Seite - 146 - in Austrian Law Journal, Band 2/2018

ALJ 2018 Hannes Hofmeister 146 proposed EMF statute, compliance with conditionality is monitored solely by the Commission, in liaison with the ECB. No role is explicitly provided for the EMF in this critical phase’.53 In conclusion, the proposed changes significantly strengthen the role of the European Commission. Given the latter’s self-perception as an increasingly political actor, it is likely that we will see a softening of reform conditions in the future due to political compromises.54 b. Common Backstop to the SRF/Lender of Last Resort The EMF would also take over certain functions in the banking union. It would provide the common backstop to the Single Resolution Fund (SRF) and act as a lender of last resort in order to facilitate the orderly resolution of distressed banks. For this purpose, the EMF will be able to provide credit lines or guarantees to secure measures by the Single Resolution Board (SRB).55 In this way, the EMF will supplement the system of financing the orderly resolution of banks in the banking union: The ‘liability cascade’ put in place envisages a primary liability of shareholders and creditors (‘bail-in’). If that proves insufficient, then the SRF, worth € 55 bn. and financed by bank levies, will be activated. Only if the SRF proves insufficient, too, then recourse to the EMF as ultima ratio would be possible. The proposed EMF instrument thus implements the options of the SRB already set out in Article 74 of Regulation 806/2014. Pursuant to Article 74, the SRB shall ‘where the amounts raised or available in accordance with Articles 70 and 71 are not sufficient to meet the Funds' obligations … contract for the fund financial arrangements, including, where possible, public financial arrangements, regarding the immediate availability of additional financial means to be used in accordance with Article 76 …’.56 In sum, the EMF would provide the common last-resort backstop to the SRF. The underlying rationale is to provide ‘enhanced confidence to all parties concerned with regard to the credibility of the actions to be taken by the SRB and to increase the capacity of the SRF’.57 c. Changes to the Decision-Making Mechanism In terms of governance, the Commission proposal includes the possibility for faster decision making in certain situations. For instance, a so-called reinforced qualified majority, which requires 85% of the votes, suffices for specific decisions on stability support, disbursements and the deployment of the financial backstop. However, unanimity voting will be kept for all major decisions with financial impact, such as capital calls. These new voting rules deserve a closer examination. They are set out in Article 4 of the draft statute of the EMF: (…) 53 Michael Ioannidis, Towards a European Monetary Fund: Comments on the Commission’s Proposal, EU Law Analysis Blog, Jan. 31, 2018, available at http://eulawanalysis.blogspot.de/2018/01/towards-european-monetary- fund-comments.html (last visited Jan. 3, 2019). 54 The non-participation of the IMF in the future only serves to underline this impression. 55 See Article 22(1) of the Draft Statute of the EMF, European Commission, ANNEX to the Proposal for a Council Regulation on the establishment of the European Monetary Fund, COM (2017) 827 final (Dec. 6, 2017), at 13. 56 Article 74, Regulation 806/2014. 57 COM (2017) 827 final, supra note 6, at 4.