Introduction

Hjalte Lokdam and Michael A. Wilkinson are, however, more ambitious in their effort to characterize the precise nature of this neoliberal imposition of policy constraints on national and supranational governance. In their view, this history has given rise to “an authoritarian framework of governing”, one designed “to insulate the market from democratic pressures”.⁴ Most importantly, this framework has “entrenched a distinction between the authorization and exercise of governmental powers that was supposed to limit governmental flexibility at both the Member State and Union level, subjecting governmental discretion to constitutional rules rather than ordinary political contestation”.

The observations we will offer here are broadly sympathetic to the interpretations offered by both Francesco Martucci and Hjalte Lokdam and Michael A. Wilkinson. We thoroughly agree that, under the guise of a purported economic constitutionalism,⁵ European elites have tried to remove highly contested matters from the realm of traditional democratic politics.⁶ The principal means of doing so has been the supranational imposition of rule-based constraints on the exercise of sovereign power at the national level. In our view, however, one should avoid speaking of these constraints in autonomously ‘constitutional’ terms (economic or otherwise), as that discourse obscures something crucial about the nature of EU governance. These constraints no doubt have had an impact on the exercise of constitutional power at the national level; nonetheless, they should not be understood as ‘constitutional’ in their own right.⁷ To use that terminology is in fact a category mistake, confusing the idea of a supranational ‘constitution’ with the EU’s essentially technocratic and juristocratic, i.e. ‘administrative’ (and hence ‘sub-constitutional’), character. This is not just a problem of legal semantics or a dispute over labels with no substantive import. The constitutional discourse leads, rather, to a profound misunderstanding of what a fundamentally technocratic and juristocratic (again, ‘administrative’) EU can realistically and legitimately achieve on its own. We submit that the disconnect between the language of constitutionalism and the EU’s fundamentally sub-constitutional, administrative character is a core contradiction that the contributions by Francesco Martucci and by Hjalte Lokdam and Michael A. Wilkinson each highlight but do not name. Our purpose here is to bring that contradiction more squarely to the fore, in order to demonstrate how it defines the limits of EU (and emu) governance.

1 Resource Mobilization and the Boundary between Administrative and Constitutional Power

The EU generally, and the emu more specifically, today sit uncomfortably at the boundary between mere administrative governance and the aspiration to a genuine form of supranational constitutionalism. European governance depends, first and foremost, on a delegation of regulatory power from constitutional bodies on the national level to primarily technocratic and juristocratic (again, ‘administrative’) agents on the supranational level. Of course, EU institutions also enjoy an electoral component by way of the European Parliament (ep) – something that many lawyers, judges and law professors often see as essential to advancing the EU’s autonomously democratic and constitutional legitimacy. Nonetheless, this electoral dimension of European governance has in fact done little to alter the fundamentally administrative character of European integration.⁸

The essential purpose of delegating regulatory power to EU institutions has been to create mechanisms to police the Member States’ fulfilment of their legal ‘pre-commitments’ to each other (most importantly, but hardly exclusively, in the area of free movement in all its forms).⁹ In fulfilling this function, these supranational agents – above all the European Commission and the Court of Justice of the European Union (cjeu), joined more recently by the European Central Bank (ecb) – possess considerable technocratic and legal legitimacy as well as normative autonomy (again, supplemented by an electoral component via the ep). And there can be no doubt that this ‘pre-commitment’ function has had important consequences for the operation of democratic and constitutional power on the national level, something also true of the rise of the administrative state more generally over the course of the 20th century.¹⁰ But even as this ‘pre-commitment’ function has had important constitutional consequences, it has never attained autonomous democratic and constitutional legitimacy in its own right, at least in the most robust sense we will describe in this contribution. Rather, the EU’s legitimacy, as an instantiation of supranational administrative power, has remained fundamentally ‘parasitic’ on the democratic and constitutional legitimacy of national institutions.¹¹ Indeed, as will also be detailed below, the limitations inherent in the EU as an extension of administrative governance to the supranational level, without robust constitutional authority of its own, explains much about the struggles of European integration over the last decade of crisis.

