsequently introduces to Parliament for ratification. On this constitutional “acrobatic”, see the question X.3 on the status of the financial assistance instruments.

[29] Usually, before the implementation of austerity measures, there is a “thriller” in the media concerning the negotiations between the Government and the “troika”, who always has very strict requirements. Concerning the negotiations between the new Minister of Administrative Reform, Kyriakos Mitsotakis and the “troika” on the mobility scheme for public sector workers, “Troika deal within reach as talks on public sector reforms get under way”, ekathimerini.com,  3 July 2012, http://www.ekathimerini.com/4dcgi/_w_articles_wsite1_1_03/07/2013_507327 ; “Greece, troika agree to public sector worker dismissal reserve”, ekathimerini.com, 9 July 2013, http://www.ekathimerini.com/4dcgi/_w_articles_wsite1_1_09/07/2013_508286.

[30] Cf. the relevant question X.3 on the status of the financial assistance instruments.

[31] Plenum decision, 28 April 2014. Cf. question X.9.

[32] Cf. “Al. Tsipras: Memorandum or SYRIZA”[in Greek], To Vima, 10 July 2013, http://www.tovima.gr/politics/article/?aid=521748; Notis Marias, “Referendum for the Amendment of the Lisbon Treaty” [in Greek], Epikaira, 24 March 2011, http://www.epikaira.gr/epikairo.php?id=15885

[33] See for example the press release of GSEE (General Confederation of Greek Workers), http://www.gsee.gr/news/news_view.php?id=1757&year=&month=&key=%EC%ED%E7%EC%FC%ED%E9%EF&page=0&limit=10, on the 16th of February 2012, concerning the MoU II. See also the site of ADEDY (Confederation of Civil Servants’ Unions), www.adedy.gr.

[34] The Athens Bar Association has organized many conferences on the constitutional questions raised by the MoU. For example, the conference on the 15th of June 2010, “Memorandum, Constitution, European Treaty, and ECHR”. The Volos Bar Association is also active in the public debate. See for example, “The Memorandum has been voted through an unconstitutional procedure” [in Greek], Eleftherotypia, 12 August 2010, http://www.enet.gr/?i=news.el.article&id=192485.

[35] On the academic –which is also political, given the politicization of the constitutional doctrine in Greece- debate concerning the first MoU, see Kostas Botopoulos, “Common sense and gaps in the ‘Memorandum Decision” [in Greek], op. cit. and the bibliography cited. In this debate, many important constitutionalists have defended the unconstitutionality of the MoU. See also Giorgos Katrougkalos, “The ‘Paraconstitution’ of the Memorandum and the Other Way” [in Greek], Nomiko Vima, February 2011. See also George Katrougalos, The Greek Austerity Measures: Violations of Socio-Economic Rights, Int’l J. Const. L. Blog, January 29, 2013, available at: http://www.iconnectblog.com/2013/01/the-greek-austerity-measures-violations-of-socio-economic-rights. Concerning the second MoU, voted in February 2012, five important constitutionalists made a common statement on its unconstitutionality. See “The Memorandum is unconstitutional” [in Greek], news247, 12 February 2012, http://news247.gr/eidiseis/oikonomia/antisyntagmatiko_to_mnhmonio.1638556.html.

[36] “Personalities from the Left against the Memorandum”, To Vima, 7 July 2010, http://www.tovima.gr/politics/article/?aid=341868. Concerning the third MoU, voted in November 2012, see the opinion of Kostas Chrysogonos, Professor of Constitutional Law in the University of Thessaloniki, after the question of Alexis Tsipras, President of SY.RIZ.A. in “Chrysogonos: Why the Memorandum III is unconstitutional” [in Greek], news247, 8 November 2012, http://news247.gr/eidiseis/koinonia/xrysogonos_giati_einai_antisyntagmatiko_to_mnhmonio_iii.2001637.html.

[37] “Scientific Service of the Parliament: the Memorandum is Unconstitutional” [in Greek], I Avgi, 13 February 2012, http://archive.avgi.gr/ArticleActionshow.action?articleID=669174.

[38] See the questions concerning the ratification procedure of the various legal instruments.

[39] See question III.1.

[40] See the relevant questions, especially concerning financial assistance to Greece.

[41] Concerning the first MoU, “Deliberation in the Council of State concerning the recourses against the Memorandum” [in Greek], “http://www.constitutionalism.gr/site/1774-syzitisi-sto-ste-twn-prosfygwn-kata-toy-mnimonioy/, “The Memorandum faces the Constitution” [in Greek], http://www.newstime.gr/?i=nt.el.article&id=50074. Concerning the second MoU, “The Memorandum 2 sticks to the Council of State” [in Greek], Eleftherotypia, 3 April 2013, http://www.enet.gr/?i=news.el.article&id=354820. Concerning the third MoU, “The judges make recourse to the Council of State against the Memorandum” [in Greek], I Kathimerini, 7 July 2013, http://www.kathimerini.gr/4dcgi/_w_articles_kathremote_1_13/01/2013_478242; “University professors make recourse to the Council of State against the Memorandum”, in.gr, 10 July 2012, http://news.in.gr/greece/article/?aid=1231256894.

[42] See the report of the High Level Mission of the ILO for Greece, http://www.ilo.org/wcmsp5/groups/public/@ed_norm/@normes/documents/missionreport/wcms_170433.pdf, and the speech of the Director General of the ILO, http://www.ilo.org/global/about-the-ilo/who-we-are/ilo-director-general/statements-and-speeches/WCMS_216803/lang–en/index.htm

[43] See Xenophon Contiades, “The return of judges” [in Greek], Ethnos, 17 July 2012, http://www.contiades.gr/index.php?option=com_content&task=view&id=1026.

[44] See question X.9.

[45] See the questions concerning the financial assistance instruments (questions X.1 and following).

[46] See the parliamentary debates cited in the questions concerning the implementation of the specific Euro-crisis law instruments.

[47] Tryfon Koutalidis, “Unconceivable consequences if the Memorandum is declared unconstitutional” [in Greek], Forum, May 2011. See also the interview of the Associate Minister of Finance, Pantelis Oikonomou, to the journalist Nikos Chatzinikolaou, http://www.minfin.gr/portal/el/resource/contentObject/id/6ad8a79e-6576-47f1-9628-9e5bcd2f1ce4.

[48] www.dsanet.gr/Epikairothta/Nomologia/668.htm.

[49] Point 28 of the decision.

[50] Chrysogonos argues that such an amendment would not be possible because of the eternity clause of the Greek Constitution (art. 110) imposing the eternity of the most fundamental constitutional provisions. See Kostas Chrysogonos, «Η χαμένη τιμή της Ελληνικής Δημοκρατίας. Ο μηχανισμός «στήριξης της ελληνικής οικονομίας» από την οπτική της εθνικής κυριαρχίας και της δημοκρατικής αρχής [The lost honour of the Hellenic Republic. The “rescue” mechanism of the Greek economy from the point of view of national sovereignty and of the principle of democracy]»,  ΝοΒ 58 [2010] p. 1356

[51] Cf. for PA.SO.K. http://archive.pasok.gr/portal/resource/contentObject/id/81e35a51-16d6-4e6ebb0f-5acc818085e5 . For N.D. see “The 31 proposals by ND for the Constitutional Amendment” [in Greek], real.gr, 29 July 2011, http://www.real.gr/DefaultArthro.aspx?page=arthro&id=83283&catID=1

[52] Cf. the propositions of PA.SO.K. in June 2012 for a “New Form of Polity” http://archive.pasok.gr/portal/resource/contentObject/id/81e35a51-16d6-4e6e-bb0f-5acc818085e5

[53] See question IX.4.

[54] Xenophon Contiades and Ioannis Tassopoulos, “The Impact of the Financial Crisis on the Greek Constitution”, in Xenophon Contiades (ed.), Constitutions in the Global Financial Crisis (Ashgate 2013),  chapter 7, 195.

[55]See the proposition of N.D. in the stage of public deliberation on the internet http://www.nd.gr/web/oi_protaseis_mas_gia_ti_suntagmatiki_anatheorisi__gia_na_anoiksei_o_dromos_gia_ti_nea_metapoliteusi See also, “Proposition by Stylianidis for radical constitutional amendment” [in Greek], To Vima, 10 April 2013, http://www.tovima.gr/politics/article/?aid=507157 . See also for the propositions by SY.RIZ.A., “The propositions of the Opposition for the political system-constitutional amendment”, I Avgi, 29 June 2013, http://www.avgi.gr/article/539667/oi-protaseis-tis-axiomatikis-antipoliteusis-gia-to-politiko-sustima-suntagmatiki-anatheorisi .

[56] Giannis Drosos, «ΤοΜνημόνιοως σημείο στροφής του πολιτεύματος [The ‘Memorandum’ as a turning point of the regime]», www.constitutionalism.gr, published in The Book’s Journal, Vol. 6, April 2011, 42.

[57] Lina Papadopoulou, “Can Constitutional Rules, Even if ‘Golden’, Tame Greek Public Debt?”, in Maurice Adams, Federico Fabbrini and Pierre Larouche (eds), The Constitutionalization of European Budgetary Constraints, Oxford: Hart Publishing, 2014, 223, 239.

[58] Kostas Giannakopoulos, «Μεταξύ εθνικής και ενωσιακής έννομης τάξης: το «Μνημόνιο» ως αναπαραγωγή της κρίσης του κράτους δικαίου [Between National and EU Legal Order : theMemorandumas a Reproduction of the Rule of Law Crisis]», www.constitutionalism.gr, p. 5: «Η αναφορά –έστω και έμμεση- των κυβερνώντων στην εφαρμογή του ασαφούς, από άποψη κανονιστικής ισχύος, Μνημονίου της 3ης Μαΐου 2010, έφτασε να υποκαταστήση πλήρως την επιβαλλόμενη στάθμιση συνταγματικών κανόνων και αρχών.»,

[59] The example of the suppression of the public service of radio and television through an administrative act is a typical example of this case. For the interpretation of the scope and protection constitutional rights before the crisis see, among others, Prodromos Dagtoglou, Individual Rights, 2 vols., 2nd ed., (Athens-Komotini: Ant. N. Sakkoulas 2005) [in Greek], Kostas Chrysogonos, Individual and Social Rights, 2nd ed., (Athens-Komotini: Ant. N. Sakkoulas 2002) [in Greek]. For the extended powers of the executive as a result of the economic crisis, see Lina Papadopoulou, op.cit., section “Executive Unbound?”, 236 f.

[60] Antonis Manitakis, «Η κατάρρευση του μεταπολιτευτικού πολιτικού συστήματος [The collapse of the Metapolitefsi political regime]», www.constitutionalism.gr

[61] The Greek Constitution has been amended in 2001 and in 2008: 7th Revisionary Parliament, Resolution of the 6th of April 2001 (ΦΕΚ 84 Α/17.4.2001), 8th Revisionary Parliament, Resolution of the 27th May 2008 (ΦΕΚ 102 A/2.6.2008).

Hungary

Nature national instruments     
III.1
What is the character of the legal instruments adopted at national level to implement Euro-crisis law (constitutional amendment, organic laws, ordinary legislation, etc)?

Article E, paragraphs 2 and 4 regulate the cases in which a Cardinal Act should implement an international treaty.

‘(2) In order to participate in the European Union as a Member State, and on the basis of an international treaty, Hungary may, to the extent necessary to exercise the rights and fulfill the obligations set out in the founding treaties, exercise some of its competences deriving from the Fundamental Law jointly with other Member States, through the institutions of the European Union.

(4) The authorization for expressing consent to be bound by an international treaty referred to in paragraph (2) shall require the votes of two-thirds of all Members of Parliament.’

According to Article T paragraph 4 of the Fundamental Act of Hungary, a Cardinal Act of Parliament is an Act of Parliament for the adoption or amendment of which the votes of two-thirds of the Members of Parliament present shall be required.

Decision to amend article 136 TFEU
European Council Decision 2011/199/EU of 25 March 2011 amending Article 136 of the Treaty on the Functioning of the European Union with regard to a stability mechanism for Member States whose currency is the euro, OJ L 91, 6.4.2011, p. 1 was incorporated into the Hungarian legal system by Act IX of 2012, that is a Cardinal Act. (see question V.2)

The Fiscal Compact,
(Treaty on Stability, Coordination and Governance in the Economic and Monetary Union) was ratified by Act XXXII of 2013, which is also a Cardinal Act. (see questions IX.2 and IX.4)

According to Article 15 paragraphs 3 and 4 of the Fundamental Act of Hungary, acting within its competence, the Government adopts decrees by statutory authorization on any matter not regulated by an act, but no decree of the Government shall conflict with any act.[1]

The financial assistance instruments were incorporated into the Hungarian legislation by decrees of Government. It was the Memorandum of Understanding that was translated and released by the Government in the 282/2008 Government statute, released on 28, November, 2008. Amendments of the Memorandum of Understanding were released in statutes on April 4th, 2009 (67/2009.), June 24th, 2009 (135/2009.), June 30th, 2009 (140/2009.) and February 28th, 2010 (28/2010.) (see question X.4).

Other Euro-crisis tools, such as reactions to the excessive deficit procedure or the Macro-economic imbalances procedure were implemented in the so-called national plans, like the convergence programmes of 2011[2], 2012[3]and 2013[4]and the Széll Kálmán plan that is a medium term plan on economic and financial policies of the Government[5].

Constitutional amendment   
III.2   
Have there been any constitutional amendments in response to the Euro-crisis or related to Euro-crisis law? Or have any amendments been proposed?

No, there has not been any and there are no plans of amending the Fundamental Act of Hungary in relation to the Euro-crisis legislation.

Constitutional context
III.3
If national constitutional law already contained relevant elements, such as a balanced budget rule or independent budgetary councils, before the crisis that are now part of Euro-crisis law, what is the background of these rules?

National constitutional law contains relevant elements, such as the balanced budget role in Articles N and 36, but this was introduced to the legal system in 2012. A Fiscal Council was created in 2008 as result of an international pressure, as detailed in the answer to question VII.5.

Purpose constitutional amendment 
III.4
What is the purpose of the constitutional amendment and what is its position in the constitution?

No amendments made, and no amendments proposed.

Relationship with EU law        
III.5
Is the constitutional amendment seen as changing the relationship between national and European constitutional law?

No constitutional amendments.

Organic law      
III.6
Have there been changes to organic laws or other types of legislation that are of a different nature or level than ordinary legislation, in relation to Euro-crisis law or the budgetary process?

The Treaties of the Euro-crisis were promulgated in a ‘Cardinal Act’, see also the answer to question III.1. According to Article T paragraph 4 of the Fundamental Act of Hungary, Cardinal Act of Parliament is an Act of Parliament for the adoption or amendment of which the votes of two-thirds of the Members of Parliament present shall be required. These acts differ from ordinary Acts of Parliament only in the way of adoption and amendment, otherwise they do not forego ordinary acts and cannot contradict the provisions of the Fundamental Act, the constitution of Hungary.

Constitutional amendment and ordinary law       
III.7
If ordinary legislation was adopted in conjunction with a constitutional amendment, what is the relationship between the two?

No constitutional amendments.

Perception source of legal change   
III.8

In the public and political discussions on the adoption of ordinary legislation, what was the perception on the appropriate legal framework? Was the ordinary legislation seen as implementing national constitutional law, or Euro-crisis law?

Pieces of Hungarian legislation in connection with Euro-crisis law were seen as implementing European Union law. In case of a Parliementary debate, both Governmental and oppostition parties took it granted that EU law was being implemented by the Parliament or the Government.

Miscellaneous
III.9
What other information is relevant with regard to Hungary and to changes to national (constitutional) law?

No other relevant information.

[1] The text of the Fundamental Act of Hungary is available here: http://www.kormany.hu/download/e/02/00000/The%20New%20Fundamental%20Law%20of%20Hungary.pdf

[2]http://ec.europa.eu/europe2020/pdf/nrp/cp_hungary_en.pdf

[3]http://ec.europa.eu/economy_finance/economic_governance/sgp/pdf/20_scps/2012/01_programme/hu_2012-04-23_cp_en.pdf

[4]http://ec.europa.eu/europe2020/pdf/nd/cp2013_hungary_en.pdf

[5]http://www.kormany.hu/download/4/d1/20000/Sz%C3%A9ll%20K%C3%A1lm%C3%A1n%20Terv.pdf

Ireland

Nature national instruments       
III.1
What is the character of the legal instruments adopted at national level to implement Euro-crisis law (constitutional amendment, organic laws, ordinary legislation, etc)?

Euro-crisis law has primarily been implemented through ordinary legislation (ex the Fiscal Responsibility Act 2012). A single constitutional amendment was employed to ensure the compatibility of the Treaty on Stability Coordination and Growth (TSCG) with the Constitution.

Constitutional amendment     
III.2    
Have there been any constitutional amendments in response to the Euro-crisis or related to Euro-crisis law? Or have any amendments been proposed?

There has been a single constitutional amendment to implement the TSGC. It was successfully adopted through a referendum in May of 2012 (see section IX below).[1]

Constitutional context
III.3
If national constitutional law already contained relevant elements, such as a balanced budget rule or independent budgetary councils, before the crisis that are now part of Euro-crisis law, what is the background of these rules?

