2. The background conditions of EU legal interpretation

To understand the impact of EU institutional lawyers on constitutional change, a good place to start is with the background conditions that guide their work. EU lawyers are Union officials, and are under an obligation to carry out their duties ‘solely with the interests of the Union in mind’ acting ‘objectively, impartially and in keeping with his duty of loyalty to the Union’.Footnote ²⁸ Beyond that, there are broader background conditions that help to explain how ‘the interests of the Union’ are understood; why some policy options, in terms of legal interpretation, seem ‘good’ and others ‘bad’; some policies appear plausible while others seem implausible. One of the broader background conditions is the language of EU law, which makes it possible to translate contested political objectives into the apparently neutral language of law while making institutional ambitions and objectives seem credible, necessary or even legally ‘true’. Examining more carefully EU law as a professional language enables us to see how policy goals turn into rules that we consider binding or authoritative and that make us believe in the beneficiality of whatever is being proposed as representative of ‘integration’.Footnote ²⁹

Formalism and anti-formalism have always co-existed in EU legal language. The EU has a long historical pedigree of teleological and strongly evolutionary interpretations of the Treaties, which have only sometimes been followed by their formal amendment. The language of EU law has been geared in the functionalist direction and relied on broad objectives. Among EU legal professionals, law is seldom seen to establish or uphold absolute constraints. Law is understood as the essence of integration, fundamentally intertwined with its political objectives. This language of ‘law as integration’ has been largely shared among all legal professionals in the field, irrespective of whether they work in the institutions or in academia.Footnote ³⁰ It has become the common language in a field populated by ‘people sharing professional tools and expertise, as well as a sensibility, viewpoint, and mission’.Footnote ³¹ Its main function and logic is to enable deeper European integration, which is promoted in path-dependent ways, under Commission leadership. Background conditions may also change, and, with them, what is considered a legally feasible interpretation of the Treaties.

EU law, not being an absolute constraint, does not make it irrelevant either. Law provides a language that allows these legal professionals to argue in a specific way that anchors EU actions into the Treaties. This has mattered in the post-Lisbon context, given the Member States’ clear Treaty message that the boundaries of EU law are strict and should correspond to the competences attributed to the EU.Footnote ³² Overt disregard of Treaty limits and formal obligations could grow into a political obstacle for the final approval and implementation of measures. Dressing political initiatives in the language of Treaty respect is also critical in insulating them against challenges in national constitutional courts. This is particularly so in the case of the German Federal Constitutional Court, which puts great importance on the principle of conferral and the ‘individual Member State’s constitutional responsibility for integration’.Footnote ³³ Its ‘integration programme’ seems predetermined in the Treaties, where it was put by the Member States and approved by their parliaments. This rather formalist and inert reading of the Treaties stands in contrast to, and in tension with, the more fluid and anti-formalist understanding prevalent among EU legal professionals and played out in the daily practices of the EU institutions. From the anti-formalist perspective, EU law exists to realise objectives defined in the institutions. In contrast, from the formalist perspective,

What would distinguish the phase we are living today from past stages of European integration is at least three things. First, whereas the classic doctrines of EU law were developed in the Commission Legal Service (with strong input from EU legal academia) and subsequently confirmed by the Court,Footnote ³⁵ today’s reinterpretations take place within the Commission and the EU’s political institutions, while the Court has been sidelined (or sidelined itself). Second, the classic doctrines were presented as powers that the EU had always possessed and were always intended to be an inherent part of the Treaties. In contrast, today’s creative readings explicitly contradict and set aside older, established interpretations (made either by Court or the institutions themselves) and/or to reach beyond powers expressly allocated to the EU, to those explicitly left with the Member States in the Treaties.Footnote ³⁶ And thirdly, the classic ‘integration through law’ project was largely focused on regulatory powers and the legal construction of the internal market. It was applied in tightly regulated and litigated fields where formalism is a necessity for the survival of measures. Today, EU executive institutions are expanding their technocratic reach into state powers that constitute the core of constitutional democracies.Footnote ³⁷ Unlike internal market regulation, their exercise is more dependent on and constrained by the degree of political integration. Most notably among such state powers, the legitimacy of budgetary powers ‘derives from the degree of democratic control by citizens so that resources are allocated according to the will of the people’.Footnote ³⁸

Only thirteen years ago, in the immediate aftermath of the financial and euro crises, Treaty competence limits still looked formidable and institutional reports on EMU development embraced the language of Treaty respect. The Commission’s ‘Blueprint for a deep and genuine economic and monetary union’ (2012) mentions either Treaty limits or the need for Treaty amendments no less than 39 times. It argues very specifically that ‘some of the instruments can be adopted within the limits of the current Treaties. Others will require modifications of the current Treaties and new competences for the Union’,Footnote ³⁹ as ‘[m]ajor Treaty reform will be required on this path’.Footnote ⁴⁰ A little later, the Five Presidents’ report built on these ideas.Footnote ⁴¹ At the time, the concern was primarily about the corrosive effects of the proliferation of intergovernmental arrangements that were used where Treaty competence was considered too limited. The institutions wished to safeguard their own role, and saw democracy best assured if EU development stayed within the institutional framework of EU law: ‘It also means better sharing of new powers and greater transparency about who decides what and when’.Footnote ⁴²

The scars of the dramatic ratification of the Lisbon Treaty remained deep. The concern for the impact of the further mushrooming of intergovernmental arrangements on institutional power left the institutions to think if the EU law could be not understood in less formalist terms. Brexit removed UK lawyers from Council meeting rooms and, with them, the only delegation that was systematically willing and able to counterbalance expansive interpretations in the institutions. What further added to institutional courage was the deference of the Court in scrutinising the innovative solutions at use during and after the euro crisis.Footnote ⁴³ It proved willing to support and supplement the expansive action through teleological interpretations, rather than challenging and controlling them. This increased the room for manoeuvre for the institutions to operate in the confines of existing Treaties, which resulted in a change in how the limits of existing Treaties came to be understood.