One would never understand these limitations, however, by looking at the discourse of legal elites in the EU – lawyers, judges, law professors – who, for the most part, continue to describe the function of the EU’s supranational agents in autonomously constitutional terms. Perhaps the leading example is the landmark Les Verts judgment in 1986, in which the Court of Justice itself famously described the European Treaties as a “constitutional charter of a Community based on the rule of law”.¹² This lofty characterization – which casts the EU as a vehicle for ensuring the rule of law through the enforcement of seemingly constitutional principles – has long dominated European legal scholarship even as there are persistent concerns today about its aptness.¹³ No doubt, this characterization contains an important element of truth on a semantic level. Among the many meanings given to the term ‘constitution’,¹⁴ perhaps the most widespread in the EU relates to the limitation and constraint of power, and more particularly of national power. For many advocates of integration, this function serves as integration’s ultimate finalité, addressing the pathologies of nationalism after the atrocities of 1914–1945, countering the “democratic malfunctions in national political processes”¹⁵ and taming the domination of one or more nation states over others.¹⁶ The internal market has certainly been one of the major achievements of that effort, requiring Member States in the EU to delegate power to supranational ‘pre-commitment’ institutions to police the Member States’ fulfilment of their mutual legal commitments to each other and thus prevent the asymmetric vindication of power by any single Member State.

And yet, even as the Union’s output legitimacy (at least in terms of a prosperous internal market) has often met expectations, the EU is nonetheless still a paradoxical combination of strength and weakness. On the one hand, the Union itself has been accused of questionable self-empowerment,¹⁷ as well as developing mechanisms of democratic legitimation that are inadequate to counter-balancing the EU’s ‘supranational technocracy’.¹⁸ On the other hand, in terms of resources available to it, the EU is broadly recognized as quite weak. At least up until the coronavirus pandemic (about which more below), the EU’s budget was capped at a level between 1.29% of all the Member States’ gni for commitment appropriations and 1.23% of the EU gni for payment appropriations¹⁹ (amounting to 153 billion euro in payments for 2020). In other words, the budget was traditionally set at an amount much smaller than the average budget of a medium-size Member State. This could hardly be sufficient to fulfil the demanding objectives set forth in the Treaties, much less addressing a crisis on the scale of the climate emergency or the coronavirus pandemic. According to the objectives set out in Article 3 teu, integration is, among other things, supposed to help achieve “the well-being of its peoples” and “a highly competitive social market economy, aiming at full employment and social progress”, while also “combat[ting] social exclusion and discrimination” and contributing to “the sustainable development of the Earth” and the “eradication of poverty”.

But one might fairly ask: how could the EU possibly achieve these demanding goals if it lacks the ability to mobilize its own revenues, most importantly via its own taxing and borrowing authority? This question of resource mobilization, frankly, is crucial to determining whether the EU is merely an (admittedly powerful) supranational administrative body rather than an autonomously constitutional entity in its own right. The EU Decision on own resources – which applies both to taxes as well as common borrowing under the Multiannual financial framework (mff) – requires unanimity in the Council and only the consultation of the European Parliament, and its entry into force is conditional upon the approval of the Member States according to domestic constitutional requirements (Article 311 tfeu). Moreover, the EU budget has traditionally been financed by national contributions (nearly 80%), whereas the remainder has come from a series of taxes that are in fact collected nationally – historically sugar levies, customs duties, and a percentage of the harmonized Value-Added Tax (vat).²⁰ The pandemic response has altered this reality to some extent, by adding to these nationally-collected taxes a layer of shared EU debt, allowing the budget to reach a level of roughly 2% of gni for a limited five-year period. However, just as before, this debt will be backed by tax revenues mobilized at the national level, not the EU’s own taxing authority.

In other words, there remains no EU tax collection service that ‘wears the EU badge’, so to speak, operating on the basis of the EU’s own autonomous legitimacy rather than that of the Member States. The absence of a supranational power and legitimacy to mobilize these resources directly has created never-ending tensions around the EU budget between Member States that are net contributors and those that are net beneficiaries, as well as the recurrent claims by the former to so-called ‘rebates’ (first of all for the UK – while it was still a Member State – and thereafter for such net contributors as Austria, Denmark, Germany, the Netherlands, and Sweden).²¹ The last decade of crisis in the EU has only accentuated these tensions in the European system. During the Eurozone crisis, observers rightly criticized the nature and the pace of the supranational response,²² which was constrained in considerable part by the EU’s lack of autonomous fiscal capacity. The persistent reliance on intergovernmentalism, as well as the use of extra-EU sources of law to manage an obviously pan-European problem – not to mention a heavy reliance on unconventional monetary measures by the ecb – brought the legitimacy and effectiveness of the collective European response into question.