National constitutional law did not already contain any relevant elements with the possible exception of the Comptroller and Auditor General (CAG) that may constitute a ‘supreme audit institution’ for the purposes of Regulation 473/2013/EU.

Purpose constitutional amendment   
III.4
What is the purpose of the constitutional amendment and what is its position in the constitution?

The 30th amendment to the constitution allowing in relation that resulted in the new Article 29.10 of the Irish constitution firstly allows the state to ratify the Fiscal Treaty and secondly provides any piece of legislation necessitated by that Treaty with immunity from constitutional challenge (‘the necessitated clause’).

Relationship with EU law          
III.5
Is the constitutional amendment seen as changing the relationship between national and European constitutional law?

The only constitutional amendment adopted in relation to the Euro Crisis is the 30th amendment permitting the ratification of the TSCG thereby giving it and any legislation adopted under it immunity from constitutional challenge. This construction mirrors that adopted to accommodate Union law in the Irish constitution.[2]

Organic law       
III.6
Have there been changes to organic laws or other types of legislation that are of a different nature or level than ordinary legislation, in relation to Euro-crisis law or the budgetary process?

There are no organic laws or types of legislation other than ordinary acts of the Oireachtas and secondary or delegated legislation (primarily Ministerial orders known as statutory instruments).

Constitutional amendment and ordinary law 
III.7
If ordinary legislation was adopted in conjunction with a constitutional amendment, what is the relationship between the two?

The balanced budget rule contained in Article 3(2) TSGC is implemented in Ireland through the Fiscal Responsibility Act 2012 and in particular its sections 3 and 4.[3] It is an ordinary piece of legislation and can be repealed or amended by the Oireachtas (Parliament) at any time according to the ordinary legislative process. However it will enjoy immunity from constitutional challenge per the second clause of Article 29.10 of the constitution.[4]

Perception source of legal change     
III.8
In the public and political discussions on the adoption of ordinary legislation, what was the perception on the appropriate legal framework? Was the ordinary legislation seen as implementing national constitutional law, or Euro-crisis law?

Sinn Féin and at least one independent TD, Thomas Pringle, believed that the ESM Treaty should have been adopted through constitutional amendment. Mr Pringle challenged the ESM Treaty before the Courts and arguing that it ceded sovereignty to an international institution and thus required a constitutional amendment per Crotty v An Taoiseach.[5] This view was treated sceptically by commentators[6] and ultimately rejected by the Supreme Court (see answer to question VIII.4 below). Instead the ESM Treaty was adopted by an ordinary piece of legislation, the ESM Act 2012. There has been no significant public discussion regarding other aspects of Euro crisis law.

Miscellaneous
III.9
What other information is relevant with regard to Ireland and to changes to national (constitutional) law?

There have been no other changes to national (constitutional) law originating in changes at a supranational level to the Euro crisis. The financial crisis in Ireland is however a major collective national shock that has triggered significant economic, political and ultimately constitutional reform. In response to the programme for financial assistance significant changes have been introduced or are planned on being introduced in areas of economic (particularly professional) regulation and labour relations. Furthermore in its programme for government, the Fine Gael-Labour Government promised far reaching reform of the political system and established a constitutional convention to look at issues such as the voting system. A referendum on the abolition of the Senead (upper house) was narrowly defeated in October 2013.[7]

[1]                As mentioned above there have been other constitutional referendums, however these are not directly related to the Euro Crisis.

[2]               See generally art 29.4 of Bunreacht na hÉireann (the Irish constitution).

[3]               For a detailed discussion on the parliamentary debates of the Fiscal Responsibility Act 2012 see the answer to question IX.3 below.

[4]               See comments by Minister of State at the Department of Foreign Affairs and Trade, Joe Costello TD Seanad Debates, 24 April 2012, Vol 214 No 15, 960. 

[5]               Crotty v An Taoiseach [1987] IESC 4 [1987] IR 713.

[6]               Darren O’Donovan, ‘That Other Treaty: Ratifying the European Stability Mechanism Treaty’ (Human Rights in Ireland, 22 May 2012)  <http://humanrights.ie/constitution-of-ireland/that-other-treaty-ratifying-the-european-stability-mechanism-treaty/> accessed 11 June 2013 and Barrett, ‘The Treaty Amendment on the European Stability Mechanism: Does It Require a Referendum in Ireland?’ (n 98).

[7]               ‘Undecided voters turn into No voters’ Sunday Business Post (Dublin, 6 October 2013).

Italy

Nature national instruments      
III.1
What is the character of the legal instruments adopted at national level to implement Euro-crisis law (constitutional amendment, organic laws, ordinary legislation, etc)?

First of all (see questions IX.1 and IX.4), Constitutional Law n. 1/2012 amended articles 81, 97, 117, 119 of the Constitution, inserting (in a somewhat nuanced way) the principle of the “balanced budget”.

Moreover, the same Constitutional Law n. 1/2012 is autonomously the source of adoption of other «Euro-crisis law» obligations, in particular by providing the need for the establishment of a Fiscal Council and by leaving to a ‘reinforced law’ the establishment of the maximum deviation from the parameter of equilibrium in the budgets.

Such a ‘reinforced law’ was adopted, as already said, at the end of 2012 (Law 243/2012). The Italian legal order does not include, in its system of sources, formal ‘organic laws’, but the Law 243/2012 is in some ways comparable to that model[1] ; in particular, its peculiar ‘reinforced’ nature is substantiated by the facts that[2] :

a) this law may be “repealed, modified or waived only expressly” by a subsequent law passed by the same special majority of art. 81, sixth paragraph of the Constitution; the laws amending the Law no. 243 of 2012 must necessarily be approved by the two plenary sessions of the Chambers

b) this special law cannot rule, in such a reinforced way, on matters already covered by ordinary legislation and outside its predicted area of competence; on the other hand, in the matters of art. 5 of Constitutional Law. n. 1 of 2012 any ordinary law is precluded

c) the Government cannot intervene on such matters by decree-law or by delegated legislation (even in the case of mandate by the Parliament reinforced as the law n. 243)

d) any effect of implied repeal of the norms of the Law 243 of 2012 is precluded.

All the other mentioned legislative measures, including the reforms on the budgetary process, came by ordinary legislation.

Constitutional amendment   
III.2    
Have there been any constitutional amendments in response to the Euro-crisis or related to Euro-crisis law? Or have any amendments been proposed?

See Questions IX.4 and IX.5, about Constitutional Law no. 1/2012, of 20 April 2012, which has introduced the “balanced budget” principle into the text of the Constitution itself, modifying the central Article 81 and, incidentally, other three provisions of the basic law: articles 97, 117 and 119.

Constitutional context
III.3
If national constitutional law already contained relevant elements, such as a balanced budget rule or independent budgetary councils, before the crisis that are now part of Euro-crisis law, what is the background of these rules?

See for a relevant point for Italy here Question IX.1: and so the debate on the previous text of Art. 81 of the Constitution, which already dictated a formally strict rule on the coverage of the financial burden (art. 81.4, previous text: «all other laws implying new or additional expenditures must set out the means to cover them»), but was then relaxed by subsequent interpretations of the Constitutional Court[3] .

But precisely for this reason, Italy needed a new constitutional reform, and so we are not properly talking of a proper «background» already in place, but simply of an interesting debate often confined in academic terms.[4]

Purpose constitutional amendment 
III.4
What is the purpose of the constitutional amendment and what is its position in the constitution?

The purpose of the constitutional amendments is the introduction of the “balanced budget” principle into the text of the Constitution itself, modifying art. 81 and, incidentally, other three provisions of our basic law: articles 97, 117 and 119.

Article 81 is central in this respect: in the Italian basic law, in the absence of a true “Economic Constitution” (according to the German definition of Wirtschaftsverfassung), the properly said fiscal rules can be found in several constitutional dispositions, strictly linked to those protecting social rights, but article 81 was and is the one directly related to the budget process, «budgets and expenditure accounts», and «new taxes and expenditures» (it is located in PART II, ORGANISATION OF THE REPUBLIC; TITLE I, PARLIAMENT; SECTION II, The Drafting of Laws of the Constitution).

The constitutional revision brings also changes to:

– Article 97 of the Constitution, the central article of the two related to the Public Administration, and in particular historically stating the «efficiency and the impartiality of administration» – by introducing the requirement that public administrations, in line with European Union directions, ensure “balanced budgets and public debt sustainability”

– Article 117, one of the central articles of the recently reformed TITLE V on REGIONS, PROVINCES, MUNICIPALITIES, and in particular devoted to the legislative powers of the central State and the regions, by amending paragraphs 1 and 2 and granting the State exclusive legislative power over the “harmonization of public budgets”, whereas it was previously shared between State and regions

– Article 119, again in Title V, on matters of regional and local finance, where more stringent constraints on the local authorities have been introduced.

It is interesting to notice that article 117 was the only one already containing a reference to «the constraints deriving from EU-legislation and international obligations» (in the absence of a proper “European clause” in the Constitution); it is now in Articles 97 and 119 (on the public administrations and territorial authorities) that reference to “economic and financial constraints derived from the European Union” was included (a reference lacking in Article 81).

Relationship with EU law        
III.5
Is the constitutional amendment seen as changing the relationship between national and European constitutional law?

See under Question IX.5 for the peculiar genealogy of the Balanced Budget Rule amendment.

But apart from that, and from the general points described also in that context in relation to the (non influential) parliamentary concerns on budgetary sovereignty, no other special elements are traceable to see the constitutional amendment as «changing the relationship between national and European constitutional law». On the contrary (see Question III.3), the point of the proper, or strict, interpretation, as opposed to the relaxation, of the balanced budget rule, has always been part of the Italian academic constitutional law debate.

Organic law      
III.6
Have there been changes to organic laws or other types of legislation that are of a different nature or level than ordinary legislation, in relation to Euro-crisis law or the budgetary process?

See Question III.1 on Constitutional Law n. 1/2012 and the “reinforced law” n. 243/2012.

Constitutional amendment and ordinary law       
III.7
If ordinary legislation was adopted in conjunction with a constitutional amendment, what is the relationship between the two?

See again Question III.1, for a brief explanation of the relationship between the aforementioned constitutional amendments, the Constitutional Law n. 1/2012, and the ‘reinforced’ (but formally ordinary) Law 243/2012.

Perception source of legal change   
III.8
In the public and political discussions on the adoption of ordinary legislation, what was the perception on the appropriate legal framework? Was the ordinary legislation seen as implementing national constitutional law, or Euro-crisis law?

Given also the political instability and the difficulties faced by Italy, and the replacement in 2011 of a political government with a ‘technical’ one with a clear pro-European flavour, the public perception was clearly of a period of direct implementation of «Euro-crisis law» measures.

Every single reform was clearly perceived in the framework of a broader European system of policies. There are several possible examples of this, including the parliamentary debates, that opened with (and often focused on) a discussion on the “political” future of the European Union.

In terms of specific reforms with adoption of ordinary legislation, there is for example the report produced by the Camera dei Deputati for its Members and for publication in its website, on the relevant «themes of parliamentary activity» of the current legislature, focusing on the budget reforms: http://leg16.camera.it/465?area=1&tema=496&Il+pareggio+di+bilancio+in+Costituzione. It is clearly contextualized in the terms of «Budget constraints and the European Union» («Vincoli di bilancio e Unione Europea»).

Miscellaneous
III.9
What other information is relevant with regard to Italy and to changes to national (constitutional) law?

No other relevant information.

[1]               N. Lupo, La revisione costituzionale della disciplina di bilancio e il sistema delle fonti, Relazione al Convegno “Costituzione e pareggio di bilancio” (Roma, 18 maggio 2012), in Il Filangieri. Quaderno 2011, Jovene, Napoli, 2012.

[2]               R. Dickmann, Brevi considerazioni sulla natura rinforzata della legge 24 dicembre 2012, n. 243, di attuazione del principio costituzionale del pareggio dei bilanci pubblici, in Federalismi.it, 6/2013, available at http://www.federalismi.it/ApplMostraDoc.cfm?content=Brevi+considerazioni+sulla+natura+rinforzata+della+legge+24+dicembre+2012,+n.+243,+di+attuazione+del+principio+costituzionale+del+pareggio+dei+bilanci+pubblici+-+stato+-+dottrina+-+&artid=22043#.Uq5Vb2TuKYU.

[3]               T. Groppi, I. Spigno, N. Vizioli, The Constitutional Consequences of the Financial Crisis in Italy, p. 94 ff.

[4]               See on this Groppi 94 ff.

Latvia

Nature national instruments 
III.1
What is the character of the legal instruments adopted at national level to implement Euro-crisis law (constitutional amendment, organic laws, ordinary legislation, etc)?

In general, the legal instruments which had to be adopted to implement Euro-crisis law were adopted in the form of (amendments to) ordinary laws and at times in the form of Regulations of the Cabinet of Ministers. Constitutional amendments have been proposed but have not been adopted. At times institutions have changed their internal procedures to ensure successful accommodation of the Euro-crisis law (e.g. internal regulations of the Ministry of Finances were changed to ensure that certain draft laws and plans are coordinated with international lenders).

An interesting discussion in Latvia concerned the question whether the state should create a new form of binding normative acts – Regulations of Ministers. This question arose as well in the discussions with the international lenders when the question of how to make the legal system more efficient was considered. However, all the discussions on this question ceded once the Committee of Constitutional Rights issued its opinion on the Constitutionality of Possible Regulations of Ministers.[1] It essentially stated that in order to implement such new form of regulations, the Constitution would have to be amended and law amendments would not suffice. Also, such regulations would be connected with additional risks and their usefulness was doubtful. The Committee suggested paying more attention to improving the efficiency of the adoption processes of the Regulations of the Cabinet of Ministers.[2]

Constitutional amendment     
III.2     
Have there been any constitutional amendments in response to the Euro-crisis or related to Euro-crisis law? Or have any amendments been proposed?

No amendments in the Constitution have yet been adopted. However, there have been proposals for such amendments which have not been revoked, even though their advancement in the Parliament is doubtful. Please see Question IX.4.

Constitutional context  
III.3
If national constitutional law already contained relevant elements, such as a balanced budget rule or independent budgetary councils, before the crisis that are now part of Euro-crisis law, what is the background of these rules?

Not applicable.

Purpose constitutional amendment       
III.4
What is the purpose of the constitutional amendment and what is its position in the constitution?

Please see Question IX.4.

Relationship with EU law           
III.5
Is the constitutional amendment seen as changing the relationship between national and European constitutional law?

There have not been discussions in the context of constitutional amendments being seen as changing the relationship between national and European constitutional law.

Organic law   
III.6
Have there been changes to organic laws or other types of legislation that are of a different nature or level than ordinary legislation, in relation to Euro-crisis law or the budgetary process?

No.

Constitutional amendment and ordinary law       
III.7
If ordinary legislation was adopted in conjunction with a constitutional amendment, what is the relationship between the two?

Not applicable.

Perception source of legal change     
III.8
In the public and political discussions on the adoption of ordinary legislation, what was the perception on the appropriate legal framework? Was the ordinary legislation seen as implementing national constitutional law, or Euro-crisis law?

In the case of Latvia during the time when the country received financial assistance and in general, the debtor-lender relationship was very unequal.[3] This was mainly due to the fact that Latvia does not have a big economy with a significant market share on the global markets. In addition, the negotiations with international lenders were not public. This all gave the Government both reasons and the possibility to argue that all the changes introduced during the crisis were forced upon the country from ‘outside’.

On the other hand, changes to the budgetary process and budgetary laws often preceded the necessity to implement Euro-crisis law requirements. For example, the Law on Fiscal Discipline was approved in the Parliament’s first reading before similar requirements resulted from EU law (for example, before the Fiscal Compact was signed). Thus, these changes were and should be seen more as an internal reaction to the crisis, than as implementation of external – Euro-crisis –law. This was so as well partly due to the fact that the crisis in Latvia started comparatively early and ‘was over’ even before the newest measures were introduced at the European level.

Miscellaneous
III.9
What other information is relevant with regard to Latvia and to changes to national (constitutional) law?

Since Latvia joined the Eurozone on 1 January 2014, discussions before accession to Eurozone might be interesting. The Parliament on 1 January 2012 adopted the Law on the Order of Implementing the Euro. From the annotation of this law and the minutes of the Parliamentary session of 31 January 2013 it follows that the legislature by adopting this law has supported the Government’s objective to implement the euro starting from 1 January 2014.[4] In the second (and final) reading Prime Minister Valdis Dombrovskis emphasized the benefits the euro will give to Latvia in his opinion:

          Accession to the euro as a logical step was foreseen already in the Latvian accession Treaty. Latvia does not have an ‘opt-out’ concerning this question.

          Latvia fulfils all the Maastricht criteria and has joined the Exchange Rate Mechanism II already in 2005 by pegging Lats (LVL) to euro (EUR) and determining a narrow floating possibility (+/-1%). However there were problems with the Maastricht criteria and Latvia had to postpone joining the euro twice.

          Since 2004 joining the euro has been one of the aims mentioned in all Government declarations.

          The irresponsible macroeconomic policy has cost us dearly and in 2008-2010 Latvia lived through the worst economic crisis in the whole EU. The implementation of the euro was determined as one of the objectives of the strategy for overcoming crisis with support inter alia from the social partners – trade unions and the Employers’ Confederation of Latvia. The Euro is the next logical step in exercising our macroeconomic policy. Already at the moment we in fact are importing the monetary policy of the Eurozone without being in it and without participating in the decision-making and with paying the exchange rates.