Towards the mid-2010’s, as the euro crisis started to fade in the rear-view mirror, so did any political momentum towards deeper integration it had mobilised. Ambitious plans for expanding the EU’s role in the fiscal sphere had to be shelved but they were not forgotten. While the inconvenient constraint remained that any such plans seemed to be running against Treaty limitations, legal preparatory work in the EU institutions continued backstage. Leo Flynn from the Commission Legal Service describes in his 2019 working paper the assignment given to the Legal Service to find ways to reform the EMU without Treaty reform,Footnote ⁴⁴ primarily building on the cohesion policy flexibility clause, Article 175(3) TFEU. In its previous case law, the Court had stressed that the clause could not be extended ‘beyond the scope of the Community’s policy on economic and social cohesion’.Footnote ⁴⁵ Setting aside this case law, EU lawyers started to work on a new interpretation of the scope of Article 175(3) TFEU, the development of which can be studied by triangulating formal Commission proposals with the legal advice by the Commission and Council Legal Services (CLS).Footnote ⁴⁶ The documents bear witness to the imperative to provide a fiscal stabilisation mechanism that could be explained as a feasible interpretation of the existing Treaties. As Jean Paul Keppenne, the Director for the Commission Legal Service unit in charge of EMU related matters later explained in an academic commentary, the Commission developed ‘a concept of cohesion as embracing real convergence between the Member States and of augmenting the resilience of their economies’.Footnote ⁴⁷ The work did not immediately lead to political breakthroughs, but the effort was not wasted. A little later, an unexpected windfall came in the form of the pandemic which bulldozed away political obstacles. And when the opportunity was there, the Commission had a model available.

3. It’s never too late to learn a new (legal) language: From EMU to NGEU

It is now 2025 – the year which in the post-crisis EMU reports was to mark attainment of the final stage of ‘a deep and genuine EMU’. Looking back, it would not be an exaggeration to say that much of what was envisaged back then has indeed been achieved. Technical solutions have evolved, but the crucial elements – such as large-scale use of joint debt issuance and fiscal incentives to promote structural reform in Member States – are there, though for the EU27 instead of just for the euro area. However, against the expectations of the visionaries of the time, this has turned out to be possible within the existing Treaties – with formal rules of constitutional amendment failing to constitute and regulate constitutional politics.Footnote ⁴⁸

The ‘constitutional change without a constitutional change’ took place almost overnight in May 2020 when German Chancellor Angela Merkel, convinced that the Union needed rescuing from the verge of collapse, agreed that the EU response to COVID-19 should be financed through the common issuance of debt.Footnote ⁴⁹ The Commission had been dropping hints about a forthcoming recovery package, but a formal proposal had been held back by disagreements over financing and allocation.Footnote ⁵⁰ Merkel and Macron proposed ‘an ambitious, temporary and targeted Recovery Fund’ to ‘provide EU budgetary expenditure for the most affected sectors and regions on the basis of EU budget programmes and in line with European priorities’.Footnote ⁵¹ The Franco-German initiative provided the impetus that, with a surprising speed, broke the political deadlock and dissipated the Treaty obstacles relating to financing EU expenditure with debt previously considered insurmountable in the Commission and the Council.Footnote ⁵² For the Commission, it provided the opportunity to pursue the plans of deeper fiscal integration it had been preparing for many years. A few weeks later, the Commission essentially formalised the Franco-German initiative in its Next Generation EU proposal.Footnote ⁵³ It was faced by fierce opposition by several smaller countries, in particular the so-called ‘frugal four’, who framed their opposition primarily in terms of money and politics, rather than legal feasibility.Footnote ⁵⁴ But as de Witte later explained, ‘craftsmanship by the legal services of the EU institutions provided the tools for common action within the constraints imposed by the EU legal order as it stands today’.Footnote ⁵⁵ ‘As it stands today’ builds on the presumption that the new interpretation fell within the remit of the possible constitutional interpretations and not to the extent to require a formal Treaty amendment.