Regardless of the breadth of the EU regulatory powers,²⁵ the unwillingness of Member States to equip the EU with the autonomous power to mobilize revenues in a compulsory fashion casts serious doubt on the EU’s purportedly constitutional character, at least in the most robust sense. What remains, therefore, is an EU fundamentally of a sub-constitutional, technocratic and thus ‘administrative’ character. In this state of affairs, the metabolism of the EU remains primarily in the hands of the Member States and their budgetary authorities, even as that power is now subject to regulatory constraints at the supranational level. The conditionality imposed by the EU on this power may have many variants – linked, as it often is, to financial assistance, the compliance with macroeconomic rules, green standards, or the rule of law. But despite that conditionality, the situation – in terms of the actual mobilization of resources – is not unlike the ‘pre-constitutional’ United States under the Articles of Confederation, in which the ‘confederal’ level, such as it was, remained entirely dependent on the polycentric legitimacy of its constituent states to mobilize resources on the confederation’s behalf.²⁶

It follows that the EU’s ‘metabolic constitution’ – the manner in which resources are mobilized towards the ends of European integration – is fractured in several ways, leaving the EU, as fundamentally a form of administrative governance, unable to transcend its own socio-legal and socio-institutional limitations as such. The most fundamental limitation, discussed in the second subchapter below, flows from the disconnect between power and legitimacy in the Union, by which we mean the repeated conferral of regulatory power on European institutions, albeit without the EU enjoying the necessary democratic and constitutional legitimacy to support the exercise of this power through an autonomous mobilization of resources in its own right. This contribution then explores how this break in the necessary ‘power-legitimacy nexus’²⁷ has manifested itself in EU governance over the last decade, most importantly in the Eurozone crisis. We then critically examine measures foreseen as part of the response to the coronavirus pandemic (most importantly, the Next Generation EU recovery and resilience facility). Our overall aim with this analysis is to assess the extent to which these more recent efforts may constitute a paradigm shift – a ‘critical juncture’²⁸ – in the EU’s fractured metabolic constitution (spoiler alert: they do not, at least not fully and not yet, again leaving the EU fundamentally of an administrative, technocratic character). Finally, in conclusion, we take stock of where the EU now stands and what might need to happen in order to overcome or transcend the boundary between administrative and constitutional power, thus perhaps leading to development of a genuinely autonomous constitutional metabolism at the supranational level in Europe.

2 The Fundamental Fracture between Power and Legitimacy in European Integration

As has long been recognized, it can be very disorienting trying to come to terms with the EU’s “constitutional structure … of bits and pieces”.²⁹ The complex interplay between the scope of the EU’s power and its lagging legitimacy contributes directly to a sense of estrangement on the part of the average European citizen towards the European system. The power to mobilize resources in a compulsory fashion – most importantly, to tax – is intimately bound up with the scope of legitimacy enjoyed by the political structure in question, notably by a national legislature. Regulatory powers, by contrast, may be possessed by an entity with a lesser and more derivative legitimacy, such as a technocratic agency within the limits provided by the principle of legality. In short, different degrees of legitimacy support different kinds of power. We can call this the ‘power–legitimacy nexus’, which refers to “the linkage between the nature of the legitimacy enjoyed by a legal or political order (legal, technocratic, functional, or robustly democratic and constitutional) and the scope of power that the legal order can then successfully exercise”.³⁰

No less than in any other system, that power-legitimacy nexus defines the scope of power that the EU can successfully exercise. The bases of legitimacy in the EU are, variously, national-executive (the European Council and the Council), technocratic (the Commission and the ecb) and juristocratic (the Court of Justice). Moreover, the EU’s ‘legislature’ (European Parliament and Council), such as it is, may inject an electoral component into the system, either directly or indirectly, but that ‘legislature’ lacks the autonomous power and legitimacy to extract and redirect fiscal and human resources on a societal scale akin to a national parliament.³¹ This crucial feature of the European system points us towards the ambiguous and incomplete ‘constitutionalism’ in EU public law.³² European supranationalism undoubtedly reflects the constraining type of constitutionalism, for example in the separation of powers or the protection of rights as well as in the use of various kinds of conditionality mechanisms. But EU public law falls short of constitutionalism in the most robust sense, i.e. the legitimate-compulsory mobilization of resources separate and apart from the Member States.

