Legal Principle in the Making
Edited by Andrea Biondi, Eglė Dagilytė and Esin Küçük
Chapter 8: The European Stability Mechanism and the European Banking Union: promotion of organic financial solidarity from transient self-interest solidarity in Europe?
The European Stability Mechanism (ESM) and the European Banking Union (EBU) have reshaped the European Monetary Union (EMU). They can be considered the most important reforms in the EMU since the creation of the single currency in the Maastricht Treaty. The different nature of these two initiatives show that the EMU is now a resilient framework, where financial assistance can be provided to euro area Member States in financial difficulties through the ESM, and where there is an increased degree of institutional and substantial harmonisation of banking supervision and regulation in the euro area. Among other reflections, these two reforms have raised the question of whether financial solidarity has been enhanced in the European Union. The development of financial solidarity as a sui generis concept of solidarity is evident in the ESM and the EBU. In particular, this chapter assesses to what extent these reforms have promoted a truly organic solidarity or if they still express the self-interest solidarity of individual Member States to avoid the collapse of the euro area. The chapter suggests that, while organic financial solidarity has been substantially enhanced, the ESM and the EBU reforms still show grounds for improvement in the future.
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