Yet, ‘the question of compatibility of NGEU with the Treaties is not only one of budgetary technique but, most notably, a question of fundamental constitutional importance, at the boom of which lies the principle of conferral’.Footnote ⁵⁶ Against the constitutional significance of the decision, the Commission’s legal argumentation was thin and built primarily on the unprecedented nature of the situation.Footnote ⁵⁷ It admitted that its proposal ‘diverge[d] from the standard practice for the establishment of the budget and financing of the Union’, but suggested that Article 122 TFEU justifies ‘derogating from standard Treaty rules, which would not allow the financing of such large amounts in addition to the Union’s budget and outside of the annual budgetary procedure’.Footnote ⁵⁸ It suggested that such concerns were alleviated by the ‘quasi-constitutional nature’ of the Own Resource Decision,Footnote ⁵⁹ which in its view ‘provides for the necessary democratic legitimacy of that innovative proposal necessary to fulfil the Union’s objectives’.Footnote ⁶⁰ Some weeks later, the CLS acknowledged that ‘borrowing to finance current or operating expenses […] has not been considered to be compatible with the principle of budgetary balance’Footnote ⁶¹ and thus the structure of the NGEU is ‘unprecedented and raises novel and delicate legal issues of a budgetary nature’.Footnote ⁶² When greenlighting the legal architecture, the CLS admits that its analysis is not purely legal but requires taking into account ‘qualitative elements’ such as

The legal justifications offered represent the idea of ‘government by emergency’ where

The EU has always derived much of its legitimacy from the claim that it is a community based on the rule of law and the principle of conferral, even if judicial control of the latter has remained problematic.Footnote ⁶⁵ With hindsight, the moment of NGEU approval constituted a paradigm shift, one in which the old language of EU integration and its formalist understanding of Treaty limitations was replaced by a new one. In the new EU legal language, competence limitations and democratic governance lost even whatever token place they had, and they were taken over by functionalist vocabulary. In this new language – as indeed in the new institutional practices – these complications no more merit even a desultory consideration. Sheltered by this language, the EU legal establishment can follow in horror how first in Warsaw, then beyond the Atlantic, constitutional foundations are being dismantled brick by brick, but spare little thought to the similarities: how an empowered executive equipped with audacious legal theories is making use of political opportunities, a weak legislator and, by and large, a sympathetic court to cross what previously looked like impassable legal boundaries. Granted, there are differences, both in substance and in style. But the language of EU law, with its belief in the fundamental merits of the cause, seems to hinder our ability for critical introspection of the EU’s own development.

In addition to creating the legal models, institutional lawyers have taken an active role in providing theories to support them. This is anti-formalism in action. After the approval of the NGEU, institutional lawyers, most notably Alberto de Gregorio Merino, appeared in academic outlets, arguing for the need to think of the EU Treaties as a ‘living Constitution’:

De Gregorio Merino’s vision was quickly supported by other institutional actors cross the board, including Christine Lagarde, the President of the ECB, who underlined the built-in need of dynamic interpretation, ‘most tellingly when [the Treaties] refer to a “process of creating an ever closer union”, of which the Treaties themselves are only “a new step”’.Footnote ⁶⁷ In the institutions, EU Treaties have come to be understood, as the Director and Deputy Director General of the Commission Legal Service have recently argued, ‘living instruments’, allowing the ‘political will of the institutions working together in order to respond to the urgent nature of [the EU’s recent] challenges’ and the ‘evolution of the EU’s institutional system through “constitutional practice”’.Footnote ⁶⁸ The same vision was also underlined by the President of the ECJ writing in extra-judicial capacity, emphasising how inter-state solidarity is protected, promoted, or even required in many of the Union’s policies.Footnote ⁶⁹ Together with Stanislas Adam, he defines solidarity as the ‘true functional matrix of integration’ and a ‘part of the very DNA of the Union’ and argues,

Shifting between the language of formalism and anti-formalism is also a question of audience and its anticipated reaction.Footnote ⁷¹ EU academia has provided little resistance, presenting the legal interpretations that gave birth to the NGEU as ‘masterpieces of high-tech legal engineering’ involving ‘incremental development of the Treaties in line with fundamentally changing contexts’.Footnote ⁷² According to another commentator,

In debates such as these, formal law will find few proponents; it is ‘utopianism supporting conservative causes’ while anti-formalism offers ‘a call for transformation: to overrule existing law either because it does not really exist at all, or if it does, it should not’.Footnote ⁷⁴ And after the initial excitement over new steps in integration, there is limited interest in social or political repercussions: the expansion of institutions and instruments is ‘good’ and an objective in itself.Footnote ⁷⁵

The concept of ‘living constitution’ obviously derives from the American constitutional doctrine. In its original context, the ‘living constitution’ has been countered with how the concept may just mean ‘“anything goes” – that talk of a living constitution is an invitation to the people in power to do what they want’:Footnote ⁷⁶

In his study of the ‘living Constitution’, Ackerman alerts to the risk that its idea becomes a

He argues that the ‘aim of interpretation is to understand the constitutional commitments that have actually been made by the […] people in history’, and not to replace them with commitments we think they should have made.Footnote ⁷⁹ Otherwise, arguments on ‘living constitutionalism’ may just serve as ‘soundbites suggesting their advocates’ political positions on a wide range of hot-button issues’.Footnote ⁸⁰ This is the exact point with the EU’s new ‘living constitution’ as well. The new life of the EU Treaties through backroom engineering has pushed the EU on a contested path of integration that reflects the background conditions of its institutional shapers and their world view, rather than being the outcome of an open political debate.

