Not only the member states should be given credit for the survival of the single currency. The European Central Bank deserves credit too. Throughout the crisis it resorted to ‘unconventional’ measures that have proven crucial for the stability of the currency union, especially its government bond programmes SMP and OMT. This chapter examines these programmes and argues that they are an intrinsic part of the transformation of the euro. Since the Bank’s mandate and constitutional position ultimately rest on the Founding Contract between the member states, it could not intervene in bond markets without a prior change in this Contract through which states committed themselves to a different currency union based on a broader stability conception. Only such a contractual change, and confirmation of it through concrete action, could provide the necessary political cover for bond purchases that pushed the boundaries of the Bank’s original mandate.

This chapter examines four flaws in the most essential assumptions underlying the single currency’s original stability set-up that were exposed by the crisis. The first concerns market discipline. The chapter looks at some of the key explanations for the failure of market discipline, in particular, those professed by the ECB. The second flaw concerns the instrument of public discipline. The shortcomings of this instrument were already visible in the early 2000s when France and Germany violated the Stability and Growth Pact. The chapter analyses these violations, the court case to which they gave rise and the reform of the Stability and Growth Pact that followed it in 2005. The third flaw concerns the excessive attention for budgetary discipline. In its preoccupation with ensuring fiscal prudence, the original set-up was blind to risks stemming from other corners of the economy, especially the banking sector. The fourth flaw is the cardinal one. Geared to safeguarding price stability, the single currency’s legal set-up left another stability dangerously exposed: financial stability. The chapter discusses its importance and the need to have it protected by a ‘lender of last resort’.

The change in the Founding Contract that political leaders initiated on 11 February 2010 put great pressure on the legal set-up of the euro that remained largely unaffected. When the European Court of Justice had to rule on the actions to which the change had given rise it consequently found itself between a rock and a hard place. It was not in a position to strike down actions that had been crucial to the single currency’s survival. Yet, in order to approve of them it had to engage in a Herculean struggle with the law that still largely reflected a stability conception from the past. This chapter examines this approval. Two cases are central: Pringle and Gauweiler. Both cases ultimately turned around the question whether and to what extent the law can accommodate the currency union’s new stability conception, characterized by the need to protect financial stability. Most of the Court’s reasoning in these cases is sound or, where it is strained, could have been justified through the use of different arguments. At one crucial point, however, the Court encounters the limits of what can be justified through legal reasoning alone.

This chapter examines the concept of solidarity, especially its existence outside the law, as a mechanism of cohesion. Three features are characteristic of this mechanism. First, solidarity mediates between the community and the individual. Second, as a result of solidarity, unity is created. Third, solidarity carries with it positive obligations, requiring individuals to act in support of, and in conformity with the group. Apart from these three general characteristics, solidarity is a multifaceted concept, with differing implications depending on the context in which it features. To understand these implications the chapter distinguishes between three kinds of solidarity: ‘social solidarity’, ‘welfare solidarity’ and ‘oppositional solidarity’. After a short discussion of each, the chapter pays special attention to social solidarity. On the basis of Aristotle’s notion of ‘friendship’, Rousseau’s ‘social contract’, Durkheim’s ‘mechanical’ and ‘organic’ solidarity and Parsons’s understanding of solidarity as a normative obligation, it analyses the concept’s roots and evolution over time.

The conclusion synthesizes the findings and, on that basis, discusses how the European Court of Justice should have positioned itself in relation to the change in the Founding Contract. It first reflects on the constitution of the Union and shows that this fits the tradition of the ‘constitutional contract’. It then discusses what consequences this has for constitutional actors, including the Court, when faced with a crisis like the one in the currency union. The initiation of the change in the Founding Contract by the heads of state or government on 11 February 2010 was a political act, an exercise of constitutional power outside the law. However, this exercise of political power does receive recognition in the law, in particular, through the principle of loyal cooperation. When the Court has to rule on a measure that has proven essential to preserve the Founding Contract in an emergency, it is under a duty of loyalty to abstain from disapproving it. Yet, instead of assessing and approving such measures on the merits, as the Court did in Pringle and Gauweiler, it should have acted on its duty by silence.

This chapter conceptualises solidarity between the member states on the basis of two spectrums. The first deals with the reasons for acting in the interest of the collective. Its poles are taken up by normative and factual solidarity. Normative solidarity occurs when states display solidarity due to a political obligation. The chapter explains that such political obligations are grounded in joint commitments, how these commitments turn their participants into a unity, and that they may not only exist between individuals, but also between states. Factual solidarity occurs when a state acts in the interest of the whole because it serves its own interest. Two situations are singled out: interdependence and common destiny. The second spectrum is subsidiary in nature and relates to the kind of solidary behaviour displayed. Its poles are negative and positive solidarity. Negative solidarity occurs when the acts displayed by a state in support of the whole relate to itself. Positive solidarity occurs when a state acts in the interest of the collective by directly benefitting another state. The chapter concludes with a discussion of the relation between joint commitments and Union law.

This prologue sets the scene by introducing the book’s main thesis that during the debt crisis, in particular, the years 2010-2012, the European Union has gone through a constitutional transformation. The transformation is characterised by a broadening of the currency union’s conception of stability. Its key manifestations are financial assistance for distressed member states and government bond purchases by the European Central Bank. The transformation can be understood through the lens of solidarity as this makes it possible to conceptualise the unity between the member states and to analyse how political leaders managed to uphold this unity during the crisis. And ultimately, it allows for an understanding of why instead of approving the transformation in Pringle and Gauweiler on the merits, the ECJ should have done so through silence.

One of the most fundamental obstacles to EU constitutionalization is said to be the lack of a European demos, which is seen as a precondition for any constitutional system.The term ‘demos’ originally referred to the common people of an ancient Greek state. Today, demos can describe the populace of a democracy, as a political unit. European Member State courts, such as the GFCC, have raised prominent concerns that further constitutionalization is constrained by the absence, in Europe, of a common attachment as an entity; they emphasize that there is no ‘European people’ and no future possibility thereof, meaning that the final say in constitutional matters will always rest with each European Member State.

In both the court of public opinion and modern legal scholarship, our Europe of today appears to lurch from crisis to crisis. These crises are political, cultural, social, environmental and now also economic. A severe financial crash has sent shockwaves around the continent, exposing the fault lines in Europe’s institutions and constitution. After the near-collapse of Greece’s national economy, the EU focused heavily on inventing new mechanisms to provide economic stability for the euro-currency countries. However, deeper issues with the broader European project, which had festered in the dark for years, were revealed and thrown into stark relief by the financial floodlights.