Tuesday 31 January 2012

Europa site

There's a great new site on The Guardian: Europa. It's a joint project with a few other European newspapers to tackle European affairs. Hopefully it will generate some good analysis and debate on what's going on - and help us to debate a bit more across borders. The article on the EU budget is good, though I hope it moves on from the articles on stereotypes to more, well, news.

Definitely worth keeping an eye on.

The Fiscal Stability Treaty

We've got our new Fiscal Stability Treaty (which you can read here). Frankly, it's hard to know how to approach it, given the fact that I've posted about it when it came out and on the problem it poses for the European left. Not much has changed in terms of the general aims and principles of the compact. Also there's a great summary of the text over at the European Union Law Blog:

"The provisions are intentionally vague in order to avoid any conflict with the enhanced powers of the EU post-Lisbon. The only meaningful instrument is the sui generis infringement procedure in case a participating Member State has failed to apply the automated deficit correction mechanism. However, this procedure is substantially weakened by the fact that Member States, and not the European Commission, must petition the ECJ. This will happen only in extraordinary circumstances and with great unease.

In addition the provisions on economic coordination are totally bland. I fail to understand how these texts may enhance economic policy coordination – they are restating existing opportunities in EU law."

I agree. We already have the Stability and Growth Pact part of the EU treaties, and the "6-pack" of legislation passed at the end of 2011 essentially tightened up the Economic and Monetary Union - which is already having an effect on national politics and budgetary policy in Belgium. Apart from enforcement mechanisms, the treaty offers little that is new: no Eurobonds, no expanded role for the ECB, nothing on investment - coordinated or otherwise - or any firm kind of economic strategy that would back up the vague mentions of growth as a goal. Good thing the treaty has the cumbersome title of "Treaty on Stability, Coordination and Governance in the Economic and Monetary Union" - if they'd called it a treaty on fiscal union they might as well have tied their credibility up in a bag and drowned it in a well.

This treaty does nothing to address the crisis, and it's only preventative in the sense that it aims to ensure that Member States don't continuously rack up debt. While this might prevent a future Greece/Italy crisis, it would be totally useless in an Irish-style crisis where budgets were balanced or in surplus before the crash and collapse in tax receipts. "Stability" is the key word. The treaty is designed to maintain the stability of a currency union which is made up of members who have joined having met the criteria and stuck to the criteria once inside the club. It does nothing to provide a mechanism for resolving crises, but rather the deficit correction ethos is directed towards isolating any crisis and protecting the stability of the currency union as a whole. It won't work, and it's hard to see how it could be politically attractive without being balanced with more fiscal solidarity - a transfer union. That's not to say that some budget discipline isn't necessary to promote stability in the good times and to build trust between Member States, but without a true fiscal union this trust isn't reciprocated and so the treaty is of questionable political and economic value.

Institutional politics and the UK

It's clear from the treaty that the Commission and ECJ will be involved under the treaty. The European Parliament and national parliaments will be involved via some sort of meeting with representatives of their relevant committees - how this works in practice is simply not mentioned - and the European Parliament president will be invited to talk at some EuroSummits. The President of the EuroSummits (yes, a president will be elected for the same 2.5 years as the European Council presidency currently held by Van Rompuy) will organise the summits (held 2x a year and after European Council summits) and report back to the European Parliament.

Clearly the European Parliament only has a slight consultative role, and it's demands for policies for economic growth have been ignored. Given that it's new president has made fighting for the EP's position under these issues a key part of his presidency, the Parliament might reject the treaty and try to weaken political support for it.

The treaty also leaves Cameron in an odd position. I've written about the strangeness of the British demands regarding the single market before, but we should be clear about one point: nothing in this treaty (or in the possible treaty within the EU) affects the single market legally. If the treaty had have been part of the EU treaty system is wouldn't have changed the single market legally. The British concern for national influence and the financial market is essentially about political and institutional influence.

