Home country control has been a long-standing principle of supervisory governance in the internal market. However, in the wake of the financial crisis, the principle has come under stress. This chapter looks at ways to deal with home country control by putting forward for discussion a new paradigm which I will coin ‘home country control with consent’ (HCC-C). My aim is to examine the building blocks of HCC-C but also to reflect more generally on the merit of a (mostly horizontal) supervisory arrangement which allows other (host) actors to get involved in the decision making of a home state authority. To describe such involvement, I will use the term ‘interference’. The basic problematic that I seek to address is that of ensuring cooperation and trust between national competent authorities. To identify the building blocks of HCC-C, I will turn to the recently enacted European Market Infrastructure Regulation (EMIR) which provides a possible, even if embryonic, template for HCC-C.

To complement the ‘no shared liability’ rule and public deficit limits, the Maastricht Treaty gave the European Central Bank (ECB) a narrow remit to focus on price stability. Crucially, as a ‘non-sovereign’ central bank, it was unclear that the ECB would act as lender of last resort in the event of market panics. The neoliberal orthodoxy at the heart of Economic and Monetary Union (EMU) held that moral hazard and inflationary risks militated against anything resembling ‘illegal monetary financing’. Following monetary union, markets under-priced risks and encouraged bubbles, but, with the onset of the crisis, sentiment overshot the other way, starving credit from banks and later sovereigns. With bailout funds limited and austerity failing to improve debt spreads, sovereigns became illiquid. ECB officials reluctantly concluded that an uncontrolled sovereign default would threaten the continuation of monetary union. The ECB was thus forced de facto to expand its mandate, first to help banks and, later, to help sovereigns facing loss of access to bond markets. Ultimately this was successful in restoring confidence, but the ECB remained uncomfortable with its role. It has continued to stress its legal limitations and has pressed for reformed governance to enforce fiscal discipline. The economic case for a lender of last resort in a crisis was always strong, but brings with it a worsening moral hazard problem that may invite leaders to avoid the deeper political changes necessary to rebalance the Eurozone.

This chapter examines the choice of legal basis in EU external relations post-Lisbon in the light of the judgment of the Court of Justice in the Legal Basis for Restrictive Measures case. Before reaching the conclusion that the regulation at issue there was rightly based on Article 215(2) of the Treaty on the Functioning of the European Union (TFEU) and rejecting the European Parliament’s argument that the measure ought to have been taken on the basis of Article 75 TFEU, the Court made a number of important observations on the principles to be followed when choosing a legal basis and recalled some of its earlier case law, in particular Titanium Dioxide and its progeny. This chapter reflects upon the application of those principles in a post-Lisbon framework.

EU management of its international responsibility for wrongful acts varies between a pragmatic approach and the proceduralisation of its responsibility. The EU either lays down complex procedures in order to manage the allocation of responsibility in order to (allegedly) preserve the internal division of competences or takes a pragmatic approach which disregards any internal division of competences. This chapter critically analyses these two trends in EU practice. More precisely, it identifies from the ongoing development in the incipient foreign direct investment policy of the EU and in its accession to the European Convention on Human Rights the problems linked to this way of managing the EU’s international responsibility. Overall, it argues that instead of complex and slow procedures or ad hoc pragmatic solutions, the EU should adhere to a rule-based approach which is at the same time pragmatic and respects the principles underpinning the proceduralisation of responsibility.

This chapter investigates the role of the Court of Justice of the European Union (CJEU) in the international legal order in light of its decision in Kadi and the forthcoming Kadi II. It focuses on establishing how the Court perceives its relationship with the UN Security Council and its position in the international legal order. The CJEU’s approach is analysed by identifying the characteristics of review adopted by it as a ‘constitutional court of a municipal legal order’. In this context, the chapter reveals how the CJEU’s review resembles that employed by domestic courts seeking to give force to the same or similar actions of international institutions and shows which motives may have led the CJEU to follow the practice of national courts in constructing its relationship with the international organs. This practice is contrasted with Advocate General Bot’s desire to depart from the image of an all-powerful but isolated CJEU, a court ignorant of other legal orders. Bot insists that what the CJEU ought to do in Kadi II is adopt both a more modest, deferential role in reviewing international sanctions and a rather more active role as a participant in the international legal order.

The European Neighbourhood Policy (ENP) is inherently political in nature. The rationalistic considerations underpinning its launch and subsequent elaboration have necessarily influenced the choice of the legal framework. At the same time, the rules regulating the conduct of EU foreign policy had a reciprocal impact on policy choices made. The legislative and political developments following the ratification of the Lisbon Treaty and the regional split in the policy arguably injected new dynamics into the interaction between the political and legal aspects of the ENP.

The chapter traces the relationship between the political objectives and the legal framework of the ENP through three phases of its existence, with a focus on the eastern neighbourhood, comprising Belarus, Ukraine, Moldova and the South Caucasus, as the addressee of the exclusionary rationale of the policy. First, the formulation and the elaboration of the initiative is revisited as the first phase of the existence of the policy. The second phase concerns the ‘Eastern Partnership’ initiative established as a result of the regional split within the policy. The third phase refers to the law and political objectives of the ENP as translated into Article 8 TEU.

From the perspective of public international law, the legal personality of the European Union (EU) carries with it the possibility for it to exercise rights and to bear obligations on the international plane. Its quasi-federal structure, however, requires consideration as to how these rights and obligations may be exercised. In this chapter, two regimes are compared: the EU’s rights and obligations as an international organisation and the possibility that its internal structures might be recognised on the international plane, thus leading to more complex notions of subsidiary responsibility, shared between the various levels of European governance.

In recent years, the question of whether, and to what extent, measures implementing United Nations (UN) Security Council Resolutions can be subject to judicial review has stirred heated debates. This contribution takes a fresh look at the question in the context of the EU’s implementation of a series of Security Council Resolutions relating to the fight against terrorism using the well-established EU principle of loyal cooperation. It suggests that the principle could play a role in determining the appropriate standard and intensity of judicial review, and considers the value of approaching the question in that way.

The Union’s constitutional regime for development policy has traditionally progressed alongside two parallel tracks. In addition to a general regime for all developing countries, there exists a special regime for African, Caribbean and Pacific Countries (ACP countries). The Union’s general development policy originated as a flanking policy within the Common Commercial Policy. This trade-centricity was only relativised by the insertion of an express development aid competence in 1992. The Union’s development cooperation competence can today be found in Article 209 of the Treaty on the Functioning of the European Union (TFEU) and allows the Union to adopt legislative acts or conclude international agreements to reduce poverty within developing countries. By contrast, the Union’s special development regime has had a very different constitutional source. It stemmed from the ‘colonial’ association to the Union (qua its Member States) of certain dependent ‘oversees countries and territories’ for which the 1957 Treaty of Rome had provided a limited development competence. Once these countries gained independence in the 1960s, however, the Union had to transfer this special regime to its contractual association competence under Article 217 TFEU. The association regime for ACP countries has itself undergone a number of significant changes with the transition from the Lomé Convention(s) to the Cotonou Agreement.