          The introduction of the Euro will achieve lower interest rates, more rapid inflow of investments, increase in export, reduction of costs of currency exchange and better resilience to economic shocks.

          The ECB in the case of necessity ensures liquidity for Eurozone banks. In 2008 Latvia was forced to ensure Parex Bank with liquidity from budgetary means. If the euro would have already been implemented, the ECB would have ensured Parex liquidity and the crisis would have been less harsh for Latvia.

          The main argument against the euro which has been mentioned is the renouncement of independent monetary policy. It is true that after joining the euro the monetary policy will be determined by the ECB. However already now the LVL is pegged to the euro and in fact Latvia is importing the monetary policy of the Eurozone. After joining the euro, essentially nothing will change in this matter. If we would like to have total monetary independence we would need to unpeg the LVL from the euro. In such case it is sure that the LVL would lose its value. In other terms independent monetary policy means de facto devaluation of the LVL which would come together with inflation and high interest rates.

          Concerning the possible collapse of the Eurozone he emphasized that the EU has done much to deal with the causes of the crisis and to overcome it. Many initiatives have been adopted in order to strengthen the EU economic governance and the EFSF and ESM were created. In general the Eurozone will come out of this crisis stronger and with better governance than ever before.

          The prices in the countries that have recently joined the euro have increased insignificantly.

          Joining the euro has as well a geopolitical aspect. By joining we strengthen our affiliation to the family of leading West-European countries. Followingly, also our role in the EU and in the world will grow.[5]

 

On 5 June 2013 the ECB and the European Commission confirmed and accepted Latvia joining the Eurozone in 2014.[6] And since 1 January 2014 Latvia belongs to the Eurozone.

[1] Committee of Constitutional Rights, ‘Viedoklis par iespējamo ministra noteikumu satversmību’, 31 May 2011. Available under: http://www.president.lv/images/modules/items/KTKT_viedoklis_01_06_11.pdf (last visited 25 June 2013)

[2] Ibid, p. 22-23.

[3] Samuel Dahan, ‘The EU/IMF Financial Stabilisation Process in Latvia and Its Implications for Labour Law and Social Policy’, ILJ 41(3), pp. 305-327, p. 308.

[4] Annex XIX Informatīvais ziņojums Finanšu ministrija 010313, p. 1.

[5] LR Ministru kabinets, ‘Ministru prezidenta Valda Dombrovska runa pirms Saeimas balsojuma par eiro ieviešanas likumprojektu’, http://www.mk.gov.lv/mp/runas-pazinojumi/dombrovska-runas/310113-MP-runa/?print (last visited 23 June 2013).

[6] DELFI, Vēsturisks lēmums: EK un Eiropas Centrālā banka Latvijai ver durvis uz eiro ieviešanu, 5 June 2013. Available under:  http://www.delfi.lv/bizness/biznesa_vide/vesturisks-lemums-ek-un-eiropas-centrala-banka-latvijai-ver-durvis-uz-eiro-ieviesanu-plkst-1444.d?id=43377243 (last visited 23 June 2013).

Lithuania

Nature national instruments      
III.1
What is the character of the legal instruments adopted at national level to implement Euro-crisis law (constitutional amendment, organic laws, ordinary legislation, etc)?

The Fiscal Compact was mainly implemented by the Constitutional Law on the Implementation of the Fiscal Treaty, which was adopted on 6 November 2014. The peculiarity of the Constitutional Law is that it is not considered to be a part of the Constitution, therefore theoretically the Law still must comply with the Constitution, although it has a higher legal power than an ordinary law. It differs from an ordinary law by the procedure of its adoption (which requires a qualified majority vote, ie more than half of all members of Seimas) and amendment (a majority of at least 3/5 members of Seimas). Art. 69 (3) of the Constitution also requires adopting a separate law providing for a list of constitutional laws (see also question IX.2)

A few amendments were also made to the Law on Fiscal Discipline (also see question II.1). Most significant amendments were made to the Law on Budget Structure by a normal act of Seimas.

The ESM treaty was ratified by law, and implemented by the Government adopting a decision.[1] (see question VIII.6)

Constitutional amendment   
III.2    
Have there been any constitutional amendments in response to the Euro-crisis or related to Euro-crisis law? Or have any amendments been proposed?

No. Prior to ratification of the Fiscal Compact the Department of European Law of the Ministry of Justice issued an advice to Seimas[2] that there was no ground to believe that there could be a conflict between the Fiscal Compact and the Constitution.

The Department reasoned that the Fiscal Compact merely specified in more detail the constitutional principle that it was necessary to balance the expenditure on social needs with the budgetary capacity.

The main focus of the opinion was the ruling of the Constitutional Court of 2002 where the Court had emphasized that the budgetary estimates should ensure a balance between the social needs and the budgetary capacity; that it was an exclusive duty of the Government to draft the budget just like discussing and adopting the budget was an exclusive duty of the Seimas, and that these competences were not transferrable.[3]

With respect to the corrective measures required by the Fiscal Compact Treaty, the Department of European Law did not think that the need to take into consideration the opinion of the European Commission in adjusting the budget in any way contradicted the Constitution. The Department also did not consider that the Fiscal Compact Treaty requirement to appoint an independent fiscal institution affected the exclusive budgetary competence of either the Parliament or the Government.

With respect to the specific Fiscal Treaty rules and the requirement to have a balanced budget the Department reasoned that these could be taken as a part of the principle accepted by the Constitutional Court that the budget needs to be planned in view of the current economic and social status, needs and capacities of the society and the State, the State‘s financial resources and its international obligations.

The department therefore did not think that there were any issues in the Fiscal Compact that could be in conflict with the Constitution, however, as the final conclusion on this issue could only be made by the Constitutional Court, it was preferable to make a reference on this issue.[4]

The Seimas, however, did not feel that the issue was as topical as to warrant a reference: only one speaker, Vytenis Andriukaitis, spoke in favour of this idea, however, clearly it was outside of the parties’ agenda of priorities.[5] Instead, a decision was taken to speed up the ratification procedure. In total the discussions over the Treaty took less than one hour after which it was ratified.[6]

Contrary to the opinion of the European Law Department, a former president of the Constitutional Court and currently a Judge at the European Court of Human Rights prof. dr. Egidijus Kūris had expressed his view publicly that in order to accommodate the implementation of the Fiscal Compact it was necessary to reconsider a number of articles of the Constitution – especially those concerning the composition of the budget and collection of taxes. His view was that a reference to the Constitutional Court was necessary before ratifying the Treaty, as it would enable to identify what, if any, constitutional amendment was needed.[7]

Constitutional context
III.3
If national constitutional law already contained relevant elements, such as a balanced budget rule or independent budgetary councils, before the crisis that are now part of Euro-crisis law, what is the background of these rules?

The Constitution does not contain explicit provisions touching on the principles provided for by the Fiscal Compact.  

However, the Constitutional Court has developed a concept which relates to the principle of a balanced budget. The Court accepts that the constitutional concept of State budget and the principle of responsible governance imply the need to form a realistic budget, and that the projected income and expenditure must correspond to the needs and possibilities of the society and the State.[8] Therefore the Court emphasizes that the Seimas and the Government, when in need to restrict the budgetary expenditure, are under a duty to take into consideration the state functions established in the Constitution, the existing economic and social situation, the needs and possibilities of the society and the State, the available and potential financial resources and state obligations (inter alia, international ones). The Court also accepted the principle requiring balanced assessment of the social needs and the fiscal ability of the State in its ruling concerning the constitutional model of healthcare.[9]

In this jurisprudence the Court further restricted the scope of the State’s ability to downsize the budgetary expenditure to the need to comply with the following principles:

  1. The salaries of the State servants can be reduced for no longer than one year; the budget of the next year should be adopted in view of the status of the economy. One year after adoption, the decision to reduce the salaries must be reconsidered.
  2. The principles of the rule of law, equality, justice, proportionality and legitimate interests and legal certainty, social solidarity and other imperatives must be taken into consideration. The social guarantees may be reduced only as an ultima ratio.
  3. Reduction of the salaries of the State servants and pensions is allowed only if the State is in a severe financial crisis. Upon an official finding that the State is in such a crisis, the Seimas may reduce the salaries and pensions. However, the reduction must be temporary and compensations must follow subsequently.

The Constitutional Court so far did not have a chance to express its views on the doctrine of the independence of the National State Audit Office.

Purpose constitutional amendment 
III.4
What is the purpose of the constitutional amendment and what is its position in the constitution?

Not applicable.

Relationship with EU law        
III.5
Is the constitutional amendment seen as changing the relationship between national and European constitutional law?

Not applicable.

Organic law      
III.6
Have there been changes to organic laws or other types of legislation that are of a different nature or level than ordinary legislation, in relation to Euro-crisis law or the budgetary process?

Yes. The Constitutional Law on the Implementation of the Fiscal Treaty No. XIIP-1761(2) was adopted on 6 November 2014. Its content is addressed above under part IX. The Law is of a different level than ordinary legislation as it requires a stricter, longer and a more complicated amendment procedure. The constitutional law is adopted if more than half of all members of the Seimas (more than 71) vote for it. Once adopted, it can be amended if at least 3/5 of all members of the Seimas vote in favour.

The Constitutional Law on the Implementation of the Fiscal Treaty was adopted by 103 members of Seimas voting for, 1 against and 2 abstending. The Law was thus included in the list of Constitutional Laws, which includes 9 other Laws: the Law on State Language, The Law on State Heraldic Arms and other Heraldic Arms and Signs, the Law on State Flag and other Flags, the Law on State Anthem, the Law on Referendum, the Law on the Approval, Entry into Force and Implementation of the Code of Elections, the Law on Citizen‘s Legislative Initiative, the Law on Petitions, the Law on State of Emergency.

Constitutional amendment and ordinary law       
III.7
If ordinary legislation was adopted in conjunction with a constitutional amendment, what is the relationship between the two?

Not applicable.

Perception source of legal change   
III.8
In the public and political discussions on the adoption of ordinary legislation, what was the perception on the appropriate legal framework? Was the ordinary legislation seen as implementing national constitutional law, or Euro-crisis law?

With little discussions as there were on the issue, there was a clear understanding among the Members of Parliament and the public that the rules were of a European origin and were adopted in order to implement the eurocrisis law.

Miscellaneous
III.9
What other information is relevant with regard to Lithuania and to changes to national (constitutional) law?

No other relevant information.

 

 

 

[1] Lietuvos Respublikos Vyriausybės nutarimas Dėl LR dalyvavimo Europos Stabilumo Mechanizmo valdytojų taryboje ir direktorių valdyboje. Europos stabilumo mechanizme tvarkos aprašas [Decision of the Government of Lithuania on Lithuania’s participation at the European Stability Mechanism Board of Governors and the Board of Directors] 2015-01-01, TAR Nr. 2902.

[2] Europos teisės departamento išvada įstatymo dėl Belgijos Karalystės, Bulgarijos Respublikos, Danijos Karalystės, Vokietijos Federacinės Respublikos, Estijos Respublikos, Airijos, Graikijos Respublikos, Ispanijos Karalystės, Prancūzijos Respublikos, Italijos Respublikos, Kipro Respublikos, Latvijos Respublikos, Lietuvos Respublikos, Kiuksemburgo Didžiosios Hercogystės, Vengrijos, Maltos, Nyderlandų Karalystės, Austrijos Respublikos, Suomijos Respublikos , Portugalijos Respublikos, Rumunijos, Slovėnijos Respublikos, Slovakijos Respublikos, Suomijos Respublikos ir Švedijos Karalystės sutarties dėl stabilumo, koordinavimo ir valdysenos ekonominėje ir pinigų sąjungoje ratifikavimo projektui, XIP-4491 [The conclusion of the Department of European Law on the draft Law Ratifying the Fiscal Compact], 2012-06-05, Nr. S-2012-4726. Department of the European Law under the Ministry of Justice is an institution which advices the Government and Seimas on issues concerning implementation of European law. It also represents the Government in cases considered by the EU Court of Justice.

[3] Lietuvos Respublikos Konstitucinio Teismo nutarimas Dėl valstybės ir savivaldybių biudžetų rodiklių [Ruling of the Constitutional Court of the Republic of Lithuania on the Fiscal Indicators of State and Municipal Budgets, Nr. 25/01, 2002-01-14. An official translation is available at: http://lrkt.lt/en/court-acts/rulings-conclusions-decisions/171/y2002

[4] Europos Teisės Departamento išvada LR Seimo Teisės ir teisėtvarkos komitetui įstatymo dėl Belgijos Karalystės, Budgarijos Respublikos, Danijos Karalystės, Vokietijos Federacinės Respublikos, Estijos Respublikos, Kipro Respublikos, Latvijos Respublikos, Lietuvos Respublikos, Liuksemburgo Didžiosios Hercogystės, Vengrijos, Maltos, Nyderlandų Karalystės, Austrijos Respublikos, Lenkijos Respublikos, Portugalijos Respublikos, Rumunijos, Slovėnijos Respublikos, Slovakijos Respublikos, Suomijos Respublikos ir Švedijos Karalystės sutarties dėl stabilumo, koordinavimo ir valdysenos ekonominėje ir pinigų sąjungoje ratifikavimo projektui, [European Law Department Conclusion to Seimas on the draft Law on the Ratification of the TSCG, 5 June 2012, no S-2012-4726.]

[5] Seimo rytinio posėdžio stenograma, [Seimas‘ morning session transcript] 2012-06-28.

[6] Ibid.

[7] Fiskalinės drausmės paktas į Lietuvos Konstituciją nesikėsins? [Will the Fiscal Treaty threaten the Constitution of Lithuania?] www.Veidas.lt , 2012-03-15.

[8] Rulings of the Constitutional Court of 14 January 2002 and of 15 February 2013, and an interpretative decision of 16 April 2014. An academic summary is presented by T. Birmontienė, Konstitucinė valstybės biudžeto doktrina [The Constitutional Doctrine on the State Budget], Konstitucinė Jurisprudencija 2012, vol. 3 (27) p. 94-119.

[9] Ruling of the Constitutional Court of  11 July 2002 on the funding of healthcare system, longterm funding of the systems of research and education, drafting and composition of the State Budget; Ruling of the Constitutional Court of 16 May 2013 on compliance with the Constitution of a number of provisions of the Law on Social Insurance, the Law on Health Insurance, the Law on Social Insurance of Maternity and Sickness. All official translations in English are available at www.lrkt.lt

Luxembourg

Nature national instruments      
III.1
What is the character of the legal instruments adopted at national level to implement Euro-crisis law (constitutional amendment, organic laws, ordinary legislation, etc)?

Euro-crisis law instruments were adopted by ordinary legislation.

Constitutional amendment   
III.2    
Have there been any constitutional amendments in response to the Euro-crisis or related to Euro-crisis law? Or have any amendments been proposed?

No constitutional amendment in response to the Euro-crisis law has been adopted.

Constitutional context
III.3
If national constitutional law already contained relevant elements, such as a balanced budget rule or independent budgetary councils, before the crisis that are now part of Euro-crisis law, what is the background of these rules?

No such rules exist in the Constitution of Luxembourg.

Purpose constitutional amendment 
III.4
What is the purpose of the constitutional amendment and what is its position in the constitution?

No constitutional amendment has been adopted.

Relationship with EU law        
III.5
Is the constitutional amendment seen as changing the relationship between national and European constitutional law?

No.

Organic law      
III.6
Have there been changes to organic laws or other types of legislation that are of a different nature or level than ordinary legislation, in relation to Euro-crisis law or the budgetary process?

No.

Constitutional amendment and ordinary law       
III.7
If ordinary legislation was adopted in conjunction with a constitutional amendment, what is the relationship between the two?

Not applicable.

Perception source of legal change   
III.8
In the public and political discussions on the adoption of ordinary legislation, what was the perception on the appropriate legal framework? Was the ordinary legislation seen as implementing national constitutional law, or Euro-crisis law?

There was no in-depth discussion about the question which kind of legal instruments are appropriate to adopt Euro-crisis law. The only discussion taken place is whether the ‘golden rule’ should be put into the Constitution or not. The former government under Jean-Claude Juncker, consisting of the Christian Democrats (CSV) and the Social Democrats (LSAP), was of the opinion that it should not become part of the constitution because political understandings should not form part of a country’s guiding principles such as set out in the Luxembourg Constitution, but should be written into a ‘separate law’ which would include a rule which requires a two-third-majority to amend this law.[1] The present legislative proposal on the implementation of the golden rule provides that the rule is written into the ordinary legislation of Luxembourg.

Miscellaneous
III.9
What other information is relevant with regard to Luxembourg and to changes to national (constitutional) law?

No other relevant information.


 


[1] See the report ‘Juncker in Luxembourg Parliament address’ on wort.lu, 15 December 2011, http://www.wort.lu/en/view/juncker-in-luxembourg-parliament-address-4f60bc42e4b047833b93768b

Malta

Nature national instruments
III.1
What is the character of the legal instruments adopted at national level to implement Euro-crisis law (constitutional amendment, organic laws, ordinary legislation, etc)?

Euro-crisis instruments are adopted by ordinary legislation. The only exception is the approval of the amendment of Article 136 (3) TFEU which is based on an order of the Prime Minister and is classified as subsidiary legislation (see question V.2).

