Competition and redistribution in Economic and Monetary Union

Measures taken by the EU institutions and Member States in response to major crises of the EU over the past decades, culminating in Next Generation EU (NGEU), the EU's Covid-19 recovery programme, have been both praised as expressions of ‘real’ European solidarity and criticized for representing a profound change in the EU's constitutional fabric lacking proper constitutional legitimation. These two viewpoints, while seemingly opposed, go hand in hand. Economic and Monetary Union is built on the principle of national fiscal responsibility, which is in tension with mechanisms that involve financial assistance, risk sharing and debt mutualization. This article examines the solidaristic elements that have been present in the EU's economic policies since the early days of the European Communities to probe whether Eurozone financial assistance and NGEU indeed constitute such a profound shift. The article argues that both are in the tradition of a narrow, instrumental version of solidarity that underpins much of the internal market and cohesion policy. Solidarity, in this sense, has the purpose of balancing constraints on competition between the Member States with certain redistributive elements. While this view on solidarity may not dispel all doubts about the constitutionality of financial assistance and debt mutualization, it helps to put claims about a shift towards ‘real’ European solidarity into perspective.