Who will really apply the emergency brake in the Recovery Fund

Who will really apply the emergency brake in the Recovery Fund

The in-depth study by Gian Luigi Tosato, emeritus professor of European Union Law, "Sapienza" University of Rome, taken from International Affairs

The introduction of the " emergency brake ", which has served to overcome the differences in the management of the Recovery Fund, is not an absolute novelty. The Maastricht Treaty already makes use of this mechanism to build a sort of bridge between Council decisions by unanimity and by qualified majority. It may therefore be useful to compare the emergency brake discipline as outlined in the conclusions of the recent European Council , with that already in place in EU law.

The Treaty on the Functioning of the European Union (TFUE) provides for the intervention of the emergency brake in three cases: measures for the coordination of social security systems for migrant workers ( art. 48 ); judicial cooperation in criminal matters ( Article 82 ); adoption of common rules with regard to certain crimes of particular gravity ( art. 83 ). In these cases, a member of the EU Council, if he believes that the legislation in question violates fundamental principles of his internal law, can ask that the matter be referred to the European Council, the summit of heads of state and government. Following the request, the legislative procedure is only suspended if in the following four months the Summit agrees to refer the project to the Council; On the other hand, the procedure is definitively interrupted if, within the same term, the Council does not decide or asks the Commission to present a new project (Article 48 is explicit in this sense, but it can also be inferred from Articles 82 and 83) .

From this discipline it appears that the emergency brake concerns legislative procedures; if activated, it blocks a decision of the Council; the block is removed only in the case of a green disc from the European Council, to be adopted with the usual consent rule; otherwise, the block becomes final. In this way, through the mechanism of referral to the European Council, each Member State can exercise its right to veto the adoption of European legislation in certain matters. Moreover, these are matters which before the Maastricht Treaty were subject to the unanimous vote of the Council, and which can now be decided by a qualified majority. The presence of the brake has therefore served to degrade, with the exception (to protect fundamental principles of domestic law) what previously represented the rule.

We now come to the emergency brake with regard to the Recovery Fund. The operation of the Recovery Fund involves two decision-making stages at European level: the first concerns the approval of the recovery plans presented by the Member States; the second, the actual disbursement of the loans requested by them for the implementation of the various projects. The plans are approved by the Council by a qualified majority on a proposal from the Commission; the Commission decides on the individual disbursements, after consulting the Economic and Financial Committee (an auxiliary body of the Council, with advisory functions).

It is only with regard to this second phase that the emergency brake comes into play. If one or more Member States consider “that there are serious deviations from the satisfactory achievement of the relevant milestones and targets” of the project, they can exceptionally request that the matter be referred to the European Council, which must discuss it at its next meeting. The Commission must refrain from any decision on the disbursements requested until the European Council has discussed the issue "in a comprehensive manner". Nothing is said about the outcomes and effects of this discussion. It is only specified that, as a rule, the decision-making process on the request for disbursements must be completed within three months of the consultation of the Economic and Social Committee by the Commission and that it will comply with the provisions of articles 17 of the TEU and 317 of the TUF.

As can be seen, the common circumstance of this emergency brake discipline and that already in place in the Treaties is that referral to the European Council allows exceptional interference by individual Member States on the normal course of decision-making processes of the Union. The two disciplines are otherwise different (at least on the formal legal level). In the case of the Recovery Fund, the brake affects an administrative and non-legislative procedure as in the other cases; it is intended to protect a financial interest which immediately concerns the Union and only indirectly the individual Member States; moreover, and this is the most important point, the referral to the European Council produces very different effects. In the case of the Recovery Fund it can only delay, but not permanently block the decision of the competent body. The Commission's competence over the management of the Union's resources remains unaffected, as confirmed by the reference to Articles 17 TEU and 317 TFEU.

Undoubtedly, what we read in the Conclusions will need to be better clarified in the implementation regulations of the Recovery Fund. It will be appropriate to specify what is meant by satisfactory progress of a project and by serious deviations from the predetermined targets; what are the procedures for consulting the Economic and Social Committee and the opinions expressed by it; how long should the European Council wait for consideration; finally, if and what feedback the Commission should give to its assessments. The opinions of the Technical Committee and the European Council are certainly authoritative and the Commission cannot fail to take them into account, especially in the case of negative or otherwise conflicting opinions. However, they do not legally affect the Commission, which remains free to decide on the requested payment.

In the first comments on the operation of the Recovery Fund there is sometimes talk of an emergency super brake. I do not think the expression is justified: for the reasons illustrated above, the mechanism has a lower braking effect than in the previous cases. And it does not lead to a shift towards the intergovernmental axis of the management of the Recovery Fund, which remains governed according to the Community model: the recovery plans of the States are approved by the Council by qualified majority on a proposal from the Commission; Fund disbursements are decided by the Commission, under the political control of the European Parliament and the legal control of the Court of Justice. However, it all depends on the authority of the Commission and the effectiveness of Parliament's and Court's controls

Article published on affarinternazionali.it

This is a machine translation from Italian language of a post published on Start Magazine at the URL https://www.startmag.it/economia/chi-azionera-davvero-il-freno-di-emergenza-nel-recovery-fund/ on Sun, 09 Aug 2020 05:00:54 +0000.