Fabian Amtenbrink

Economic Governance in the European Union - Fiscal Policy Discipline versus Flexibility

This contribution examines fiscal policy co-ordination in the Economic and Monetary Union (EMU) and discusses whether the amendments of the Stability and Growth Pact proposed in the past, some of which have since been implemented, enhance budget discipline. In doing so, it provides a detailed analysis of the legal provisions on multilateral surveillance and the excessive deficit procedure based on the concepts of open and closed method of coordination. Arguably, it is the mixing of these two distinct concepts which stands at the heart of the current controversies. This has to be taken into account when assessing the recent proposals to introduce greater flexibility. Indeed, rather than introducing more flexibility, the analysis of the current system presented in this contribution suggests that those elements of economic coordination which prevent the existing rules from being implemented properly should be amended, thereby to some extent depoliticising economic coordination. The contribution begins with a discussion of the fiscal policy rules previously in place, followed by a political-economy analysis of these rules. Thereafter the reform proposals of the Commission, as well as other proposals for institutional reforms, including those originally foreseen in the Treaty establishing a Constitution for Europe, are examined. It is concluded that the reforms of the pact do little to redress the failure of some Member States to consolidate their public finances in times of economic prosperity.

Securing financial independence in the legal basis of a central bank

Together with institutional, functional and organizational independence, financial independence constitutes one of the cornerstones of central bank independence, the economic ratio of which has been demonstrated extensively in the literature. In broad terms financial independence may be defined as referring to the legal and practical arrangements identifying the finances of a central bank and the extent to which the bank is subject to outside influence in this regard. In the (legal) debate on central bank accountability, arguably arrangements relating to central bank finances have sometimes been treated in a rather step motherly fashion. Yet, with the wider debate on good governance structures having reached central banking, more attention is paid to such detailed arrangements. This contribution focuses on and aims at providing an overview on the impact on central bank independence of the legal arrangements relating to several aspects of central bank finances. While government access to central bank money undoubtedly has an impact on the financial position of the central bank, this contribution focuses on those elements, which are arguably more directly linked to the financial position of a central bank, including capitalization and recapitalization, the determination of the central bank budget and the arrangements on profit and loss distribution. In legal studies these arrangements have certainly received less attention. To this end a critical assessment of the role which the legal basis of a central bank plays in enhancing or undermining the financial position of a central bank vis-a-vis government and, thereafter. In this context, legal arrangements which do not only support the financial independence of a central bank but also enhance its accountability are observed. Where appropriate, references are included to legal arrangements in existing central bank systems so to provide for negative and positive examples.

Regulating Credit Rating Agencies in the European Union: A Critical First Assessment of the European Commission Proposal

In the wake of the ongoing global financial crisis, recently the European Commission has published a proposal for a European Parliament and Council Regulation on Credit Rating Agencies. With this proposal the European Union aims at addressing calls for more regulation of the (global) financial markets and overall improvements in the rating process of Credit Rating Agencies. According to some analysts, such as the Financial Stability Forum, poor credit assessments of complex structured credit products by Credit rating Agencies contributed to both the build up and the unfolding of the financial crisis. The authors offer a first critical comparative examination of the proposed Regulation against the background of the current regime under the non-binding IOSCO Code of Conduct for Credit Rating Agencies. In doing so, answers are sought to the question, whether and to what extent the introduction of the envisaged regulatory framework will result in a more effective and efficient oversight over the activities of Credit Rating Agencies in the European Union. A certain degree of scepticism may be called for, as the proposed Regulation falls short of addressing some important shortcomings of the present regulatory framework, while the value added of the proposed regulatory framework may not necessarily outweigh its risks.Since the beginning of the global financial and economic crisis, the search for its causes has been in full flight on both sides of the Atlantic. Inter alia, fundamental failures in the evaluation of risk and the role that Credit Rating Agencies (CRAs) play in the assessment of credit risk are discussed. More specifically, the question is raised as to what the role of CRAs is in the financial markets, why this role may be problematic and how the main weaknesses of the present system can be addressed in the European Union (EU) and elsewhere. This contribution does not aim to provide a discussion of all theoretical aspects that might be involved in an economic analysis of CRAs, but to better understand the main behavioural economics and normative arguments that may be related. Thereby, the current EU regulatory framework on CRAs and credit ratings will be scrutinized. The basic hypothesis of this contribution is that the current and proposed future EU regulatory framework does not fully succeed in effectively tackling failures in the CRA market, because insights from behavioural economics are widely neglected.