The UK won't block the use of EU institutions - Cameron has confirmed this, though he points out that he will be on the look out to ensure that there is no abuse that would damage the British national interest. I have no idea what practical policy or action this would refer to as all single market legislation has to be voted on within the EU structures. One possibility would be that the UK would try to ensure that the Eurozone countries didn't discuss single market issues in their meetings, but it would be a bit hard to enforce in practice as ministers and heads of state and government could discuss these issues at the meetings without having them on the official agenda. However, the UK is helped by the fact that EuroSummits will take place after European Council summits, so this limits their potential as a platform for countries to agree and discuss issues in advance without the UK. On the other hand, as it isn't a signatory to the treaty, the UK won't have a right to be involved in the EuroSummits unlike other non-Euro participating countries.

Overall the UK hasn't gained anything by using it's veto,* and hasn't lost out legally from using it either. It's in good will, influence and future participation in negotiations and debates that it has lost. How big of a loss depends on the future of the Fiscal Stability Treaty...

*And using it prematurely at that, given that denying use of the EU treaty system would be a bigger threat later on in negotiations - it's hard not to get the impression that Cameron doesn't know the first thing about the practical aspects of negotiation...

Wednesday 25 January 2012

Happy Birthday Bloggingportal.eu!

The EU blog aggregating website Bloggingportal.eu is 3 tomorrow. Since it was launched the number of blogs being aggregated has ballooned to 904, with over 250 posts being generated over the past week. The Euroblogosphere is definitely more vibrant than when Bloggingportal started out, and Bloggingportal is still the top aggregation site for EU blogs - I'm not aware of any others.

I've been a voluntary editor with Bloggingportal for much of the last 3 years (it's been around 2 1/2 years now) - it's only staffed by volunteer Eurobloggers, and it's very much reflected in how the site's operated. The layout and look of the website hasn't changed much, though there's been lots of discussion about changing this and adding functionality, progress has been limited by the voluntary nature of the site, the small number of editors with the magical combination of free time and technical know-how, and the problems with coming up with a way of reconciling the need for a different role structure (at least partially) to make Bloggingportal.eu more useful with the dependence of the site on the motivation and goodwill of sufficient editors.

That said, Bloggingportal has become a focal point in the Euroblogosphere, with the Hungarian Presidency opening the presidency up more to Bloggingportal and the Euroblogosphere in general (when we had launched a blog action against the Hungarian media law), and editor's picks being linked to by the Guardian's CiF Europe site. Perhaps unsurprisingly for bloggers, we've been most successful with doing, well, blogging stuff on Bloggingportal - the "Week in Bloggingportal" posts that summarise what's been going on in the EU according to the editor's picks, and the blogging actions (like the action over the European Citizens' Initiative) are still where there is the most editor engagement and where Bloggingportal positively interacts with the Euroblogosphere.

The scope for positive engagement with the rest of the Euroblogosphere is extremely limited, as we try to remain neutral and to separate out what we do in our blogs (and what we might want to do in common through our blogs) and what is right for Bloggingportal's independent position. (Do you think we've managed to maintain Bloggingportal as a neutral aggregation site for the Euroblogosphere?) But we've also hosted physical events (such as an event in London in December 2010), and represented Bloggingportal at other blogging events. I think these physical meetings are important, particularly given the diverse and geographically spread nature of Euroblogging (though a lot of editors tend to end up in the London-Brussels-Berlin triangle at some point), which would encourage a feeling of community that would help sustain citizen blogging and can build more connections (I agree with Mathew Lowry that specialist blogs will be a fundamental part of a Euroblogosphere, but I think that non-specialist, citizen blogs are the connective tissue between them, or should be).

So we need to be more connective: connecting more blogs and bloggers online through offering a site that provides easy access to specialist Euroblogs and that has some limited level of real world presence that provides a small social boost to those outside the Brussels Bubble. Achieving any of this to even a modest level would require a lot of changes, though, and Bloggingportal changes slowly: it's a bit surprising that the rapidly changing Euroblogosphere hasn't been able to evolve anything better so far, so maybe we can work something out.

What do you want from Bloggingportal.eu? What would make you want to use it more?

Friday 20 January 2012

A stronger, more active European Parliament?