To mitigate such risk of capture, there are checks and balances to constitutional evolution. A ‘living constitution is an attribute of a mature society, one in which precedents and traditions have had an opportunity to develop and evolve’,Footnote ⁸¹ and where constitutional evolution happens through ‘precedents and traditions that accumulate over time. Those precedents allow room for adaptation and change, but only within certain limits and only in ways that are rooted in the past’, which prevents whoever is in a powerful position from ‘simply manipulat[ing it] to fit their own ideas.Footnote ⁸² In a pluralist, democratic society the way to change is through persuading a sufficient majority, which is ‘the only general moral imprimatur permissible’; it is ‘always time consuming, frequently difficult, and not infrequently impossible’:

In the EU context, such checks and balances are thin – and are intentionally kept thin, as the next sections will show – which makes it easy for those in a powerful position to advance their own ideas of integration. EU politics are executive driven.Footnote ⁸⁴ The Court is, as repeatedly indicated by its President, happy to lend its support to its vision.Footnote ⁸⁵ The legal academia, with its equally strong commitment to the political objectives of integration, acts as cheer leaders. European media is non-existent, and the European Parliament is far too often preoccupied with sporadic issues, missing the big picture. Seeking alternatives is left to wise men breathing the same rarified institutional air. There is no serious public debate of where Europe is heading, and what the alternatives to the Commission’s agenda might be. There are no alternative modes of constitutional politics that could secure the constitutional legitimacy inherent in formal amendment procedures.Footnote ⁸⁶ As it is, the politics of the European constitution ‘alive’ may, in the minds of its protagonists, well be ‘for the people’, but it certainly is not ‘by the people’ nor ‘of the people’.

4. NGEU model in action: the unabridged story

For the Commission, the NGEU was a legacy-defining decision, rolling of the dice that it simply cannot afford to lose. It is therefore unsurprising that the Commission has been quick to declare victory. In its mid-term review of the RRF, it already celebrates how

The Commission’s eagerness to draw conclusions and take control of the narrative reflects what Majone has described as ‘the EU political culture of total optimism’ of EU elites.Footnote ⁸⁸ It tends to discount or ignore any long-term consequences at the European level and simply ‘push ahead with European integration without worrying too much about public support or democratic legitimacy’. In this culture,

This is important given that the NGEU has now started to turn into the blueprint for future EU cooperation. For one, Mario Draghi, in his recent Report, invites the EU to ‘build on’ the NGEU model.Footnote ⁹⁰ The same vision is also included in the political guidelines of Ursula von der Leyen’s second Commission,Footnote ⁹¹ and the MFF package approved in July 2025.Footnote ⁹²

But what actually is the ‘NGEU model’, and how was its design guided by the way the Treaty constraints were understood at the time of its approval? How does the NGEU model operate beyond noble intentions, in empirical and practical terms? And more importantly, how does the creating a fiscal capacity for the Union in a crisis disguise, without amending the Treaties, affect its legal architecture?

First, the explicit aim of the NGEU model is to overcome Treaty-based competence limitations and buy influence, through financial incentives, in areas of national competence. As to what actually gets financed under the NGEU, the RRF Regulation only provides some highly general objectives, such as ‘digital’ or ‘green’, or addressing a significant subset of the country-specific recommendations (CSRs).Footnote ⁹³ These are broad enough to host nearly any national project, and this is what indeed has happened.Footnote ⁹⁴ Consistent with the emphasis on ‘national ownership’, national plans have been prepared in the capitals, each in its own national silo, under mostly light guidance from the Commission. Much of the funding goes to projects in core national policy areas, such social and health policies and education. There is very little overarching logic or consistency in the implementation, and almost no actual ‘integrationist’ effect. When reading the national plans, it is difficult to understand why the EU would want to fund many of these costs. Most crucially, RRF has crowded out the financial envelope for cross-border projects for which EU funding would make much sense.Footnote ⁹⁵

Second, to enable this process, Article 175(3) TFEU has been turned into a general legal space on EU spending. Later updates to the RRF further broadened its scope to the fallout from Russia’s war of aggression against Ukraine (RePowerEU) and to support Europe’s strategic sectors and technologies (STEP). As Panasci notes, RePowerEU ‘confirms how a plan that was originally intended to tackle the pandemic can be used to achieve virtually any other public objective’.Footnote ⁹⁶ Cohesion policy can now be invoked as the foundation of a broad EU economic and industrial policy, to serve in varied fields such as energy transition, security and autonomy.Footnote ⁹⁷ Yet, this is not how the scope of the NGEU was presented at its inception, which continues to limit the ‘exceptional response’ to the ‘recovery in the aftermath of the COVID-19 crisis’.Footnote ⁹⁸ Also the German Federal Constitutional Court seemed to condition its deference on this limitation, finding that the Treaty ‘prevents the European Union from borrowing funds for tasks for which it lacks competence under the principle of conferral’.Footnote ⁹⁹ How is this to be reconciled with Article 175(3) TFEU that seems to have lost any effective boundaries?