Constitutional amendment
III.2
Have there been any constitutional amendments in response to the Euro-crisis or related to Euro-crisis law? Or have any amendments been proposed?

No, but see question VII.2 on a proposal to write a new fiscal clause into the Constitution.

Constitutional context  
III.3
If national constitutional law already contained relevant elements, such as a balanced budget rule or independent budgetary councils, before the crisis that are now part of Euro-crisis law, what is the background of these rules?

No such rules exist in the Constitution of Malta.

Purpose constitutional amendment       
III.4
What is the purpose of the constitutional amendment and what is its position in the constitution?

Not applicable.

Relationship with EU law
III.5
Is the constitutional amendment seen as changing the relationship between national and European constitutional law?

Not applicable.          

Organic law   
III.6
Have there been changes to organic laws or other types of legislation that are of a different nature or level than ordinary legislation, in relation to Euro-crisis law or the budgetary process?

No.

Constitutional amendment and ordinary law       
III.7
If ordinary legislation was adopted in conjunction with a constitutional amendment, what is the relationship between the two?

Not applicable.

Perception source of legal change
III.8
In the public and political discussions on the adoption of ordinary legislation, what was the perception on the appropriate legal framework? Was the ordinary legislation seen as implementing national constitutional law, or Euro-crisis law?

There was no specific discussion about the appropriate legal framework for Euro-crisis law. However, the attempt of the government to adopt the Fiscal Compact by an order of the Prime Minister was not accepted by Parliament. This is why the government decided to ratify the Fiscal Compact by the ordinary legislative procedure to adopt statutory law. The discussion shows that Parliament is eager to be adequately involved in the ratification procedure.

Miscellaneous
III.9
What other information is relevant with regard to Malta and to changes to national (constitutional) law?

Not applicable.

Netherlands

Nature national instruments      
III.1
What is the character of the legal instruments adopted at national level to implement Euro-crisis law (constitutional amendment, organic laws, ordinary legislation, etc)?

The instruments that have been adopted have either been aligned with the existing legal frameworks or on the basis of ordinary legislation.

Constitutional amendment   
III.2    
Have there been any constitutional amendments in response to the Euro-crisis or related to Euro-crisis law? Or have any amendments been proposed?

No.

Constitutional context
III.3
If national constitutional law already contained relevant elements, such as a balanced budget rule or independent budgetary councils, before the crisis that are now part of Euro-crisis law, what is the background of these rules?

The budget rights of parliament are vested in constitutional law. This has been described in the answer to question II.1.

Purpose constitutional amendment 
III.4
What is the purpose of the constitutional amendment and what is its position in the constitution?

Not applicable.

Relationship with EU law        
III.5
Is the constitutional amendment seen as changing the relationship between national and European constitutional law?

Not applicable.

Organic law      
III.6
Have there been changes to organic laws or other types of legislation that are of a different nature or level than ordinary legislation, in relation to Euro-crisis law or the budgetary process?

Not applicable.

Constitutional amendment and ordinary law       
III.7
If ordinary legislation was adopted in conjunction with a constitutional amendment, what is the relationship between the two?

Not applicable.

Perception source of legal change   
III.8
In the public and political discussions on the adoption of ordinary legislation, what was the perception on the appropriate legal framework? Was the ordinary legislation seen as implementing national constitutional law, or Euro-crisis law?

The Wet HOF is the only real new law that has been introduced to implement EU crisis measures.  The perception of this law within The Netherlands is not dominantly perceived as a measure that implements Euro-crisis law. The political debates do mention this dimension but somehow this is absent in the public debates. The public debates mainly frame it as a battle between central government and local governments.[1]

Miscellaneous
III.9
What other information is relevant with regard to The Netherlands and to changes to national (constitutional) law?

The Parliamentary motion Brinkhorst that was adopted in 1980 stipulated that the interpretation of the Dutch Constitution should always be made in a way that the EU integration process is not frustrated.[2] This motion has recently been repealed by Parliamentary motion Van der Staaij that stipulates that interpretation of the Dutch Constitution should exclusively be made on the basis of the intentions of the Dutch legislator.[3] The government response to this repeal is that neither the motion Brinkhorst nor the recent repeal of that motion change any of the EU relevant legal obligations for The Netherlands that came into existence autonomously as a direct consequence of the accession to the European Union.[4]

[1] For example, http://www.binnenlandsbestuur.nl/financien/nieuws/dijsselbloem-noemt-kritiek-op-wet-hof-achterhaald.9014113.lynkx

[2] 02 Treaty 136 – Parliamentary motion Brinkhorst 1980

[3] 02 TFEU 136 – Parliamentary repeal motion Brinkhorst

[4] 02 Treaty 136 – Government response to Parliamentary repeal of motion Brinkhorst

Poland

Nature national instruments   
III.1
What is the character of the legal instruments adopted at national level to implement Euro-crisis law (constitutional amendment, organic laws, ordinary legislation, etc)?

Changes into the Constitution were not introduced and are not planned. Only the ordinary legislation is amended or new pieces of ordinary legislation prepared.

Constitutional amendment
III.2    
Have there been any constitutional amendments in response to the Euro-crisis or related to Euro-crisis law? Or have any amendments been proposed?

No amendments were proposed so far. The Constitution will need an amendment when Poland will be joining the Eurozone.

Constitutional context    
III.3
If national constitutional law already contained relevant elements, such as a balanced budget rule or independent budgetary councils, before the crisis that are now part of Euro-crisis law, what is the background of these rules?

The Polish Constitution and the Public Finances Act (ustawa o finansach publicznych) enshrine fiscal rules on public debt.

Art. 216 par. 5 PC states that:

It shall be neither permissible to contract loans nor provide guarantees and financial sureties which would engender a national public debt exceeding three-fifths of the value of the annual gross domestic product. The method for calculating the value of the annual gross domestic product and national public debt shall be specified by statute.

The Polish Constitution enshrined this provision since its enactment in 1997.

Moreover, Art. 220 par. 1& 2 provide that:

The increase in spending or the reduction in revenues from those planned by the Council of Ministers may not lead to the adoption by the Sejm of a budget deficit exceeding the level provided in the draft Budget.

The Budget shall not provide for covering a budget deficit by way of contracting credit obligations to the State’s central bank.

Art. 86 of the Public Finances Act (2009) provides three security thresholds:

       if the public debt exceeds 50%GDP, the Council of Ministers must prepare the Budgetary Act, where the relationship between the budgetary deficit and the budgetary income is not higher than in the current year (similarly in the regional budgets);

       If the public debt exceeds 55%GDP, the Council of Ministers must prepare such Budgetary Act, where a deficit is not foreseen or the relationship between the deficit and the GDP at the end of the year is lower than currently, with a simultaneous limitation on the deficits of the regional entities. The Council of Ministers must present to the Sejm a reform programme aiming at decreasing the relationship between the public debt and the GDP;

       If the public debt exceeds 60%GDP, the public finances units do not have a right to give assurances or guarantees, the Council of Ministers, within a month after the relationship between the public debt and the GDP is revealed, must present a reform programme, leading to a decrease of the public debt under 60%GDP and the Budgetary Act for the next year and the budgets of the regional units may not foresee any deficit.

Law on Public Finances contains also a ‘disciplining expenditure rule’ (Art.112a) limiting the growth of certain budget expenditure to forecast CPI inflation rate increased by 1 percentage point, which has been replaced by the ‘stabilizing fiscal rule’ (Cf. Question VII.7).

Purpose constitutional amendment 
III.4
What is the purpose of the constitutional amendment and what is its position in the constitution?

Not relevant for Poland.

Relationship with EU law 
III.5
Is the constitutional amendment seen as changing the relationship between national and European constitutional law?

Not relevant for Poland.

Organic law
III.6
Have there been changes to organic laws or other types of legislation that are of a different nature or level than ordinary legislation, in relation to Euro-crisis law or the budgetary process?

Not relevant for Poland.

Constitutional amendment and ordinary law      
III.7
If ordinary legislation was adopted in conjunction with a constitutional amendment, what is the relationship between the two?

Not relevant for Poland.

Perception source of legal change 
III.8
In the public and political discussions on the adoption of ordinary legislation, what was the perception on the appropriate legal framework? Was the ordinary legislation seen as implementing national constitutional law, or Euro-crisis law?

As the parliamentary debates on the Treaty Amendment, the Fiscal Compact and the Six Pack show (see the relevant questions in the questionnaire), the perception was that it is an implementation of Euro-crisis law. This is even more visible in the fact that no constitutional amendments were introduced and the only planned changes concern infra-constitutional law (e.g. the Public Finances Act). Yet, the new stabilising fiscal rule seems to serve both improving the national financial frameworks and implementing the directive 2011/85/EU.[1]

Miscellaneous
III.9
What other information is relevant with regard to Poland and to changes to national (constitutional) law?

No other relevant information.

[1]  Cf. Uzasadnienie do zmiany ustawy o finansach publicznych (Justification for the amendment of the Public Finances Act, see attachment), p.3.

Portugal

Nature national instruments  
III.1
What is the character of the legal instruments adopted at national level to implement Euro-crisis law (constitutional amendment, organic laws, ordinary legislation, etc)?

The measures implementing the guidelines of the Memorandum of Understanding assume, in their majority, the shape of ordinary legislation. In what concerns the measures implementing the Six-Pack, however, they have been mostly enshrined in the recently altered framework budget law, hence gaining the statute of law of enhanced value.

Constitutional amendment          
III.2    
Have there been any constitutional amendments in response to the Euro-crisis or related to Euro-crisis law? Or have any amendments been proposed?

According to articles 159 and 285 of the Constitution only members of parliament can present amendments.

 

In June 2014, Members of Parliament from PPD/PSD Madeira presented a proposal for Constitutional amendments. In July 2014 Members of Parliament of CDS/PP Madeira presented a proposal too.

 

Proposed amendments include the extinction of the Constitutional Court (turning it into a specialised section of the Supreme Court of Justice), the extinction of the figure of the Portuguese Republic’s Representative, introduced by the constitutional amendment of 2004, the extinction of the National Electoral Commission, as well as the Regulatory Authority for Media and Communications, extension of the mandate of the President of the Republic to ten years (currently 5 years), the independency of the fiscal and financial system, the creation of regional parties and reduction of the number of members of the Parliament, amongst others.

 

Parliament has created a commission to analyse and discuss the proposed amendments in late September 2014. The Commission will work for 90 days. It is composed by 23 Members of Parliament: 11 MP from PPD/PSD, 7 PS, 2 CDS/PP, 1 Communist Party (PC), 1 Left Bloc (BE) and 1 Ecologist Party (PEV).

 

These amendments do not seem to have been proposed as a reaction to the Euro-crisis. Neither PPD/PSD nor CDS/PP have expressed support to neither of the projects. After several failed attempts to create momentum towards a Constitutional revision this particular project will not allow for a deep reform as envisaged by Passos Coelho (see question X.1).

 

According to the Portuguese Constitution the Parliament can amend the Constitution only every five years counting from the date of publication of the last ordinary reform.[1] Before the 5 years term any changes must take place under the auspices of an extraordinary amendment, which requires 4/5 of the MP to vote positively for its approval.

Constitutional context   
III.3
If national constitutional law already contained relevant elements, such as a balanced budget rule or independent budgetary councils, before the crisis that are now part of Euro-crisis law, what is the background of these rules?

Art. 105º/4 of the Portuguese Constitution already enshrines a ‘balanced budget’ rule. It is the most important budgetary rule in terms of substance, both for planning purposes and for purposes of enforcing financial control of the Central Administration. It is nevertheless a substantive – rather than formal – balance budget rule. It means that, in abstract, the planning and implementation of public financial management, the predicted and effective costs must be covered by the predicted and effective revenue provided for in the Budget. This rule was present already in the first version of the Constitution, in 1976.

 

Moreover, article 167º/2 of the Constitution enshrines, for the purposes of budgetary stability and balance, a ‘break-rule’: MPs, parliamentary groups, the Legislative Assemblies of the autonomous regions and groups of voters may not submit legislative proposals which would involve, in the current financial year in question, increased spending or reduced revenues, as opposed to the ones provided in the Budget. This rule was introduced during the fourth constitutional amendment, in 1997.

The Government did push for a constitutional amendment that would enshrine the “golden-rule” in the Constitution rather than an alteration to the LOE. However, PS made it clear that it would never support it. On the implementation of the Fiscal Compact vis-à-vis article Art. 105º/4 of the Portuguese Constitution see question VII.6.

 

Purpose constitutional amendment      
III.4
What is the purpose of the constitutional amendment and what is its position in the constitution?

See question III.2.

Relationship with EU law           
III.5
Is the constitutional amendment seen as changing the relationship between national and European constitutional law?

See question III.2.

Organic law      
III.6
Have there been changes to organic laws or other types of legislation that are of a different nature or level than ordinary legislation, in relation to Euro-crisis law or the budgetary process?

See question VII.6. Shortly before the agreements on the Six-Pack, Portugal had made a change to the law (LEO) establishing the framework for the budgetary procedure (Law 22/2011, 20th May). There were further changes to the LEO, still in 2011 (Law 52/2011, 13th October, and Law 64-C/2011, 30th December. Due to the intense controversy raised by the ‘golden-rule’, its introduction was postponed until the beginning of 2013. The government’s intention was to inscribe the so-called ‘golden-rule’ directly in the Constitution, so that its amendment would also require a qualified majority; however, it was enshrined instead in the amendment to the law establishing the framework for the budgetary procedure. This Framework law is one of enhanced value, according to article 112º/3 of the Constitution.

Constitutional amendment and ordinary law    
III.7
If ordinary legislation was adopted in conjunction with a constitutional amendment, what is the relationship between the two?

There was no ordinary legislation adopted in conjunction with a constitutional amendment.

Perception source of legal change          
III.8
In the public and political discussions on the adoption of ordinary legislation, what was the perception on the appropriate legal framework? Was the ordinary legislation seen as implementing national constitutional law, or Euro-crisis law?

Between 2011-2013, ordinary law instruments discussed and approved were seen, in their great majority, as mere consequences of the obligations resulting from the MoU and therefore “Euro-crisis” law.

Parliamentary debates on ordinary legislation are noticeable about MPs interpretation of the MoU. The elimination of golden shares[2], labour law reviews,[3] cancelling intercity railway investments,[4] these were among the very first measures to be discussed right after elections in 2011. However, hundreds of parliamentary debates on approval and alterations of ordinary legislation followed and they all either invoked – as a legal basis -, or discussed – as if to clarify -, the terms in which the MoU bound Portugal to alter its laws. Discussions were heated. The MoU was often referred to as “pact of aggression” by lef-wing party PCP.[5] PS, the opposition party with biggest representation in the parliament, rarely agreed on austerity measures.

 

The Constitutional Court became, since 2011, the centre of public attention (including of the media) having been awarded “national figure of the year” in 2013 by Newspaper “Expresso”. Its decisions have been broadly discussed by the Prime Minister, members of government, opposition parties, economists and the general public. Open criticism by the government has been labelled as defiant of separation of powers.[6]To its rulings have been attributed macroeconomic effects and fiscal alterations – especially the ones on Budget Law. It has deeply influenced the relations between Portugal and the troika. “Idolized and hated” it created Crisis-Jurisprudence, with its rulings sometimes pointing even to alternative political solutions.[7] It created a movement pro and against the Court and ignited passionate discussions on the Constitution amongst scholars in the public sphere.[8]

 

In terms of public opinion, it is quite clear that the changes in legislation are perceived as direct consequence of the Troika’s “intervention” (on related public demonstrations see question X.7).[9]

 

Miscellaneous
III.9
What other information is relevant with regard to Portugal and to changes to national (constitutional) law?

No other relevant information.

[1] The last reform was in 2005. See: http://www.tribunalconstitucional.pt/tc/crp-revisoes.html

[2] Parliamentary debate 3 August 2011, available at http://debates.parlamento.pt/page.aspx?cid=r3.dar&diary=s1l12sl1n11-0066&type=texto&q=troika&sm=p.

[3] Parliamentary debate 31 August, 2011, available at http://debates.parlamento.pt/page.aspx?cid=r3.dar&diary=s1l12sl1n13-0056&type=texto&q=troika&sm=p

[4] Parliamentary debate 9 September, 2011, available at http://debates.parlamento.pt/page.aspx?cid=r3.dar&diary=s1l12sl1n17-0057&type=texto&q=troika&sm=p.

[5] As an example Parliamentary debate 8 March 2012, available at http://debates.parlamento.pt/page.aspx?cid=r3.dar&diary=s1l12sl1n82-0046&type=texto&q=troika&sm=p.

[6] Jorge Reis Novais, “Em defesa do Tribunal Constitucional, Resposta aos críticos”, Almedina, 2014, page 7-17.

[7] Alexandre Sousa Pinheiro, “Jurisprudência de Crise: Tribunal Constitucional (2011-2013) in Observatório

[8] For a view on the clash over the Constitutional Court rulings “O Tribunal Constitucional e a Crise, Ensaios críticos”, Almedina, 2014 and “Em defesa do Tribunal Constitucional, Resposta aos críticos”, Jorge Reis Novais, Almedina, 2014.

