Marco Inglese, Postdoctoral (senior) researcher, Faculty of Law, University of Sarajevo

1. The Greek debt crisis has attracted so many comments that it would be practically impossible to provide a full account of the current debate. It suffices to consider the complex overlapping of several actors –such as the European Commission, the so-called Eurogroup, the International Monetary Fund, the European Central Bank, Greek banks, Greece itself- with their different roles to admit that the final say is yet to come. Moreover, it is also well known that, especially after the referendum held in July, the Greek financial and economic framework is still a jigsaw made of patches, loans and bailouts.

Far from newspapers’ headlines and Commission press releases, people were also engaged in this heated battle seeking to exploit a new instrument introduced by the Treaty of Lisbon: the citizens’ initiative (hereinafter CI). Pursuant to Article 11 TEU (see Mendes and Cuesta Lopes), one million of citizens, from a significant number of member States, can invite the Commission -within the scope of its powers- to propose a legal act which they deem to be necessary to implement the Treaty. Article 24 TFEU is the legal basis of regulation 2011/211 which sets out the procedures on registration and follow-up of a CI (see Dougan).

The case Anagnostakis v. Commission, decided on the 30^th September by the General Court, was introduced to challenge the European Commission decision that denied the registration of the CI “One million signatures for Europe”. The initiative was aimed at introducing -within Title VIII of the Treaty (economic and monetary policy)- the principle of the state of necessity, thereby enabling a State not to pay its own debts to the extent that the payment would jeopardize the very existence of the State itself. The General Court dismissed Mr. Anagnostakis claim and soon thereafter the applicant issued a press release contesting the formalistic approach taken by the European Union in respect of such an important democratic means.

The case has already been commented in Daniel Sarmiento’s blog. However, the author mainly focused, on the one hand, on the powers attributed to the Commission; on the other, whether this kind of litigation might influence the distribution of competences among EU institutions. We will instead seek to follow a different path.

This contribution will, firstly, analyze the General Court judgment and, secondly, provide a general overview of the state of necessity doctrine in light of the solution adopted in the Anagnostakis case. We will finally offer some remarks on the use of the CI and the role that it might play in order to enhance the democratic participation to the political life of the European Union.

2. The legal reasoning of the General Court’s judgment can be split in two parts: whereas the first assesses whether the denial of registration satisfied the duty to give reasons, the second seeks to ascertain whether the introduction of the state of necessity doctrine would fall within the framework of the Commission’s powers concerning the economic and monetary policy.

First and foremost the General Court recalls that the EU is based on the principle of conferral and that it applies to the European Union as a whole, thus including its institutions. Against this framework, the Commission has to decide whether the citizens’ initiative falls within its attributed powers. Indeed, as provided for by Article 4, para 2, letter b, of regulation 2011/211 the Commission shall register the CI whereas it «does not manifestly fall outside the framework of the Commission’s powers to submit a proposal for a legal act of the Union for the purpose of implementing the Treaties». Hence, this apparently formal requirement becomes a substantial assessment of the Commission’s competences.

The General Court holds that the Commission complied with the duty to give reasons in respect of the registration refusal. Not only this obligation stems from Article 296 TFEU and Article 41 of the Charter of Fundamental Rights of the European Union but is also specified in Article 4, para 3, of regulation 2011/211. In particular, the Commission argued that the state of necessity principle is not linked to any of its powers within the framework of Title VIII of the Treaty, more specifically, that neither Article 122 TFEU nor Article 136 TFEU would constitute the proper legal basis for its introduction. Moreover, those two provisions have been identified only during the hearing and not in the previous stage, thereby enhancing the legitimacy of the Commission’s refusal.

The General Court turns now the attention to articles 122 and 136 TFEU.

3. Mr. Anagnostakis claims that the introduction of the state of necessity doctrine would be consistent with the reading of article 122 TFUE. Indeed, this provision allows some extraordinary interventions to be carried out in a spirit of solidarity, whereas difficulties may arise either in the supply of certain products –notably energy, but this seems to be a mere exemplification- or in case of natural disasters and other exceptional occurrences. Thus, according to the applicant’s submission, this “spirit of solidarity” should be applicable also nowadays that the economic crisis is so severe to affect the very existence of Greece. The Commission, in light of the Pringle case, puts forward that the European Court of Justice already held that Article 122 TFEU cannot be considered as the proper legal basis to aid member States in financial difficulties.