Martin Schulz, the former leader of the Socialists and Democrats Group in the European Parliament has been elected the President of the Parliament for 2.5 years.* He's set out his stall for parliamentarianism: that he'll stick up for the EP within the EU's institutional triangle and in the ongoing negotiations for the New Fiscal Compact (acceptance speech [PDF]):

"The intergovernmental agreement on a new fiscal union will be the first test. In the negotiations, representatives of our Parliament initially failed to secure support for their call to combine budgetary discipline with measures to foster growth and employment. But it is just such a sensible compromise that the citizens of Europe want! For this reason as well, we must have a seat at the table at European summits."

So there are two political goals here: for the Parliament's resolution on the fiscal and stability union to be incorporated in some way into the New Fiscal Compact, and for the EP to have a seat at European summits (probably for the EP president who currently only reports on the Parliament's view to the European Council, but is not part of the European Council - while the Commission President is a member). Interestingly, Proinsais de Rossa, an Irish MEP who is stepping down soon, has claimed that the European Parliament might reject the new treaty. This wouldn't block the treaty - it won't be part of the EU treaty system - but it could politically damage the ratification process, especially if Ireland holds a referendum on the pact.

Polscieu has picked up on Schulz's line on first reading agreements - agreements between the Council and Parliament on a draft of legislation so it can be passed quickly. If Schulz's "re-thinking" of the issue leads to fewer first reading agreements, then we're likely to see more parliamentary debates on legislation and a strengthening of the Parliament's political voice and profile. Since the EP is now equal to the Council as a legislator in almost every area (that the EU has competence in) but foreign policy, the loss in profile by first reading agreements is self-inflicted. That's not to say that first reading agreements don't have their place, but it's hard to see why the statistic of 72% of legislation passed by co-decision (now called "ordinary legislative procedure") being decided under such agreements in the last parliament (2004-9) should be repeated again for this parliament.

If Schulz makes progress on all three counts, then the EP's public profile should increase - particularly if the EP gains a bigger role at European summits, given that most of the media attention is focused on these "zero-sum game" events. We'll see what his record is by the next European elections.

*The first 2.5 years of the Parliament presidency was held by Jerzy Buzek (EPP) - the two biggest political groupings traditionally make a pact to share the presidency between them during the life of the Parliament.

Thursday 19 January 2012

Debate on Hungary in the European Parliament

Hungary's Prime Minister addressed the European Parliament today in the debate on Hungary's new constitution and Fidesz's actions in power. Earlier, in the debate on the Danish presidency, Danish PM Thorning-Schmidt signaled her support for the Commission's legal action against Hungary, side-stepping the question of using Article 7 TEU against Orban's government if Fidesz doesn't make sufficient changes.

Viktor Orban repeated his defence of the new constitution to the EP: that it was the final part of the transition from Communism to democracy. EPP group leader Daul continued along the same line, agreeing with Orban's assessment that it was part of the transition to democracy, while also signalling support for any changes that might be required under EU law. This is a shameful balancing act by the EPP leadership - both the Hungarian government and the Commission are linked to the European People's Party: Fidesz is part of the EPP and the Commission is dominated by the EPP. Since the legal action that can be taken by the Commission is limited to narrow breaches of EU law, rather than the separate procedure for breaches of the EU's values under Article 7 TEU, Daul is essentially making it known that the EPP in Parliament will block any motion to initiate the Article 7 procedure against Hungary. Zbigniew Ziobro (Europe of Freedom and Democracy group) came out in full support of Orban, denouncing EU interference as interference in a sovereign state, and praising Orban for standing up for Hungary.

Guy Verhofstadt (leader of the liberal ALDE group) attacked the direction of Hungary's government and brought up the issue of Article 7:

"What is necessary is to check the conformity of the Hungarian Constitution and cardinal laws with the European values: democracy, the rule of law, the freedom of religion, the freedom of expression, equality also.

I think, besides the infringement procedures, this House, should take its responsibility.

I call on our colleagues of the LIBE committee to make a report on the basis of article 71 TEU. Stating YES or NO if there is a clear risk of a serious breach of our values. That is what we have to do."

