Page - 150 - in Austrian Law Journal, Volume 2/2018

ALJ 2018 Hannes Hofmeister 150 In summary, the integration of the ESM into the EU legal framework would make the institutional structure of EMU more coherent and transparent. It would end an anomalous situation that resulted from ‘a patchwork of decisions taken to face an unprecedented crisis’.68 B. The Competence for Integrating the ESM into the EU Legal Framework One of the fundamental principles of EU law is the principle of conferral established in Article 5(2) TEU. Under this principle, the EU shall only act within the limits of the powers conferred upon it by the Member States in the Treaties. It highlights that the EU – as a supranational institution – lacks a so-called ‘competence-competence’, i.e. a power to create its own competences (this jurisprudential doctrine is often referred to by using the German term ‘Kompetenz-Kompetenz’). Practically speaking this means that the EU – whenever enacting a new legislative act - has to rely on a specific legal base in the Treaties, implied powers69 or the subsidiary competence enshrined in Article 352 TFEU. This section will therefore analyse the potential legal bases that might justify the establishment of the EMF.70 It will first analyse specific legal bases, such as Article 122(2) TFEU et alt. In case none of them applies to the case under consideration, we will turn to the subsidiary competence enshrined in Article 352 TFEU. 1. Specific Legal Bases The issue of whether or not the EU has the power to establish a financial stability mechanism was addressed – albeit indirectly – by the ECJ in Pringle (2012). In this case, the ECJ held that the establishment of the ESM constitutes an economic policy measure. Articles 2(3) and 5(1) TFEU, however, restrict the role of the Union in the area of economic policy to the adoption of mere coordinating measures. Hence, the provisions of the TEU and the TFEU do not confer any specific power on the Union to establish a stability mechanism: ‘… as regards whether Decision 2011/199 affects the Union’s competence in the area of the coordination of the Member States’ economic policies, it must be observed that, since Articles 2(3) and 5(1) TFEU restrict the role of the Union in the area of economic policy to the adoption of coordinating measures, the provisions of the TEU and TFEU do not confer any specific power on the Union to establish a stability mechanism of the kind envisaged by Decision 2011/199’.71 Nonetheless, the Court goes on to examine – at least cursorily – Article 122(2) TFEU and Article 143(2) TFEU. It quickly concludes, though, that none of them is applicable in the case at hand: ‘Admittedly, Article 122(2) TFEU confers on the Union the power to grant ad hoc financial assistance to a Member State which is in difficulties or is seriously threatened with severe difficulties caused by natural disasters or exceptional occurrences beyond its control. However, as emphasised by the European Council in recital 4 of the preamble to Decision 2011/199, Article 122(2) TFEU does 68 COM (2017) 827 final, supra note 6, at 3. 69 Dogmatically speaking, ‘implied powers’ are also considered to be ‘conferred’ within the meaning of Article 5(2) TEU, see judgment of 31 March 1971, AETR, C 22/70, EU:C:1971:32, para. 15, 19. 70 And hence the enactment of the underlying legislative act, i.e. the ‘Regulation on the establishment of the European Monetary Fund’. 71 Case C-370/12, Pringle v. Government of Ireland and Others, ECLI:EU:C:2012:756, para. 64.