[9] http://debates.parlamento.pt/page.aspx?cid=r3.dar&diary=s1l12sl1n66-0008&type=texto&q=troika&sm=p

Romania

Nature national instruments
III.1
What is the character of the legal instruments adopted at national level to implement Euro-crisis law (constitutional amendment, organic laws, ordinary legislation, etc)?

Euro-crisis law has primarily been implemented through ordinary legislation (e.g. the Fiscal Responsibility Law). In some cases, the Government adopted the implementing legislation using the Emergency Ordinance procedure adopting legal acts with the same power as ordinary laws issued by the Parliament, subject to the subsequent approval of Parliament. In other cases, the Government subjects measures to a confidence vote procedure (see on this procedure in Romania section III.9) before the united chambers of the Parliament for the legislative proposals, thus enabling the Parliament to approve the act before coming into force, but without the possibility to amend it, only to approve or reject it. In both instances the adopted acts have the legal force of an ordinary law in the national legal system, being assimilated to the ‘law’ as normative act of the Parliament.

Please refer to section III.9 below.

Constitutional amendment     
III.2     
Have there been any constitutional amendments in response to the Euro-crisis or related to Euro-crisis law? Or have any amendments been proposed?

Two constitutional revisions were initiated during the crisis period – in 2011 and 2014. The 2014 constitutional revision proposal is currently pending in the Parliament.

On the political context of these revision proposals, see section I above.

The first, 2011 constitutional reform was initiated by the President on the proposal of the Government after the positive results of the consultative referendum of November 22, 2009 on transition to unicameral parliament and reduction of MP seats to a maximum of 300. The President, exercising the attributes stipulated in Article 90 of the Constitution, initiated the referendum.[1] As the referendum was only a consultative one, a revision of the constitution had to be initiated to enforce its results (see section III.4 below). The constitutional legislative project of 2011 did not limit the revision proposal to the number of Parliament chambers and seats, but put forward an extensive constitutional reform, intending the amendment of more than 60 articles out of the current 156.[2]

Several proposed amendments are relevant from a Euro-crisis law perspective.

First, on Article 138 – ‘National public budget’ the amendment proposed the change of paragraph 2 as follows: ‘The Government prepares the drafts for the State budget and for the State social security budget on an annual basis, which are submitted to the institutions of European Union after informing the Parliament on their content’.[3] [author’s translation from Romanian].

Second, the inclusion of a new Article 138-1 entitled ‘Financial policy’ was proposed to enshrine the balanced budget principle at the constitutional level. It reads:

‘(1) The State must avoid an excessive budget deficit. The budget deficit cannot be higher than 3% of GDP and public debt may not exceed 60% of domestic GDP.

(2) Foreign loans may only be contracted in the area of investments.

(3) In the event of a natural disaster or exceptional situations with negative impact on public finances, the maximum ceilings set out in paragraph (1) can be exceeded, with the consent of the majority of Members of Parliament, only if the excess can be compensated up to a period of three years.

(4) Notwithstanding the provisions of paragraph (2) to prevent consequences of natural disaster or other serious disasters, with the consent of the majority of members Parliament other foreign loans can be contracted.’ [author’s translation from Romanian].

The Constitutional Court exercised an ex officio constitutional review of the 2011 legal proposal, pursuant to Article 146(1) a) of the Constitution.[4]

The Court found the proposed amendment of Article 138, regarding the obligation to submit the draft budgets to the European Institutions “excessive and redundant”.[5] The Court criticised the opportunity of constitutionalising the sole obligation of ‘submitting’ the draft budgets to the EU Institutions and held that as a full member of the EU Romania exercises together with other Member States the competences delegated to the EU pursuant to the founding treaties and no further regulation at the constitutional level was necessary in this respect.[6]

When it comes to the Balanced Budget provision of the proposed Article 138-1, the Court found that the provisions are constitutional and necessary as they re-state the obligations undertaken by Romania under the Stability and Growth Pact; equally, the Court notes that the obligations are part of the Treaty on the Functioning of the European Union and Article 126 thereof, as well as Protocol 12. Most importantly, the Court found that the proposed provisions do not infringe Article 152 on the limits of revision that prohibit any revision of the provisions touching upon the independent character of the Romanian state.[7]

The Chamber of Deputies rejected the aforementioned constitutional review project in May 2013 due to lack of political support.[8] The proposal, as emanating from the former Boc Government (PDL) and the President was highly unpopular with the governing coalition (at the time USL) and did not get the necessary constitutional law quorum (two thirds of the MPs) therefore it was not submitted to a referendum according to Article 151 (1)-(3) of the Constitution.

In February 2013, another constitutional reform was initiated. This time, the reform was supported by the majority coalition (USL). A Commission on the revision of the constitution was set up to draft the constitutional legislative proposal.[9] Onwards a constitutional forum was set to ensure a transparent process of public consultation.[10]

In 2014 the legislative proposal was formally registered with the Parliament, the Senate – the first Chamber invested with the constitutional reform legal project.[11] Compared to the 2011 revision project, the 2014 proposal has a wider scope, envisaging 128 amendments touching upon the vast majority of the Constitutional provisions currently in force.[12]

The priorly proposed Article 138-1 ‘Financial policy’ proposing the constitutionalisation of the Balanced Budget principle was not kept in the 2013 constitutional proposal.

The proposed amendment of Article 138 (2), which attempts the constitutionalisation of the obligation of the Government to submit the annual budget law proposal to the EU Institutions has maintained the same formulation: “The Government prepares the drafts for the State budget and for the State social security budget on an annual basis, which are submitted to the institutions of European Union after informing the Parliament on their content.” [author’s translation from Romanian][13]

In February 2014, the Constitutional Court exercised an ex officio control of the new proposal on the revision of the Constitution. The Court re-stated its 2011 reasoning on Article 138 (2), concluding that the amendment appears “excessive and redundant”.[14]

Constitutional context  
III.3
If national constitutional law already contained relevant elements, such as a balanced budget rule or independent budgetary councils, before the crisis that are now part of Euro-crisis law, what is the background of these rules?

The 1991 Constitution of Romania, as revised in 2003 and currently in force, contains only one provision coming close to a balanced budget rule stated in art. 138 (5): “no budgetary spending can be approved without establishing the financing source’’.

In 2011, a constitutional amendment proposing the inclusion of a Balanced Budget Rule, enjoyed the favourable opinion of the Constitutional Court in 2011, however the project did not pass in Parliament. The Budget Balance Rule was implemented by national ordinary law in 2013. See section II.2 above and section IX.4 below.

Constitutional provisions on an independent budgetary council are neither present nor have they been envisaged by the two constitutional reform proposals (section III.2 above). The Fiscal Council established in mid-2010 is part of Euro-crisis law in Romania, but was not introduced into the Constitution (please refer to section VII.5 below).

Purpose constitutional amendment       
III.4
What is the purpose of the constitutional amendment and what is its position in the constitution?

According to Title VII of the Constitution of Romania, the revision of the Constitution may be initiated by the President on the proposal of Government, by two-thirds of the deputies or senators or by 500.000 citizens with voting rights. The project is submitted to the two Chambers of the Parliament (Article 150). These may adopt the proposal by two thirds of the members of each Chamber (Article 151 (1)). In case of dissent on the content of the revision proposal the United Chambers may adopt the revision proposal with a three-fourths majority (Article 151 (2)). The revision is final after the approval of the Romanian citizens by referendum, organised in the next 30 days following the decision of the Parliament (Article 151 (3)).

Article 152 enshrines the limits of constitutional revision. Pursuant to the article, the constitutional provisions on the “national, independent, unitary and indivisible character of the Romanian state, republican form of government, territorial integrity, independence of justice, the political pluralism and official language” may not form the object of revision. Equally, any revision that would hamper the fundamental rights and liberties as guaranteed by the Constitution is prohibited. The revision is also not allowed during a state of emergency and other crisis situations.

The present Constitution of Romania was adopted in 1991 and has been amended once since, in 2003, in the view of accession to the European Union (the ‘EU’) and to the North Atlantic Treaty Organization (the ‘NATO’).[15]

Since the start of the crisis, there were two different constitutional revision projects, none of them adopted until the present stage (see sections III.2 above).

The broad genesis of the two constitutional revisions is found in the political instability and rivalry between the central political institutions that culminated with several severe constitutional crises in the last decade.

As already mentioned above (section I), the constitutional architecture of Romania lays down a challenging avenue for political institutions when on different sides of the political spectrum. One should mention the suspension of the President in 2007 and 2012, the constant conflicts between the Parliament and the Government that led to multiple Government changes, the political unrest between the President and the Parliament and the present open conflict between the President and the Prime Minister (the forthcoming presidential elections of November 2014 are highly important in this sense).[16] In this context, the Constitutional Court exercised the role of an ‘arbiter’ being called to rule on the conflicts of constitutional nature and of a legal nature more than sixteen times from 2008 to 2013.[17] Recently, in May 2014, the Court has been called again to mediate the claimed constitutional conflict between the President and the Prime Minister.[18]

On the political context, please refer to section I above.

Beyond the broad background context, each revision was triggered by specific circumstances.

The first constitutional review project was fed by the positive results of the 2009 referendum, initiated by the President. The President consulted the Romanian people on the reform of the Parliament. The reform of the Parliament as an institution proposed a double limitation. First a limitation of the Chambers – from a bi-cameral to a unicameral Parliament; second, the limitation of the seats to 300 (of the current number of 584). After the positive results of the referendum on both limits, a constitutional revision was then initiated by the President on the proposal of the Government. During the process, the legislative project on the revision of the constitution reached a much larger scope than that of merely implementing the referendum results, including the constitutional provisions on financial and budgetary policy, presented in section III.2 above.

The second constitutional review was initiated by the USL parliamentary majority in response to the major constitutional crisis of July 2012, described in section I above. Following the recommendations of international and EU institutions, notably the Council of Europe’s Venice Commission,[19] the European Commission[20] and the European Council,[21] the 2012 USL Government put the constitutional revision on top of the agenda. The revision was also fed by the USL Government territorial decentralisation reform project and the inclusion of the ‘region’ as a territorial-administrative unit to complete the existing ones: the county, the town and the commune.[22] The USL parliamentary majority supported the Government’s agenda. The constitutional legislative proposal is currently pending in the Parliament, more specifically in the Senate, awaiting the report of the specialised Committee on the revision of the constitution.[23]

As seen above (section III.2), in the context of both projects for the revision of the Constitution the euro-crisis amendments have a rather ancillary nature, especially in the text of the last 2014 project. The main discussions and public debates are centred upon an equilibrated political institutional architecture and the sensitive territorial-administrative organisation issue.

It must be stressed that following the USL coalition’s fall in February 2014, there is currently no clear qualified parliamentary majority to support the constitutional review. As well, in April 2014 the Constitutional Court declared the proposed project unconstitutional in more than twenty-four instances.[24]

Relationship with EU law          
III.5
Is the constitutional amendment seen as changing the relationship between national and European constitutional law?

For the time being, there is no constitutional amendment adopted after 2003. The 2013 constitutional revision process presented in section III.2 and III.4 above is currently at an incipient stage. The final revision and approval by referendum shall take substantial time, depending greatly on political support. The Constitutional revision project contains relevant elements concerning the relationship between EU law and national law.

Namely, a proposal regarding the change of Article 148 ‘Accession to the European Union’ dealing with the relationship between national and European law was listed (the so-called ‘accession clause’). The change is meant to update the constitutional provision and formalise the EU Member State status of Romania, as of January 1st 2007 (the ‘membership clause’).

The proposal puts forwards the following changes:

Constitution of 1991 revised in 2003

Constitution revision proposal 2013

Title VI ‘Euro-Atlantic Integration’

Title VI ‘The Membership of Romania to the European Union and North Atlantic Treaty Organization’

Article 148 Integration into the European Union

Article 148 Integration into the European Union

 (1) Romania’s accession to the constituent treaties of the European Union, with a view to transferring certain powers to community institutions, as well as to exercising in common with the other member states the abilities stipulated in such treaties, shall be carried out by means of a law adopted in the joint sitting of the Chamber of Deputies and the Senate, with a majority of two thirds of the number of deputies and senators.

(1) Ratification of the treaties that amend or complete the constituent treaties of the European Union and the treaties through which The North Atlantic Treaty is modified or supplemented, is made by a law passed in a joint session of the Chamber of Deputies and the Senate, by a vote of two thirds of the Deputies and Senators.

 (2) As a result of the accession, the provisions of the constituent treaties of the European Union, as well as the other mandatory community regulations shall take precedence over the opposite provisions of the national laws, in compliance with the provisions of the accession act.

(2) Romania shall ensure compliance, within the national legal order, of the European Union law obligations under the Act of Accession and the other treaties signed in the Union.

(3) The provisions of paragraphs (1) and (2) shall also apply accordingly for the accession to the acts revising the constituent treaties of the European Union.

 

(4) The Parliament, the President of Romania, the Government, and the judicial authority shall guarantee that the obligations resulting from the accession act and the provisions of paragraph (2) are implemented.

 

(5) The Government shall send to the two Chambers of the Parliament the draft mandatory acts before they are submitted to the European Union institutions for approval.

 

Source: Proposal L233/07.04.2014 and Article 148 Constitution [author’s translation from Romanian]

As to the substance of the amendment, the proposed amendment of Article 148 paragraph 2 was seen by the Constitutional Court as changing fundamentally the relationship between national constitutional law, on the one hand and EU law, on the other. As such, by decision 80/2014, the Constitutional Court declared the proposed amendment unconstitutional as being contrary to the provisions of Article 152(2) of the Constitution – ‘The limits of revision’: “no revision shall be made if it results in the suppression of the citizens’ fundamental rights and freedoms, or of the safeguards thereof”.[25]

In fact, the current Article 148 paragraph 2 states that the EU treaties and other binding EU law provisions: “shall take precedence over the opposite provisions of the national laws”. The proposed revision does not retain the formulation “national law” stating at the general level that: “Romania shall ensure compliance, within the national legal order, of the European Union law obligations”. As such, the proposed text encloses in the notion ‘national legal order’ also the Constitution and the provisions thereof. The change was considered problematic by the Constitutional Court. In this sense it held that:

“461. Therefore, to accept the new wording proposed at Article 148 (2) would amount to the creation of necessary premises allowing the limitation of the jurisdiction of the Constitutional Court, in the sense that the only acts that are adopted in areas not subject to the transfer of competences to the European Union would still be subject to constitutional review, whereas the normative acts […] adopted in the areas of shared competences, would be subject exclusively to the legal order of the European Union, being excluded from constitutional control. Nevertheless, irrespective of the area of legal acts, they must respect the supremacy of the Constitution of Romania, according to Article 1 para. (5).

462. Therefore, the Court finds that such a change would constitute a restriction of the citizens right to constitutional justice, to defend certain constitutional values, rules and principles, namely the suppression of a guarantee of these constitutional values, rules and principles, which also include the sphere of rights and fundamental freedoms.” [author’s translation from Romanian, Decision 80/2014, published in Official Journal 246 of 07.04.2014]

Other proposed provisions of the Article 148 ‘membership clause’ remain substantively largely the same, however the framing is more succinct and general, compared to the prior explicit and detailed formulation. As well, the reference to specific institutions is avoided (see comparative table above).

More specifically:

The amendment of the first paragraph is imminent. Currently it has no legal value for the future of Romanian constitutional law, because it refers to the process of accession, which already took place in 2007. Equally, the proposed provisions retain the qualified majority rule (two thirds of the MP’s) for the ratification of treaties that amend or complement the constituent treaties of the European Union.

The provisions of the current paragraph 3 are included in the proposed paragraph 1.

The provision of paragraph 4, mandating the Government to send to Parliament the draft of binding acts before their submission to the EU institutions is repealed. However, the Parliament is still consulted based on the subsidiarity principle enshrined in the Protocol 2 as included by Lisbon treaty.

For the time being, the constitutional revision project is still pending in the Parliament, subject to further substantive revisions and debates. As soon as a final formulation of the revision proposal is reached, and possibly after another constitutional review, the law on the revision of the constitution shall be eventually submitted to a national referendum.

Organic law   
III.6
Have there been changes to organic laws or other types of legislation that are of a different nature or level than ordinary legislation, in relation to Euro-crisis law or the budgetary process?

The Romanian legal system provides for three categories of laws: constitutional, organic and ordinary. The constitutional laws concern the revision of the Constitution, are adopted by qualified majority of two-thirds of the members of each Chamber of the Parliament and are subject to subsequent approval by referendum. The organic laws are adopted by absolute majority – the vote of fifty per cent plus one of the members of each Chamber. The ordinary laws are adopted by simple majority – of fifty per cent plus one of the present members of each Chamber (Constitution of Romania Articles 73 and 76).

The euro-crisis law implemented by Romania did not fall into the areas of organic law as regulated by Article 73 (3) a)-s) of the Constitution. The law related to the Euro-crisis has primarily been implemented through ordinary legislation.

In some cases, the Government adopted the legislation by emergency ordinance procedure (see section III.9 below), adopting legal acts with same power as ordinary laws issued by the Parliament, subject to the subsequent approval of Parliament (Article 115(4)-(5) Constitution).

In other cases, the Government ‘assumed responsibility’ by subjecting measures to a confidence vote procedure before the United Chamber of Deputies and the Senate for legislative proposal (Article 114 Constitution). Thus, the Parliament was left with two options: either tacitly accept the act before its entry into force, without the possibility to amend it or dismiss the Government by adopting a motion of no confidence (see section III.9 below).

