Embracing austerity: should budget stability be a constitutional rule to cope with the global economic and financial crisis?

Abstract

National legal systems increasingly appear to be burdened with the necessity of coping. Situations of an “outdating” of the Law can arise when law-making tasks insist on being entirely joined with the nation-state viewpoint. These everyday situations can introduce matters whose legal solutions may not be found within systemic boundaries, rather, beyond them. To an extent, the Law, as it has been respectively defined through time, is losing its effectiveness as a means of regulation in correlation with increasing globalization. This paper seeks to confine the unforeseen consequence of the current economic and financial crises by arguing that the constitutional recognition of the rule of budgetary stability can precisely serve as a solution to exit the current crisis. Whether or not this rule is adequate, necessary, feasible, and/or acceptable to a modern Democracy is subject to current legal and political, academic debate.Keywords: globalization, economic crisis, financial crisis, constitutional democracy, budget stability.