Will Next Generation EU require a change in the European Economic Constitution?

Abstract

The economic crises triggered by the pandemic COVID-19 is deep and it does not seem on the verge of a resolution. The European Central Bank is playing a central role in assisting the Eurozone economy towards a recovery, with the objective of creating a strong European economy more resilient and sustainable. Among the many legal instruments the ECB is deploying, ‘Next Generation EU’ is object of a complex debate between the EU members. NGEU, according to what was established by the European Commission, has a total endowment of 750 billion euros, distributed to members of the Eurozone, a portion in the form of a grant, as a sort of non-repayable loans, for a total of approximately 312 billion; and a portion distributed in the form of loans, at extremely favorable conditions, equal to approximately 360 billion in total. The governance of the fund will be entrusted to the EC, as the governing body of the Union, but also to a collegial body, which thus guarantees a greater impartiality with respect to the evaluation of projects and their implementation. However, no member state will be able to veto the allocation of funds and their management; but it will be possible, for each country, to substantially ask for a stop period in the disbursement in order to raise concerns about the projects and the use of funds by asking for detailed clarifications on the merits of the individual areas of intervention. In previous years, similar instruments like the European Stability Mechanism, the Outright Monetary Transactions Program and the Public Sector Purchase Program have been heavily criticized because they, supposedly, went against the Treaty of Functioning of the European Union and the Treaty of the European Union. However, each trial concluded with the European Court of Justice ruling in favor of the above-mentioned instruments, suggesting that a new perspective or paradigm may be necessary in order to rethink the European Economic Constitution. The last aim would be to allow European Authorities, for example the ECB, to be more effective in implementing policies with the mere scope to support the European Economy and benefit European citizens.