Page - 145 - in Austrian Law Journal, Volume 2/2018

ALJ 2018 European Monetary Fund 145 This ‘partial involvement’ of EU institutions, such as the ECJ, in an intergovernmental mechanism has generated a ‘complex landscape where judicial protection, respect of fundamental rights and democratic accountability are fragmented and unevenly implemented’.48 This has led to frequent calls for reforms, which were eventually heeded in late 2017. B. Transforming the ESM into an EMF – the Key Changes On 6 December 2017, the Commission published a set of proposals to reform the euro area. These proposals include, inter alia, the creation of a post of European Finance Minister, a euro area budget-line, the integration of the fiscal compact into the Union legal framework and the establishment of a European Monetary Fund. The latter will be at the centre of this section. The Commission does not intend to set up the EMF anew from scratch. Rather, the new EMF is to be built on the well-established structure of the ESM.49 The new EMF will thus succeed to and replace the ESM,50 with the latter’s current financial and institutional structure essentially preserve.51 However, the new institution will also take on a number of additional responsibilities/functions. Moreover, some further modifications are necessitated by the integration of the mechanism into the EU legal framework. These are set out in the Draft Statute of the EMF52 annexed to the Draft Regulation on the establishment of the EMF and will be analysed in the next section. 1. The Key Changes a. Negotiating and Monitoring Reform Programmes So far negotiating reform programmes and monitoring compliance was the task of ‘the institutions’, i.e. the Commission, the ECB and the IMF. Under the new proposal, the IMF – despite its long-standing experience – will no longer be involved. All references to the IMF are deleted in the new draft. Interestingly, the role exercised so far by the IMF is not passed on to the EMF. Rather ‘conditionality is for the Commission to keep. According to Article 13 of the draft EMF statute, conditionality is negotiated by the Commission, in liaison with the ECB, and ‘in cooperation with the EMF’. ‘Cooperation’ is admittedly a very weak form of involvement, especially if it is compared with the phrase ‘together with’ that previously described IMF involvement under the ESM Treaty. Moreover, MoUs shall be signed by both the Commission and the EMF. In contrast, under the ESM Treaty, MoUs where signed by the Commission ‘on behalf’ of the ESM. The phrase ‘on behalf’, establishing an agent-principal relation between the Commission and the ESM, is now deleted, meaning that the Commission becomes legally a co-owner of EMF conditionality. Finally, under the 48 COM (2017) 827 final, supra note 6, 3. 49 In legal terms, it will succeed to and replace the ESM, including in its legal position, with all its rights and obligations. 50 See Article 2(1) COM (2017) 827 final, supra note 6, at 26; Article 2(1) provides: ‘The EMF shall succeed to and replace the European Stability Mechanism (ESM), including its legal position and assuming all rights and obligations. [...].’ 51 COM (2017) 827 final, supra note 6, at 5. 52 The Statute of the EMF forms an integral part of the Regulation, see Article 1(2) of said Regulation.