This is hardly to say that the constraining activity of EU institutions is without value. Indeed, the opposite is true: the EU acts as a crucial agent of peaceful cooperation and coordination, seeking to ensure that the Member States fulfil their myriad legal and political commitments to each other. “For this reason, as a matter of functional necessity, the EU must operate with a degree of autonomy from direct member-state control (although not from member-state legitimation)”.³³ But in pursuing this essential function, the EU lacks a robustly constituted power, precisely because the EU does not (as yet) possess the deep-rooted democratic and constitutional legitimacy of a pan-European variety needed to sustain it.³⁴ And it is for this reason that the metabolic constitution of the EU is polycentric, fractured among the several Member States, where – despite the extensive delegation of power to EU technocratic and juristocratic bodies – the robust form of democratic and constitutional legitimacy continues to reside.³⁵

In this way, the EU is ‘parasitic’ on the democratic and constitutional authority on the national level.³⁶ Thus, when national democracies suffer from constitutional retrogression or are under populist attack or risk a serious economic downturn, the EU is also affected in its ability to deliver. Since the 1990s, the increasing globalization of economies and the interdependence among legal systems have combined with other challenges – from climate change to migration, terrorism, and health emergencies – to demand forms of governance beyond the nation-state. In the case of the EU, these challenges have further amplified both the functional demands for ‘more Europe’ as well as the gap between the EU’s needed powers and its lagging legitimacy. Not only is the legal basis for the exercise of EU authority often contested, but the EU is also unable to mobilize the needed resources in a compulsory and legitimate manner to support that authority even when it is legally determined to exist. Although the EU is often, functionally and even legally, the most apt level to act, it nonetheless cannot provide the fiscal and human lifeblood to the response. By contrast, national political communities, while equipped with the democratic and constitutional legitimacy to mobilize resources, are often functionally limited in what they can achieve alone and therefore must coordinate through the EU in order to address problems effectively.³⁷

The challenge, therefore, is to bridge this fundamental disconnect between the two levels of governance in the EU – robustly democratic and constitutional at the national level, primarily administrative, technocratic and juristocratic at the supranational level. Both are essential to addressing the myriad challenges that Europe has faced over the last decade – from the Eurozone crisis, to the climate emergency, to the coronavirus pandemic. From the perspective of the so-called ‘democratic deficit’ at the supranational level, this may appear mainly as a challenge of institutional engineering, something that can and should be addressed by further ‘democratization’ at the EU level. That is a normatively attractive option but, as experience has shown, it has proven easier said than done. The reason is that the ‘democratic deficit’ misunderstands the actual nature of the European edifice, assuming it is robustly constitutional when Member States refuse to endow it with powers beyond those of an (again, admittedly powerful) administrative agency. At this stage of the EU’s development, the true challenge is thus to find ways to bridge the ‘democratic disconnect’ between the European and national levels, which today requires finding a way to channel the democratic and constitutional legitimacy (and hence mobilization powers) of the national governance to the supranational level. Such channelling remains essential when dealing with forms of fundamentally administrative governance, as in the EU. Unless and until a deeper transformation – that is, a ‘critical juncture’ – takes place in the relationship between power and legitimacy in European governance, the EU will remain fundamentally a sub-constitutional instantiation of administrative governance.³⁸ The problem is much more socio-political and socio-cultural than it is simply legal and institutional, something that integration’s most fervent (usually legal) advocates repeatedly ignore.

If one were to translate this point into the terms of Dani Rodrik’s famous ‘political trilemma of the world economy’,³⁹ the challenge in the EU context becomes clearer. Rodrik’s model tells us why, as between maintaining national sovereignty, preserving democratic politics, and pursuing deep economic integration, “we can combine any two of the three, but never have all three simultaneously and in full”.⁴⁰ Considerable nuance is necessary, however, to apply this model to the EU case. Most importantly, one needs to reconcile integration’s extensive delegation of regulatory power to the supranational level with the retention of legitimate-compulsory mobilization powers by national parliaments. The best way to do so, we suggest, is through an appreciation of the aforementioned power-legitimacy nexus,⁴¹ as well as how this nexus has shaped the balance between democracy, sovereignty, and economic integration in the EU context. To achieve this reconciliation, integration necessarily built on what we can call, in historical terms, the ‘post-war constitutional settlement of administrative governance’.⁴² When applied to realities of European integration, Rodrik’s trilemma would properly look something like this:

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Rodrik’s trilemma applied to European integration

