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European Journal of Law Reform


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Issue 4, 2014 Expand all abstracts
Editorial

Editorial

Article

A Crisis Beyond Law, or a Crisis of Law?

Reflections on the European Economic Crisis

Keywords Eurozone, economic crisis, Greece, debt, Grexit
Authors Ioannis Glinavos
AbstractAuthor's information

    This paper attempts to locate the place of law in debates on the economic crisis. It suggests that law is the meeting point of politics and economics, not simply the background to market operations. It is suggested therefore that the law should be seen as the conduit of the popular will through political decision making onto economic systems and processes. The paper argues that the crisis can be seen as being the consequence of the dis-embedding of the political from the economic, and it is this distance that causes legal frameworks to operate in unsatisfactory ways. With this theoretical basis, the paper examines the sovereign debt crisis in Europe. The European debt crisis in general and the plight of Greece in particular show why plasticity in policy making is necessary and also reveal why current orthodox solutions to economic calamities fail. The inflexibility of the neoclassical understanding of the state-market relationship does not allow for avenues out of crisis that are both theoretically coherent and politically welcome. Such realisations form the basis of the examination of the rules framing the Eurozone. This paper, after conducting an investigation of exit points from the Eurozone, condemns the current institutional framework of the EU, and especially the EMU as inflexible and inadequate to deal with the stress being placed on Europe by the crisis.


Ioannis Glinavos
Dr Ioannis Glinavos is Senior Lecturer in Law at the University of Westminster, i.glinavos@westminster.ac.uk.
Article

Beyond Financialisation?

Transformative Strategies for More Sustainable Financial Markets in the European Union

Keywords financialisation, financial market integration, financial reform, financial innovation, financial crisis
Authors Dieter Pesendorfer
AbstractAuthor's information

    The global financial crisis has led many regulators and lawmakers to a rethinking about current versus optimum financial market structures and activities that include a variety and even radical ideas about deleveraging and downsizing finance. This paper focuses on the flaws and shortcomings of regulatory reforms of finance and on the necessity of and scope for more radical transformative strategies. With ‘crisis economics’ back, the most developed countries, including the EU member states, are still on the edge of disaster and confronted with systemic risk. Changes in financial regulation adopted in the aftermath of the financial meltdown have not been radical enough to transform the overall system of finance-driven capitalism towards a more sustainable system with a more embedded finance. The paper discusses financialisation in order to understand the development trends in finance over the past decades and examines various theories to describe the typical trends and patterns in financial regulation. By focusing on a limited number of regulatory reforms in the European Union, the limitations of current reforms and the need for additional transformative strategies necessary to overcome the finance-driven accumulation regime are explored. Finally, the regulatory space for such transformative strategies and for taming finance in times of crisis, austerity, and increased public protest potential is analysed.


Dieter Pesendorfer
Queen’s University Belfast, School of Law, d.pesendorfer@qub.ac.uk.
Article

Collective Action Clauses in the Eurozone

One Step Forward, Two Steps Back

Keywords collective action clauses (CACs), sovereign debt restructuring, Eurozone, European Stability Mechanism
Authors Giuseppe Bianco
AbstractAuthor's information

    Amongst the measures taken inside the European Union to tackle the sovereign debt crisis, the focus of the legal scholarship has been mainly on the financial stability mechanisms and the European Central Bank’s action. These initiatives constitute the liquidity assistance part of the response. Arguably, less attention has been devoted to the initiatives intended to face issues of debt sustainability. As regards the course of action to adopt in case a country cannot repay its debt, the European Union opted for collective action clauses (CACs). This paper takes a critical look at the Eurozone CACs. It aims to answer the following research question: Are the adopted CACs an efficient means to achieve their purported objective (i.e. facilitate renegotiations of sovereign bonds between creditors and the sovereign debtor)? To do so, the paper investigates the CACs’ content and their historical bases. It then compares the final version with the initial draft and points to several interesting findings. The paper argues that it is likely that practical results from the use of CACs will be significantly below political leaders’ expectations.


