The Liability of the EU in the ESM framework
| Date | 01 February 2017 |
| DOI | 10.1177/1023263X17693198 |
| Published date | 01 February 2017 |
| Author | Anastasia Poulou |
| Subject Matter | Case notes |
Case note
The Liability of the EU
in the ESM framework
Anastasia Poulou*
1. Introduction
Ledra Advertising and Others v. Commission and ECB, decided by the Grand Chamber of the
Court of Justice of the European Union (the Court of Justice) on 20 September 2016,
1
is a mile-
stone case for the protection of human rights in the context of post-cr isis European financial
assistance. After a long history of case law, in which the Court of Justice refused to go into the
merits of Greek and Portuguese cases that challenged the compatibility of financial assistance
conditionality with fundamental rights,
2
the Grand Chamber finally placed the conditions attached
to the financial support awarded to Cyprus under substantial judicial scrutiny. The Cypriot rescue
package is of particular interest, since it marks the first time that bank depositors were targeted as
part of a European bailout deal. But where does European financial assistance conditionality come
from and why has it so far escaped judicial scrutiny on the basis of EU law?
Created in order to safeguard the stability of the Eurozone and to assist Euro area Member
States in financial distress, the European Stability Mechanism (ESM) was instituted outside of the
EU legal order through an international agreement between the Eurozone Member States. The
common ground among all of the financial assistance programmes awarded by the ESM is the use
of strict conditionality: all loans are made dependent on the compliance by the recipient state with
strictly monitored economic policy conditions. These conditions are negotiated between domestic
authorities and the so-called ‘Troika’, namely officials from the Commission, the European Cen-
tral Bank (ECB) and the International Monetary Fund (IMF). Despite the involvement of the
Commission and the ECB, the fact that the ESM lies outside the EU legal order led the General
* Senior Research Fellow, Max Planck Institute for Social Law and Social Policy, Munich, Germany
Corresponding author:
Anastasia Poulou, Max Planck Institute for Social Law and Social Policy, Munich, Germany.
Email: poulou@mpisoc.mpg.de
1. Joined Cases C-8/15 P to C-10/15 P Ledra Advertising and Others v. Commission and ECB, EU:C:2016:701.
2. See Case T-541/10 ADEDY and Others v. Council ,EU:T:2012:626; Case T-215/11 ADED Y and Others v. Council,
EU:T:2012:626; as well as Case C-128/12 Sindicato dos Banca
´rios do Norte and Others, EU:C:2013:149; and Case
C-264/12 Sindicato Nacional dos Profissionals de Seguros e Afins, EU:C:2014:2036.
Maastricht Journal of European and
Comparative Law
2017, Vol. 24(1) 127–139
ªThe Author(s) 2017
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DOI: 10.1177/1023263X17693198
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