After the Eurozone crisis, conditionality has become the new topos within the EU economic governance. All types of European assistance to countries under financial distress have been contingent upon the recipient Member State fulfilling far-reaching conditions and seven out of the 28 Member States have been under conditionality schemes in the last five years. Crucially, in the context of financial assistance, and contrary to what happens in the context of accession and trade-preferences, conditionality is not applied vis-à-vis third states, but internally, vis-à-vis Member States. During the crisis, conditionality proved to be an extremely powerful instrument. It has been used to press for reforms in fields that go far beyond EU competences. Not only in the field of economy, but also in healthcare and pension systems, in education and research and even in national defense. Never before had European institutions been engaged in so close surveillance and micromanagement of domestic public policies.
Conditionality was a major instrument in the process of transforming the EU economic constitution during the crisis, functioning as a bridge between two paradigms. According to the first paradigm, that of economic independence, countries are self-sufficient in economic terms: when they need money beyond taxation they procure them in capital markets and they are fully responsible for their economic policies. According to the paradigm of complete economic union, such as the case of a federation, the constitutional entities offer each other assistance in case of economic troubles but they also surrender a part of their autonomy in making economic policies to the central level. In the Eurozone crisis, conditionality was used to bridge these two paradigms: some limited transfers where allowed in exchange for the implementation of well-monitored conditions.
This project investigates this paradigm-change function of conditionality and investigates how conditionality could be aligned with fundamental principles, such as democratic accountability, respect of human rights and judicial review.