Open Review of Management, Banking and Finance

«They say things are happening at the border, but nobody knows which border» (Mark Strand)


by Angela Troisi

Abstract: The paper considers the “founding fathers’ project” for a European Community, having regard to the individualistic tendencies of the Member States and the dangers of regulation unsustainability.
In this respect, it is worth considering also the lack of a common purpose and the specific problems of the Eurobonds and the ESM, in the light of the evidences arisen at the time of Covid 19.
Then, the focus goes to the Recovery Fund and the need for recovery the socioeconomic emergency in terms of solidarity. 

Summary: 1. Introduction. – 2. The “founding fathers’ project” for a European Community; methodologies and disciplinary evolution. – 3. The individualistic tendencies of the Member States and the dangers of regulation unsustainability. – 4. The lack of a common purpose and the specific problems of the Eurobonds and the ESM. – The European Union at the time of Covid 19. – 6. The Recovery Fund and the fight against health and socioeconomic emergency. – 7. Is it true solidarity?   

1.  The EU needed such an extraordinary event as the Covid 19 pandemic to foster some significant changes in its monetary policies and, more generally, in its attitude. Eventually, this incident might inject new lifeblood in the body of European integration process and make it possible to overcome certain dystonic factors which so called “pro-Europeans” feared would lead to the substantial decline of the original Community design over the last decade. The latter has been identified as the intention to combine “the prospect of mere economic cooperation with the pursuit of objectives of greater importance in the political field”[1] by the doctrine.

        The pandemic – which has caused a serious health emergency in many European countries and a severe economic crisis – has acted as a catalyst for the emergence of critical issues in the Union, highlighting its dangerous implications for its future development. It has been acknowledged that is necessary to abandon the longlasting rigidities of the European policies to embrace a different operational strategy based on greater cohesion and solidarity in order to emerge unscathed from the general malaise in which the coronavirus had dragged all Member States.

Hence, the abandonment of the austerity mindset – which promoted dissent among European countries since 2007 – has still to prove its beneficial effect on the Union, despite being widely welcomed by its Members. Certainly, as we will discuss later, the willingness to sustain heavily affected countries’ economies is subordinated to the presentation of appropriate spending programs by the applicants. There are still doubts regarding the scope (rectius: tenor) of the checks aimed at verifying the correct use of the funds according to European rules.

It is clear that the Union has reached a moment in its history when it needs to find a rational balance between its members’ selfishness, hegemonic tendencies on one side and a responsible behaviour aimed at the well being of everyone on the other. In this context, some countries must also understand that they need to cut some of the long pursued unsustainable welfare policies in view of a renewed commitment to put Europe at the very center of the global geopolitical arena and give new life to the “European dream”.  

2.     The legal and economic doctrine has long dwelt on the analysis of the so-called Manifesto of Ventotene, written by Altiero Spinelli, Ernesto Rossi and Eugenio Colorno, which is based on the need to maintain peace between European people and nations in perennial conflict[2]. This work contains the inspiring principles and future expectations for Europe, which reflect a neoliberal conception aimed at overcoming the difficulties of sharing national development economic policies according to the federalist approach.

On a technical level, the institutional architecture of the European Community owes to the functionalism of Mitrany and the neo-functionalism of Haas and Lindberg[3]; these orientations have shown significant limits over time due to the difficulty of shifting from an integration based on mere pooled economic resources to some sort of political agreement through a spillover mechanism.

More specifically, since the regulatory design in EU institutions is reduced to a simple co-decision technicality(being the Commission to advance regulatory projects, and the Council and Parliament to approve the wording), the contents are drawn up by agreement between the several countries, so the stronger ones obviously end up imposing their view. As it has been authoritatively stated, this “intergovernmental method” does not favour harmony between Member States, allowing forms of prevarication to take place[4]. Nonetheless, it is widely adopted in European institutional bodies[5] as it provides room for individualistic behavior to prevail in bilateral relations.

Actually, the current institutional framework could be considered as an obstacle for  the establishment of a cohesive and supportive system by reinforcing the endemic lack of political and economic convergence.

         The introduction of a single currency enhanced cooperationin the European Union but also introduced a “technocratic” power, being outside the political decision of the States and its management being entrusted to an autonomous supranational body[6]. In this way, a substantial restriction of national sovereignty is implemented by taking away the monetary autonomy and, therefore, reducing the scope of its power. Moreover, as it will be detailed in the next paragraph, the ‘single currency’ has intrinsic limits which will contribute to the rise of policy divergences by negatively impacting on the integration process and resulting in a growing gap between the EU countries.

         This situation has been made worst by the crisis of 2007 and following years. To counter its effects, the Union has adopted a strict austerity regime, which is linked to an increase in economic inequality within Europe.  In addition, the financial crisis compromised the stability of the credit sector by generating huge amounts of impaired loans. These affected the whole sector, hence the prospect of incurring dangerous pathological situations. The onset of such events did not find a European supervision system able to counteract them adequately; on the contrary, there were significant limits to the supervisory activity not yet assessed by the national authorities, which appeared to be lacking also with regard to the pursuit of a ‘joint interventionist action’.