The way the RRF is structured, the question is not about which projects best contribute to the asserted EU objectives, but is about allocating the pre-determined Member State envelopes. The financial impact is highly uneven, as some States are rewarded lavishly while for others the contributions from the RRF are negligible. The equalising logic can be traced to the decision to build the instrument on cohesion policy. Had the instrument been built on the EU’s solid environmental competence, its objectives and funding criteria would have been more likely to be framed as contributing to transboundary environmental objectives in a much more efficient way.Footnote ¹⁰⁰

Thirdly, the governance framework is at inherent tension with national democratic procedures, and intentionally so, operating as an ‘external constraint which could discipline, pre-empt and fragment public power’.Footnote ¹⁰¹ This setting is familiar from the framework of European Semester, which has for years been perceived as suffering from poor ‘national ownership’ of EU-born recommendations and chronically low compliance.Footnote ¹⁰² The NGEU tries to do better by putting its wallet where its mouth is, in the hope that this would inspire better national ownership. To an extent, this has worked, though one needs to understand that ‘national’ here refers to national governments, who largely decide what EU funding is spent on when preparing the national plans, rather than to broader societal acceptance.

The plans are also susceptible to ‘authorship uncertainty’. They are formally authored by national authorities but co-constructed and co-negotiated with the Commission, and ultimately turned into binding legal text in the form of a Council decision.Footnote ¹⁰³ The real substantive talks take place in highly confidential negotiations between governments and Commission officials, where national parliaments (let alone other stakeholders) do not participate or even receive information from. By the time the text emerges from these talks, national parliaments find themselves ‘incentivised’, by the financial rewards, to rubber stamp the measures that their government has negotiated. It is not obvious whether it is the national government or the Commission that is the greater winner in this shift of power. It is quite obvious that the loser is the national parliaments. The RRF model represents what Arendt once described as the

As a result ‘there is no one left who could even be asked to answer for what is being done. It is this state of affairs, making it impossible to localise responsibility and to identify the enemy’;Footnote ¹⁰⁵ ‘there is nobody left with whom one can argue, to whom one can present grievances, on whom the pressures of power can be exerted’.Footnote ¹⁰⁶

This final point is demonstrated by the difficulty to access any information about these negotiations.Footnote ¹⁰⁷ This information is shrouded in the foundational secrecy over how EU money is spent. For example, the Commission response to investigative journalist Peter Teffer’s request to access key information relating to the negotiations of the Dutch national plan arrived more than 21 months after his initial request. When it finally arrived, access to much of the data was predictably denied on the basis that

It is important to understand that the requested documents related to a decision-making process that had been long ago concluded and the outcome of which had been published as a Council Decision nearly two years earlier. In general, the Commission has been embarrassingly, and probably tactically, slow in reacting to any document requests related to the RRF and consistently refused disclosure, irrespective of the position of the Member State in question or the stage of decision-making on the plan.Footnote ¹⁰⁹ In the Commission’s view, access to key documents relating to the plan should be limited until the last disbursements have been made in 2026. Instead of making facts available, the Commission chooses to govern by imaginaries – lofty communication campaigns placed on bus stops and railway stations around Europe, aimed at convincing the citizens that NGEU indeed ‘make[s] it real’, ‘green’, digital’, ‘healthy’, ‘strong’ and ‘equal’.Footnote ¹¹⁰

Given the large amount of public funds at stake, and the legislative work that is needed to deliver on it, these are odd choices. They increase the Commission’s own responsibility for the choices made and contribute to risks of corruption and misuse of funds. Legislative and budgetary powers are the core of democracy, and one could expect better appreciation of the key legitimising role a well-informed public sphere could play. It is for a reason that the ECJ has emphasized that ‘in a democratic society, taxpayers and public opinion generally have the right to be kept informed of the use of public revenues’.Footnote ¹¹¹

The Commission’s way of managing the process reflects the same background conditions that guide its lawyers’ reading of the law. Efficiency concerns are paramount, leading to confidential and executive-run processes and the attempts to eliminate democratic engagement. In line with contemporary constitutional theories, national politics are framed as a threat:

All this constitutes a lost opportunity for political debate on EU priorities. If the Commission believes in truly integrated Europe, it should instead embrace the right of the public to call power-holders – including itself – to account, even when this feels inconvenient and risks efficiency in the short term. But of course, time is lacking, because of the need to uphold the illusion of a crisis instrument, justified with the unexpectedness of the pandemic.

Fourth, peer-scrutiny by other Member States is highly limited.Footnote ¹¹³ Instead of transparency, the other Member States and the European Parliament receive pre-packaged information carefully curated by the Commission – a set of colourful power points primarily intended to serve as PR material.Footnote ¹¹⁴ They provide no basis for actual scrutiny: debating possible difficulties or opportunity costs. But one also needs to acknowledge that more information would not do much to solve the matter. The bodies meant to oversee the implementation of the RRP simply lack the expertise, the time, the information, the local knowledge, and the resources necessary properly to evaluate the merits of the thousands of investment and reform projects that constitute the RRF. By design, the RRF creates maximum distance between the projects on the ground and the bodies formally tasked to oversee and decide on the use of money. As evidenced by ECA reports about absorption challenges in the main beneficiary countries,Footnote ¹¹⁵ putting together the information and other necessary ingredients to understand and operate the multitude of projects is challenging even for those with the best resources and local knowledge. For Brussels-based institutions or colleagues in other capitals, it is simply impossible.

