Page - 151 - in Austrian Law Journal, Volume 2/2018

ALJ 2018 European Monetary Fund 151 not constitute an appropriate legal basis for the establishment of a stability mechanism of the kind envisaged by that decision. The fact that the mechanism envisaged is to be permanent and that its objectives are to safeguard the financial stability of the euro area as a whole means that such action cannot be taken by the Union on the basis of that provision of the TFEU’.72 The second provision examined - Article 143 TFEU – is not applicable either. It only allows for financial assistance for Member States whose currency is not the euro.73 In summary, none of the specific legal bases analysed can be invoked to justify the establishment of the EMF. Hence, recourse to the subsidiary competence under Article 352 TFEU is possible.74 2. Article 352 TFEU It therefore comes as no surprise that the European Commission bases its proposal for a Council Regulation on Article 352 TFEU. This article – often referred to as the ‘flexibility clause’ - stipulates: If action by the Union should prove necessary, within the framework of the policies defined in the Treaties, to attain one of the objectives set out in the Treaties, and the Treaties have not provided the necessary powers, the Council, acting unanimously on a proposal from the Commission and after obtaining the consent of the European Parliament, shall adopt the appropriate measures. Where the measures in question are adopted by the Council in accordance with a special legislative procedure, it shall also act unanimously on a proposal from the Commission and after obtaining the consent of the European Parliament. In other words, for Article 352 TFEU to apply, the following conditions must be met: (a) the measure must be within the framework of EU policies; (b) the envisaged measure must be necessary (c) to attain one of the EU’s objectives; (d) no specific legal basis exists in the treaties (‘subsidiarity’). We will now examine whether these conditions are met in the case under consideration. a. Within the Framework of Union Policies First of all, the establishment of the EMF must constitute an action by the Union within the framework of the policies defined in the treaties. This is undoubtedly the case. The ECJ has already decided in Pringle (see above) that the establishment of a stability mechanism is an economic policy measure, which falls within the scope of application of the EU Treaties (see Article 120 TFEU et seq.): ‘In the light of the objectives to be attained by the stability mechanism the establishment of which is envisaged by Article 1 of Decision 2011/199, the instruments provided in order to achieve those objectives and the close link between that mechanism, the provisions of the TFEU relating to economic policy and the regulatory framework for strengthened economic governance of the 72 Id. para. 65. 73 The ECJ held: ‘Further, even if Article 143(2) TFEU also enables the Union, subject to certain conditions, to grant mutual assistance to a Member State, that provision covers only Member States whose currency is not the euro’, Case C-370/12, supra note 71, para. 66. 74 Implied powers are evidently not applicable in the case under consideration.