Following the late 2000s economic and financial crises, constitutional orders of Europe were faced with the question of incorporating balanced budget rules into their constitutions, that is, rules typically prescribing balance between revenue and public spending and containing public debt. This issue arose from EU’s legal responses to the euro-crisis, aimed at increasing oversight over national economic and budgetary policies.
Following the adoption of relevant European legal instruments, several EU Member States have adopted balanced budget constitutional amendments. The relevance of these balanced budget amendments making or enhancing constitutional fiscal discipline in European constitutions has far exceeded their euro-crisis origins. Amending the constitution means giving impetus to fiscal prudence beyond a period of financial turbulence and awarding it a constitutional status, and, with it, a special weight within a polity, equal to other constitutional principles and rights. It also means constraining future governments in how they decide on public finance. Balanced budget amendments have been shaping fundamental labour and social rights beyond the euro-crisis era, as well as other important fields of state action, such as responses to the climate crisis.
Current accounts on the topic of constitutionalisation of European fiscal constraints are premised on a narrow understanding of constitutionalisation: their focus is typically placed on constitutional amendments, that is, altering the letter of constitutional texts in line with formal constitutional amendment rules. In constitutional change theory, however, formal constitutional change is one of more possible paths towards changing the constitution. Informal constitutional change – that is, a change in the meaning of the constitution without a corresponding change in its text – is an equally recognised path towards constitutionalisation of new concepts, principles, rights and meanings, associated with shifts in legal practice, sub-constitutional laws and constitutional interpretation. This leaves a substantial gap in how we understand the current fiscal strand of European constitutions and its relationship to other constitutional strands and state functions.
In my paper, I illustrate the possibility of informal constitutionalisation of rules of fiscal discipline. I use the case of Greece’s post-crisis social constitutionalism, alone and in comparison with Italy, to show how instruments and rules of fiscal discipline can enter the constitutional sphere through informal means (sub-constitutional laws and constitutional interpretation) and reshape pre-existing constitutional norms.