         Still, there is a need to overcome the above-mentioned differences within the Union, which are an obstacle to the proper supervisory integration. The debate within the EU focuses on the analysis of the new ‘top-level architecture’ of the European financial system and its impact on national systemic realities; it is the basis for a redesign of the market’s legal order, which is summarised in the achievement of the European Banking Union. Therefore, there is a significant division of competences between central and national authorities, while the ECB performs ‘specific tasks of prudential supervision’[7] of credit institutions (reference to Article 127 TFEU).

 The technical structure of the Banking Union is aimed at homogenising the banking operations and, consequently, to facilitate banking activity under the control of a single supervisory body. However, when the national authorities lose control of banking supervision, they end up restricting any form of democratic control, with no connection with the policy that is a prerequisite of the latter[8]. In perspective, the ECB might extend its supervision to the whole financial system (i.e. also the non-significant banks), as it can be inferred from a decision from the Court of the European Union of 16 May 2017 (case T-122/15). Eventually, it might be difficult to reconcile the regulations implemented at a domestic level and those imposed by the EU[9].

3. As we discussed above, we acknowledge a technical top-level architecture of the European financial system and a decision-making system in which importance is given to the individualism of each Member States. This reality certainly does not facilitate the achievement of the original community project as desired by the “founding fathers”. Historically, relevant difficulties have shown in striking a political balance between the hegemonic tendencies of Germany, supported by a group of satellite states (Holland, Austria, Slovakia, Finland), the ambivalence of Great Britain, the grandeur ofthe French agere andthe difficulties of the Mediterranean countries[10].

        In this various framework, countries experienced different speeds in identifying  suitable economic development tools or adequate remedies to counteract critical issues (namely recessions) that occurred due to the adverse economic situation at the beginning of the millennium. This phenomenon favoured separatism and an individualistic mindset summarized by the above-mentioned intergovernmental approach; in fact, the European integration has been limited to the economic field by preserving a relational system aimed at safeguarding specific national interests. Indeed, the commitment of the Member States ends up being essentially correlated to the preferences and benefits that can derive from defending domestic policies.

 Little space is given to “convergent policies” despite the fact that intergovernmentalism’s liberal[11] theoretical basis is aimed at supporting common growth or forms of greater social cohesion. Actually, EU technical bodies promoted such approach and, therefore, deprived the political bodies, which could represent the will and interests of the European people.

 From other points of view, the original organisational structure of the European Community – as mentioned above – has produced a technically oriented decision making, so as to make it appear that the demands of politics are poorly defended.  

 Specifically, the creation of the European Monetary Union did not achieve the desired effects, being criticized by the doctrine which highlighted the unsustainability of the Maastricht Treaty, the failure to implement the underlying program and, in some cases, even a worsening of economic conditions in the adhering countries[12]. In this regard, doubts have been casted about the validity of the parameters defined in the Maastricht Treaty, as well as about the concrete possibility of implementing the objectives indicated by the European regulator, which should have paved the way for the achievement of a political union[13].  

 We cannot hide the fact that the systemic structure underlying the ‘single currency’ appears in some ways contradictory since it focuses on the separation between monetary policy, which is the ECB’s responsibility, fiscal and budgetary policy, which is left to the individual Member States. As a consequence, we witness the growing gap linked to different economic and financial conditions. It also explains the asymmetries and structural problems of the Eurozone studied by the doctrine[14], as well as the concept of an economic govenance “not … yet satisfactory from the point of view of its democratic legitimacy”, hence the risk of “repeating and widening the long-standing problem of the democratic deficit of the EU”[15].  

  Also, the regulator has shown a preference for technicality over policy in designing the European Banking Union, as it sought to address systemic criticality (caused by the 2007 crisis) and to give greater stability to the credit sector. Following the same approach for the establishment of the ESFS (European System of Financial Supervision), new authorities had broad supervisory powers in order to create “a single supervisory mechanism for the Euro Area”, which is based on the involvement of the ECB, since the latter’s action has been perceived as the key tool for avoiding the risks that, at that time, undermined the economic recovery of the Union[16].   

        The new financial supervisory architecture has allowed Europe to benefit from the global[17] economic growth, but it also proved unsuitable for encouraging the formation of a common purpose within the EU. It is true that the creation of the European Banking Union has contained the critical issues arising from the financial turmoil but it also failed to address the loss of sovereignty by the supervisory authorities of the member states. This eventually turned to a sort of “unresisting attitude” which has a negative impact on the prospect of homogenisation ofthe credit sector desired by the regulator.

 From another point of view, the identification of the strategies to be applied in the supervisory action has been left to technocratic bodies, so it is often an issue for those who look critically at the economic burdens (i.e. increase in costs) imposed on them (here we refer to the small local banks, such as the Italian BCCs); this has inevitable negative repercussions on the their will to take active role in the Union. In fact, the operational directives of the ECB and, more generally, of the EU are sometimes unwelcomed even if aimed at moving towards a common goal. Hence, we see the emergence of a growing gap between the European reformer’s intentions and the possibility of a coherent response by the banking market which is coupled with the progressive evanescence of a “political union”. The latter appears increasingly limited to a mere, emphatic statement of intentions made by governments.