A parliamentary report finding a breach of EU values would be the basis for a reasoned opinion which would be part of an EP motion for an Article 7 action. While Hannes Swoboda, the new leader of the Socialists and Democrats group, was very critical of the Orban government and the authoritarian culture surrounding it (pointing out that if Croatia had adopted the same rules it wouldn't be given EU membership) and mentioned the question of starting the monitoring step for Article 7 (though not as stongly as Verhofstadt). He also urged the EPP to hold Orban to account. Daniel Cohn-Bendit gave an impassioned speech for the Greens against Orban and his line on his government's anti-Stalinist motives.

Since the United Left and European Conservatives and Reformists groups were also critical of Hungary, it might be possible that the Parliament will flex its political muscle by starting the Article 7 procedure. Even if it does, it would take 4/5s of Member States voting for the motion for it to be passed, which is extremely unlikely given the dominance of the EPP in the Council, but such a clear and determined action by the EP would send a powerful political signal and keep this issue in the spotlight.

Wednesday 18 January 2012

What legal action is the Commission taking against Hungary?

The Commission has announced that it will be taking legal action against Hungary, but only so much can be done under EU law. While people point out that:

"Viktor Orbán's regime combines the extreme centralisation of economic assets (including the expropriation of the private pension funds, of several public foundations and the forthcoming centralisation of the municipal government's assets) and the monopolisation of power in a single party that intends to dominate every aspect of social and private life, turning citizens into subjects. The improvised nature of many of the new laws creates a wide margin for arbitrary decisions that increase dependence and insecurity.

In addition to a frontal attack on civil liberties, the government has redistributed economic assets (particularly through the tax system and investment allocations) in favour of interest groups close to Fidesz and a restricted layer of the well-to-do. This group zealously defends the party's power and executes its guidelines.

At the same time – through the unilateral rewriting of the labour code, the restriction of union action and collective bargaining rights, the radical dismantling of social welfare nets and independent social care institutions – the government exposed the most vulnerable social groups (the poor, the unemployed, Roma, pensioners, sick and handicapped) to the unfolding economic crisis. Life is precarious for those who live on wages and have no reserves or additional revenue."

...the Commission doesn't have the jurisdiction (and neither does the European Court of Justice) to take Orban's government to task over all these issues. The Commission has decided to focus on the areas of the independence of the judiciary, the independence of the central bank, and the independence of Hungary's data protection authorities: probably because the EU legal case is strongest here. Let's look at some of the reasons behind the legal action:

"1) Independence of the national central bank

"The Commission has identified several breaches of primary law, notably breaches of Article 130 TFEU stipulating full independence of the central bank and of Article 127(4) TFEU requiring consultation with the ECB "on any draft legislative provision in its field of competence".

•Article 130 TFEU states that: “neither the ECB, nor national central bodies, from bank … shall seek or take instructions from Community institutions or any government of a Member State or from any other body”.

•Article 127(4) TFEU stipulates that "the ECB shall be consulted […] on any draft legislative provision in its field of competence"

Moreover, 14.2 of the Statute of the European System of Central Banks and of the ECB as well as Article 4 of Council decision (98/415/EC) on timely consultation of the ECB were not respected. On a number of elements, the Commission has invited the Hungarian authorities to provide clarification.

The infringements identified in the letter of formal notice concern both the MNB law ('Magyar Nemzeti Bank') but also the new constitution.

Under the MNB law, the Minister can participate directly in the meetings of the Monetary Council, offering to the government the possibility to influence the MNB from the inside. Similarly, the agenda of MNB meetings needs to be sent to the government in advance, thus impeding its capacity to hold confidential discussions. Also, changes in the remuneration scheme for the Governor are made again immediately applicable to the incumbent, while they should apply only as of a new term to avoid using salaries to put pressure on the MNB. Finally, the Governor and the members of the Monetary Council have to take an oath (of fidelity to the country and its interests) whose text is problematic given that the Governor of the MNB is also a member of the General Council of the ECB.

The Commission has doubts on the rules of dismissal for the Governor and the members of the Monetary Council which are prone to political interference (even the Parliament can propose to dismiss a member of the Monetary Council) and possible misuse. Also the frequent changes of the institutional framework of the MNB raise doubts, for instance via the increase in the number of Monetary Council members together with the possibility of increasing the number of deputy governors without due consideration of the MNB’s needs.