Introduction: The active paradigm of the study of the EU’s place in the world

This book zooms in on the EU’s active engagement with the international legal order. It aims at analysing how the EU shapes its environment and creates rules and practices for the world, reshaping – or at least attempting to reshape – international law. The book does more than simply visiting a range of essential fields of the EU’s engagement. It offers an ethical perspective on the Union’s actions, shedding light on some underlying motivations, which are at times more complex than the official documents would suggest. This collection advocates what we refer to as an ‘active paradigm’ of the study of the EU in the international legal context, approaching the Union as an active co-creator of the international legal order, as opposed to emphasizing the perspective of the reception of international law in the EU, the latter’s legal interconnectedness with the rest of the world, its role in emergencies or the soft

Taming the beast? New European regulation for credit rating agencies

This paper discusses the proposal of the European Commission for further regulation of Credit Rating Agencies (CRAs), focusing on what the proposal will imply for: (1) the large concentration in the market for credit ratings, (2) the overreliance of investors and regulators on credit ratings, (3) the conflicts of interest that arise due to the business model of CRAs, (4) the lack of transparency and liability, and (5) the role of CRAs in rating sovereign debt. It is concluded that the political agreement on this proposal as a result of the trilogue between the European Parliament (EP), the Council of the European Union and the European Commission can hardly be considered breaking ground on any of the major issues identified in this contribution.

Central Bank Challenges in the Global Economy

There are few institutions linked to the exercise of public power in the economic sphere that have stood the test of time for as long as central banks.

The Multidimensional Constitutional Legal Order of the European Union - A Successful Case of Cosmopolitan Constitution-Building?

European integration has been portrayed as an example of the juridification of cosmopolitan values and the constitutionalization of cosmopolitan law. Yet, is the EU really a successful case of cosmopolitan constitution-building? Moreover, can cosmopolitanism itself provide a way out of the current dilemmas of the EU as occasionally seems to be suggested? In seeking an answer to these questions, first of all the roots of and contemporary rationale for moral and legal cosmopolitanism are explored from a normative point of view. What emerges from this is that the juridification of cosmopolitan values, such as universal human rights standards, together with the increasing loss of power of states resulting from globalization have raised concerns about the democratic legitimacy and accountability of the current global legal order. Democratic states are believed to no longer function properly given the non-democratic nature of the current global legal environment. Demands for the establishment of a (different) global legal order which constitutes, attributes and demarcates public power effectively amount to an appeal for the constitutionalization of cosmopolitan law. From an analysis of the relevant literature the allocation of power, the provision of democratic legitimacy and accountability, and the establishment of a political community beyond the state, are identified as the main challenges that any viable model for the constitutionalization of cosmopolitan law has to address. Applying these key issues as a theoretical framework for the analysis of the multidimensional constitutional legal order of the EU, it can be observed that while the EU undoubtedly signifies the most advanced form of governance beyond the state, it can neither unreservedly be considered to constitute a cosmopolitan project, nor does it offer a convenient model for the establishment of a democratic global legal order. At the same time, given the many uncertainties governing its concrete shape, legal cosmopolitanism also does not offer ready-made solutions for the structural, constitutional and institutional challenges which the EU currently faces.

Netherlands Yearbook of International Law 2017 : Shifting Forms and Levels of Cooperation in International Economic Law: Structural Developments in Trade, Investment and Financial Regulation

This Volume of the Netherlands Yearbook of International Law explores emerging trends and key developments in international economic law. It examines shifts in the levels of cooperation (from multilateral to plurilateral, regional or bilateral—or vice versa), and shifts in the forms of cooperation (new types of actors and instruments). These trends are analysed both from a conceptual and a practical perspective, with contributions addressing drivers for change, historical perspectives, future developments, and evolutions in specific policy fields. While a focus on international economic law may certainly not tell the whole story in relation to shifts in levels and forms of international cooperation, it does allow for a more detailed analysis of some of the important trends we currently witness. The Netherlands Yearbook of International Law was first published in 1970. It offers a forum for the publication of scholarly articles in a varying thematic area of public international law.

Is there life in the old dog yet? Observations on the political economy and constitutional viability of common debt issuing in the euro area

Abstract Departing from a political economy analysis of the benefits of common debt issuance by the Eurozone member states, we examine to what extent the various proposals for Eurobonds may be considered admissible under EU law and exemplary national (constitutional) laws, including those of Germany, Estonia, France, Ireland and Poland, from which one can deduce general national constitutional requirements applicable in all Eurozone member states. The medium and long-term potential gains from increased Eurozone stability and improved fiscal discipline must be traded off against the considerable legal and political obstacles of implementing any of these proposals. Yet key to the success of any common debt issuance is the effective dealing with the legacy debt of the Eurozone member states.

Conclusion: Messianism, Mission, or Realpolitik? Some Concluding Observations on the Union's Role in Shaping the International Legal Order

These are the conclusions to an edited volume compiled to test the feasibility of an active paradigm of the study of EUs engagements with the international legal order. The work aims at analysing how the EU shapes its environment and creates rules and practices for the world, reshaping – or at least attempting to reshape – international law. The book does more than simply visiting a range of essential fields of EU’s engagement. It offers an ethical perspective on the Union’s actions, shedding light on some underlying motivations, which are at times more complex than what the official documents would suggest. This collection advocates what we refer to as an ‘active paradigm’ of the study of the EU in the international legal context, approaching the Union as an active co-creator of the international legal order.