Giuseppe Bianco
PhD Fellow, University of Oslo – Université Paris 1 Panthéon-Sorbonne. He can be reached at giuseppe.bianco@jus.uio.no. The author wishes to thank Régis Bismuth, Annamaria Viterbo, and Michael Waibel. Any errors and omissions are the sole responsibility of the author.
Article

EU Corporate Governance

The Ongoing Challenges of the ‘Institutional Investor Activism’ Conundrum

Keywords EU corporate governance, institutional investors, stewardship, shareholders, asset managers
Authors Konstantinos Sergakis
AbstractAuthor's information

    Institutional investor activism seems to be the ultimate means for steady improvement in corporate governance standards, as well as a powerful tool for refocusing short-term strategies towards more sustainable and viable business projects. Although EU institutions have endeavoured over the past decade to facilitate the exercise of a wide range of shareholder rights, the impact of such regulatory initiatives remains to be seen. This paper challenges the current EU regulatory approach by supporting the idea that, while it has touched upon important topics, such as companies or financial intermediaries, hoping that the investor community will make full use of its discretion and evaluation of these actors, it has avoided resolving another crucial issue, namely, that of investor behaviour. In fact, institutional investors have been partially accused of apathy and contributing indirectly to the EU capital markets crisis. EU law thus needs to find new ways to nurture and maintain an effective willingness to engage in long-term dialogue with companies. It is therefore crucial to reassess all EU initiatives and critically challenge their efficiency in order to propose a way forward to unblock institutional investor activism and establish a veritable alignment of objectives with corporate managers.


Konstantinos Sergakis
Lecturer in Law, University of Bristol. The author is very grateful to Professor Charlotte Villiers for her valuable comments at the early stages of this article. The usual disclaimer applies.
Article

Addressing the Pension Challenge: Can the EU Respond?

Towards Facilitating the Portability of Supplementary (Occupational) Pension Rights

Keywords Economic crisis, social protection, pension provision, occupational pensions, cross-border portability of pension rights
Authors Konstantina Kalogeropoulou
AbstractAuthor's information

    The European economic crisis has underlined the challenges that Member States of the European Union face towards ensuring adequate social protection provision for their citizens. The effects of the crisis have and can further impact on the capacity of pension schemes, both state provided and privately managed, that constitute a significant aspect of social protection, to deliver pension promises. This paper highlights the current situation that the common pension challenges pose for Member States and focuses on a particular issue around occupational pension provision, which has been on the European Commission’s agenda for a long time, and on which limited progress had been made. This is the issue of cross-border portability of supplementary pension rights. It is argued that current circumstances facilitate EU action to be taken in this area. In the first section, the paper identifies the main challenges around pension provision stemming from demographic ageing and the effects of the economic crisis. Section two provides a brief overview of the Commission’s holistic approach envisaged in its 2012 White Paper on safe, adequate, and sustainable pensions. Section three provides an overview of the issue of the portability of supplementary pension rights for EU workers. Section four outlines previous attempts and recent developments towards the adoption of legislative measures to promote the portability of such pension entitlements. The paper concludes by arguing that the renewed focus on pensions, in the context of current challenges and the need to enhance workers’ mobility and to provide adequate social protection, have paved the way towards the adoption of measures in this area.


Konstantina Kalogeropoulou
Senior Lecturer in Law, Kingston University. I would like to thank Dr Ioannis Glinavos for the invitation to participate in this special issue.
Article

Another Type of Deficit?

Human Rights, Corporate Social Responsibility, and the Shaping of the European Union’s Linkage Strategy

Keywords human rights, corporate social responsibility, linkage strategy
Authors Aurora Voiculescu
AbstractAuthor's information

    This article engages with the European Union’s continuing strategy, in the context of the economic crisis, of addressing the human rights deficit of the current economic model by promoting a multifarious normative linkage between the economic, market-driven sphere and the human rights-anchored social sphere. The article looks into issues of normativity associated with the EU linkage agenda and interrogates some of its institutional and conceptual elements. It contends that, while the linkage discourse depends on a multitude of actors and factors, the EU encompasses a number of features that – by entropy as much as by design – facilitate an interrogation of the normative set-up that currently holds between human rights and the market mechanisms. The first part of the article addresses the linkage or ‘trade and’ debate that carries distinct nuances within contemporary international economic law. In the second part, the potential as well as the challenges brought about by the EU as a socio-political entity highlight the bringing together of competing normative issues. Lastly, the article considers the EU conceptual inroads in developing the necessary tools for consolidating and addressing the linkage agenda. Through this analysis, the article highlights an essential, dynamic nexus and a search for normative synchronisation between the economic development model and the social model. It is argued that coupling this nexus with a conceptual rethinking can increase the chances of matching the so far rhetorical persuasiveness of the linkage discourse with the so far elusive conceptual coherence and policy consistency.


Aurora Voiculescu
Westminster International Law and Theory Centre, University of Westminster, London, United Kingdom. A first draft of this paper was presented at the workshop organised by the Centre for the Law of EU External Relations (CLEER) ‘Linking trade and non-commercial interests: the EU as a global role model?’, on 9 November 2012 at the TMC Asser Institute, The Hague. I am very grateful to the workshop participants as well as to Tamara Takacs, Andrea Ott, and Angelos Dimopoulos for the very insightful comments that helped me develop the paper further. Of course, all remaining mistakes are entirely mine.