The Eurozone Crisis Is Also a Governance Crisis – Isn’t It?

by Kenneth Anderson

Over the last few months, as the eurozone crisis has gathered steam, I have wondered what the crisis means for the governance structures of the EU. One answer is, not much — the political leadership will somehow muddle through as it always does, on the basis of discretionary deals among the national leaders of European states. Then the institutional arrangements will be adjusted after the fact to reflect whatever happened in the politics of the event.

In that case law, in the sense of legally binding governance arrangements, is epiphenomenal on political contingency which, in this case, is contingent upon relations with the financial markets, which is to say, upon the willingness of lenders to continue to lend and roll over debt. Even something as apparently legally binding as the ECB’s charter turns out not to be legally binding on any ordinary reading of it. On this account there’s not a lot to say from the standpoint of governance theory or institutional governance arrangements because the EU’s lawyers will not know how to (re-)arrange the legal furniture until afterwards. The role for the governance lawyers is the lawyer-as-scribe; the legal rules are post-hoc and revisable according to the contingencies of politics.

This does not seem to me a plausible way of looking at the role of legal rules; if it were, it seems unlikely to me that European states would have been lent this amount of money by investors globally. Why not? Because investors don’t like to lend into discretionary legal regimes, for obvious reasons. But leave that aside. I have raised these points before, and have been nonplussed by how little commentary there is by European public lawyers on the question of institutional design, exit from the Eurozone, etc. This, even as it appears from various leaked documents that various important national and EU agencies are indeed privately trying to plan for various contingencies ...

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