Moreover, a constitutional provision regulates the possible merger of the MNB with the financial supervisory authority. While the merger is not a problem as such, the MNB Governor would become a simple deputy chairman of the new structure, which would structurally encroach on his independence.

2) Independence of the judiciary

The infringement case affecting the judiciary focuses on the new retirement age for judges and prosecutors and relates to Hungary's decision to lower the mandatory retirement age for judges, prosecutors and public notaries from 70 years to the general pensionable age (62 years) as of 1 January 2012.

EU rules on equal treatment in employment (Directive 2000/78/EC) prohibit discrimination at the workplace on grounds of age. Under the case-law of the Court of Justice of the EU, an objective and proportionate justification is needed if a government decides to reduce the retirement age for one group of people and not for others. This principle was affirmed when the Court ruled on 13 September 2011 that prohibiting airline pilots from working after the age of 60 constitutes discrimination on grounds of age.

In Hungary's case, the Commission has not found any objective justification for treating judges and prosecutors differently than other groups, notably at a time when retirement ages across Europe are being progressively increased and not lowered. The situation is even more legally questionable because the government has already communicated to the Commission that it intends to raise the general retirement age to 65.

As regards the independence of the judiciary, the Commission is also asking Hungary for more information regarding new legislation on the organisation of the courts. Under the law, the president of a new National Judicial Office concentrates powers concerning the operational management of the courts, human resources, budget and allocation of cases. There is no longer collegial decision-making of the operational management of the courts or other appropriate safeguards. One person alone now makes all important decision on the judiciary, including as regards the appointment of judges. In addition, the mandate of the former president of the Supreme Court, who was elected for six years in June 2009, was prematurely terminated at the end of 2011. In contrast, other former judges of the Supreme Court continue their mandate as judges of the new Curia, which has replaced the Supreme Court. The Commission expects detailed answers of the Hungarian authorities to be able to decide whether further infringement proceedings are needed.

3) Independence of the data protection supervisory authority

The case on the data protection supervisor relates to Hungary's recent decision to create a new National Agency for Data Protection, replacing the current Data Protection Commissioner's Office as of 1 January 2012. As a result, the six-year term of the Data Protection Commissioner currently in office, who was appointed in 2008, will be prematurely put to an end. There are no interim measures until the term of the current Commissioner's term ends in 2014.The new rules also create the possibility that the prime minister and president could dismiss the new supervisor on arbitrary grounds.

The independence of data protection supervisors is guaranteed under Article 16 of the Treaty on the Functioning of the EU and Article 8 of the Charter of Fundamental Rights. In addition, EU rules on data protection (Directive 95/46/EC) require Member States to establish a supervisory body to monitor the application of the Directive acting in complete independence. This has been confirmed by the Court of Justice. In its ruling in a case concerning Germany (C-518/07 of 3 March 2010), the Court underlined that data protection supervisory authorities have to remain free from any external influence, including the direct or indirect influence of the state. The mere risk of political influence through state scrutiny is sufficient to hinder the independent performance of the supervisory authority's tasks, the Court ruled."

The outcry over what is going on in Hungary has been very political - in the sense that it's been about the high politics of rights and what makes a fair democracy - and rightly so. The Commission's response reveals the nature of the EU's power when it comes to protecting these key rights: as an organisation of sovereign Member States, the EU can only act where the Member States have contravened EU law. The EU treaties don't define a specific governing structure that Member States have to have, such as a presidential or parliamentary system or how their judiciary is organised (though it does set human rights and democratic tests for candidates to pass before they join), so the points of EU law can be quite narrow. This is especially obvious when it comes to the Commission's action over the judiciary laws - the action focuses on the unfair dismissal of serving judges, rather than the general separation of powers between the judiciary and the executive. The press release references these wider questions and demands answers, but whether or not there will be further legal action depends on whether or not the measures breach EU law.

The Commission (and the EU) is therefore not well placed to become a crusader for liberal democracy in its Member States, so there's a limit to what we can expect. The EU can, however, remove Hungary's EU voting rights via Article 7 TEU as a last resort, but this would require a super-majority. The Commission should investigate the changes to the electoral system and judiciary with an eye to using Article 7 if Hungary refuses to reverse any abuses. While the EU and the Commission's power might be limited (and we need to bear this in mind when Hungary claims it has changed its judicial rules in line with EU requirements), we should demand that all Member States live up to minimum democratic standards if they want to stay in the EU.