4. As mentioned above, the European Union has shown unequivocal limits in the creation of a “unitary group” of states, being cohesive and animated by a purpose of unity. The Member States are not able, in fact, to go further in the integration process and go beyond the simple regulatory harmonization oriented to economic development. The commitment of the technical authorities, like the interventions of the ECB, are not able to expand their objectives beyond those of stability. Therefore, only an increased political action can guarantee adequate levels of balance and growth. A widespread climate of uncertainty characterizes the European Union because the constraints on the public debt/GDP ratio and on the deficit/GDP ratio have not given an effective economic response, at least for some countries including Italy[18].

        Having a closer look to the issue, perhaps the lack of willingness to “share their destinies” seems to be linked to the malaise that has plagued Europe so far. In fact, some Member States, such as Germany and Great Britain before Brexit, have shown themselves to be aware of the difficulties of “being united in diversity”.

The affirmation of democratic consensus, on which the EU was supposedly build, makes unacceptable the opportunity of a single country ruling. At the same time, the Member States cannot refuse to define a common strategic action aimed at the institutional renewal of the entire Community because their refusal would cause a certain drift in the process of Europeanisation.

       This reality is fully confirmed in the guidelines of the German Constitutional Court by the judgment known as Maastricht-Urteil. The latter outlines the distinction between “community of solidarity” and “community of stability” and in the most recent decision of 5 May 2020 the Court stressed that the European Union does not establish a “union of peoples”. According to the Court, the European Union is “an association of states” and not “a state founded on a European people”[19]. For this reason, the Court has the power to disregard any disciplinary innovation and activities implemented in the EU (including the ECB policies) if they are not deemed to comply with its Basic Law[20].

       In a nutshell, the Constitutional Court has claimed the power to review the compliance of EU activities with the German legal system and, at the same time, the Court has expressed the power to disregard a ruling of the European Court of Justice. In doing so, the Court wanted to reaffirm that the German Parliament holds “functions of substantial political weight”, which certainly contradict the logic of unitary construction and federal statehood to which many European citizens have long aspired to.

       In this context, we can easily understand why Germany and other neighboring countries have long opposed the acceptance of financial instruments, such as the Eurobonds, which pursue the objective of sharing the debt burden between Member States thus implying an enhanced participation in the financial needs of each individual State. 

In fact, the creation of Eurobonds is supported by the issuance of guarantees by Eurozone Member States. This mechanism would give life to a solidarity process having the purpose of promoting stability and economic integration in the European Union.

        It is true that, theoretically, the Eurobonds have been considered several times and their function has been subordinated to the achievement of various goals, such as common growth and mutual trust[21]. However, the Eurobonds have been essentially brought back to the category of the so-called “unavailable principles” (among which we count the autonomous responsibility of each State for its debts) thus preventing the pooling of national debtor exposures or part of them.

          The affirmation of the Eurobonds is rooted in value assumptions that are based on unity, cohesion and solidarity. In order to accept these value assumptions, Member States should reach the maturity necessary to overcome national differences and individualisms. The well-being of the Member States would be achieved by joining the project of building a ‘common house’.

            From another perspective, the issue could be analyzed by taking into account the European Stability Mechanism, established by the European Council in 2011 in order to preserve the financial stability of the Union. The ESM has significantly expanded its lending capacity to support countries in need from mid-2013, just after it replaced the EFSF.

The ESM provides assistance only to ensure the financial stability of the euro area as a whole and if the requesting state is willing to sign a Memorandum of Understanding on Macroeconomic Adjustment with the Commission. In this way, the applicant State submits itself to a rigorous analysis of the sustainability of its own debt, so accepting the surveillance which is closely linked to the decisions of the Troika.

          The history of some Member States, especially Greece, shows the serious and unjustified financial situation that made it necessary for them to have recourse to ESM aid[22]. Although the doctrine has made an assessment about the malaise of Greece, noting considerable contradictions and structural deficiencies[23], Europe as a whole has experienced tough times, sometimes even exasperated by commentators. Actually, the so called “Troika” does not appear to be free from criticism. The events brought to light a delicate “humanitarian issue”: compliance with the macroeconomic requirements imposed by the Troika did not take into account the dramatic deprivation of the population and other tragedies (e.g. numerous suicides). Greece has shown the “dark face” of this institution.

           Therefore, we can easily understand the roots of the current discredit that public opinion attributes to the ESM. In fact, the ESM has appeared to many, on the one hand, exactly the opposite of the purpose of unity that must characterize the achievement of the EU’s objectives and, on the other hand, in line with Germany’s intention to inflict “lessons of rigorous orthodoxy with a strong ideological background”[24] on its partners.

Nowadays, because of this mistrust about the ESM, in Italy some politicians refuse to have access to its loans, which (unlike what happened in the past) are taken away from macroeconomic “conditions” unfavorable for the beneficiary country.

5.      As mentioned above, the pandemic outbreak has taken place in a European Union that basically lacks the prerequisites for a cohesive and united action. Nowadays, the absence of real economic and legal convergence in the European Union increases the difficulties related to overcoming the shock caused by Covid 19. As far as the banking sector is concerned, the prudential policies implemented by European and domestic authorities are not yet fully in line with the pursuit of financial system’s stability and integrity. Indeed, banking and financial intermediaries are forced to face increasing problems following the great global financial crisis of the years 2007-2008.

