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Any good faith observer cannot deny the impeccable democratic credentials of the British Prime Minister and the French President (or for that matter of the other heads of State and Government of the Union). This does not prevent their visions of European democracy, expressed with great vigour during their respective speeches delivered in London and Strasbourg, to be fundamentally incompatible.
A first impediment to agree on “Democracy within the EU” stems from the existence in each Member State of a specific “democratic” model (electoral system, majority rules, power-sharing, constitutional law, etc.) Each is perfectly legitimate when taken separately, but they do not lend themselves to be integrated as such within a single system that preserves automatically the attributes of a democracy.
A further difficulty resides in the definition of the geographical perimeter within which democracy is supposed to apply. Insofar as democratic control of the Union would be exercised by national Parliaments, as suggested by David Cameron, it is obvious that this demand is incompatible with the (still insufficient) control ascribed to the European Parliament; the British recipe, if adopted, is sure to lead to a quasi permanent deadlock.
In addition, one should consider the question of the different levels of public authority, between which it is imperative to preserve a “democratic” coherence by ensuring a clear hierarchy of norms. At present, similar competencies are far from being exercised in a uniform fashion within the 27 Members of the Union.
Furthermore, the current institutional architecture of the Union, as established by the European treaties, does not comply with the attributes of a democracy. Several aspects depart from the norm:
Since its creation, the Union has been transformed through a succession of treaties, from the Treaty of Rome to the Lisbon Treaty, ratified, each time, by all signatories, either on the occasion of new accessions or of amendments and/or extensions to its aims. This falls clearly within the realm of a “confederal” model, by which a series of sovereign States agree to share certain competencies for which modalities for decision-making (unanimity, majority or qualified majority) and for financing are agreed upon.
The principle of ratification by the competent institutions, in line with the prescriptions applicable to each signatory, ensures that the procedure is “democratic” at the national level. However, each treaty revision requires unanimity and thereby confers to each Member State a de facto veto, which allows them, whatever their size, to promote their self interest. Thereby, many concur with François Hollande when he deplores the growing ascendency of national interests over those of the Union. This power gives Member States the opportunity to contest (democratically) aspects of the “acquis communautaire”, as is the case when David Cameron demands the repatriation of powers previously devolved to the Union or requests opt-outs for the sole benefit of the United Kingdom.
This system, which has allowed significant progress to be made since the ratification of the Treaty of Rome, has clearly reached, if not exceeded, the limits of efficiency. Despite the clearly expressed preference of François Hollande for the further extension of agreements between different ad hoc sets of Member States (treaties or reinforced co-operations), this formula can no longer underpin satisfactorily the coherence of deeper integration because of the inextricable interpenetration of the matters concerned. A variable participation by Members in these agreements weakens their scope and can even impair their application when their provisions are in conflict with existing community legislation. This happens to be the case when the UK insists, for instance, on the primacy of Single Market regulations over certain aspects of financial measures proposed by the eurozone, which are key to its operation.
Another flawed aspect of the institutional setup from the standpoint of democracy is the coexistence of different voting systems for the European parliamentary elections. Without in any way challenging the legitimacy of individual Members, this situation raises the question of the legitimacy of the institution as a whole. Indeed, if equality among citizens is a fundamental tenant of democracy, the multiplicity of voting systems introduces a differentiation in the weight of the individual votes. This also leads to the transposition within the EP of the political fault lines existing in individual Member States, and constitutes one of the main obstacles to the existence of pan-European political parties. It follows that, from the citizen’s standpoint, the EU lacks visibility; it becomes then the “scapegoat” of choice for all the nationalist and populist movements which consider it responsible for the current crisis or any other difficulty that may arise.
Another important aspect of the institutional setup that suffers from a serious deficit of democracy is the accountability of its representatives. Despite a welcome trend aiming at reinforcing progressively the powers of the EP (itself suffering from flaws discussed above), it is at present undeniable that the division of powers within the EU remains heavily biased in favour of the European Council, whose Members are only accountable to their respective national public opinions. The make-up of the Commission is far from “democratic”, despite a procedure of hearings and approval by the EP. It is also true for many appointments within Community Institutions such as the Court of justice, the Court of Accounts, the ECB, the EIB etc. as well as for the control of their operations.
Finally, and of particular relevance these days, it is the manifestly insufficient amount of budgetary resources which constitutes probably the greatest obstacle to the establishment of a truly democratic Union.