Finally, there is the question of whether, and to what extent, the RRF has been able to deliver structural reforms, a key focus of the EU over the years. The Commission, on its part, is convinced and explains how, thanks to the RRF, ‘Member States are seeing an unprecedented delivery of structural reforms in response to the European Semester CSRs’.Footnote ¹¹⁶ Others find that CSRs have been implemented selectively.Footnote ¹¹⁷ The milestones and targets supposed to deliver the structural reforms vary in number and ambition between Member States.Footnote ¹¹⁸ Much of the difficulty here is that reforms, which constitute half of the RRF, tend to evade objective measurement. Many milestones and targets are of a rather fluffy kind, such as national strategies or programmes, reports or guidelines. For the most part, their contribution to Union objectives cannot be synthesised into objective indicators. Whether one then classifies an outcome as a success or a failure is very much in the eye of the beholder.

The RRF is, in the Commission’s words, ‘an innovative, performance-based instrument’.Footnote ¹¹⁹ This means that the ‘incentive’ money paid by the EU under the FNLTC (funding not related to costs) model has no relation to the actual costs (if any) of the reforms that Member States include in their plans. Instead, the ‘value’ of each reform is based on a discretionary assessment of the Commission. ECA has repeatedly expressed concerns about how this model ensures financial accountability.Footnote ¹²⁰ In its recent review, it questioned whether the RRF payments truly are linked to performance. Rather, in its view, milestones and targets ‘focus on outputs rather than results, vary in ambition, sometimes lack clarity and do not always cover a measure’s key implementation stages, including completion’. In its view, ‘the efficiency of resource use, and therefore value for money, cannot be assessed given that the Commission does not collect or use information on actual costs’’.Footnote ¹²¹

Today, the EU is hurrying to get the money out before the facility expires. The Commission is encouraging the Member States to ‘comprehensively review their RRPs’ and indicates its readiness to swap difficult milestones to more realistic ones.Footnote ¹²² The pressure is on the governments to find ways to spend the money remaining in their envelopes, without much consideration as to who the final beneficiaries might be. At the same time, the Union accumulates debt which eventually needs to be paid back; a prospect that is already casting a long shadow over the upcoming MFF negotiations. Unless the EU agrees to cover this debt with a new debt, of course – something that so far has been considered impossible in light of Treaties,Footnote ¹²³ but that may of course change.

So how are we to summarise the new world into which the NGEU is ushering the EU? First, the RRF is clearly a momentous change in how the EU uses its money, promotes its aims and interacts with its Member States. It is also a change with potentially long-lasting consequences on the relative powers of different institutions at the national and the union level. It is a world which clearly prioritises the Commission’s control of the narrative and its room to manoeuvre over the ability of parliaments, auditors, media and the general public to understand how money is being spent and on whose decision.

The general contours of this new world may have been decided by politicians but have been much shaped and chiselled by EU institutional lawyers. Legal work, here as elsewhere, is about making choices; and those choices privilege some values or interests over other values or interests. In making those choices, without necessarily taking much notice about it, EU lawyers operate in the confines of EU legal language, where ‘solidarity’ weighs heavier than ‘democracy’ or ‘accountability’. As Duncan Kennedy writes,

Making significant spending decisions behind closed doors is neither very good stewardship of taxpayers’ money nor respectful of the basic principles of democratic and financial accountability. It speaks of the ‘weakness of politics in the Union; a weakness for which so many European protagonists seek to compensate with juridical techniques’.Footnote ¹²⁵

5. It’s party time! The disappearance of the Treaties

Uniqueness and the crisis context were important legal conditions at the time of the NGEU creation.Footnote ¹²⁶ Today, the key elements of the NGEU model are on their way to becoming a permanent feature of EU governance. Several new vehicles rely on the similar model of off-budget funds.Footnote ¹²⁷ The EU’s new funding vehicles (Social Climate Fund, Western Balkans Facility) and the reformed Stability and Growth Pact rely on models built on national plans.Footnote ¹²⁸ Performance-based disbursement is likewise being mainstreamed. The Commission’s mid-term evaluation of Cohesion policy underlines how its ‘flexibility and breadth’ allows refocusing ‘the programmes towards the urgent new challenges facing the European Union stemming from an evolving global environment’. Cohesion policy will now contribute to challenges as diverse as ‘Europe’s sustainable prosperity and competitiveness’ and a ‘new era for European Defence and Security’.Footnote ¹²⁹

For some, the increased common borrowing and spending in support of Ukraine ‘highlights the legacy of the NGEU model and suggests a trend toward consolidating a centralised fiscal capacity at the EU level of government’.Footnote ¹³⁰ There is some truth in that. The substantial increase in borrowing volumes made the traditional policy of back-to-back loans impracticalFootnote ¹³¹ and necessitated ‘a new Diversified Funding Strategy with a pooling of funding needs much like the strategy employed by sovereign issuers’.Footnote ¹³² The new strategy was ‘an effort to consolidate [the EU’s] market presence and further advance in its transformation towards a sovereign-style issuer’,Footnote ¹³³ thus taking an important step towards becoming a European ‘treasury’.Footnote ¹³⁴ As the result, the ‘euro area treasury accountable at the European level’ envisaged by the Commission in its blueprint more than a decade earlier has – in some respects – come into being though with limited political discussion, no Treaty change, and, apparently, with no legal analyses.Footnote ¹³⁵