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The EU operates primarily along the left prong of Rodrik’s model, through the delegation of regulatory power to supranational ‘pre-commitment’ institutions, both technocratic (e.g. the Commission or the ecb) as well as juristocratic (the cjeu). The very purpose of these institutions is to police the member states’ fulfillment of their legal commitments to each other in the treaties (hence mobilizing national sovereignty in service of deep economic integration). Because the EU’s ability to achieve autonomous democratic and constitutional legitimacy is limited (alas, the ever-present ‘no-demos problem’), it cannot combine supranationalized democratic politics and deep economic integration as it aspires to do (the right prong of the model). In the end, the necessary reconciliation of supranational regulatory power and national democratic and constitutional legitimacy must occur along the bottom branch of the trilemma, albeit with some adjustments not properly accounted for in Rodrik’s original. These include constitutional limits on the scope of power delegable to the EU level (particularly in terms of resource mobilization); nationally-mediated oversight (executive, legislative and judicial) of powers otherwise delegable to the EU; as well as transparency, participation and reason-giving obligations at the EU level in order to reduce information costs to such nationally-based oversight.⁴³

The purpose of such mechanisms, in other words, is to find ways to bridge the ‘democratic disconnect’ between the national and supranational levels in the EU. But in the end, this bridging challenge is not simply one of institutional engineering; rather, it is more deeply socio-political and socio-cultural, imposing clear constraints on what a still-fundamentally ‘administrative’ EU, as currently constructed, can realistically achieve without constitutional legitimacy of its own.

3 The Multilevel Impact of the Democratic Disconnect in and after the Eurozone Crisis

Europe’s experience with the global financial crisis, and more particularly with the Eurozone crisis, manifested this socio-political and socio-cultural challenge quite well. The Eurozone crisis was defined by two inter-related impacts operating in parallel: on the one hand, the sense of power-legitimacy fracture deepened at EU level; on the other hand, the response to the crisis brought the nexus between power and legitimacy at the national level into question as well. We will take each of these parallel effects in turn.

4 Will the Coronavirus Pandemic Response Serve as a ‘Critical Juncture’ in the Transformation of the EU’s Metabolic Constitution?

With the World Health Organization declaring a global pandemic on 11 March 2020, and with the growing number of infections and deaths throughout Europe, the Covid-19 crisis became the most serious challenge for the EU and its Member States since the Second World War. The arrival of the coronavirus pandemic acted as a sort of institutional and political earthquake. The re-imposition of border controls, along with the fact that many Member States were understandably focused on the internal impact of the crisis and thus seemingly insensitive to the needs of a pan-European response, all helped to raise questions about the unity and integrity of the EU. And yet, due to its “borderless nature, Covid-19 [became] a matter of common European interest since its first detection on the continent”.⁷⁰

A major obstacle to an effective response, however, was Europe’s fractured metabolic constitution, in which wealthier and more financially secure Member States were in a much better position to mobilize the resources needed to address the crisis, both in terms of public health and economic response. One of the first steps the EU took, lacking resources of its own, was to temporarily free the Member States from EU fiscal constraints by activating the general ‘escape clause’ in budgetary surveillance regime.⁷¹ Similarly, in the area of state aids, the Commission also announced the relaxation of a panoply of restrictions on Member-State support to private businesses.⁷² As a consequence of these two steps, the Member States were able to pump nearly 2 trillion euros into the economy. However, as The Economist reported: “Half of this was in Germany: a problem if you are a producer based in a country that cannot afford to be so generous, but which must accept German-made goods”.⁷³ Fairness and equity demanded a European response. But what kind?

Given these pressures, the question arose whether, in effect, the EU’s fractured metabolic constitution – dependent as it has always been on nationally mobilized resources – now faced what French President Emmanuel Macron called a ‘moment of truth’,⁷⁴ or what academics often call a ‘critical juncture’.⁷⁵ By this is meant the confluence of profoundly demanding social and political circumstances that can radically undermine existing institutional settlements, thus overcoming the natural lags that favour those settlements (‘hysteresis’), thereby opening the way for genuinely new institutional configurations.⁷⁶ In the early months of the coronavirus pandemic, however, there was no telling what kind of Europe might emerge. In this first stage of the pandemic response, as with the Eurozone crisis before it, the ecb necessarily provided the most important supranational input. The ecb announced an ambitious asset purchase programme, the Pandemic Emergency Purchase Programme (pepp), to mobilize up to 750 billion euro in Eurozone assets and debt instruments: a very important signal for the financial markets. (The ecb later increased pepp by 600 billion euro for a total 1.350 trillion euro.)⁷⁷ The pepp also once again pushed the ecb’s competences to their outer limits, just as in the Eurozone crisis. The ecb has been repeatedly forced to take on this sort of central role in addressing crises in the EU, as one commentator aptly noted at the time, for a very simple reason: “in Europe [it] is the only agency engaged in economic policy worthy of the name” and “is the one part of the complex European constitution that actually functions with real authority and clout as a federal institution”.⁷⁸

