Conditionality through the lens of the CJEU: a “blurry” view

From the very beginning of the Eurozone crisis, conditionality progressively entered into the vocabulary and the normative sphere of the EU economic governance. At the time of the first assistance package to Greece, conditionality was just an emergency tool set in the bilateral Loan Agreements, signed by Greece and other Members States. However, after the establishment of emergency funds like the European Financial Stabilisation Mechanism (EFSM) and the European Financial Stability Facility (EFSF), and especially after the creation of a permanent institution, a sort of “European mirror image of the IMF” (Ruffert, 2011) – the ESM – conditionality has become a sort of leitmotiv of the European response to the economic crisis or, even, a necessary requirement according to the ECJ (see M. Ioannidis, 2014).

Despite being widespread within the so-called euro-crisis law and its “constitutionalization” in art. 136 TFUE, conditionality still represents a controversial instrument, whose legal nature within the EU and the national legal frameworks has yet to be clearly defined.

Among the several problematic profiles of conditionality, on which the debate recalls the one on IMF’s conditionality, we will focus on two main issues: its legitimacy and its relationship with the EU law.

The legitimacy of conditionality, given the huge impact on national core business like health care, pension, education, is probably the most contested issue: it has been argued that conditionality, as prescribed in a Memorandum of Understanding (MoU), ‘amounts to a sell-out of the political autonomy and responsibility of democratically legitimate institutions, an exchange of obedience for money’ (Joerges, 2014)

As for the second aspect that is up for debate – the legal nature of MoUs – some scholars argue that they constitute ‘simplified agreements’, with no binding value ...

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