Seite - 158 - in Austrian Law Journal, Band 2/2018

ALJ 2018 Hannes Hofmeister 158 the ESM is integrated into the EU legal framework. According to the actus contrarius doctrine, unanimity would be required to repeal the Regulation on the establishment of the EMF.104 Thus, Member States should be aware that once the EMF is established and integrated into the EU legal framework it will be very difficult to ‘escape’ its obligations. IV. Conclusion The Commission’s proposal faces a plethora of problems: First of all, it seems highly questionable whether the EU has indeed the competence to integrate the ESM into the EU legal framework. In particular, the invocation of Article 352 TFEU as legal base is not convincing for the reasons outlined above. Second, the integration of the ESM into the EU legal framework will not render EMU any more democratic. The European Parliament continues to play a marginal role only – all it can do is to request annual reports by the EMF and to demand a hearing of the Managing Director. Third, efficiency may indeed be increased by changing the decision-making procedure. However, it comes at a cost of democratic legitimacy: The principle of democracy - as enshrined, inter alia, in Article 20 of the German Basic Law - requires that the German Parliament remains the place in which autonomous decisions on revenue and expenditure are made, including those with regard to international liabilities. However, this will no longer be the case once the veto right is lost (e.g. during the emergency procedure). This would interrupt the democratic legitimation nexus between the budgetary overall responsibility of the national parliament and the ESM/EMF. It would shift the decision making process to the supranational level, where the European Parliament still plays a marginal role only. In light of these implications it is highly questionable whether the individual Member States and in particularly Germany will – and indeed can – support the proposal, which requires unanimity.105 104 Provided Article 352 TFEU is indeed used – as proposed by the Commission – as the legal base for enacting said Regulation. 105 At least if one accepts the Commission’s view that Article 352 TFEU is the appropriate legal base.