The bills adopted according to the above mentioned special legislative procedures are assimilated to the laws as legal acts of the Parliament and have the same legal force, even if of different types:

  • Laws adopted by the Parliament (Article 76 Constitution);
  • Government Emergency Ordinances adopted by the Government through legislative delegation, subsequently approved by Parliament (Article 115 (4) Constitution);
  • Laws adopted by the Parliament on Government proposals after the Government ‘assumed responsibility’ (that is, subjects measures to a confidence vote procedure), without the possibility for the Parliament to amend the proposals (Article 114 Constitution).

Constitutional amendment and ordinary law       
III.7
If ordinary legislation was adopted in conjunction with a constitutional amendment, what is the relationship between the two?

For the time being, there is no constitutional amendment adopted after 2003, by consequence there is no amendment in relation to Euro-crisis law or the budgetary process. All the ordinary legislation adopted in relation to Euro-crisis law or the budgetary process is referred to and discussed in the answers given to the following questions at section X below.

The 2013 amendment of the Fiscal Responsibility ordinary law introduced the Balance Budget Rule (see section IX.4 below), however the relating constitutional amendment proposed in 2011 was not kept in the 2014 constitutional revision proposal.

Perception source of legal change 
III.8
In the public and political discussions on the adoption of ordinary legislation, what was the perception on the appropriate legal framework? Was the ordinary legislation seen as implementing national constitutional law, or Euro-crisis law?

The political debates regarding the legal instruments for the adoption of euro-crisis law were widely framed around two special procedures – emergency ordinances and so-called ‘engagement of responsibility’ – used by the Government to pass legislation on the austerity measures. The euro-crisis legislation adopted according to the two mentioned procedures was equivalent to ordinary law as the bills did not fall within the area of organic law (Article 73 Constitution).[26]

Please see also section III.9 below.

The ordinary legislation was seen as implementing Euro-crisis law. The state institutions, including the President, the Government, the Parliament and the Constitutional Court stated expressly and all accepted the economic redress multilateral programme and the adjustment legislation as emanating from the International Financial Institutions, notably the IMF. The link with the EU was not so clearly emphasised. All Governments invested after the multilateral loan was contracted by Romania in 2009 stated their political commitment to the obligations undertaken under the financial assistance agreements with the IMF, World Bank and European Commission. The Constitutional Court further qualified the economic instabilities as a serious threat to national security. As such, the agreement with the International Financial Institutions and the European Commission was considered necessary to address this threat.[27]

When passed by ordinary legislative procedure the fundamentation note (document supporting the legal proposal stating the legal, political, economical considerations for adopting a legal act) of the legal proposals expressly stated the Euro-crisis measures as the reason for legislative intervention – as was for instance the case of the 2013 reform of the Public Finances law and Fiscal Responsibility law (see section II above).

The parliamentary debates during the 2009-2012 period usually expressed the discontent of the opposition regarding the austerity measures adopted without consultation of the Parliament.[28] One could mention, for instance, the constitutional conflict between the Parliament and the Government on the education law, passed by the so-called ‘responsibility engagement procedure’ (see section III.9) even if the law was under parliamentary debate.[29] The opposition’s criticism also addressed the choices of the Government, as for instance the cut of salaries and pensions. One of the many reasons for dismissal in April 2012 of the Government led by Prime Minister Ungureanu was the Government’s engagement to adopt the Fiscal Compact without due consultation of the Parliament (on the Fiscal Compact see section IX below).[30] It must be stressed that the critiques were mainly political as none of the emergency ordinances were overturned by the Parliament in an ex post legislative control. This confirms the conclusion that the Romanian politicians usually see the Euro-crisis law as mandatory, without stressing the constitutional balance between national prerogatives and EU authorities.[31] This state of facts has multiple causes, one of them being the dependency of Romania on the EU financial support. Also, in a country subdued by constant political ‘battles’ between the President and the former opposition (see section I above), every one of the main political figures saw an opportunity to gain advantage by winning the popularity and support of the western leaders. After the parliamentary elections of December 2012, the USL coalition got an overwhelming parliamentary majority. As the Government and the parliamentary majority were on the same side of the political spectrum, Euro-crisis legislation was increasingly passed directly through Parliament from 2012 onwards, however the emergency ordinances culture is still frequently practiced as it is so deeply rooted in the Romanian decision making modus operandi.

As for the general public perception, in Romania there was no relevant wider public debate regarding the adoption of Euro-crisis law or the appropriate legal instruments to be employed. Generally, before the first austerity package measures were agreed with the IMF and the MOU with the EU, both in 2009, public opinion was largely unaware of the euro-crisis threat. During the parliamentary electoral campaign of 2008 citizens were reassured that Romania was not in crisis. The harsh economic adjustment measures of 2009 and 2010 came as an avalanche for public opinion followed by a dramatic fall of popularity in the polls of the President and the PDL Government.

In Romania usually the national leaders were seen as the ones to blame. As such, there was no strong public opinion questioning the decisions taken at the EU level. The EU and the International Financial Institutions were seen as the solution for the mistakes of the Government.

Even if slightly in decline during the deepest economic downturn Romanian public opinion remained supportive when it comes to EU. The spring 2014 Eurobarometer shows that Romania is the Member State with the highest raise in trust towards the EU compared to the 2013 period (+10%).[32] Similarly, the public perception on the image of the EU has improved by 12% – again, the highest score compared to other EU Member States.[33] On the other hand, the perception of the national employment and economic avenues is constantly pessimistic.[34] The contrast in public perception when comparing the EU and national situation was examined in a recent study, which explains that: “[t]he paradox is only apparent and it can be explained by one distinctive feature of the Romanian public opinion. Since EU accession, Romanians have pictured the EU as a saviour and as a safe haven. This frame still lingers in the collective memory, fuelled by a chronic discontent with the national political class and a tendency towards self-victimization”. [35]

Miscellaneous
III.9
What other information is relevant with regard to Romania and to changes to national (constitutional) law?

Government Emergency Ordinances – an ordinary extraordinary procedure

As mentioned in section III.8 above, the vast majority of crisis-driven legislation was passed through Government Emergency Ordinances.

The instrument as enshrined in Article 115 (4)-(8) of the Romanian Constitution is designed as an extraordinary procedure, meant to address the situations that allow no postponement of legislative action. A bill passed in the form of a Government Emergency Ordinance enters into force after notification of the Parliament and publication in the Official Journal. Subsequently, the Parliament adopts a law of approval or rejection of the ordinance within thirty days form the notification by the Government. If the first notified chamber of the parliament fails to examine the legal initiative on the approval of the Emergency Ordinance within a thirty days period, the law is considered adopted and passes automatically to the other chamber for approval. When an Emergency Ordinance concerns matters of organic law, it must be approved with the majority provided for the latter, as prescribed by Article 76 (3) of the Constitution. Government Emergency Ordinances have a limited scope and these are not to be adopted in the areas that touch upon the fundamentals of the constitutional system. Nevertheless, this has not always been respected.[36]

In spite of its extraordinary character, this tool has been used on an ordinary basis – both before and during the crisis period – well exceeding 100 emergency ordinances annually.[37] The Venice Commission has expressed concern regarding the excessive use of the procedure, recommending instead the use of delegated legislation pursuant to Article 115 (1) to (3) Constitution, which would allow a prior involvement of the Parliament, as well as a revision of the Parliament’s rules of procedure.[38] The use of Government Emergency Ordinances to ratify and implement multilateral financial assistance packages (please refer to sections X.3, X.4, X.5 below) raises important democratic legitimacy issues. However, it must be stressed that none of the financial assistance instruments ratified by way of Emergency Ordinance were subsequently blocked or brought into question by the Parliament on the occasion of ex post legislative control.

The ‘engagement of government responsibility’ procedure. Article 114 Romanian Constitution.

In addition to Government Emergency Ordinances, as the preferred option for passing crisis-led legislation, the so-called ‘engagement of government responsibility’ is another procedure, which has known an unprecedented active use. The procedure enshrined in Article 114 of Romanian Constitution states that the Government may engage its responsibility in front of the Parliament regarding a programme, declaration or a bill. In this case, the bill is considered adopted in 3 days if the Parliament does not pass a motion of censure (vote of no-confidence) against the Government.

Since 2008, the procedure was used more then 13 times for passing core crisis-driven measures, including the amendment of the pensions law, the social dialogue law, the labour code, the national framework act on wages, the maternity leave act, the military pensions act, the public education law et al. Basically, the procedure was used when the emergency ordinance was not feasible or desirable.

In contrast with Government Emergency Ordinances, the acts adopted by engagement of Government responsibility are not followed by ex post parliamentary control. They are automatically adopted if no motion of censure is formulated and successfully passed by the Parliament, acting by absolute majority (fifty per cent plus one of the members of the two chambers) within 3 days after the engagement of responsibility. The procedure gives insurance that the adopted measured shall not be overturned by the Parliament in an ex post control as the case may arrive for Government Emergency Ordinances.

The frequent use of the procedure during 2010-2011 was criticised by the opposition as a way to by-pass the legislator.[39]

In response to the extensive use of the Government responsibility procedure, both projects for the revision of the Constitution (section III.2 and III.4 above) proposed a limitation of the use of the procedure to one engagement of responsibility per legislative session. The Constitutional Court has further advised the limitation to ‘one engagement of responsibility per legislative session corresponding to a single domain’.[40]

[1] Article 90 (1) Constitution: The President of Romania may, after consultation of Parliament, ask the people of Romania to express their opinion on matters of national interest, by referendum. [author’s translation from Romanian]

[2] For the full constitutional revision proposal and findings of the Constitutional Court, see Decision 799/2011 of the Constitutional Court of Romania, Official Journal 440/23.06.2011, available in Romanian at: http://www.ccr.ro/files/products/D0799_11.pdf

[3] Constitution of Romania, Article 138 (2): ‘The Government prepares the drafts for the State budget and for the State social security budget on annual basis, and such are singly submitted to Parliament for approval’. For the English translation of the Constitution of Romania see: http://www.ccr.ro/constitutia-romaniei-2003

[4] Constitutional Court of Romania, Decision 799/2011, Official Journal 440/23.06.2011, available in Romanian at: http://www.ccr.ro/files/products/D0799_11.pdf

[5] Ibidem.

[6] Ibidem.

[7] Constitution of Romania, Article 152 (1): ‘The provisions of the present Constitution concerning the national, independent, unitary and indivisible character of the Romanian State, the Republican form of government, or territorial integrity, independence of judiciary, political pluralism, or official language may not be subject to revision.’ Full text available at: http://www.cdep.ro/pls/dic/site.page?id=371

[8] Legislative proposal on constitutional revision, File Pl-x 492/2011, available in Romanian at: http://www.cdep.ro/pls/proiecte/upl_pck.proiect?idp=12163

[9] Decision of the Parliament No 17/2013, Official Journal 95/15.03.2013.

[10] The official page of the forum is available in Romanian at: http://forumconstitutional2013.ro/ce-este-forumul-constitutional/

[11] Legislative proposal on the revision of Constitution of Romania, File No. PL nr. L233/2014, available at: http://www.cdep.ro/pls/proiecte/upl_pck.proiect?cam=1&idp=17422; See also the Opinion of Venice Commission on the draft law, 16 September 2013, available at: http://www.venice.coe.int/webforms/documents/default.aspx?pdffile=CDL-AD(2014)010-e

[12] For the complete constitutional revision project and the reasoning of the Court see: Constitutional Court of Romania, Decision 80/2014, Official Journal 246/07.04.2014.

[13] Constitutional Court of Romania, Decision 80/2014, Official Journal 246/07.04.2014

[14] Ibidem.

[15] Constitution of Romania, English, available at: http://www.cdep.ro/pls/dic/site.page?id=372&idl=1

[16] For a summary of the constitutional crises (Romanian) see the 2013 Report of the Constitutional Forum, pp.33-34, for Constitutional Court intervention to solve the constitutional conflicts of legal nature see: Table p.139, available at: http://forumconstitutional2013.ro/wp-content/uploads/2013/03/Raport-final-FC-1-iunie.pdf

[17] Ibidem, Table p.139.

[18] Constitutional Court, Decision 284/21.05.2014, available in Romanian at: http://www.ccr.ro/files/products/Decizie_284_20141.pdf

[19] Venice Commission, Opinion 685/2012, available at: http://www.venice.coe.int/webforms/documents/CDL-AD(2012)026-e.aspx#, consulted on 05.09.2014

[20] Report from the Commission to the European Parliament and the Council on the progress of Romania under the Co-operation and Verification mechanism as of 2007, available at: http://ec.europa.eu/cvm/docs/com_2013_47_en.pdf

[21] Speech of President Van Rompuy, European Council, Press release, Bucharest, April 25, 2013, available at: http://www.consilium.europa.eu/uedocs/cms_data/docs/pressdata/en/ec/136946.pdf

[22] 2013 Report of the Constitutional Forum, fn 77, available at: http://forumconstitutional2013.ro/wp-content/uploads/2013/03/Raport-final-FC-1-iunie.pdf

[23] Legislative proposal on the revision of Constitution of Romania, File No. PL nr. L233/2014, available at: http://www.cdep.ro/pls/proiecte/upl_pck.proiect?cam=1&idp=17422

[24] Constitutional Court, Decision 80/2014 available in Romanian at: http://www.ccr.ro/files/products/Decizie_80_2014_opinii2.pdf

[25] Decision 80/2014, published in Official Journal 246 of 07.04.2014, available in Romanian at: http://www.ccr.ro/files/products/Decizie_80_2014_opinii2.pdf

[26] Constitution of Romania, Article 76(3):” Organic laws shall regulate: a) the electoral system; the organization and functioning of the Permanent Electoral Authority; b) the organization, functioning, and financing of political parties; c) the statute of Deputies and Senators, the establishment of their emoluments and other rights; d) the organization and holding of referendum; e) the organization of the Government and of the Supreme Council of National Defence; f) the state of partial or total mobilization of the armed forces and the state of war; g) the state of siege and emergency; h) criminal offences, penalties, and the execution thereof; i) the granting of amnesty or collective pardon; j) the statute of public servants; k) the contentious business falling within the competence of administrative courts; l) the organization and functioning of the Superior Council of Magistracy, the courts of law, the Public Ministry, and the Court of Audit; m) the general legal status of property and inheritance; n) the general organization of education; o) the organization of local public administration, territory, as well as the general rules on local autonomy; p) the general rules covering labour relations, trade unions, employers’ associations, and social protection; r) the status of national minorities in Romania; s) the general statutory rules of religious cults; t) the other fields for which the Constitution stipulates the enactment of organic laws.

[27] Constitutional Court, Decision 872/2010, analysed at section X below

[28] Parliamentary debates, April 19, 2011, MP Calin Potor declaration (Romanian) “The assumption of responsibility? No, the neutralization of democracy and parliamentarianism”, [author’s translation] available at: http://www.cdep.ro

[29] Constitutional Court, Decision 1525/2010, Official Journal 818 of 07.12.2010.

[30] Parliament of Romania, United Chambers, session of 27 April 2012, Presentation of motion of censure, (Romanian), available at: http://www.cdep.ro/motiuni/2012/1468.pdf

[31] http://www.ziare.com/politica/politica-externa/romania-si-sindromul-copilului-abandonat-1224533

[32] Standard Eurobarometer 81 of Spring 2014, p.94.

[33] Ibidem., p. 98.

[34] Ibidem., p.33-43.

[35] Alina Bârgăoanu, Flavia Durach – The Crisis of the European Union and its Reflection in the Romanian Public Sphere. Recent Findings, Romanian Journal of European Affairs Vol. 13, No. 1, March 2013, available at http://www.ier.ro/documente/rjea_vol13_no1/RJEA_2013_vol13_no1_art.1_.pdf

[36] See: Emergency Ordinance 38/2012 on the amendment of the law on the functioning of the Constitutional Court. Venice Commission, Opinion 685/2012, available at: http://www.venice.coe.int/webforms/documents/CDL-AD(2012)026-e.aspx#, consulted on 05.09.2014, paras. 9-29.

[37] According to the data of Legislative Bulletin of the Senate, available in Romanian at: http://www.senat.ro/index.aspx?Sel=E41323AD-273F-4449-BD0C-78D144CFEDB5

[38] Venice Commission, Opinion 685/2012, available at: http://www.venice.coe.int/webforms/documents/CDL-AD(2012)026-e.aspx#, consulted on 05.09.2014, para. 79.

[39] Parliamentary debates, April 19, 2011, MP Calin Potor declaration (Romanian) “The assumption of responsibility? No, the neutralization of democracy and parliamentarianism”, [author’s translation] available at: http://www.cdep.ro

[40] Decision 799/2011; Decision 80/2014, published in Official Journal 246 of 07.04.2014, available in Romanian at: http://www.ccr.ro/files/products/Decizie_80_2014_opinii2.pdf, paras 334-337,.

Slovakia

Nature national instruments      
III.1
What is the character of the legal instruments adopted at national level to implement Euro-crisis law (constitutional amendment, organic laws, ordinary legislation, etc)?

