The Accountability of the European Stability Mechanism and the European Monetary Fund: Who Should Answer for Conditionality Measures?

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Table of Contents: I. Introduction. – II. We are one, but we are not the same. The Mallis case and the accountability of the Eurogroup and the Board of Governors. – II.1. The Cypriot bail-out. – II.2. The Mallis case. – II.3. The political and legal accountability of the Eurogroup. – III. The man the authorities came to blame? The institutional liability of the Commission in the Ledra case. – III.1. The legality of European institutions acting outside the Treaties. – III.2. The action for damages: The right path to ensure the liability of the ESM? – III.3. Does the Ledra case (indirectly) improve the judicial accountability of ESM conditionality? – IV. Are the times really a-changing? The possible transformation of the ESM into the European Monetary Fund. – IV.1. The Commission’s Proposal. – IV.2. The legal accountability of the EMF. – IV.3. The political accountability of the EMF. – V. Final remarks.

Abstract: This Article analyses the judicial and political accountability of the European Stability Mechanism (ESM) in light of the seminal Mallis and Ledra cases (respectively, Court of Justice: judgment of 20 September 2016, case C-105/15 P, Mallis and Malli v Commission and ECB [GC]; judgment of 20 September 2016, case C-8/15 P, Ledra Advertising v. Commission and ECB [GC]). It seeks to determine to what extent the intergovernmental nature of the ESM has shielded its activity from the accountability mechanisms established within EU law. It then assesses whether the Proposal, recently issued by the Commission, to transform the ESM into an EU body, the European Monetary Fund (EMF), would improve the accountability of this body. It is argued that embedding conditionality policies in the European constitutional legal order constitutes a necessary, but not a sufficient step. To achieve this objective, it is necessary to couple a close judicial scrutiny by the Court of Justice with an equally substantial democratic oversight by the European Parliament.

Keywords: European Stability Mechanism – European Monetary Fund – financial assistance – conditionality – Eurogroup – accountability.

European Papers, Vol. 3, 2018, No 2, pp. 511-545
2499-8249 - doi: 10.15166/2499-8249/246

* Marie Curie ESR researcher and PhD candidate, Erasmus University Rotterdam,


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