Today the European Parliament will be debating the Hungarian situation.

Ireland's Euro-diplomacy (and Debate)

Last night's Tonight with Vincent Browne debated the Irish government's (and Taoiseach Enda Kenny's) ability to negotiate in the EU. Key to this was an exchange in the Dáil where Michael Martin (the Leader of the Opposition) questioned Kenny's approach at the December summit for not meeting with David Cameron. Kenny replied that he'd been at the EPP pre-summit meeting in Marseilles, and he'd spoken to him by phone.

It was a very strange point to make - that Kenny was incompetent at negotiations because he didn't meet with Cameron, when it's Cameron who's opted out of the EPP (which controls the Council, Commission and is the largest party in the European Parliament), and that Cameron's own skill in negotiations has been seriously questioned since the December veto. The implication seems to be that a clever Irish premier would have been able to steer the British PM right and keep him in negotiations (though if having the pro-EU Lib Dems and a Deputy with plenty of personal European connections couldn't keep Cameron in negotiations, it's hard to see how Kenny could have).

Much more serious is the sense that the Irish government has no European vision or policy because it's absorbed in questions over the EU/IMF/ECB deal. There has been some debate in the media over Ireland's European direction (including the suggestion that Ireland should consider focusing less on aligning itself with a Britain that's flaky on European issues), but politicians haven't been able (or willing) to take up the debate on what kind of Eurozone/EU they want. This really goes for the opposition as well as the government, because the opposition has been focusing on criticising the government for this lack, while not coming up with much itself.

It's a serious defect in our politics that we've not been willing to have a robust debate on the kind of EU and Euro that we want. Do we want Eurobonds and a transfer union? Would we be willing to be major contributors to other Member States under those same conditions in any future crisis 30 years down the road? If we argue for investment-tempered austerity, we should ask ourselves the question: would we be willing to loan billions to, say, Slovakia, in order to invest in its infrastructure to revive its economy and reduce its deficit? Under what conditions, and with what common political institutions?

Without politicians (and enough citizens) taking up this debate, we'll probably find ourselves voting in a referendum a few months from now on the new fiscal compact, rushing ourselves through a low-quality debate and being asked to decide on a fundamental question of Ireland's European direction...

Friday 13 January 2012

Brussels v Brussels: Belgium and the EU clash over the budget

The Commission’s scrutiny of Belgium’s draft budget has caused a political backlash from PS (PES) government minister Paul Magnette:

““Wie kent Olli Rehn? Wie heeft ooit het gezicht van Olli Rehn gezien? Wie weet waar hij vandaan komt en wat hij heeft gedaan? Niemand. Terwijl hij zegt hoe wij onze economische politiek moeten voeren.”

[“Who knows who Olli Rehn [Commissioner for Economic and Monetary Affairs] is? Who has seen Olli Rehn’s face? Who knows where he comes from and what he’s done? Nobody. Yet he tells us how we should conduct our economic policy.”]”

This was sparked by the Commission’s intervention through its budgetary surveillance role:

“The commission caused a flurry in Belgian political circles over the weekend by warning that the country needed to curb this year's spending. Rehn suggested the government's calculations that the budget deficit for 2012 would be 2.8 percent were too optimistic and asked for a cut of between €1.2 billion and €2 billion.

Belgium eventually settled on freezing €1.3 billion in spending, a move that saw it escape the threat of monetary sanctions on Wednesday (11 January) when the commission assessed the matter.”

Although the Commission has given Belgium a clean bill of health for its budget, how far the Commission should influence how Member States stick within the rules remains an issue. It’s up to Member States to meet their budget targets, but they’re free to do so however they want – it looks like the actual issue here was the credibility of the forecasts that the Belgian government built its budget on. Clearly the forecasts will have to be credible (if Member States could pluck numbers out of thin air or pick and force the Commission to accept them, then the rules would lose much of their force), but the political argument is over the democratic legitimacy of the Commission to involve itself in the sensitive area of national budgets. The Commission has rebutted the argument that it doesn’t have the democratic legitimacy to oversee the budgets:

“"De regels zijn regels die zijn goedgekeurd door het Europees parlement en door alle lidstaten", reageerde woordvoerder Amadeu Altafaj. "De 3 procent (de grens voor begrotingstekorten, nvdr) is dus geen dictaat van de Europese Commissie."