           Also, the prevalence of national individualism has prevented the completion of the European Banking Union. Some Member States have denied the possibility of implementing “risk mutualisation measures”. These States have thus shown a clear unwillingness to accept the fiscal unification project as well as the measures aimed at introducing a logic of solidarity in relation with other Member States[25].

           Conversely, many Member States have taken a defensive stance in the face of the danger of contagion, intervening with borders closing, blocking airlines, etc.

Such initiatives seem suitable in terms of health protection, but it again highlights separation and diversity; in this context, Europeists are disappointed and the EU risks implosion. In fact, the timid and uncertain reactions of the Union’s institutional leaders have not convinced, especially at the beginning of the pandemic (i.e. when the devastating effects of the pandemic have not yet been fully realised). In this way, according to many commentators, the “European dream” may have come to an end.

              The inability of states to give content to a new statehood that goes beyond the models inherited from the past is evident. Therefore, the values underlying the original agreements of the Community seem to have been definitively altered.

In this regard, Massimo Cacciari’s considerations regarding the post-coronavirus appear to be precise: “it seems to me that it will be a tombstone […] (for the Union) […], although hope is the last to die. […] it seems to me that by now we must put the European dream away. The coronavirus was the coup de grace for an already compromised situation. I sincerely hope that I am wrong, by the way”[26] .

           Fortunately, facing such a catastrophic event as the pandemic, Europe’s reluctance was short-lived, as realism and a sense of joint responsibility prevailed! After the shy forms of intervention activated by the ECB alone to provide liquidity to the countries affected by Covid 19[27], other European institutions also reviewed the rigorous positions that had initially inspired their activity. In this respect, the agreement reached on a proposal from the Commission to suspend the stringent fiscal rules laid down in the Stability Pact seemed very useful[28]. As mentioned above, the fears denoted by the scholars appeared to be well-founded. It is necessary to take action to resist and oppose the economic emergency which appears to be of incalculable proportions!

            On the other hand, many politicians and businessman appealed for resolute action. The appeal of Sergio Mattarella, President of the Italian Republic, is memorable; he makes an express reference to the need for greater cohesion: “Italy is going through a difficult condition and its experience of combating the spread of the coronavirus will probably be useful for all the countries of the European Union. We therefore rightly expect, at least in the common interest, initiatives of solidarity and not moves that may hinder its action”[29]. Also, the former ECB’s President Mario Draghi declared that it is necessary to reach “higher levels of public debt” in order to restart the European economy blocked by the coronavirus[30].

         These solicitations did not stay unanswered and, shortly afterwards, the ECB announced “a new Pandemic Emergency Purchase Programme (PEPP) to counter the serious risks posed by the coronavirus” [31]. In addition, the ECB is “broadening the scope of control” by promising banks a flexible interpretation of capital requirements and accounting standards to ensure rapid access to credit for businesses and households[32].

            Despite the criticism of some small countries (the Netherlands and Austria), which, in selfish attitude, insist on taking advantage of the ESM[33], this intervention marks a turning point in the strategies of the Union’s summits. The latter have understood that it is their task to avoid the harmful consequences of the misalignment between a necessary monetary expansion and the constraints of restrictive regulation. Unfortunately, the decisive step is still difficult to take; in fact, it was only after some hesitation from Germany in implementing a change of course[34] that the EU started to implement the so-called ESM. Recovery Fund which is guaranteed by the EU budget (from 2021 to 2027) and identifies a strong signal against a possible EU solution[35].

6.        After the uncertainties shown by the Union in the first phase of Covid 19, the common will to cooperate in overcoming the economic and health emergency emerged after the European countries realized how serious the situation was.

              The underpinning thought is that Europe cannot rely on an individualistic strategy, nor on interventions of limited duration. Therefore, long-term remedies based on the creation of “a common debt instrument” are needed. This constructive approach lays the real foundations of a unitary state structure that overcomes the reluctance of some States[36]. An innovative path of the Union could begin, on the basis of the instrument called the Next Generation EU, which could perhaps find that purpose of cohesion lacking right now.

         Specifically, a fund of EUR 750 billion (linked to the EU budget for seven years) is to be set up for transfers and loans to Member States (EUR 500 billion and EUR 250 billion respectively). These funds are intended to “strengthen cooperation in the health field” and to provide a common response to the crisis. Some national authorities have welcomed this proposal with enthusiasm. The Italian authorities also had a positive attitude. In fact, they stressed that the Next Generation EU represents “an important opportunity to prepare a common response which, like the monetary measures, is proportionate to the gravity of the crisis”[37].

         The launch of this instrument is therefore a proof that the Member States are fully aware that they must react in a united manner to the situation determined by Covid 19, which is now perceived by the European community in its dramatic profiles. In fact, the Governor of the Bank of Italy pointed out that “only joint, strong and coordinated action will be able to protect and relaunch of productive capacity and employment throughout the European economy”[38]. Moreover, Next Generation EU has been accepted by most of the EU countries and, at the same time, it has been strongly desired especially by the countries of the Mediterranean area[39], which got satisfied after some initial indecision of the President of the European Commission, Ursula Von der Leyen and Germany’s Angela Merkel[40].