The General Court endorses the Commission’s argument and develops it to the extent that the state of necessity doctrine, should it be construed according to the CI, would have an impact also on non-EU subjects. In sum, should a member State be allowed not to repay its debts, this non fulfillment would not involve solely Member States or EU institutions but also other economic actors. Consequently, the state of necessity doctrine cannot be introduced within Article 122 TFEU. Hence, the General Court dismisses the first plea.

The applicant argued also that the state of necessity could be included within Article 136 TFEU as long as the Council sets out the economic policy guidelines for the so-called Eurozone member. The General Court recalls again the Pringle case and holds, in a very straightforward way, that the EU is a mere coordinator for those countries whose currency is the euro. Should the state of necessity doctrine be included within Article 136, the consequence would be that a legislative act will allow a member State not to pay its own debts. In other words, this legislative act would substitute the free will of the parties who entered into a financial agreement. This plea is also dismissed.

Mr. Anagnostakis moreover claims that the state of necessity doctrine could be linked to Article 222 TFEU which embodies a solidarity clause whereas a State is under a terroristic attack or other unforeseeable events. The General Court rejects this argumentation simply stating that Article 222 TFEU has nothing to do with the economic and monetary policy.

Finally, the applicant claims that the state of necessity doctrine is already recognized as a rule of customary international law and that it was also endorsed by the General Court itself in the case Greece v. Commission. The General Court acknowledges that this principle may very well exist in international law but this is not sufficient to infer that the Commission enjoys the competence to propose a legal act based upon it.

In conclusion, the General Court dismisses all the applicant’s pleas, thus confirming the validity of the Commission’s decision that denied the registration of the citizens’ initiative.

As Sarmiento noted, the reasoning behind the judgment is quite straightforward for the very reason that the General Court analyzed the state of necessity solely in the light of the Commission’s powers. In other words, a simple reading of the Treaty and some references to the Pringle case were sufficient to dismiss Mr Anagnostakis action. However, it should be acknowledged that this case arose in a context whereas there were neither intervening States nor institutions; hence other actors potentially interested showed little or no interest in the litigation. Moreover, the General Court was substantially bound by the pleas put forward by the applicant.

Nonetheless, a thorough analysis of the principles of the state of necessity and solidarity would have enabled the General Court to deliver a more accurate judgment. This is why we now focus on their interplays, without engaging in a full examination though; rather, we are going to explore how they could have been exploited.

4. The principle of solidarity and the state of necessity doctrine represent perhaps the best argument for those who do not see any positive outcome over the Greek crisis. Whereas the former, generally speaking, underpins the entire soul of the European experience, the latter is widely accepted as a rule of customary international law. Yet, their interplay could have been used either by the General Courts or by Mr. Anagnostakis to put flesh on the bones of their argumentations.

First of all, it is noteworthy to mention that debt crisis has always been existing in the history of States. If the Wall Street Crash is the most famous one, Stiglitz and Walter thoroughly described the most recent, eg. in Argentina, South Korea and Russia. Thus, it is safe to affirm that debt crisis is nowadays considered something that might physiologically (or pathologically?) happen to a sovereign State. However, the Argentinian case  is the only one that can offer some useful hints to tackle our subject. Given the complexity of the social, economic and financial aspects as well as the involvement of supranational institutions (eg. the World Bank and the International Monetary Fund) it suffices to say, for our purposes, that Argentina claimed the application of the state of necessity in several disputes (see Alberto Alvaro-Jimenez). So, it seems that it is not uncommon that States seek to avoid fulfilling their monetary obligation through the state of necessity. This is exactly the core of Mr. Anagnostakis CI.

The International Law Commission draft Article 25 on responsibility of States for internationally wrongful acts recognizes the state of necessity as a rule of international customary law affirming that it applies whereas the vital interests of a State are at stake. However, there are some conditions to match in order to claim successfully the state of necessity as an exception to an allegedly wrongful behavior: a) measures adopted on its basis must not jeopardize other contracting States of the obligation; b) there must be a grave and imminent peril; c) there must be no other available means; d) the State concerned had not contributed to create the situation. To this list, we might also add that the reliance on it must be limited in time.

The problem hence becomes different: is Greece allowed to rely on the state of necessity doctrine and, in turn, can the Commission accept –not only on the basis of a literal interpretation of the Treaty- a CI aimed at its introduction?

