Solidarity in the Eurozone

Pavlos Eleftheriadis
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Pavlos Eleftheriadis: University of Oxford

No 256, Working Papers from Bank of Greece

Abstract: Proposals for Eurozone reform aim to complete its institutional architecture by securing stability without creating moral hazard. Such policy arguments inevitably rely, however, on implicit assumptions about justice, or on what is owed to whom. A common assumption is that member states are solely responsible for what happens to them. This paper, written from the point of view of public law and legal theory, asks if this assumption is correct. The relevant idea is often considered to be that of solidarity. Yet, solidarity is a puzzling concept. Although it is mentioned in the EU treaties, it does not appear to create any clear duties of mutual assistance. Many prominent legal theorists argue that solidarity will only become relevant in the future, when new European institutions bring citizens together under a single Europe-wide political community. This paper argues, however, that these arguments are misleading. They are at least incomplete in that they miss the key role played by corrective justice. Unlike distributive justice, which applies within states but not among states, corrective justice applies to cooperative arrangements creating interdependence. Corrective justice creates a principle of redress, which requires that those who are unfairly burdened by an agreement should be compensated by those who caused the unfairness. Any state that was unfairly burdened by the Eurozone’s flawed architecture, may thus have a claim of redress for the losses it incurred as a result of the unfairness. It follows that the programmes of financial assistance were not merely actions of self-preservation or prudence by the Eurozone. They were also manifestations of an existing European principle of solidarity based on corrective justice.

Keywords: Eurozone; fairness; corrective justice; distributive justice; European Stability Mechanism; European Union treaties; solidarity (search for similar items in EconPapers)
JEL-codes: K12 K42 N10 N20 (search for similar items in EconPapers)
Pages: 60
Date: 2019-01
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