Seite - 69 - in Austrian Law Journal, Band 1/2015

ALJ 1/2015 Authoritarian Liberalism 69 Second, when the Member States were first confronted with the potential default of countries like as Greece, they had to answer the simple and important question whether the original treaty framework was indeed susceptible to flexible complementation.12 As originally understood, the Treaty had made no credit available to Member States from the ECB qua lender of last resort (Article 123 TFEU) and had also seemed to have ruled out that Member States somehow assume the liability of any other (Article 125 TFEU). The exigency of rescuing the common currency, how- ever, soon made the Member States divine ways of working around existing constraints, for ex- ample, by using the solidarity clause of Article 122(2) TFEU as a basis for adopting the regulation introducing the European Financial Stabilization Mechanism.13 More importantly, outside the Treaty framework they quickly created institutions charged with helping debt-challenged Mem- ber States to restructure their sovereign debt, such as the European Financial Stability Facility and the European Stability Mechanism. The Euro Zone remained sustainable owing to amendments that were anchored in Public International Law.14 II. Obvious problems Not surprisingly, the amendment of existing law and the creation of new institutions have been persistently trailed by two recurring challenges. They have been concomitant to European inte- gration for decades. The first challenge questions whether or not the Union or the Member States really have the legal power to adopt the relevant measures15 (for example, of introducing reverse qualified majority voting when it comes to imposing sanctions in the context of multilateral surveillance).16 This ultra vires challenge is often complemented with the other challenge alleging that European crisis management has exacerbated the already existing “democracy deficit”.17 Remarkably, in this context the competence challenge appears in a dual format that looks toward the democracy deficit. Not only is it debatable whether, for example, the Member States have the power to assign in the Fiscal Compact certain tasks to the Union institutions without the consent 12 As Scharpf points out correctly, it would have been possible to let Greece default on its debt on the basis of a strict construction of Maastricht rules. For such a “tough luck” approach, see FRITZ W. SCHARPF, NO EXIT FROM THE EURO-RESCUING TRAP? 5 MPIFG DISCUSSION PAPER at 7 (2014). 13 See Council Regulation 407/2010. 14 See Pieter-Augustijn Van Malleghem, Pringle: A Paradigm Shift in the European Union’s Monetary Constitution, 14 GERMAN LAW JOURNAL, 2013, at 141. 15 The Pringle case concerned the legality of the European Stability Mechanism. See Case C-370/12, Pringle v. Ire- land, [2012] ECR I-nyr. The conclusion of the Fiscal Compact generated a great deal of critical observation. See, for example, P.P Craig, The Stability, Coordination and Governance Treaty: principle, politics, pragmatism, 37 EUROPEAN LAW REVIEW 231, 238-239 (2012). The current saga concerning the Outright Monetary Policy (OMT) of the ECB, which allows it to buy debt from Member States that receive credits from the ESM, involves an ultra vires chal- lenge by the Federal Constitutional Court, which still needs to be answered by the ECJ. For an account of the story, see Armin Steinbach, The Legality of European Central Bank’s Sovereign Bond Purchases, 39 YALE JOURNAL OF INTERNA- TIONAL LAW ONLINE, 2013, at 15. This challenge seems to be a major blow to the rescue efforts not least because the OMT policy seems to have helped a lot to help the Member States concerned. 16 For a skeptical view, see Martin Höpner & Florian Rödl, Illegitim und rechtswidrig: Das neue makroökonomische Regime im Euroraum, 92 WIRTSCHAFTSDIENST 219, 219-222 (2012); Jürgen Bast & Florian Rödl, Jenseits der Koordinierung? Zu den Grenzen der EU-Verträge für eine Europäische Wirtschaftsregierung, 39 EUROPÄISCHE GRUNDRECHTEZEITSCHRIFT, 2012, at 269. 17 See, for example, Agustin Menendez, Editorial: A European Union in Constitutional Mutation?, 20 EUROPEAN LAW JOURNAL, 2014, at 127; Ruth Fox, Europe, Democracy and the Economic Crisis: Is It Time to Reconstitute the “Assise”? 65 PARLIAMEN- TARY AFFAIRS, 2012, at 463. See already FRITZ W. SCHARPF, MONETARY UNION, FISCAL CRISIS AND THE PREEMPTION OF DEMOC- RACY, 11 MPIFG DISCUSSION PAPER (2011).