Economic governance. 1. The Parties shall improve macro-economic stability and promote structural reforms and appropriate economic, fiscal and monetary policies that create the much-needed space for investment expansion, job creation and private sector development, and strengthen resilience to economic shocks. They shall facilitate the process of economic reform by improving shared understanding and exchange of information on the fundamentals of their economies and the formulation and implementation of economic policies.
Economic governance. On economic governance, the solution being sought was said in the 10 November letter to consist of “legally binding principles that safeguard the operation of the Union for all 28 Member States – and a safeguard mechanism to ensure these principles are respected and enforced”. The arrangements provided for by Section A of the HSG Decision, and by the HSG Statement on Section A and the Draft Council Decision attached thereto, constitute such a solution. The 10 November letter identified seven matters that the envisaged principles needed to address. Those matters are well covered by the principles set out in Section A of the HSG Decision. The principles are fully compatible with the existing EU Treaties: they simply spell out in express language what is already implicit in various texts, such as Article 4 (2) TEU on the equality of Member States before the Treaties. Accordingly, they will become legally binding once the Decision enters into force, as part of a “subsequent agreement between the parties regarding the interpretation of the treaty or the application of its provisions”, within the meaning of Article 31 (3) (a) of the Vienna Convention on the Law of Treaties (VCLT). Consistently with that principle, the Court of Justice of the EU (CJEU) has held in Case C-135/08, Xxxxxxxx, with regard to the Decision on Denmark, that it must be taken into consideration as being an instrument for the interpretation of the (then) EC Treaty.2 Point 7 of Section A states that “[t]he substance of this Section will be incorporated into the treaties at the time of their next revision...”. The effect of eventual incorporation, whether into relevant parts of the Treaties themselves or by way of a separate Protocol, will be to give the principles the status of primary EU law in their own right (as distinct from serving as a tool of interpretation); any infringement of the principles will, therefore, provide grounds for challenging the validity of the offending EU measure in annulment proceedings under Article 267 TFEU. The proposed safeguard mechanism builds upon the so-called “Ioannina Compromise”, initially devised in the context of the 1994 enlargement, which currently applies to qualified majority voting (QMV) by the Council under the rules that came into force in November 2014. It enables Member States in the minority, where the QMV threshold is achieved by a relatively small margin, to insist that the Council do all in its power to reach, within a reasonable time and ...