What emerged out of the negotiations over the next several weeks, culminating in the announcement of the Next Generation EU (ngeu) recovery and resilience facility in July 2020, was undoubtedly a major achievement. The historic innovation – a ‘Eurobond’ in all but name – was the use of the mff as a temporary instrument of common borrowing and macroeconomic stabilization. Nonetheless, it is important not to exaggerate too much the impact of the agreement on the EU’s metabolic constitution. The increased borrowing is, at this stage, still envisioned as temporary and in any case ultimately backed by the fiscal mobilization capacities of the Member States severally, through their proportional obligations to the mff. No doubt, ngeu contemplates a series of new taxes (for example, on digital technology and single-use plastics) to join customs duties and a portion of vat as part of the EU’s own resources. But if and when they are in fact adopted, they will still need to be imposed and collected nationally, per the requirements of Article 311 tfeu. Indeed, in some countries (e.g. Austria and Germany), the national-parliamentary approval for these levies may require qualified majorities, the same needed to amend their respective Constitutions.⁷⁹ Thus, in terms of the EU’s metabolic constitution, Next Generation EU still did not cross the crucial Rubicon, that of a proposed Europeanization of taxation authority to accompany the increased borrowing under the mff. The financial underpinnings of the new recovery fund would still be entirely in keeping with how the Member States financed the response to the Eurozone crisis over the prior decade – ultimately through their own fiscal capacities, whether directly or indirectly.

The mechanism set in place – EU debt issuance – is also not new.⁸⁰ What is new, however, is the magnitude of that debt. Indeed, the EU is set to become one of “Europe’s largest bond issuers” in the financial markets, most likely triggering a transformation of European capital markets.⁸¹ The EU’s move towards debt-financed deficit spending is also historic in legal terms, given the long-standing interpretation of Article 310 tfeu as prohibiting the EU to finance its expenditures through borrowing.⁸² As such, given the explicit requirement of an EU balanced budget (again, in Article 310 tfeu), this shift may trigger, at least in the medium term, the creation of a real fiscal capacity at the EU level to make its budget sustainable.

This raises an interesting philosophical question, as one commentator quickly noted after the deal was announced: “whether … the EU can initiate sovereign fiscal capacity through public debt alone? Or does it also require tax revenue raising capacity?”⁸³ Eventually, no doubt, any EU borrowing beyond the short-term and limited scale of Next Generation EU will need to be accompanied by autonomous taxing authority, which in turn would require treaty change. And, as this commentator rightly noted, any change of that magnitude would lay the groundwork for considerable political conflict in the future. Other commentators were more sanguine, seeing Next Generation EU as a vehicle for “reshap[ing] the EU’s political economy”: because “what can be done once can be done again”, this means that national leaders “have boarded the train towards more common taxation and cannot get off and turn back”.⁸⁴

Time will tell. To turn this temporary instrument into a permanent feature of European political economy (shifting responsibility to macroeconomic stabilization to the EU, combined with authority to raise taxes) would indeed require a quite fundamental treaty change, something for which there clearly does not appear to be the political appetite. Thus, it is perhaps best to say that, even if the EU has not yet crossed the Rubicon, Next Generation EU has brought it right up to its banks. On the opposite shore is a new socio-political terrain, one marked by several more demanding macroeconomic and geopolitical features, whether completing emu, developing a genuine European security and defense capacity, or meeting the demands of the climate emergency that will no doubt reassert themselves once the pandemic has passed. These new challenges require something beyond the traditional forms of supranational governance in the EU; that is, something more than regulatory power and technocratic-juristocratic ‘pre-commitment’ mechanisms, combined with one-off decisions to create borrowing capacity. What these challenges will demand, in other words, will be something approaching both the power and legitimacy of genuinely autonomous metabolic constitution for the EU in its own right. Europe must find a way to transcend the fundamental contradiction in the EU’s fractured metabolic constitution, one perhaps only temporarily and partially reduced under Next Generation EU: “National institutions are increasingly constrained in the exercise of their constitutional authority but supranational institutions cannot fill the void because they are unable to transition to genuine constitutionalism – that is the autonomous capacity to mobilize fiscal and human resources in a compulsory fashion”.⁸⁵