Slovakia adopted a complex fiscal legislative reform. On the apex is the Fiscal Responsibility Constitutional Act as a separate constitutional law that introduces debt brakes, new institutional framework (Council for Budget Responsibility and two committees – for macroeconomic forecasts and for tax forecasts), and transparency rules. These rules are further detailed through amendments to budgetary rules (two statutes – for general government and for territorial self-governments), and minor changes to the law on budgetary assignment of taxes (mainly balancing new requirements for territorial self-governments). The details are set by Ministry of Finance’s by-laws (especially regarding details on process, content, and form of data and information obligations of public authorities) and statutes of the Council for Budget Responsibility and the committees. Other changes result from activities of the Council for Budget Responsibility, which created an advisory panel for supervising its methodology and other work-in-progress adaptation to the new rules. Finally, information gathered in the course of this report suggests that many obligations resulting from regulations are not explicitly implemented and the authorities rely directly on the EU regulations.

To understand the position of FRCA within the Slovak legal order, I shall briefly explain the structure of the Slovak legal order. In general, there are two forms of parliamentary legislation in Slovakia – constitutional acts and ordinary statutes. All constitutional acts are, in theory, equal. They can take the form of amendment to existing constitutional law or of new constitutional act. One of the constitutional acts is called the Constitution. Although the Constitution is the central constitutional act, the Slovak constitutional order does not contain an eternity clause and so the relationship between different constitutional acts and different constitutional provisions is subject to balancing without being per definition in a hierarchical relationship. That means the position of FRCA within the Slovak legal order would be the same if it were enacted as an amendment to the Constitution as it currently possess as a special constitutional act. Constitutional acts (and amendments) require three-fifth majority of all members of the Parliament (Art. 84/4 of the Constitution), while ordinary statutes require simple majority (Art. 84/2 of the Constitution). Ordinary statutes must be in compliance with the Constitution, constitutional laws and international treaties to which the Parliament has expressed its assent and which were ratified. The Slovak Constitutional Court exercises both an abstract review and concrete review. It decides on conformity of statutes with the Constitution, constitutional laws and international treaties to which the Parliament has expressed its assent and which were ratified. The Constitutional Court also decides upon submission by the President or Government on the compliance of international treaties with the Constitution or constitutional law.

Constitutional amendment   
III.2    
Have there been any constitutional amendments in response to the Euro-crisis or related to Euro-crisis law? Or have any amendments been proposed?

Yes – the Fiscal Responsibility Constitutional Act. Its content and adoption process was exhaustively covered in the previous sections of the report (see especially the answers to questions VII.4, VII.5, VII.16 and IX.5). The previous sections also discuss failed constitutional bill dealing with tax sovereignty (see the answer to question VI.1).

Constitutional context
III.3
If national constitutional law already contained relevant elements, such as a balanced budget rule or independent budgetary councils, before the crisis that are now part of Euro-crisis law, what is the background of these rules?

The Fiscal Responsibility Constitutional Act was adopted in Dec. 2011 and became effective on March 1, 2012. The draft of the Act was submitted to the Parliament on Nov. 8, 2011, that is one month before the December EU Council meeting that agreed on the outline of the Fiscal Compact.[1] The draft of the Act was prepared by an expert group composed of representatives of all parliamentary parties and published in early Oct. 2011,[2] and was a result of talks among political parties that had begun in Dec. 2009.[3] The works on the bill started with mapping out the fiscal rules in EU countries, but also other successful models such as one of New Zealand. For more on the political and legislative process of drafting and adopting the Act see the answer to question IX.5. Evidence show that the works on finalizing the Fiscal Responsibility Constitutional Bill were done in view of the Fiscal Compact negotiations. No changes on the constitutional level have been made after the Fiscal Compact was signed and ratified (the BBR and deficit rules were implemented in the form of an ordinary statute and there are no intentions to anchor these rules in the constitutional law). Regarding the Six-pack legislation, it was enacted at the time the Fiscal Responsibility Constitutional Bill was being finalized and is reflected in the bill. Based on this legislative history, it can be concluded that the constitutional law have been changed in reaction to the Eurocrisis and with account to Eurocrisis law. The requirement of Art. 3/2 of the Fiscal Compact is considered fulfilled by implementation in the form of a statute (see more in the answers to the questions on the Fiscal Compact).

Purpose constitutional amendment 
III.4
What is the purpose of the constitutional amendment and what is its position in the constitution?

The purpose of the Fiscal Responsibility Constitutional Act is to, first, entrench certain fundamental fiscal rules in the legal system (mainly debt brakes and transparency rules), and second to create competences and obligations for public authorities that would otherwise being prevented by other constitutional provisions (for instance by rights of territorial self-government) or constitutionally problematic (e.g. corrective mechanisms within the debt brakes system such as confidence vote) or insufficient (such as independency of Council for Budget Responsibility and Committee for Macroeconomic Forecasts).

The FRCA is a separate constitutional law. All constitutional laws (including the Constitution) are of equal legal force, a conflict is resolved mostly through classic continental law techniques such as lex posteriori derogat priori, lex specialis derogat generali etc., and through a balancing test.

Relationship with EU law        
III.5
Is the constitutional amendment seen as changing the relationship between national and European constitutional law?

No such discussion emerged. There was a wide consensus on these changes among political parties as described mainly in the answer to question IX.5 and the works on a complex fiscal reform started in Dec. 2009. Moreover, all Slovak parties supported tightening of fiscal rules, strengthening of the SGP, etc. (also the opposition to the ESFS, Greek bailouts, or ESM has been driven by arguments calling for stronger fiscal rules that would prevent these measures to be activated). In sum, the fiscal reform had been on track to a certain extent independently of the Eurocrisis law (but of course not independent of the Eurocrisis) and therefore, it can be assumed, was not understood primary as something imposed from the EU or Eurozone group and has not changed the understanding of relationship between the national and European constitutional law. In this connection, it must be noticed that there was no involvement of courts in the process, which would otherwise need to assess these questions.

Organic law      
III.6
Have there been changes to organic laws or other types of legislation that are of a different nature or level than ordinary legislation, in relation to Euro-crisis law or the budgetary process?

The concept of organic law is foreign to the Slovak legal system. As mentioned above, the Ministry of Finance adopted some highly technical by-laws regarding the process, content, and forms for submitting data and information by public authorities for the purposes of its fiscal responsibilities and forecasting. Most specifically the by-law of the Ministry of Finance of the SR of Nov. 22, 2012 No. MF/21513/2012-31, on the layout, content, form, term and place of submission of accounting information and data necessary for the purposes of evaluation of the budget observance by the general government.[4] The Ministry issued also a Methodical Guidelines to the by-law MF/21513/2012-31 providing specific guidelines on the content, form, and process of submitting financial and accounting information to the Ministry for the purposes of central macroeconomic and fiscal evaluations.[5]

Constitutional amendment and ordinary law       
III.7
If ordinary legislation was adopted in conjunction with a constitutional amendment, what is the relationship between the two?

Two major statutory amendments have been enacted. The first, an amendment to the budgetary rules for general government, is intended, according to its explanatory report, to implement the Fiscal Compact. However, it implements also the Fiscal Responsibility Constitutional Act (e.g. definition and regime of expenditure ceiling). The second, an amendment to the budgetary rules for territorial governments implements, according to its explanatory report, the Fiscal Responsibility Constitutional Act. The Fiscal Responsibility Constitutional Act created a constitutional basis for changes that would not be possible via ordinary law due to a limitation in competences of some public authorities or possible conflict with other constitutional provisions (such as right to self-government or vote of confidence). Both amendments must be in compliance with all constitutional laws.

Perception source of legal change   
III.8
In the public and political discussions on the adoption of ordinary legislation, what was the perception on the appropriate legal framework? Was the ordinary legislation seen as implementing national constitutional law, or Euro-crisis law?

The process of adopting both the constitutional law and ordinary laws implementing the Eurocrisis law is exhaustively described above. In the answer to the previous question I cite the explanatory reports that show that there was a mix of reason for adopting concrete provisions. That is in one bill, several provisions from different “higher sources” such as the Fiscal Responsibility Constitutional Act (national constitutional fiscal law), the Fiscal Compact, the Directive 2011/85, and provisions of various six-pack and two-pack regulations were implemented and a discussion did not follow these differences.

As mentioned repeatedly above, in the case of Slovakia, we must differentiate two groups of reforms – financial assistance and stability mechanisms on the one had, and fiscal reform on the EU and Slovak level on the other hand. In the first group of reforms, Slovakia was very critical (see mainly the answers to the questions IV.1, IV.4, IV.6 and IV.7 on the EFSF and questions VIII.1, VIII.3, VIII.6 en VIII.7 on the ESM); while the second group of reforms was supported by virtually all political parties (there were rather minor disagreements on the form of an internal reform and worries about the ability of the EU to enforce strengthened rules against big member states). The second group of reforms, consisting mainly in the six-pack (see the answers to the questions VII.3, VII.6, VII.9, VII.13 and VII.14), two-pack (section forthcoming), and the Fiscal Compact (see the answers to the questions IX.1-IX.3 and IX.5) were rather non-conflicting. This was also in compliance with the Slovak opposition to some of the elements of the first group of reforms (ESFS, ESM, Banking Union); that is if states were fiscally responsible, there would be no need for paying their debts now. Therefore, Slovakia supported the tightening of fiscal rules and their effective enforcement in general (see the answer to question IX.5). It also started its own complex fiscal reform already in Dec. 2009 and in the parliamentary elections of 2010, all politically parties called for fiscal responsibility. A commission, which had been preparing the Fiscal Responsibility Constitutional Act, which stands on the apex of the reform, consisted of representatives of all political parties and the Act was later approved unanimously in the Parliament (see the answer to question IX.5). From all the evidence in the instruments-related sections of this report, it can be concluded that the complex fiscal reform was considered a Slovak reform, that it had built primarily on a comparison of fiscal constitutions existing in 2009 in Europe and the world at large, and that Eurocrisis law rather fitted in well than that Slovakia was following requirements coming from the EU/Eurozone (see the answers to the questions III.3 and III.5). The whole different story is the first group of reforms (EFSF, ESM, Banking Union), which is considered as imposed and has been widely criticized as not fully taking into account Slovak realities and damaging the Slovak economy as a consequence (see the answers to the questions IV.1, IV.7, VIII.1, VIII.6, and section on banking union – forthcoming). However, the support to the first group of reform, the argument goes, must be given in order for Slovakia to stay in the core of the Eurozone and EU integration, because that ensures the best position for negotiations and protection of Slovak interests (see e.g. the answers to the questions VIII.3 and IX.1).

Miscellaneous
III.9
What other information is relevant with regard to Slovakia and to changes to national (constitutional) law?

Not applicable.

[1] It is worth noting that main discussion on the constitutional bill (the second reading) took place on Dec. 8, 2011, that is at the same time as the EC meeting.

[2] Investujeme.sk, Expertná skupina predstavila ústavný návrh zákona o rozpočtovej zodpovednosti, Oct. 5, 2011. Available at: http://www.investujeme.sk/expertna-skupina-predstavila-ustavny-navrh-zakona-o-rozpoctovej-zodpovednosti/.

[3] MP Jozef Kollár, 26th Session of the 5th Parliamentary Term, Dec. 8, 2012. Available at: http://mmserv2.nrsr.sk/NRSRInternet/Vystupenie/75864/Kollar_Jozef.html.

[4] Opatrenie Ministerstva financií Slovenskej republiky z 22. novembra 2012 č. MF/21513/2012-31, ktorým sa ustanovuje usporiadanie, obsahové vymedzenie, spôsob, termín a miesto predkladania informácií z účtovníctva a údajov potrebných na účely hodnotenia plnenia rozpočtu verejnej správyAvailable at: http://www.kniznica.sk/fileadmin/kniznica/transparentna_kniznica/zakony/Opatrenie_z_22.novembra_2012_c._MF_21513_2012_31_k_FIN_vyk….pdf .

[5] Metodické usmernenie Ministerstva financií Slovenskej republiky z 12. decembra 2012 č. MF/27088/2012-31 k postupu pri aplikácii  § 2 opatrenia Ministerstva financií Slovenskej republiky  z 22. novembra 2012 č. MF/21513/2012-31, ktorým sa ustanovuje usporiadanie, obsahové vymedzenie, spôsob, termín a miesto predkladania informácií z účtovníctva a údajov potrebných na účely hodnotenia plnenia rozpočtu verejnej správy pre rok 2013.

Slovenia

Nature national instruments  
III.1
What is the character of the legal instruments adopted at national level to implement Euro-crisis law (constitutional amendment, organic laws, ordinary legislation, etc)?

There was an amendment of the Constitution. An important reform took place in May 2013 when the fiscal rule was implemented in the Slovenian Constitution (Art. 148). The Constitutional amendment also provided for the adoption of the “implementation law” within six months from the entry into force of the amendments to the Constitution. The Law will determine more precisely the fiscal rule, in a way to fully implement the Council Directive, the regulations, and the Fiscal Compact. In adopting such law, the government intends to propose a detailed solution on the actual fiscal policies, define the role of the independent Fiscal Council, specify what are considered to be exceptional circumstances, and what the correction mechanism looks like. As of October 2014, no such law was adopted.

Constitutional amendment          
III.2    
Have there been any constitutional amendments in response to the Euro-crisis or related to Euro-crisis law? Or have any amendments been proposed?

Yes. See answer to question III.1 concerning the implementation of the fiscal rule in the Slovenian constitution. See also answer to questions VII.2 and VII.5 concerning the suggestion to implement provisions of the fiscal council in the constitution.

Constitutional context   
III.3
If national constitutional law already contained relevant elements, such as a balanced budget rule or independent budgetary councils, before the crisis that are now part of Euro-crisis law, what is the background of these rules?

Not applicable.

Purpose constitutional amendment      
III.4
What is the purpose of the constitutional amendment and what is its position in the constitution?

The implementation of the gold fiscal rule aimed to ensure the balanced budged. By implementing in the constitution, the Slovenian government aimed to signal a stronger commitment to respect provisions concerning the budgetary balance.

Relationship with EU law           
III.5
Is the constitutional amendment seen as changing the relationship between national and European constitutional law?

No.

Organic law      
III.6
Have there been changes to organic laws or other types of legislation that are of a different nature or level than ordinary legislation, in relation to Euro-crisis law or the budgetary process?

No.

Constitutional amendment and ordinary law    
III.7
If ordinary legislation was adopted in conjunction with a constitutional amendment, what is the relationship between the two?

Not applicable.

Perception source of legal change       
III.8
In the public and political discussions on the adoption of ordinary legislation, what was the perception on the appropriate legal framework? Was the ordinary legislation seen as implementing national constitutional law, or Euro-crisis law?

There was an intensive debate concerning the revisions to the constitution or to regular laws. Several commentators did not favour the implementation of the golden fiscal rule in the constitution. Dr. Lojze Ude argued that the fiscal function is only one of the state functions. Ude maintained that giving a constitutional status only to one of the activities of the state, while leaving others to lower levels, is not an optimal solution.[1] Ude argued that there are circumstances in which the state should make investments, even if doing so would increase the public debt. The implementation of the fiscal rule in the constitution would prevent the government to make such investment, Ude argued. Further, Ude maintained that there was no need to implement the rule in the Constitution. He reasoned that Slovenia is legally bound by its international agreements, and it is therefore already bound by the fiscal rule provided in the EU legal framework. Several commentators pointed out that countries, as for instance Germany, had such rule but then revoked it. They also maintained that the rule would prevent the government to make investments, particularly those related to the infrastructure.[2] Dr. Joze Menzinger similarly argued that the implementation of a fiscal rule in the constitution was not necessary.[3] Dr. Igor Masten, on the contrary, maintained that other countries, like Switzerland and Sweden, have adopted in the past such rule, and, as a result, they were able to cope better with the economic crisis.[4] (see also question IX.5)

There was also an intensive discussion about the implementation of provisions concerning the Fiscal council in the constitution. Masten emphasized that if Slovenia wants to assure compliance with the fiscal rule, there is a need for an external body that monitors Government’s compliance with the rule. In order to be reliable, such body should be unaffected by the daily political discussion. Such position could be obtained by giving this body a constitutional importance.[5] Others however rejected such position. Ude, was for example against the implementation of provisions about the Fiscal council in the Constitution, maintaining that the approval of the EU provisions is sufficient. [6] (see also question VII.5)

Miscellaneous
III.9
What other information is relevant with regard to Slovenia and to changes to national (constitutional) law?

No other relevant information.

[1] http://imss.dz-rs.si/imis/2cd704e6815827d32ce6.pdf

[2] http://www.finance.si/992881/Pojem_zlato_pravilo_ni_fiskalno_pravilo

[3] See attachment: Annex IVc Fiskalni svet- menje 2012, p. 5.

[4] See workshop: http://www.katoliski-institut.si/sl/dogodki/275-javna-tribuna-fiskalno-pravilo

[5] http://www.dz-rs.si/wps/portal/Home/deloDZ/seje/evidenca?mandat=VI&type=pmagdt&uid=42954D591788B7BAC12579FE001F59AB

[6] See: Annex IVa Ude’s opinion on changes to the Article 148 of the Constitution. See also: http://www.rtvslo.si/slovenija/zelena-luc-zlatemu-fiskalnemu-pravilu-rdeca-luc-fiskalnemu-svetu/282739

Spain

Nature national instruments  
III.1
What is the character of the legal instruments adopted at national level to implement Euro-crisis law (constitutional amendment, organic laws, ordinary legislation, etc)?