[“The rules are rules passed by the European Parliament and by Member States,” said spokesman Amadeu Altafaj. “The 3 procent (the limit for the budget deficit, nvdr) is therefore not a diktat from the European Commission.”]”

From the Commission’s point of view (and that of its supporters), it is applying the technical criteria set by the Parliament and Council (see three of the “six pact” acts for enforcement here, here and here [all PDFs]). But Magnette’s frustration goes further – he says the EU’s policies will cause a 15 year long recession, and that the Commission is a bastion of the “right and ultra liberal”. The Commission is dominated by the EPP, and it is a very political institution. But what’s happened with the “six pack” legislation on budgetary monitoring is that the political and economic assumptions behind the EU’s current direction have been enshrined in the technical rules governing the economic union. The Commission can say that it’s just applying the rules passed by the Member States and the democratically elected Parliament because, well, that’s what’s happening. However the Commission proposed these laws and it was politically active in shaping them and guiding them through the Union legislature – if Magnette (or indeed any government ministers or parliamentarians) want to push for different rules or attack the Commission for its political direction, it’s better done during the passage of legislation or when building a coalition for new legislation.

Like the new fiscal compact, there’s a problem for the left here. For there to be the necessary trust to build an economic union with more solidarity, there needs to be a certain level of discipline: it cannot be a one-sided bargain between those (currently) with deficit problems and the (current) core creditors. Magnette is right that the Commission is highly political (though we should distinguish between its political and technical functions), but those opposed to its political direction need to be equally political back. There needs to be support for Commission proposals for them to pass and the left will need a clearer strategy and narrative if it’s to build a coherent and effective opposition. Somehow I don’t expect it to be built around Di Rupo’s socialist-led government...

And Di Rupo? He distanced himself from Magnette’s remarks, citing Belgium’s pro-European traditions.

Thursday 12 January 2012

Shifts on the New Fiscal Compact

The EU Observer has reported some changes in the drafts on the new fiscal compact:

"The role of the EU commission in taking debt sinners to court for not properly transposing the golden rule into national law, an idea introduced in the second draft at the demand of the European Parliament, has also been watered down to the commission "issuing a report" at the demand of another country adhering to the pact.

The power of taking countries to court is instead to reside with countries - a u-turn going back to the first draft - after French worries the commission risks becoming too powerful.


Another watering down of earlier drafts rules out introducing new sanctions for countries that break rules on overall public debt, opting instead to limit such penalties to ballooning budget deficits.


The 'working group' which is pumping out the texts - a mixed bag of member states' officials led by a Luxemburger - kept another EU parliament demand, to enshrine the intergovernmental pact in EU Treaty law in the next five years.

But it also changed the threshold of countries needed to ratify the pact for it to come into force from 15 to 12. In the first draft, the threshold was even lower, at nine countries."

The "golden rule" on deficits will no longer have to be inserted into constitutions, so the final deal could simply require an act of parliament to ensure governments don't spend over a certain limit. This would get around the need for referendums in several Member States, but it could open up political problems in the future if budgets passed by parliaments are being challenged by other EU countries in the courts - a potentially politically toxic situation.

France's position on the Commission's powers is revealing and worrying for the credibility of the pact. Given that it's simply a Stability and Growth Pact Plus, further entrenching the current rules, the institutional and political credibility of the mechanisms actually working was the key problem. Of course, if any contracting country can take another to court, then it's more likely to happen than under the current system which requires a vote in Council. Still, France wants the Commission to be kept away from this position of power because diplomacy could still influence the outcome - and this would be much more advantageous to larger Member States who could throw their weight around more. The potential for differences in treatment echo the complaints from the smaller Member States that France and Germany were among the first to break the Stability and Growth Pact in the last decade. Also, the value of integrating the deal into the current treaties for the European Parliament is questionable if the Commission's role is minimal, since there would be little for the EP to act on.

