LAUSR

Ledra Advertising and Others v. Commission and ECB, decided by the Grand Chamber of the Court of Justice of the European Union (the Court of Justice) on 20 September 2016, is a milestone case for the protection of human rights in the context of post-crisis European financial assistance. After a long history of case law, in which the Court of Justice refused to go into the merits of Greek and Portuguese cases that challenged the compatibility of financial assistance conditionality with fundamental rights, the Grand Chamber finally placed the conditions attached to the financial support awarded to Cyprus under substantial judicial scrutiny. The Cypriot rescue package is of particular interest, since it marks the first time that bank depositors were targeted as part of a European bailout deal. But where does European financial assistance conditionality come from and why has it so far escaped judicial scrutiny on the basis of EU law? Created in order to safeguard the stability of the Eurozone and to assist Euro area Member States in financial distress, the European Stability Mechanism (ESM) was instituted outside of the EU legal order through an international agreement between the Eurozone Member States. The common ground among all of the financial assistance programmes awarded by the ESM is the use of strict conditionality: all loans are made dependent on the compliance by the recipient state with strictly monitored economic policy conditions. These conditions are negotiated between domestic authorities and the so-called ‘Troika’, namely officials from the Commission, the European Central Bank (ECB) and the International Monetary Fund (IMF). Despite the involvement of the Commission and the ECB, the fact that the ESM lies outside the EU legal order led the General