international analysis and commentary

Towards a political Union?

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The proposal by Sergio Fabbrini and Stefano Micossi to “politicize” the Presidency of the Council, in order to solve the problem of the democratic legitimacy of the EU, while maintaining the character of neutrality of the Commission, captures a central problem in the current structure of the EU. However, such a solution implies the a reform of the Treaties, that may take a long time to enter into force, as it was the case for the Constitutional Treaty, successively entered into force as the Lisbon Treaty. The eurozone’s debt crisis is much more than an economic and financial crisis and has put the very existence of the EU at risk. At the same, this crisis is proving to be an extraordinary chance for the European Union to make a step ahead on the way to further political integration.

When the Treaty of Lisbon entered into force three years ago, most of the analysts and commentators agreed that the EU would see no further institutional changes for some twenty years. However, the strain triggered by the economic and financial crisis on the euro and on the EU itself was so formidable that EU leaders had to convene myriad summit meetings to respond to this challenge. The Economic and Monetary Union has gone through many changes in the last two and a half years, from the signing of international treaties to the adoption of both primary and secondary legislation. In particular, first the so called “Six Pack” and then the Treaty on Stability, Coordination and Governance, better known as the Fiscal Compact, have introduced strict a mechanism to ensure Member States’ compliance with fiscal rules originally foreseen by the Stability and Growth Pact, with failure to comply being sanctioned by the EU Court of Justice. In addition, the so called European Semester implies that national governments are asked to submit their Stability or Convergence Programmes to the European Commission before they are discussed and adopted by national parliaments.

The outcome is a sort of chain reaction:  first, existing institutions have started to act differently, with the European Council meeting more and more often, which has made it generally more difficult for national parliaments to scrutinize their executives and, indirectly, EU institutions. In addition, new measures have been introduced that affect not only  the room for manoeuvre of national executives, but also what has traditionally been one of the most important scrutiny power of parliaments, that on the budget. Besides transferring power from national capitals to Brussels-based institutions and reinforcing the executives over the legislative institutions, these reforms have had another deep effect when it comes to the institutional architecture of the EU and the political relations between Member States. These changes have de facto widened the gulf separating two categories of EU members: the degree of cooperation among the countries that have adopted the euro, the so called “euro ins”, has increased, to the detriment of those that have not, the so called “euro outs”. Among the latter, some, like Poland, are keen to adopt the euro, when they will comply with the conditions and the eurozone itself will have resolved its most urgent problems, but others, like the United Kingdom, are not interested at all in joining the common currency at a later time. Furthermore, London finds itself more and more at odds with other EU Member States, like Germany and France that have been for some time absorbed by the need to fix the eurozone problems. Not only has London been increasingly side-lined by key EU decision-making, that has obviously tended to focus on the strengthening of the EU starting exactly from the enhancement of the eurozone institutions and powers; London has also been marginalized by the decision taken by a number of national capitals, including Berlin, Paris and Rome to proceed with a financial transaction tax. The result is that the British government is less and less relevant in current EU decision-making and struggles to retain a role over choices that may strongly affect it and notably the city of London, the biggest financial centre in Europe.

The overall result of the above mentioned factors is that the post-Lisbon EU struggling with the crisis of the eurozone is characterised by both centripetal and centrifugal forces, by processed of further integration and possible disintegration. It makes sense to take a brief look at some of the proposals for further integration, considered that disintegration might come as an unintended result rather than as the outcome of a deliberate process. The latest European Council, held on 13-14 December 2012, saw no advance on the possible reform of the EU. While a roadmap was set up for the introduction of the Single Supervisory Mechanism that will provide the European Central Bank (ECB) with the power to supervise, directly or indirectly, all EU banks, no progress at all was registered on proposals for deeper integration of the eurozone. In particular, a division between Northern and Southern EU countries prevented the EU from agreeing on a eurozone budget, that could also be used to support euro countries facing difficulties. Broadly speaking, the division between Germany and Southern countries is that the former prefers to first agree on formal transfer of responsibilities from national capitals to Brussels in economic and monetary matters and only afterwards provide the EMU with stronger instruments. On the other hand, the latter would like to first launch some measures that could be decisive in saving the eurozone, like a fully-fledged banking Union and the mutualisation of national public debt through the emission of the so called euro bonds, which continues to be dismissed an unrealistic idea by the German Chancellor. The question that widely circulated in Southern European countries is: how genuine is Germany in asking for significant transfer of competences (difficult to accept for a country like France) before agreeing on measures that are considered to be instrumental in getting the eurozone out of the trouble? In this way, a significant political reform of the EU, entailing new changes in the Treaty, is procrastinated.

In any case, it must be made clear that “Political Union” proposed by the German government is not an ambitious proposal: it is in fact minimalist, meaning that it falls short of launching strong measures such as the euro-bonds, that might be indispensable in the long run for the survival of the euro and is still framed within a vision inspired by fiscal consolidation and austerity as the key words. In other words, the Political Union advocated by Germany appears to be much less than a federation of Member States, with a significant budget and effective instruments.

The proposal by Sergio Fabbrini and Stefano Micossi envisages the election of the President of the European Council by a number of so called “Presidential electors” organised in national electoral constituencies. These electors can choose the President among two candidates previously indicated by the EU Heads of State and Government. While being very innovative and preserving the character of political neutrality of the Commission, this idea implies a reform of the Treaties, that may prove to be very long. In addition, the popular choice is only indirect and leaves a big room for manoeuvre to national member states. Considered the difficulty of agreeing on new institutional reforms, in particular if they imply Treaty changes, it is worth re-considering a proposal that was floated at the time of the European Convention and also suggested, among others, by the Istituto Affari Internazionali (IAI) in 2009: a direct political mandate for the President of the Commission. According to this proposal, that does not need a Treaty reform, the major European political forces would select their own candidates for the Presidency of the Commission, that will compete with distinct political programmes at the elections for the European Parliament. The party that will win the elections will have his/her candidate appointed as President of the European Commission, pursuant to the procedures established by the EU Treaties. Not only would this give the Commission the important role that it seems to have lost in the past years. It will also make citizens closer to the EU institutions, helping them make sense of the elections for the European Parliament, that are currently perceived to be nothing more that a collection of national mid-terms elections, where popular vote is not able to make any difference in the government of the European Union.