Conclusion: Taking Stock of Where We Are

Europe thus finds itself at a pivotal moment, potentially on the cusp of a genuine constitutional transformation but not there yet, at least not until the EU gains taxing authority in its own right to support increased borrowing capacity. There has been considerable debate over whether common borrowing, combined with distribution by grants, marks the arrival of a ‘Hamiltonian moment’ in the EU, though on this point, the sceptics have the better of the argument.⁸⁶ Many observers fixate on debt-mutualization as the primary sign of such a moment, when in historical fact, the true Hamiltonian innovation of the founding period in the United States was the conferral of taxing authority on the federal government in the US Constitution.⁸⁷ Such authority remains, as of this writing, a bridge too far for the EU to cross, precisely because the EU lacks the autonomous democratic and constitutional legitimacy to such a demanding form of sovereign power – once again, the inescapable power-legitimacy nexus in EU governance.⁸⁸ Lacking such capacity, the fractured metabolic constitution compels the EU to rely on more convoluted means to mobilize fiscal resources. For precisely this reason, Next Generation EU is both promising yet also limited. The EU’s fractured metabolic constitution has, as with the Eurozone crisis before it, forced the EU into a complex exercise in political and financial engineering – an effort that could have been, if not entirely avoided, at least mitigated if the EU had both the power and legitimacy to mobilize fiscal resources on its own.

It is precisely for this reason that Hjalte Lokdam and Michael A. Wilkinson are right to be sceptical of Mario Draghi’s functionalist invocation of, in effect, a technocratic and juristocratic (i.e. administrative) potentia as a sufficient basis of governing legitimacy in Europe going forward. We have, in fact, been around this block many times before, stretching all the way back to the earliest years of the integration process in the post-war decades. For many advocates of European integration in the late 1940s and early 1950s, the seeming example of technocratic independence under the New Deal offered a justification for the delegation of regulatory power to autonomous supranational bodies. The New Deal represented, from this perspective, the triumph of functionalist governance – that is, governance that evolved as a function of the problems it sought to address, rather than being determined by seemingly outdated constitutional categories (‘separation of powers’ in the purported case of the New Deal, ‘national sovereignty’ in European integration). The irony, of course, was that Roosevelt’s New Deal was much less receptive, both in principle and practice, to the sort of technocratic independence that these advocates believed to be inevitable and desirable in the case of integration. Indeed, consistent with a more nuanced understanding of the New Deal model, European integration would eventually secure a durable institutional existence only after being brought more directly under the shared control and oversight of the national executives of the Member States.⁸⁹

Contrary to expectations of functionalist (and later so-called neofunctionalist) theorists, European supranationalism did not evolve merely as a consequence of functional demands for technocratic independence. Rather, two additional dimensions of change also proved decisive: the political – or the defense of existing institutional advantages and/or the struggle to realize new ones –; and the cultural – or the mobilization of conceptions of ‘right’ or legitimate governance in the face of purported functional and political pressures for change. As a consequence of the interplay of all three dimensions – functional, political, and cultural – European integration ultimately settled on a form of governance in which the political oversight and control of national executives played a decisive role, a feature of European supranationalism that persists to this day. However, over the last several decades, this mediated legitimation through national executive oversight has been supplemented by national parliamentary and national judicial oversight – the other two crucial elements of the ‘post-war constitutional settlement of administrative governance’.⁹⁰ It was only through all three forms of mediated legitimacy that the post-war constitutional settlement allowed Europe to reconcile the functional demands of administrative governance with the political and cultural requirements of democracy and constitutionalism, thus surmounting what Carl Schmitt had claimed was ‘insurmountable’.⁹¹

In the atmosphere of crisis over the last decade, however, this necessity of mediated legitimation through national bodies has deeply complicated European governance, given the needs to extensive resource mobilization to address the various crises. Europe thus faces a choice, It can either continue the authoritarian dérive described by Hjalte Lokdam and Michael A. Wilkinson – seeking to excise national parliaments and courts as sources of mediated legitimation in favor of an alliance of national executives with supranational technocracy and juristocracy – or it can seek to develop a sufficiently robust democratic and constitutional legitimacy of its own to support the shift in compulsory mobilization powers to the EU level. This genuine form of European democratic constitutionalism would, however, require the emergence of a genuine European demos operating in conjunction with the various national demoi.⁹² We are still a ways away from that point, but there are nonetheless encouraging signs of an increasing political-cultural transformation afoot, accelerated by the functional demands of the crisis precipitated by the pandemic.

