3 - The Principles of the European Macroeconomic Constitution

Summary

The chapter describes and analyses the principles of European Macroeconomic Constitution and how it guides the ECB and EU in its macroeconomic governance. The principles can be divided into objectives and safeguards. The main objective of the economic constitution, integration through internal market, continues but gets price stability as the main macroeconomic objective, and to an extent a more elaborated open market economy principle to guide EU institutions. The safeguards start from central bank independence that are further defined by the prohibition of central bank financing and a narrow central banking model without explicit value judgments. Member States remain responsible for the other areas of economic policy with the obligation of sound fiscal policy. The principles form a logical whole and complement the earlier microeconomic constitution. However, the assumptions and theory backgrounds of the two constitutions differ substantially, which has many implications, including for the role of law and courts as well as independent experts, such as the ECB. These implications have even become apparent already in the earlier case law by the CJEU.