         The implementation of the Fund will have to face the process ofa complex procedure design, which should define its operational details. The European Commission has defined a Strategic Guide for the implementation of the Recovery and Resilience Facility in its 2021 Annual Sustainable Growth Strategy (ASGS) [41].

         The support provided by these Guidelines sets out the criteria for the use of financial resources that should support the European Union in overcoming the crisis caused by the pandemic event. The main objectives concern environmental sustainability, productivity growth and macroeconomic stability. These objectives must be taken up by Member States in ‘recovery and resilience plans’, as well as in national reform and investment projects. These national plans must be submitted by 30 April 2021 and under preliminary draft by 15 October 2020.

         Therefore, the use of the Recovery Fund is subject to the preparation of national investment and reform programs in line with political criteria. These programs should address the economic policy challenges set out by the EU in country-specific recommendations to enable the transition to green and digital. More specifically, the Commission encourages Member States to consider investment and reforms in certain key areas such as (i) clean technologies and the development of renewables, (ii) improving the energy efficiency of public and private buildings; (iii) broadband services to all regions and citizens; (iiii) digitisation of public administration; (iiiii) education systems to support digital skills and vocational education and training.

       Although the Commission has made it clear how the financial resources provided by Europe need to be used, it has not yet specified the practical operational aspects of implementing the policy content of the plans. In particular, there is still no agreement on the methodology to be used when transposing and subsequently using the funds and the schedule in reimbursing them is unknown.

Similarly, the criteria for identifying the exact extent of the necessary contribution by Member States has not yet been identified. In this context, the academic literature has already represented the difficulties regarding the “concrete amount of resources actually made available for our country” [42] with the obvious consequence that there is a substantial indeterminacy in the implementation of the projects.

        Undoubtedly, the competent political authorities will have to take into account the close link between the disbursement of funds and the pursuit of the objectives indicated by the Commission. Such an ordinary criterion places an insurmountable limit in the identification of the actual modalities of operation of the Recovery Fund: the financial means made available to the applicant countries may not be used for purposes other than those indicated in the presentation of the recovery plans and, therefore, for the reduction of taxes or other welfare purposes.

EU authorities have a right to verify compliance with the ‘guidelines’ referred to above, not only when approving programs drawn up by Member States, but also when implementing them in practice. In the event of a mismatch between the commitment made and the way in which it is implemented, the Commission may suspend disbursement, or even (in the extreme case) activate a procedure to reduce the amounts already defined.

       The current historical moment appears very complex: the Union needs to realize that the time for postponement in the decision on the quid agendum is over! The pandemic has made it possible to remove the delays, and to understand the need to “change pace”. It is an opportunity (perhaps the last one) that Member States cannot and must not let go if they want to keep the “European dream” alive.

7.      The Recovery Fund and other measures adopted by the EU will be able to make a major difference to the future destiny of the Union. This consideration leads us to reflect on the extent of the change taking place and, therefore, to evaluate the possibility of bringing to the latter an innovative path in the process of European integration.

Indeed, the “pact” underlying the preparation of the above-mentioned interventions is based on a unified action of the Member States aimed at strengthening the resilience of individual countries. The objectives embrace the green economy, digitalization and innovative forms of entrepreneurship. In this context, relations between Member States should change and should also benefit from regulatory and bureaucratic simplification, as well as appropriate tax and justice changes.

           It is time for choices that cannot be postponed further if we want to save a project that, although modified with respect to its original formulation, still shows significant interest. Europe could thus assume a central position in the global geopolitical context. In fact, the aforementioned interventions on the economic sector should counteract the serious effects of the pandemic and, at the same time, lead to a harmonized modernization of the entire European system. In this way, inequalities and diversities will be reduced, finally allowing for a full sharing of pre-ordained objectives to a common goal.

 Indeed, German political leaders have also developed this conviction and, at the same time, have overcome the adversities of the so-called frugal countries and the Visegrad group, meeting the demands of the Mediterranean countries, first and foremost Italy.

One wonders, however, whether this attitude is indicative of a change of course in ‘solidarity key’ or whether, after the adversities of the present moment, national individualisms will still prevail. The latter still finds support in the ‘no front’ of the frugal countries that do not desist from expressing their obstinate dissent[43].   

         These doubts can only be dispelled by assessing the future behaviour of EU countries when the new financial measures will be operative. It is hopeful, however, that the program will see the European Commission raising funds on the market through bonds guaranteed by the EU budget, thus building a unified strategy for the EU that was unthinkable a year ago. In anticipation for the difficulties in implementing the Recovey Fund, all the governments of the Member States are also moving to set up national structures that can set a “dialogue with the task force set up within the European Commission and led by the Deputy Secretary-General, Celine Gauer of France”[44].

               It is too early to announce a fundamental change in the policy of the EU that could lead to the creation of a federal state. In fact, a process has been launched that cancels the Europe of austerity and excessive rigor, but it is still too early to envisage a return to the original design of the founding fathers. On this point, the doctrine has underlined that the latter could be “traced back to a mere customs union that… ensures a common market of proven utility… (i.e. the possibility of maintaining a monetary union by changing its current parameters of sustainability could prevail)”[45].