This leads us to close, then, like both Francesco Martucci and Hjalte Lokdam and Michael A. Wilkinson, on a (very) cautiously optimistic note. For Martucci, the Covid-19 crisis has had the potential of liberating European politics from the “carcan de la règle”, indeed perhaps even giving rise, via ngeu, to “un centre de décision pour la politique économique prévue par le plan Werner”. For Hjalte Lokdam and Michael A. Wilkinson, the pandemic response “has created the possibility for Eurozone-wide programmes that potentially point in a different ideological direction, towards more socially inclined ends”. We would argue, in a similar vein, that the pandemic response also contains within it the potential seed of a genuinely metabolic constitution at the EU level. The common borrowing in the ngeu creates tangible incentives to ensure debt sustainability through greater coordination of national tax legislation. For the foreseeable future, this coordination will remain under the rubric of the ‘own resources’ decision adopted under Article 311 tfeu (requiring unanimity in the Council, mere consultation of the ep, and entry into force only upon the approval of the member states according to domestic constitutional requirements). Nonetheless, the obvious functional advantages of common borrowing may be sufficiently powerful enough to facilitate, over time, a de facto fiscal mobilization capacity in the EU that is much less fragmented among the Member States than it is today.

With that capacity, moreover, could come a kind of polity-building power that reaches well beyond the sort of technocratic and juristocratic ‘pre-commitment’ authority that has underpinned European integration up to this point. That, at least, is the ultimate potential of the ‘rule-of-law conditionality’ that the EU25 have sought to impose on Hungary and Poland in conjunction with the adoption of the ngeu.⁹³ There are considerable potential obstacles to the success of this dynamic, to be sure, notably the obvious legal hurdles. Hungary and Poland pointed to a previously-undisclosed opinion of the Council Legal Service (cls) in 2018⁹⁴ to argue that any effort to enforce rule-of-law conditionality by way of a regulation adopted under Article 322(1)(a) tfeu would violate Article 7 teu as the sole means of such enforcement under the treaties.⁹⁵ Commentators have harshly criticized the 2018 cls opinion,⁹⁶ but the dispute recalls, as a legal matter, the very earliest of the so-called ‘constitutionalizing’ decisions of EU law in the 1960s. In Van Gend en Loos,⁹⁷ the Court of Justice was confronted by a seemingly exclusive enforcement mechanism (the old Articles 169–170) but also had at its disposal a provision (the old Article 177) whose language was sufficiently capacious, even if somewhat vague, to ground an alternative enforcement mechanism. The Court opted for the latter precisely because of the functional advantages that this alternative enforcement mechanism provided to the cause of European integration.

Has the Court opted for the same approach here? The cjeu was under enormous political pressure from the EU25 as well as the ep to do so, given the cultural demand for rule-of-law conditionality in the distribution of the EU own resources, including the ngeu proceeds. In its judgments of 16 February 2022 on cases C-156/21 and C-157/21 (not yet reported), the cjeu (full court) confirmed the validity of the Regulation establishing a mechanism of horizontal conditionality with a view to protecting the EU financial interests against violations of the rule of law. While the Court grounded its reasoning in the protection of the EU budget, linking it precisely to Art. 322(1) TFEU, the EU judges clearly also linked the mobilization of EU resources to the principle of solidarity and the protection of the EU identity as grounded on the rule of law. Even though the timing and the effectivenness of the Regulation’s implementation still remains unclear as of this writing (Spring 2022), we can safely say that the CJEU has successfully tied the mobilization of fiscal resources at a genuinely ‘constitutional’ scale to the enforcement of core values on behalf of the polity as a whole. In doing so, the EU has taken a small but important step towards establishing a genuine European demos and thus transcending, in a metabolic sense, the fragility of the ‘as if’ constitutionalism that has characterized the integration project to date.⁹⁸

Note on the Text and Acknowledgments

The present discussion draws from C. Fasone and P. L. Lindseth, « Europe’s Fractured Metabolic Constitution: From the Eurozone Crisis to the Coronavirus Response », luiss School of Government, sog Working Paper, n°61/2020 (October 2020, available at: https://sog.luiss.it/research/working-papers; last consulted on 12 February 2022). The authors would like to thank Nicholas Lindseth, BA 2021, Brown University, for his assistance in converting our working paper into this contribution.