There are no clear-cut answers to these questions. To a certain extent, it might be true that no other States would be jeopardized by the Greek refusal, that there are no other available and suitable means and, eventually, that a grave and imminent peril is present. In this regard two Argentinian cases seem to be useful, namely Enron corporation ponderosa assets  and C.M.S. transmission company.

However, would it be arguable that Greece did not contribute to the creation of its own debt? De Sena and Starita also share these concerns insofar as they propose to soften this requirement, at least in cases dealing with the economic crisis. Recalling the conditions set forth in draft Article 25, Alberto Alvaro-Jimenez wonders how «substantial» (p. 160) the State’s contribution has to be in order to (un)successfully claim the state of necessity.

As one can infer from Campanelli’s analysis on the principle of solidarity, the latter has a meaning in international law that cannot be automatically transposed into EU law. Notwithstanding this, it is also a common knowledge that solidarity underpins the EU construction (for our purposes see Alison McDonnell and Jean-Victor Louis). Yet, as the General Court pointed out, this principle cannot be coupled with the state of necessity and stretched to the extent Mr. Anagnostakis and his supporters wanted.

Unfortunately the General Court avoided any clarification on the status of those two principles in the EU legal order. Even though this analysis would have been useful, the lack thereof is a direct consequence of the jurisdictional power of the European Court of Justice. Indeed, one should not forget that the Anagnostakis case stems from an annulment procedure, thus, the General Court is bound by the applicant’s pleas. Moreover, if one considers also the peculiarity of the factual situation, the General Court cannot be blamed for its short reasoning.

5. The evaluation of the Anagnostakis case is not as straightforward as it might appear at first glance. To the extent that the General Court analysed the powers attributed to the Commission within the framework of Title VIII of the Treaty, there are no other remarks to make. One can argue that the General Court shielded itself with the Treaty in order to avoid any further discussion on the state of necessity. Yet, this assumption is partially true since, as we showed, the General Court had to assess the case only on the basis of the pleas put forward by the applicant. Hence, does the Anagnostakis case have any impact on EU law?

The answer is twofold. On the one hand, it is already clear that the General Court was willing neither to deliver a landmark judgment nor to explore the state of necessity doctrine coupled with the principle of solidarity. This is even truer if one considers that the judgment has been written without any reference to further international instruments and cases. On the other, the General Court had no other possibility, given the strictness of the subject matter, that is, the lawfulness of a decision.

So, if we want to underestimate the Anagnostakis case, we have a plethora of suitable arguments. However, a different path might be helpful to prove that it will have an impact over the future case law of the European Court of Justice.

The CI has been used very rarely so far (for a full account see here), rectius, the Commission often denied the registration, arguably since subject matters did not fall within the scope of its competencies. This means, in essence, that it is very difficult for European citizens to grasp this peculiar aspect; furthermore, it would also be burdensome to prove that a legal act is deemed necessary to achieve the purposes of the Treaty. In other words, the legalistic approach endorsed by the Commission and the General Court hampers the enjoyment of citizenship’s rights. This is not to say that the General Court should have annulled the decision, on the contrary, we have showed that it is sound and not ill-founded. Nonetheless, the General Court highlighted that the Commission had a specific duty to give reasons to the initiative’s proponents and that that duty was correctly fulfilled. Perhaps the General Court itself could have done the same, at least to enable the applicant to challenge the judgment before the European Court of Justice, issue on, to the best of our knowledge, there are no news yet.

In conclusion, the CI was another effort to cope with the Greek crisis which, in turn, is far from being resolved. One can say that the CI is a means to bring the European demos closer to the EU, finally overcoming the old-fashioned adagio of democratic deficit. Dougan (p. 1812-1813) seems to share this view whereby he states that direct democracy means, such as the citizens’ initiative, «generally contribu[tes] to the sense of constitutional ownership and political responsibility».

This is confirmed by the fact that, on November the 30^th, the CI Wake up Europe! Agir pour préserver le projet démocratique européen has been registered. Its proponents invite the Commission to refer Hungary to the Council, according to the procedure set forth in Article 7 TEU, for alleged violations of European values (Article 2 TEU). Considering the other procedural steps to comply with – not to mention the interests involved –, it is uneasy to foresee the outcome of the initiative. However, this testifies that CI can be also used as means of political pressures. In this regard, the very fact that the Commission registered it is good news not for the sake of its final result but as a sign of sincere cooperation willingness. For the time being this appears to be the greatest challenge for the EU vis-à-vis its own citizens.