         The Recovery Fund can therefore be traced back to a reactivation of the “political union” project. However, it is likely very difficult to implement a new reconstruction project: the loss of certain advantages from some Member States (which they have enjoyed to the detriment of the general interest of all participants in the Union) can only be accepted if the purpose of a stronger solidarity is affirmed.

Angela Troisi has a Ph.D. in Business law at Luiss University

[1] See Capriglione, Covid-19. Quale solidarietà, quale coesione nell’UE? Incognite e timori, on Riv. Trim. Dir. Econ., 2020, p. 176.

[2] The first edition of the Manifesto, published under the title Per un’Europa libera e unita. Progetto d’un manifesto, has been lost; subsequently, in 1944 a new edition, edited by Colorni, was printed in Rome in a book entitled Problemi della Federazione Europea, with the addition of two other essays of Altiero Spinelli (Gli Stati Uniti d’Europa e le varie tendenze politiche and Politica marxista e politica federalista) written between 1942 and 1943.

Except for few and isolated critics to the federalist ideas contained on the Manifesto, the prevailing view among scholars points out the essential role of the latter for the interpretation of the federalist proposal; see, among others, VOIGT, Ideas of the Italian Resistance on the Postwar Order in Europe, in LIPGENS – LOTH, Documents on the History of European Integration, Berlin-New York, 1985, vol. I, p. 456ss; PAOLINI, Altiero Spinelli, Appunti per una biografia, Bologna 1988.

More recently, the aforementioned document has been analyzed by Frosio Roncalli, L’origine di un idea: il nesso tra federalismo e unità europea nel manifesto di Ventotene, in Storia del Mondo, n. 12, 2003; levi, Altiero Spinelli, founder of the movement for European unity, in appendix a spinelli e rossi, Il Manifesto di Ventotene, Milano 2006, p. 179 ff; napolitano, Altiero Spinelli e l’Europa, Bologna, 2007, in which, analyzing the Manifesto, the author stated that: “It would be arbitrary and wrong to reduce it to a summary appeal for the liquidation of national States. It is worth to recall and highlight the sharpness and modernity of that federalist approach ” (p. 77); vassallo G., Per un’edizione critica del Manifesto di Ventotene: prime valutazioni sul stato delle ricerche, in Eurostudium, October-December 2008, p. 61 ff.

[3] See haass e.b., The Uniting of Europe – Political, Social and economic Forces, 1950-1957, London, 1958; id. Beyond the Nation State, London, 1964; lindberg, The Political Dynamics of European Economic Integration, London 1963.

[4] See amato, Il Trattato di Lisbona e le prospettive per l’Europa del XXI secolo, on aa.vv., Le nuove istituzioni europee. Commento al trattato di Lisbona, on Quaderni di Astrid, Bologna, 2010, p. 441.

[5] See savino, La comitologia dopo Lisbona: alla ricerca dell’equilibrio perduto, on Giornale di diritto amministrativo, 2011, p. 1041.

[6] For the examination of the institutional legal situation following the Maastricht Treaty see, among others, Merusi, Governo della moneta e indipendenza della Banca centrale nella federazione monetaria dell’Europa, in Il Diritto dell’Unione Europea, 1997, n. 1-2, p. 89 ff.; Papadia e Santini, La banca centrale europea, Bologna, 1998; Capriglione, Moneta, in Enc. dir. Id., Globalization, Economic Growth and the Ethics of Democratic Organization, in European Business Law Review, 2005, p. 737 ff.; Vella, Banca centrale europea, banche centrali nazionali e vigilanza bancaria: verso un nuovo assetto dei controlli nell’area dell’euro, in Banca, borsa, tit. cred., 2002, I, p. 154 ff.; Pellegrini, Banca centrale nazionale e Unione monetaria europea, Bari, 2003, passim, but in particular Chapters V and VI; Antonucci, Il credito di ultima istanza nell’età dell’euro, Bari, 2003.

[7] See ex multis Wymeersch,The European Banking Union. A first Analysis, Universiteit Gent, Financial Law Institute, WP, 2012-07, October 2012, p. 1 ff; Capriglione, European Banking Union. A challenge for a more united Europe, in Law and economics yearly review, 2013, I, p. 5 ff; aa.vv., Dal testo unico bancario all’Unione bancaria: tecniche normative e allocazione di poteri [Acts of the conference organised by the Bank of Italy, Rome, 16 September 2013], in Quaderni di ricerca giuridica della Banca d‘Italia, n. 75; aa.vv., L’unione bancaria europea, Pisa, 2016; Ibrido, L’unione bancaria European. Profili Costituzionali, Rome, 2017.

[8] See Sepe, EBU and the National Credit Authorities’ structure: the Italian case. The role of CICR in the new institutional context, on Law and economics yearly review, 2015, I, p. 161 ss.

[9] See the judgment on Rivista Trimestrale di diritto dell’ economia, 2017, II, p. 45 sso, with comment of Lemma, “Too big to escape”: a clarification of significant relevance on the scope of the Single Supervisory Mechanism).

[10] See Capriglione – Sacco Ginevri, Politica e finanza nell’UE, Padua, 2015, ch. VII.

