The Fiscal Compact and the European constitutions: ‘Europe speaking German’

Abstract

This brief contribution outlines some of the puzzling constitutional aspects of the Treaty on Stability, Coordination and Governance in the Economic and Monetary Union, concluded in March 2012, also known as the 'Fiscal Compact'. It requires member states to entrench the 'balanced budget rule' into their legal systems, binding parliaments when adopting the national budget. Precisely because the core substance of the obligations contained in the Fiscal Compact can also be achieved by, and are mostly already contained in secondary EU law, this raises the question of why it was felt necessary to conclude nearly the same rules in a treaty text which is half inside and half outside the EU legal order. It is submitted that on the one hand it shows the constitutional dependence of the EU on the member state constitutional orders; on the other it shows the degree to which the member states need to adapt to the EU to the extent of requiring a substantive limitation of national parliaments' power of the purse in their national constitutions.