The Political De-determination of Legal Rules and the Contested Meaning of the ‘No Bailout’ Clause
| Date | 01 April 2017 |
| Published date | 01 April 2017 |
| DOI | 10.1177/0964663916666629 |
| Author | Pablo José Castillo Ortiz |
| Subject Matter | Articles |
Article
The Political
De-determination
of Legal Rules and the
Contested Meaning of
the ‘No Bailout’ Clause
Pablo Jose
´Castillo Ortiz
University of Sheffield, UK
Abstract
Traditional debates on legal theory have devoted a great deal of attention to the question
of the determinacy of legal rules. With the aid of social sciences and linguistics, this article
suggests a way out of the ‘determinate–indeterminate’ dichotomy that has dominated
the academic debate on the topic so far. Instead, a dynamic approach is proposed, in
which rules are deemed to undergo processes of political ‘de-determination’ and
‘redetermination’. To illustrate this, the article uses the example of Article 125 of the
Treaty on the Functioning of the European Union, the ‘no bailout’ provision, which
played a major role in the management of the Euro-crisis. As will be shown, with the start
of the crisis, this provision, whose meaning was once scarcely controversial, became the
object of intense interpretative disagreement. As it became politically relevant, the rule
also became the site of interpretative competitions, until the intervention of the
European Court of Justice disambiguated and redefined its meaning.
Keywords
Article 125 TFEU, determinacy of rules, Euro-bailouts, juridical field, law and politics
Corresponding author:
Pablo Jose
´Castillo Ortiz, The School of Law, University of Sheffield, Bartolome House, Winter Street, Sheffield
S3 7ND, UK.
Email: p.castillo-ortiz@sheffield.ac.uk
Social & Legal Studies
2017, Vol. 26(2) 249–272
ªThe Author(s) 2016
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DOI: 10.1177/0964663916666629
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Introduction
From 2009, the depth of an ever-increasing crisis in the Eurozone led to the creation of
mechanisms of assistance for countries experiencing severe financial difficulties. Mem-
ber States such as Ireland, Portugal and Greece, to note only a few examples, were the
objects of the so-called ‘bailouts’, by which financial support was provided in exchange
for profound, often socially contested, economic and political reforms. This idea of
financial assistance was foreseen by Article 125 of the Treaty on the Functioning of the
European Union
1
(TFEU) – the ‘no bailout’ clause – which in fact had gone relatively
unnoticed before 2009. Legal literature in the pre-crisis period about the meaning and
role of this rule in the general context of European Union (EU) economic governance
had been scarce, at least in relation to its far-reaching political relevance (but see, inter
alia, Herdegen, 1998: 26; Hessel and Mortelmans, 1993). Analyses had usually been
limited to brief descriptions of the clause, suggesting that it prohibited bailouts within the
Union without further discussion of difficult scenarios or ‘hard cases’ (see on this
concept Dworkin, 1975: 1057).
The outbreak of the Euro-crisis and the creation of the first mechanisms of financial
assistance dramatically changed the situation (Wendel, 2014: 268). Article 125 TFEU
suddenly became the object of intense debate. The provision was at the core of political
disputes regarding the convenience and legality of the granting of bailouts to EU Mem-
ber States undergoing financial problems. Parallel to debates among politicians, aca-
demics began to focus on the provision and polarized into two opposed groups: those
asserting that the bailouts were forbidden under Article 125 TFEU and those who argued
that they could be allowed, at least under certain circumstances (see inter alia, Athanas-
siou, 2011: 558; Louis, 2010: 976; Lupo Pasini, 2013; Palmstorfer, 2012). The debate
still endures.A provision whosemeaning was once uncontroversialhad become the object
of intense interpretative disagreement. The no bailout clause seemed to have suddenly
become a paradigmatic example of an ‘indeterminate’ legal provision, whose application
to the difficult case of the ‘euro bailouts’ was polemic from all perspectives.
This article analyses the process through which the meaning of Article 125 became
contested. To do so, the article proposes c hanging the traditional approaches to th e
analysis of the determinacy of rules in legal theory. Instead of considering legal rules
as either determinate or indeterminate, or anything in between,
2
I shall argue that they
are subject to processes of political ‘de-determination’ and ‘redetermination’ in which
their meaning is the object of political struggles. More generally, drawing on the con-
tributions of sociolegal literatu re (inter alia, Bourdieu, 1987, 1991; Pi cciotto, 2015;
Schepel and Wesseling, 1997), the article replaces the traditional static approach to the
determinacy and meaning of rules for a dynamic one, capable of acknowledging their
mutability and contestability. As I will show, when a formerly uncontr oversial rule
becomes the object of political struggles, a number of actors begin to compete with
different interpretations about its meaning and application to real cases. In this inter-
pretative competition, juridical actors, such as legal scholars, play a core role. Taking
inspiration from Bourdieu (1987, 1991), the juridical field can be deemed to convert
political struggles into legal ones, in which legal actors compete through their
doctrinal interpretations and manage conflict through legal procedures. As Picciotto
250 Social & Legal Studies 26(2)
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