[11] See Quaglia, Negoziando il Trattato Costituzionale. Una replica all’ antigovernamentalismo liberale, on Riv. ital. di Scienza politica, Bologna, 2007, n. 3, p. 413 ff.

[12] See ex multis di taranto, Le basi problematiche problematiche della moneta europea, in Aspenia, I futuri del capitalismo, 2012, n. 56, 176-183; id., Il salvataggio temporaneo di Atene? Vantaggioso solo per Berlino, on Milano Finanza of 16 March 2012; id., L’Europa tradita, Rome, 2014, passim; id., Così l’Italia può cambiare l’euro (e guadagnarci), interview published online on 19 January 2014, in the section Economia e Finanza de; savona, Serve un piano B per uscire dall’Euro. Da Renzi mi aspetto molto, interview released on 9 March 2014, available on; rinaldi, Europa kaput (S)venduti all’euro, with presentation of savona, Rome, 2013.

[13] See ex multis Guarino, Diritto ed economia. L’Italia, l’Europa, il mondo, Rome, 2011; Savona, Eresie, esorcismi e scelte giuste per uscire dalla crisi. Il caso Italia, Catanzaro, 2011; Masera, Ecco i compiti a casa per l’inconcludente Unione europea, in Il Foglio of 30 November 2011.

[14] See Capriglione – Troisi, L’ordinamento finanziaria dell’UE dopo la crisi, Turin, 2014, p. 130.

[15] See Bilancia, La nuova governance dell’Eurozone e i “riflessi” sui sistemi nazionali, in, December 2012, p. 15.

[16] See in this regard the speech given by President Barroso at the last working session of the Council Summit in which he declared: ” “I know that many people were sceptical about the prospects for this summit. And I hope that they were pleasantly surprised when they heard the news this morning… We have agreed a convincing vision for a strengthened economic and monetary union, and this is a point I would like to highlight particularly, following the report presented to the European Council on the genuine EMU”.

[17] See Conclusions of the European Council of 29 June 2012, Euco 76/12.

[18] See Capriglione – Troisi, L’ordinamento finanziario dell’Ue dopo la crisi, cit. p. 132.

[19] See capriglione – ibrido, La Brexit tra finanza e politica, Milan, 2018, p. 89, where reference is made to the decision of the German Federal Constitutional Court in which the compatibility of the Maastricht Treaty with the Basic Law of Bonn was confirmed (2BVerfG 12 October 1993, n. 2159/92, in 89 Entscheidungen des Bundesverfassungsgerichts, 1994, 155 ss). This decision sets the limits for the compatibility of the monetary union with the German Basic Charter and the basic principles of national law, clarifying the extent of Germany’s participation in the EMU; for critical assessments, rescigno g.u., Il tribunale costituzionale federale tedesco e i nodi costituzionali del processo di unificazione europea, on Giurisprudenza costituzionale, 1994 , p. 3115 ss.; everling, Zur stellung der Mitgliedstaaten der Europaischen Union als “Herren der Vertrage“, on Beyrling, Bothe, Hofmanne Petersmann, Rechts zwischen Umbruch und Bewahrung-Volkr-recht- Europarecht-Staatrecht. Festschrift fur R. Bernhardt, Berlin, 1995, p. 1161 ss.; herdegen, Germany’s Costitutional Court and Parliament: Factors of Uncertainty for the Monetary Union?, on European Monetary Union Wtch, XIX, 1996, p. 8 ss.

[20] This is clear from point 111 et seq. of the decision of May 5, 2020, summarized in point 2 of the official maximum: “2. The Court of Justice of the European Union exceeds its judicial mandate, as determined by the functions conferred upon it in Article 19(1) second sentence of the Treaty on European Union, where an interpretation of the Treaties is not comprehensible and must thus be considered arbitrary from an objective perspective. If the Court of Justice of the European Union crosses that limit, its decisions are no longer covered by Article 19(1) second sentence of the Treaty on European Union in conjunction with the domestic Act of Approval; at least in relation to Germany, these decisions lack the minimum of democratic legitimation necessary under Article 23(1) second sentence in conjunction with Article 20(1) and (2) and Article 79(3) of the Basic Law“.

[21] The reference to a similar form of bond dates back to the 1960s, when this phrase was used to identify particular financial instruments issued, in foreign currency, by companies in order to raise capital for infrastructure investments.

Also significant is the analysis of the technical forms applicable in the case in point, in which it was used to address the financial problems faced by countries exposed to adverse market conditions.; see ex multis  Quadrio Curzio, On the Different Types of Eurobonds, in Economia politica, 2011, n. 3, p. 279 ss.

[22] See Nelson- Belkin -Mix, Greece’s Debt Crisis: Overview, Policy Responsens, and Implications, Crs Report for Congress, 2010, 14.5.

[23] See ex multis Rossano D., Ancora in tema di crisi dell’euro. Il caso “Grecia” e le sue implicazioni sulla moneta unica, on, 2015, n. 5, p. 2 ss.

[24] See Caracciolo, Ma il rigore tedesco e le nostre debolezze rischiano di liquidare anche l’idea di Europa, on laRepubblica, del 7 luglio 2015.

[25] See de polis, La tutela dei depositi bancari nel quadro dell’Unione Bancaria Europea, report held at the University of Rome La Sapienza, Rome 27 April 2016, p. 13.