As is widely recognised, money is at the very heart of power. The Union’s lack of any significant “own resources” maintains the real power within the hands of Member States which are responsible for financing the lion’s share of the budget. The contradictory positions held by Members on this subject are emblematic: whether they call for a reduction of the budget in real terms (United Kingdom), targeted savings (France), maintenance or creation of rebates (UK, Holland, Denmark, Austria), a “status quo” (Commission) or even a modest increase (European Parliament), none are up to embracing explicitly or implicitly the real challenge which is key to the long-term survival of the Union itself.
On this subject, the French President’s speech in Strasbourg is a model of ambiguities and contradictions: “Making savings, Yes – weakening the economy, No” implies his support for a budgetary deal under the lowest common denominator. His simultaneous call for renewed growth initiatives by the EU and his recognition of the need to increase the Union’s own resources are at best wishful thinking. Indeed, any increase of own resources can only be financed from either a new “European Tax”, which would increase the overall tax burden in each of the Member States, or by the transfer, to the benefit of the EU, of existing national tax receipts. The first alternative would hinder competitivity (weakening the economy, No); the second increases transfers by Member States in flagrant contradiction with the positions staked out by all parties to the budgetary negotiations (making economies, Yes).
A rational solution does, however, exist: a simultaneous transfer of national resources and relevant “competencies”. This amounts, of course, to further transfers of sovereignty (the reverse of what Belgium is aiming at with devolution to the regions), over which the chances of reaching any agreement appear remote. It would also be bound to exacerbate calls for “I want my money back” which would significantly weaken its impact.
Nevertheless, if the Union was endowed with an autonomous fiscal capacity, it would acquire as a result a borrowing capacity that would be independent of guarantees provided by Member States. Combined, own resources and borrowings could finance Community programmes as well as « transfers » in line with defined integrated economic and social policies. Considerable economies of scale and effecencies could be engineered, in particular if defence and foreign affairs budgets were centralised; this would open up significant margins of budgetary flexibility focusing more resources on reinforcing competitivity as well as fostering employment, both at Union and national levels.
Conclusion
The demands formulated by both David Cameron and François Hollande demonstrate that the EU has reached – if not exceeded – the limits of its capacity to reform itself progressively by reaching a consensus to adapt its objectives and its institutional structure.
Contrary to a widely held belief, the European citizen is highly interested by this debate which will shape his own future and that of his children. This was manifestly demonstrated when, twice in a row, Guy Verhofstadt and Daniel Cohn-Bendit followed by Sylvie Goulard and Mario Monti packed the 2,400 seat great hall of the Brussels Palais de Beaux-Arts to detail their “federalist” proposals.
The time is fast approaching when a choice must be made between two radically opposed visions of the Union’s future:
On the one hand the strengthening of a “confederal” architecture. Its main purpose would be the completion and limitation of the EU as a “Free Trade Area”. In parallel one would proceed with the repatriation of all other elements of national sovereignty, previously devolved to the EU. This option, put forward mainly by the United Kingdom, implies, inter alia, the dismantling of the single currency with all its uncertainties. It would also mean the end to the pre-eminence of the City as the main global foreign exchange market, Europe being deprived of its hard fought for world reserve currency.
On the other hand, the creation of a truly “federal” structure with a clear hierarchy of the powers devolved between federal, national and local authorities which would ensure their “democratic” exercise at each level in full compliance with the principles of subsidiarity. The federal level would consist of a (political) Executive Branch accountable to the European Parliament, itself made up, on the German (USA) model, of a directly elected House of Representatives and a Senate representing the federated States. A federal judiciary would be created that would be distinct of the national courts, each operating in their respective spheres of competencies (similar to the USA).
These two visions can be made compatible as outlined last September by the Thomas More Institute (Note N° 13: “The time for Federalism has come”) in which a “Federal European Community” (adopting the whole of the “acquis” with no opt-outs) could become the central pillar of a “Confederal European Union” (whose other Members could contract with the EC their participation in specific community programmes).
Democracy is a value deeply entrenched within the population; it is the sine qua non condition for the long term survival of the social model and quality of life in Europe. It has become urgent to adapt the institutional architecture that governs our lives so that democracy can blossom unhindered.
Paul N Goldschmidt, Director, European Commission (ret); Member of the Advisory Board of the Thomas More Institute
Tel: +32 (02) 6475310 / +33 (04) 94732015 / Mob: +32 (0497) 549259
E-mail: paul.goldschmidt@skynet.be / Web: www.paulngoldschmidt.eu