The range of legal instruments adopted in Spain in order to implement Euro-crisis law has been very broad and diverse. It has included constitutional amendments (e.g., Article 135 of the Spanish Constitution), the approval of different organic laws, royal-decree laws, decree-laws, ordinary laws, decisions, etc., and most importantly, the crisis and the critical financial situation have led to a different approach towards the way of legislating, having a much more coral and integrative vision of Spain within the European Union.

Constitutional amendment          
III.2    
Have there been any constitutional amendments in response to the Euro-crisis or related to Euro-crisis law? Or have any amendments been proposed?

On September 2011, Article 135 of the Spanish Constitution (Constitución Española) on public debt, was amended, setting in the text the concept of “budget stability” while introducing the absolute priority of debt and interest repayment. The Spanish Government approved a law in congress to amend the Constitution to require a balanced budget at both the national and regional level by 2020.

The detailed process of adoption of the amendment is stated when answering Question VI.2.

Constitutional context   
III.3
If national constitutional law already contained relevant elements, such as a balanced budget rule or independent budgetary councils, before the crisis that are now part of Euro-crisis law, what is the background of these rules?

Most of the relevant elements concerning Euro-crisis constitutional law in Spain (e.g., amendment of Article 135 CE; Organic Law 2/2012 of 27 April; on Budgetary Stability and Financial Sustainability; the creation of the National Commission for Local Administration (CNAL), etc.) have been developed in response to the crisis and were not contained in the law before the start of the financial crisis in Europe.

Purpose constitutional amendment      
III.4
What is the purpose of the constitutional amendment and what is its position in the constitution?

For 33 years the Spanish Constitution had been considered untouchable by the ruling parties, only amended once in order to adapt the country’s legislation to the European Union’s legal framework. However, on August 2011, in a span of two weeks since Prime Minister Zapatero announced that he was planning an amendment, a new article was added in a bid to reassure international markets that Spain was serious in cutting its deficit.[1]

The main purpose of new Article 135 of the Constitution is to subject all public administrations to comply with the principle of budgetary stability, forbidding them to incur a deficit position above the thresholds defined in the Stability and Growth Pact. The political agreement set a maximum structural deficit of 0.4% of GDP to be achieved by 2020, which was distributed at the rate of 0.26% for the State and the remaining 0.14% for the Autonomous Communities. Soon later, Organic Law 2/2012 resolved that no administration may incur into structural deficit, so that 0.4% is only allowed when the deficit is the result of structural reforms to be made and when having long-term budgetary impact. The idea of constitutional limits on debt levels was broached at the July 21 European Summit, when European Union leaders approved a new loan package for Greece and encouraged member states to implement fiscal discipline. Germany has already included this stipulation in its constitution, while France and Italy were working on it.

Article 135 is embedded in Part VII of the Spanish Constitution (“Economy and Finance”, Articles 128-136). Title VII deals with the organization and distribution of national wealth, although this also appears on more articles.[2]

Article 128 establishes that the Tax Office shall be subordinated to the general interest and public initiative. Participation in private and public sectors (e.g., Social Security) is established in Article 129. Attention to the modernization and development of the economic sectors, especially the most disadvantaged is given in Article 130. Economic planning is allowed (Art.131), as well as the creation of local tax offices (Art.133). Article 132 determines which the goods under public property domain are. This will enable the funding mechanisms of the autonomous communities (Article 156) and Territorial Compensation Fund (Fondo de Compensación Territorial) contained in Article 158 of the Constitution. Article 134 says that State expenditure must be submitted through official budget presented by the Government in order to be approved later by Parliament. In addition, the Government may issue public debt and may get credit (Art.135). Finally, Article 136 expresses that all expenses and income, and the economic management of the State will be audited by the Court of Auditors (Tribunal de Cuentas).

Title VII should be interpreted in light of international treaties.

Relationship with EU law           
III.5
Is the constitutional amendment seen as changing the relationship between national and European constitutional law?

The reform of Article 135 of the Spanish Constitution of September 27, 2011, the second that has been made since the adoption of the Constitution in 1978, meant a profound modification of this provision. The two sections that included this article in its original wording were turned into six, which gives an idea of the depth and relevance of the amendment carried out.[3]

The deal followed calls by Germany and France for Spain and other states at the sharp end of the euro zone debt crisis to set binding limits on their deficits to regain the trust of investors.

As stated in the Article 135 Preamble, the reason for the amendment was to meet Spain’s commitments acquired when joined the European Monetary Union, a framework in which fiscal stability acquires structural value, conditioned to the ability for financial performance by the public administrations. Fiscal stability is conceived as essential to the maintenance and development of the Welfare State as proclaimed in Article 1.1 of the Spanish Constitution. Accordingly, it comes included in the constitutional text, therefore granting fiscal stability the maximum regulatory status possible within the Spanish legal system.

This is another proof of what constitutes already a reality in Spain (worsened since the beginning of the current crisis), a reality which, among others Prof. Óscar Alzaga clearly expressed:[4] the guidelines on economic policy coming from Brussels are increasingly accurate, so that the sovereign authority to prepare the State Budget will be heavily conditioned by the European economic governance policy. In short, the constitutional reform consecrated a new allocation of powers under the Constitution, required to continue the construction of the European Union.

The new Article 135 begins by establishing a principle of conduct for all public administrations in their actions: the budgetary stability principle. Moreover, paragraph 2 of the same article admits the existence of a structural deficit of the State and the Autonomous Communities, which in no case shall exceed the margins set by the European Union.

As for public debt, the amendment kept the content of former Article 135 in the new paragraph 3, establishing that the issue of debt must be authorized by law, and also the payment of term loans for satisfying public debt. It introduced an important new feature consisting in linking the total public debt for all public administrations, measured in relation to the GDP reference value set in the Treaty on the Functioning of the European Union (TFEU), particularly in Article 126, which is set at 60% of GDP. This represents another feature of the increasing relation between national and European constitutional law in Spain.

Organic law      
III.6
Have there been changes to organic laws or other types of legislation that are of a different nature or level than ordinary legislation, in relation to Euro-crisis law or the budgetary process?

On the changes of organic laws, see in particular Question VI.2.

Constitutional amendment and ordinary law    
III.7
If ordinary legislation was adopted in conjunction with a constitutional amendment, what is the relationship between the two?

Organic Law 2/2012, of April 27, on Budgetary Stability and Financial Sustainability,[5] is the law that develops the amendment of Article 135 of the Constitution, which also experienced a rapid process of parliamentary approval, responding to bipartisan agreement to reduce the deficit public and meet the new European legal framework enshrining the “golden rule” of balanced budgets (see Question VI.2).

It is the very own wording of new Article 135, which provides the mandate to develop the content of this article in organic law before June 30, 2012. With the approval of Organic Law 2/2012 on Budgetary Stability and Financial Sustainability for the Public Administration it is given full compliance to the constitutional mandate.

The reference to the rules of European stability, both in the Constitution and in LO 2/2012, is constant, being Spain one of the first countries to incorporate the European economic governance package to its domestic law. In addition, LO 2/2012 gives effect to the European Fiscal Stability Treaty (Treaty on Stability, Coordination and Governance in the Economic and Monetary Union; also referred to as TSCG) of March 2, 2012, ensuring a continuous and automatic adaptation to European standards.

Organic Laws in Spain

Under the current Spanish Constitution of 1978, an Organic Law has an intermediate status between that of an ordinary law and of the constitution itself. It must be passed by an absolute majority of the Congress of Deputies. The Spanish Constitution specifies that some areas of law must be regulated by this procedure, such as the laws developing fundamental rights and freedoms recognized in the first section of Chapter Two of Title I of the Constitution, as well as the laws that approve the Statutes of Autonomy of the Autonomous Communities of Spain, among others. Prior to the 1978 constitution, this concept had no precedent in Spain, but was inspired by the similar concept in the current French Constitution of 1958.

Notice that, as established in Article 81 of the Spanish Constitution, the adoption of a Ley Orgánica requires the absolute majority of the Congreso de los Diputados (which, together with the Senado, constitutes the Spanish Parliament) in the final voting of the law.      

Perception source of legal change          
III.8
In the public and political discussions on the adoption of ordinary legislation, what was the perception on the appropriate legal framework? Was the ordinary legislation seen as implementing national constitutional law, or Euro-crisis law?

The economic crisis exposed the inadequacy of the national mechanisms of discipline on Budget laws and economic governance to control deficit, to ensure adequate funding of the public sector and to provide security to investors about the ability of the Spanish economy to grow and meet its national and international commitments. It also did not suit the path taken by the European Union seeing the need to advance the economic integration process, looking for achieving greater coordination and fiscal accountability of the Member States, and aiming towards greater economic and fiscal surveillance of them, with the consequent transfer of sovereignty.

In the medium and long term, in order to strengthen economic and fiscal policy that would allow ensuring permanent economic growth and the creation of jobs, according to the legislators, it was needed to ensure fiscal stability, which would help to strengthen the confidence in the Spanish economy and raise finance on better terms. Thus the Constitution introduced a fiscal rule limiting the structural public deficit and restricted public debt reference to the reference value of the Treaty on the Functioning of the European Union, being Spain pioneer in this regard.

Once analysed the legislation that has been developed in Spain to address the European crisis, the resulting perception is that Spanish legislators have been implementing national constitutional law, but in an increasingly integrated and complementary way with the “Euro- crisis law”.

 

Miscellaneous
III.9
What other information is relevant with regard to Spain and to changes to national (constitutional) law?

No other relevant information.

[1] See http://elpais.com/elpais/2011/08/26/inenglish/1314336041_850210.html

[2]Spanish Constitution, Part VII, Economy and Finance:

http://www.lamoncloa.gob.es/IDIOMAS/9/Espana/LeyFundamental/titulo_septimo.htm

[3] See new Article 135 Const. Synopsis: http://www.congreso.es/consti/constitucion/indice/sinopsis/sinopsis.jsp?art=135&tipo=2

[4]Reforma Constitucional (Constitutional reform) explained (ES)::

http://pendientedemigracion.ucm.es/info/sistema/textos/reforma.htm

[5]Boletín Oficial del Estado No. 103, of 30 April 2012:

http://www.boe.es/boe/dias/2012/04/30/pdfs/BOE-A-2012-5730.pdf

Sweden

Nature national instruments      
III.1
What is the character of the legal instruments adopted at national level to implement Euro-crisis law (constitutional amendment, organic laws, ordinary legislation, etc)?

Changes have so far only been made to ordinary legislation. The procedure and arguments for using that procedure has been described under Question V.2 and Question IX.2.

Constitutional amendment   
III.2    
Have there been any constitutional amendments in response to the Euro-crisis or related to Euro-crisis law? Or have any amendments been proposed?

There have been no constitutional amendments and no amendments have been formally proposed by the Government.

Constitutional context
III.3
If national constitutional law already contained relevant elements, such as a balanced budget rule or independent budgetary councils, before the crisis that are now part of Euro-crisis law, what is the background of these rules?

It should first of all be pointed out that most of the relevant rules are not provided in constitutional law, but in ordinary legislation and practice.

As previously explained, Sweden has not suffered badly by the euro-crisis. As explained by Boije, Kainelainen and Norlin[1] :

“Even though the financial crisis affected Sweden similarly to other countries in terms of loss of GDP, the effect on the public finances has, largely, been less severe. Deficits have been modest, even though Sweden has pursued among the most active contra-cyclical policies during the crisis. This combination was made possible by the large pre-crisis net lending surpluses. Each year since 2000, Sweden has abided by the numerical rules in the SGP and is one of the few EU member countries that have managed to also abide by the rules during the current crisis. The financial markets also seem to have confidence in the sustainability of the Swedish public finances; the interest spread to Germany is close to zero, unlike the case for many other EU countries. This has been important for the effectiveness of the stabilization policy measures taken to combat the crisis.”

How can this then be explained? Why did Sweden do so well in the euro-crisis? According to Boije, Kainelainen and Norlin, one explanation is found in the Swedish fiscal policy framework, which contains many of the elements now introduced by euro-crisis law:

“The relatively favourable development of Sweden’s public finances can probably, to a large extent, be attributed to the introduction in 1997–2000 of a well-defined national fiscal policy framework, consisting of a surplus target for general government, an expenditure ceiling for central government (combined with a stringent top-down budget process), and a budget-balance requirement on local governments. It also reflects a strong political commitment to adhere to this framework. Since 2007, a Fiscal Policy Council has played a central role in the external monitoring of this framework.”[2]

The background to many of these rules is the severe financial and economic crisis that Sweden faced in the early 1990s. There was a sharp recession and the banking system nearly collapsed. In the beginning of the 1990s, Sweden’s deficit was 11 % of GDP and the debt was about 70 % of GDP. This required a government rescue and the implementation of a consolidation programme adopted by a broad support from the political parties. Following the crisis, Sweden established strict budget rules. For example, Sweden already has independent budgetary councils (Question VII.5), balanced budgetary rule for local government (Question IX.4), and MTOs even more ambitious than what is now introduced on the EU level (Question VII.11).

Purpose constitutional amendment 
III.4
What is the purpose of the constitutional amendment and what is its position in the constitution?

No amendments made, and no amendments proposed.

Relationship with EU law        
III.5
Is the constitutional amendment seen as changing the relationship between national and European constitutional law?

No constitutional amendments.

Organic law      
III.6
Have there been changes to organic laws or other types of legislation that are of a different nature or level than ordinary legislation, in relation to Euro-crisis law or the budgetary process?

No.

Constitutional amendment and ordinary law       
III.7
If ordinary legislation was adopted in conjunction with a constitutional amendment, what is the relationship between the two?

No constitutional amendments.

Perception source of legal change   
III.8
In the public and political discussions on the adoption of ordinary legislation, what was the perception on the appropriate legal framework? Was the ordinary legislation seen as implementing national constitutional law, or Euro-crisis law?

There have been no objections raised to the choice of appropriate legal framework. There has been no such debate.

Miscellaneous
III.9
What other information is relevant with regard to Sweden and to changes to national (constitutional) law?

No other relevant information.

[1] Robert Boije, Albin Kainelainen and Jonas Norlin, ‘The Swedish fiscal policy framework’, Nordic Economic Policy Review, Number 1/ 2010, p 201.

[2] Ibid.

United Kingdom

Nature national instruments 
III.1
What is the character of the legal instruments adopted at national level to implement Euro-crisis law (constitutional amendment, organic laws, ordinary legislation, etc)?

All legal instruments at national level are ordinary legislation but for the European Union (Approval of Treaty Amendment Decision) Bill 2012 a specific legislative procedure required under the European Union Act was followed (see questions on Treaty Amendment).

Constitutional amendment     
III.2     
Have there been any constitutional amendments in response to the Euro-crisis or related to Euro-crisis law? Or have any amendments been proposed?

In the UK there is no written constitution, Parliament theoretically is sovereign and so there would be no need for any constitutional amendment to introduce any legislation if Parliament chose to do so.

Constitutional context  
III.3
If national constitutional law already contained relevant elements, such as a balanced budget rule or independent budgetary councils, before the crisis that are now part of Euro-crisis law, what is the background of these rules?

The Office of Budget Responsibility already existed before the need for a fiscal council became part of Euro-crisis law.

On 17 May 2010 the Chancellor of the Exchequer announced the formation of an interim Office for Budget Responsibility (OBR), led by a Budget Responsibility Committee (BRC). The interim Committee was chaired by Sir Alan Budd.

Purpose constitutional amendment       
III.4
What is the purpose of the constitutional amendment and what is its position in the constitution?

Not applicable.

Relationship with EU law           
III.5
Is the constitutional amendment seen as changing the relationship between national and European constitutional law?

Not applicable.          

Organic law   
III.6
Have there been changes to organic laws or other types of legislation that are of a different nature or level than ordinary legislation, in relation to Euro-crisis law or the budgetary process?

It’s difficult to say, the only change that could really exist would be that Parliamentary sovereignty has been further reduced. This itself is difficult to gauge, in part because control over the UK budget may be seen as a further loss of sovereignty over a new field or as further evidence that Parliament is no longer sovereign so long as Britain remains in the EU.

As McEldowney notes “the UK’s Constitution has shown remarkable resilience… Evaluating the long-term constitutional impact is both complex and confusing. Complex, because banking regulation is difficult to assess and the new regulatory arrangements have yet to be put into place; confusing, because constitutional responses are politically driven under a coalition government, unusual in modern times, and hard to evaluate in terms of their enduring legacy.”[1]

Constitutional amendment and ordinary law       
III.7
If ordinary legislation was adopted in conjunction with a constitutional amendment, what is the relationship between the two?

Not applicable.

Perception source of legal change 
III.8
In the public and political discussions on the adoption of ordinary legislation, what was the perception on the appropriate legal framework? Was the ordinary legislation seen as implementing national constitutional law, or Euro-crisis law?

The main piece of legislation adopted was the Loans to Ireland Act. In Parliament it was stressed that this was a bilateral loan, although fears were raised that the EU may gain jurisdiction over it (see section II.1)

Miscellaneous
III.9
What other information is relevant with regard to the United Kingdom and to changes to national (constitutional) law?

No.

[1] McEldowney, J.F. ‘The Constitution and the Financial Crisis in the UK: Historical and Contemporary Lessons’ in Contiades (ed) Constitutions in the Global Financial Crisis (Ashgate, 2013)