[26] See the interview by Bedini crescimanni entitled Massimo Cacciari: il coronavirus è la pietra tombale sulla integrazione europea, sarà la Cina a risollevare l’Italia, viewable on https:// ea-sara-la-cina-a-risollevare-litalia.

[27] This refers to the Quantitative Easing increase programme in anticipation of a massive long-term loan programme, the so-called FTT III, which was accompanied by the forecast of an additional 120 billion euros in assets to be purchased until the end of 2020, while no change is made to interest rates; a decision of immobility that the markets did not like; see

[28] See the editorial entitled Pronti a rivedere la regola del pareggio di bilancio, ha detto Angela Merkel at

[29] See the Note of the Quirinale 12 March 2020, in

[30] See l’editoriale di Financial Times intitolato Draghi: we face a war against coronavirus and must mobilise accordingly Free to read visionabile su

[31] See the text of this announcement on https://www.Banca

[32] See massaro, Coronavirus, la Bce «libera» 1.800 miliardi per prestiti a famiglie e imprese, viewable at billion-family-loans-b000a0ac-6abf-11ea-b40a-2e7c2eee59c6.sht.

[33] See the editorial entitled MES: spunta il documento con le condizioni dell’Olanda. Quali sono? available at

[34] The perplexities raised by Merkel – at the meeting of the European Council on 23 April 2020 – to resolve the financial problems of countries in serious difficulties by issuing Eurobonds or similar instruments are highlighted, see the editorial entitled Merkel: “Pronti a maggiori contributi Ue in spirito di solidarietà contro la pandemia”, available at non_e _niente_solidarieta, in which the Chancellor’s words are reported, according to which for the mutualisation of debt we should “modify the treaties” and this requires time and the involvement of parliaments.

[35] The position of the Italian Prime Minister is significant in this regard, as the editorial entitled Eurogruppo, trovato l’accordo sul Mes: unico requisito l’uso dei fondi per spese sanitarie. Conte: “Insufficiente senza Recovery Fund”. Maggioranza divisa, M5s: “Inadeguato”. Pd: “Così è un’opportunità”, viewable on eurogroup-trovatola accordo-sul-mes-unico-requisito-luso-of-funds-per-spese-healthcare-duration-media-maximum-loans -of-10-years/5795662.

[36] See gagliarducci’s editorial entitled UE: perché in realtà non è stato trovato alcun accordo contro il coronavirus, available at

[37] See Banca d’Italia, Relazione per l’anno 2019, Considerazioni finali, p. 17 of the printing drafts.

[38] See Banca d’Italia, Relazione per l’anno 2019, Considerazioni finali, loc. cit.

[39] Significant in this regard is the position of the Italian Prime Minister in the debate on the application of the ESM without conditions, see the editorial entitled Eurogruppo, trovato l’accordo sul Mes: unico requisito l’uso dei fondi per spese sanitarie. Conte: “Insufficiente senza Recovery Fund”. Maggioranza divisa, M5s: “Inadeguato”. Pd: “Così è un’opportunità”, available on eurogroup-trovatola accordo-sul-mes-unico-requisito-luso-of-funds-per-spese-healthcare-duration-media-maximum-loans -of-10-years/5795662.

[40] See the editorial EU Commission proposes €750 billion recovery fund in wake of Covid-19 crisis, available at http://www.france24. com /en/20200527-eu-commission-proposes-%E2%82%AC750-billion-recoveryfund-in-wake-of-covid-19-crisis, in which Von der Leyen’s words “tomorrow the cost of inaction in this crisis will be more expensive for us” are quoted, from which there is a logic that seems to give priority to the objective of sound management of EU finances, rather than to the intention of reversing relations between Member States in a spirit of solidarity.

Also significant is the initial position of Angela Merkel who – at the meeting of the European Council of 23 April 2020 – opposed a clear refusal to resolve the financial problems of countries in serious difficulties by issuing Eurobonds or similar instruments; see in this regard the editorial entitled Merkel: “Pronti a maggiori contributi Ue in spirito di solidarietà contro la pandemia”, available on angela_merkel_l_ue_ non_e _niente_solidarieta, in which the Chancellor’s words, according to which the mutualisation of debt should “modify the treaties” and this requires time and the involvement of parliaments, are reported.

[41] See European Commission, NextGenerationEU: Commission presents next steps for €672.5 billion Recovery and Resilience Facility in 2021 Annual Sustainable Growth Strategy, Brussels, 17 September 2020, available on

[42] See caputi, Se l’Europa rischia di gettare via il biglietto vincente, see https://

[43] See the editorial entitled Il fronte che si oppone al Recovery Fund. Le ragioni dei ‘frugali’ e del Gruppo Visegrad, available at

[44] See the editorial entitled Recovery, per blindare i tempi cabina di regia e poteri sostitutivi, which can be viewed on IlSole24Ore on 1 October 2020.

[45] See Capriglione, Covid-19. Quale solidarietà, quale coesione nell’UE?, on Riv. Trim. di dir. econ., 2020, I, p. 223.


This entry was posted on 20/09/2020 by in law and tagged , , , , .
%d bloggers like this: