Page - 154 - in Austrian Law Journal, Volume 2/2018

ALJ 2018 Hannes Hofmeister 154 Court held that accession to the ECHR ‘… would have entailed a substantial change in the existing Community system for the protection of human rights [...] Such a modification of the system for the protection of human rights in the Community, with equally fundamental institutional implications for the Community and for the Member States, would have been of constitutional significance and would therefore have been such as to go beyond the scope of Article 235 of the EC Treaty (which became Article 308 EC), a provision now contained in Article 352(1) TFEU, which could have been brought about only by way of amendment of that Treaty’.84 Against this background, the scope of application of Article 352 TFEU needs to be restricted to cases of intrinsic Treaty supplementation. Hence, a distinction has to be made between admissible Treaty supplementation (covered by Article 352 TFEU), and inadmissible Treaty amendment (covered only by Article 48 TEU).85 From a dogmatic perspective, this element is regarded as a negative intrinsic requirement deduced by means of a teleological reduction.86 The key question therefore is whether the envisaged integration of the ESM into the EU legal framework, i.e. the takeover of the ESM’s tasks by the EU, leads to a treaty amendment or a mere treaty supplement. This is decided by the Court on the basis of an analysis of the effects that the adoption of the provision would have.87 The establishment of the EMF would lead to a takeover by the EU of powers to safeguard financial stability in the euro area – a task so far exercised by the euro area Member States. This takeover would also include the transfer of the right to decide on the use of the financial resources provided by the euro area Member States.88 In this way, the EU’s coordinating competences in the field of economic policy would be substantially extended: The Union would henceforth be equipped with significant decision making and implementing powers regarding the provision of stability support. Whether such an extension of Union powers is compatible with the ECJ’s jurisprudence seems questionable. Indeed, it seems that a future EMF which employs strict (and binding) conditionality and which has the right to decide89 on the provision of stability support ‘goes beyond the distribution of powers to the Union, which in the field of economic policy has coordinating competences only’.90 This appears to be confirmed by earlier statements of the ECJ in Pringle, where the Court held that ‘[…] the ESM is not concerned with the coordination of the economic policies of the Member States, but rather constitutes a financing mechanism. Under Articles 3 and 12(1) of the ESM Treaty, the purpose of the ESM is to mobilise funding and to provide financial stability support to ESM Members who are experiencing, or are threatened by, severe financing problems. While it is true that, under Article 3, Article 12(1) and the first subparagraph of Article 13(3) of the ESM Treaty, the financial assistance provided to a Member State that is an ESM Member is subject to strict conditionality, appropriate to the financial assistance instrument chosen, which can take the form of a macro-economic adjustment programme, the conditionality prescribed nonetheless does not 84 Opinion C-2/13, ECLI:EU:C:2014:2454, para. 38. 85 Matthias Rossi, Art. 352, in EUV/AEUV KOMMENTAR, , 74 (Christian Calliess/Matthias Ruffert eds., 2016). 86 Id. at 74. 87 Id. at 74. 88 For details see below, point 3.b. 89 For details see below, point 3.b. 90 Ioannidis, supra note 53.