While existing Treaty articles were being re-interpreted, any discussion about Treaty change evaporated. Unlike the Commission Blueprint and the EMU Reports – which he co-authored – twelve years ago, in his latest report, Mario Draghi does not waste much ink on the Treaties. His Report outlines a broad societal reform programme allowing ‘Europe to radically change’ in the face of an ‘existential challenge’. While he makes the point that ‘[s]trengthening the EU requires Treaty changes’, the Report nonetheless proceeds on the assumption that such change ‘is not a precondition for Europe to move forward’.Footnote ¹³⁶ He argues against ‘focusing all minds and energies on the long and burdensome process of a Treaty change from day one. To begin with, a small number of overarching, targeted institutional changes should be made – without the need for Treaty change’.Footnote ¹³⁷

From a governance and budgetary perspective, the Draghi Report seeks to eventually convert the planning model developed under NGEU from an emergency tool into the permanent mode of EU governance, with national RRPs now turning into ‘Competitiveness Action Plans’ within the ‘Competitiveness Coordination Framework’, and with a hugely expanded scope.Footnote ¹³⁸ Given the scale and the transformative nature of the programme – economic, legal, and institutional (both national and supranational) – it is difficult to see how such a strategy can be successful without a Treaty change.Footnote ¹³⁹ It is also difficult to see how its implementation would be any more transparent and inclusive than the one applied in the NGEU model. And seeing the expediency in which the Report’s recommendations are already being translated into legislative proposals, it is equally difficult to envisage it having been prepared without significant background work already having taken place in the Commission DGs and its Legal Service.

The political guidelines of von der Leyen take a similar approach. They include a single reference to possible Treaty reform: ‘I believe we need Treaty change where it can improve our Union’.Footnote ¹⁴⁰ Meanwhile, her Commission will ‘put forward proposals to enhance Europe’s capacity to act, looking at new formats and decision-making processes’ with a ‘focus on what can already be done now and those areas where a broad consensus is emerging’. The Commission’s new MFF package of July 2025 is deeply anchored in the NGEU experiment.Footnote ¹⁴¹ It promotes ‘prosperity, sustainability and security’ based on ‘tailored investments and reforms through national and regional partnership plans’ building on national envelopes but with a vastly expanded scope. The focus on broad and flexible national plans means that the steering effect of legislation will remain largely lacking. Broad European objectives are again pursued at national level, and whether they really are promoted is a question for bilateral discussions between the Commission and the Member States. The Commission remains stuck in the post-euro-crisis thinking where the main function of EU funds is to make sure that Member States do sensible things, irrespective of whether the matter falls under Union competence or not. The focus on reforms and investments remains unchanged, as does the belief that this combination ‘will bring more impact and value for money. Payments will be conditional upon the fulfilment of investment and reform milestones and targets linked to agreed priorities’. The package also envisages new types of own resources and a ‘new extraordinary and temporary mechanism will be established to respond to the consequences of severe crises’ to provide ‘loans to Member States backed by EU borrowing’.Footnote ¹⁴² The Treaties are filled with life, as was the clearly expressed intention included in the solemn oath given by von der Leyen before the Court of Justice. She underlined that

The procedures through which the Treaties have been re-interpreted in the institutions have never been transparent; however, the Commission seems intent to make them even less so. In December 2024, it updated its Rules of Procedure, creating a new presumption of secrecy for all its legal advice, ‘unless the applicant demonstrates an overriding public interest’.Footnote ¹⁴⁴ In other words, the Commission wants no prying eyes to watch it ‘filling the Treaties with life’. According to the established case law of the court, legal advice given in legislative matters benefits from a strong presumption of disclosure.Footnote ¹⁴⁵ Further, the secrecy presumption is clearly created in bad will. There simply is no way for an applicant to ‘demonstrate overriding public interest’ if the Commission does not want to see one.Footnote ¹⁴⁶ In its response to my requests, the Commission has given short shrift to the existence of any public interest in the publicity of the legal work of its lawyers. While admitting that public should be informed about how public money is spent, the Commission considers that

In other words, the Commission argues that there could not possibly be any public interest in uncovering the way its lawyers (together with their Council peers) stitched together a legal construction that turned debt into (external assigned) revenue and made legal what a few months earlier still was illegal, thereby enabling the EU to spend 750 billion of taxpayer money. Some chutzpah.

Since Trump’s return to the White House, the focus of discussions has been on financing defence. If the political will to anchor defence cooperation into the EU framework persists as strong as it now seems to be, I have great faith that the creativity of lawyers in the EU institutions will, here too, bring about a legal construction that eliminates any hurdles on the side of EU law. The EU legal academia is already offering its support. There are suggestions for reconsidering whether the Own Resources Decision – once marketed as the ‘quasi-constitutional’ guarantee of the NGEUFootnote ¹⁴⁸ – really should be decided by unanimity ‘so as to allow the European Union to breathe more freely when faced with new economic policy challenges’.Footnote ¹⁴⁹ Elsewhere, in the spirit of teleology, Crowe from the European Parliament’s Legal Service finds it striking that ‘the Union still lacks the budgetary autonomy that was intended for it by the authors of the Treaties, as a complement to the autonomy of its legal order’. For him, the ‘post-Lisbon era of crises has been characterized by much innovation and even positive consolidation in matters of public finance at Union level, but the rigid MFF model carried over from the pre-Lisbon era continues to restrict the Union’s capacity to act’.Footnote ¹⁵⁰ He continues:

Crowe and his colleagues can rely on the support of the Court and large sections of the EU legal academia. What is less clear is whether they have fully factored in what it takes for the EU to truly ‘breath freely with its budgetary lungs’. The markets and credit rating agencies are unlikely to be convinced by mere creative legal engineering and rather look for the existence of the machinery of sovereign state necessary to underpin the issuance of debt. So far, they continue to treat the EU as something far from a sovereign state. As Grund and Steinbach note,

6. The morning after – the consequences of legal engineering

Legal engineering has consequences beyond the immediate deliverable. The most direct consequence of the choices made in 2020 is that the EU now holds a great deal of debt, which will require 25–30 billion annually to serve, almost 20 per cent of the annual budget.Footnote ¹⁵³ RRF funding has helped many Member States that, in the early days of the pandemic, were seen to be at risk of financial distress, to maintain fiscal support for their economies. In some cases, such as Croatia and Greece, support from the EU amounted well above 15 per cent of their GDP.Footnote ¹⁵⁴ That, of course, was the key reason for the NGEU to be established in the first place and the main yardstick against which its success is measured. It served a purpose of pacifying the markets at a point when fragilities were high and risks very real. But a more permanent legacy of the NGEU is a spending model that leaves much to be desired in terms of democratic and financial accountability.

But the perhaps even broader issue relates to the function of the EU Treaties in the future. The understanding of EU law that has framed EU decision-making in the past decade has contributed to the Union entering contested paths of integration. It has ushered in a governance model that undermines democratic governance at both EU and national levels. Underlying these changes has been a specific language of EU law that is dominant in the EU institutions and among the EU legal academia and shapes the Union decision-making. That language is, by and large, unchallenged by other languages advocating other political priorities, including democratic and financial accountability. Once governance by law becomes outdated, it is unpleasant to think what might be at the end of that road. What will happen to the inalienable virtues associated with it, such as due process, good and open governance, respect for parliamentary prerogatives, predictability rather than arbitrariness, and – most importantly – confined public power?Footnote ¹⁵⁵

To meet its current challenges, Europe needs to grow stronger. But the greater role of the Union needs to be supported by far more developed mechanisms of democratic accountability than it currently possesses.Footnote ¹⁵⁶ The EU legal academia has a significant task in helping to solidify that foundation. It exists not only to cheer the EU onwards through ever more audacious legal interpretations, but also to provide a critical counterweight when one is needed and, crucially, to conduct, promote and facilitate the democratic scrutiny that the EU ultimately depends on to perform its increasing duties in a sustainable manner. Although the EU legal system could be retrofitted to solve almost any current policy priority – through heroic reinterpretation by lawyers and technocrats in the backroom – it does not mean it should.

Let me be clear: I’m not arguing for an originalist reading of the Treaties, and I believe that constitutions should encapsulate the common values of the publics that they serve. They must be ‘sufficiently flexible and sufficiently rigid’ as Bruno de Witte has argued; the former is needed to adapt to new circumstances and the changing will of the people as expressed in elections.Footnote ¹⁵⁷ Constitutional readings should respond to societal evolution.Footnote ¹⁵⁸ But a Constitution ‘lives’ through legal and societal developments operating in parallel, featuring a variety of players and institutions that continually struggle over what is reasonable and unreasonable:Footnote ¹⁵⁹

The way the EU constitutional transformation of the past five years or so has happened is very different from these bottom-up transformations. On this side of the ocean, change has been driven and formulated by legal professionals who do their very best to protect themselves from democratic politics. Instead of promoting an integrated political community that would provide the solid basis for deeper integration, the Commission does its utmost to frustrate the work of researchers and investigative journalists, who try to provide a critical inspection of what the Commission plans to do and why. It is remarkable how today, the ones most eagerly speaking for a ‘living Constitution’ in Europe are those who also most empathically seek to limit public scrutiny of how legal interpretations shift and the impact of democratic politics on Europe’s choice. Living constitution should not be about making clever use of short-lived tactical windows of opportunity, however spectacular ones, and it should not aim at eliminating democratic politics. Excessive legal ingenuity in circumventing and bending the Treaties to respond to the multitude of current challenges does not make them alive, it makes them dead.

In these processes the role of an institutional lawyer is crucial. Lawyers respond to political leadership and are paid to promote their employer’s goals.Footnote ¹⁶¹ At the same time, a public sector lawyer also works for another employer: the citizens. In this respect, a significant tension appears when the institutional agenda is aimed at limiting the roles of democratic institutions, the possibilities of debate, and public participation and scrutiny. In such circumstances, I believe that public sector lawyers also have a duty to safeguard democratic processes, irrespective of how incomplete and fractured such processes may today be, and do their utmost to strengthen democratic deliberation instead of hampering it. While lawyers may not (and should not) have the power to prevent illegality, they have the power to call it illegal. If that determination is public, then they force the political authority to justify its actions in public. And it is only after such an open process of deliberation that a Constitution may potentially live.