The EU’s Reformed Institutional Framework and the Way Forward

This article focuses on measures taken in 2012 and 2013 to reform the EU’s institutional framework. These measures, which were largely based on provisions included in the Treaty of Lisbon, have increased the role of the European Parliament and of the national parliaments. Stronger parliamentary involvement and interinstitutional agreements on democratic accountability seem to counter the theory of a lack of democratic legitimacy; legitimacy would appear to be jeopardized more severely by an emerging “social deficit.” At the same time, governance has become more complex, as the Community method of decision making was mixed with intergovernmental decision making in crisis management and prevention measures, and as variable membership patterns have evolved. By establishing the European Stability Mechanism (ESM) for euro area countries and a facility for providing balance of payments assistance to non-euro area countries, the EU has set up permanent financial crisis management mechanisms. Fiscal governance reforms replicate the precrisis structure, and – as before – success depends on the commitment of Member States to implement reform measures. With more detailed reporting requirements and more ambitious timelines in the European Semester, economic governance has become more extensive. Yet European and Monetary Union (EMU) remains incomplete: By establishing a banking union, the EU Member States have transferred national sovereignty to the supranational level, but the reforms stop short of a fiscal union, for which the Treaty of Lisbon would need to be changed.