Finally, setting the minimum number of Member States at 12 for the treaty to come into effect will, if it's in the final draft, have a big effect in the parliamentary votes and referendum campaigns as it ensures that even some Eurozone states could reject it (and stay outside it), and the deal wouldn't be completely stopped. The fear of exclusion (and the effect of this on the economies of the excluded Eurozone States) will make opposing the deal more problematic, and it will be a major feature of the Yes campaigns.

UPDATE: Honor Mahony has written a good blog on the problems these shifts reveal for the future of the negotiations.

Monday 9 January 2012

The Orbarony of Hungary

This weekend saw, rightly, a wave of stories about Hungary (see yesterday's Week in Bloggingportal for some blog articles). The new constitution came in for a strong attack by the Party of European Socialists president Sergei Stanishev:

"Hungarian democracy is under siege. The actions of the conservative Fidesz government under Prime Minister Viktor Orbán have resulted in an unprecedented attack on basic international democratic standards. It is an extraordinary thing to say in the year 2012, but the cold hard fact is that the European Union could now be said to include a non-democratic state as one of its members.

Now it is a test for European leaders and institutions of their commitment to democratic values when democracy is at stake. It is not a matter of internal policy but rather the question of whether the EU will preserve one of its core values and features. A new constitution has been in place in Hungary since January 1 this year. It contains set of provisions that are an attempt to institutionalise authoritarian rule. The measures have been, accurately, described as a 'constitutional coup'.


The essential point is this: there does not seem to be any end-point to the actions of Fidesz. Their actions indicate a consistent and quickening slide towards authoritarian rule. Those responsible have not listened to rational requests and they have not heeded eloquent calls to respect democracy. Therefore the international community must look at more robust measures."

The PES counts the opposition MSZP party among its members. The changes brought about by the new constitution are:

"- The Constitutional Court has been stripped of its powers
- The government can decide which judges will review which cases
- The supervision of elections is overseen by a new Council of Government party appointees
- A'media board' of government appointees has been given power to decide what constitutes "balanced" media coverage and has been allowed to impose fines which only be appealed after payment
- Tax and fiscal policy, including a new flat tax, can only be changed by a two-thirds majority.
- The government can appoint a deputy governor to the central bank
- Provisions to protect citizens from discrimination based on sexual orientation have been deleted."

The governing Fidesz party is part of the European People's Party, which controls the Commission and the Council of the EU, and is the biggest party in the European Parliament. The Economist has called for the EPP to be tough on its wayward member:

"Mr Orban’s fellow centre-right leaders, who include Germany’s Angela Merkel and France’s Nicolas Sarkozy, have more leverage over him than other European politicians, and therefore a particular responsibility to take him to task. Fidesz is proud to belong to their umbrella group, and the biggest political family within the EU, the European People’s Party. Threatening to chuck Mr Orban out of the EPP could be the best way of steering him off the path towards autocracy."

The only communication I can find from the EPP on the issue was this press release, stating that they would support whatever decision the Commission took on the constitution's compatibility with EU law - but this is not simply a matter of compliance with EU legal requirements (though The Economist points out that the Commission should stand firm on the requirement for an independent central bank). This is a question about European values and the standards of democracy that a Member State should be held accountable to. Candidate countries have to measure up to a certain democratic standard: so should current members.

While the EPP may control the Commission and play up its central role in European politics (every press release ends with a note to the editor on the size and influence of the Europarty), but as a political and parliamentary group it seems content to accept the decisions of the Commission and Council - no rebellious backbenchers, these. The press release shows the party trying to have it both ways, stating that they would support technical corrections, but using language supporting Orban's post-Communist narrative of the new constitution:

""The Hungarian Parliament adopted on 18 April 2011 a new constitution that replaced a Stalinist-type constitution, which dated from 1949. Hungary was the only country in Central Europe which could not draft a new fundamental law since the fall of communism. The new constitution has incorporated the Charter of Fundamental Rights and also a new, fairer electoctal system was established which offers the possibility for minorities to be represented in Parliament," said [EPP Leader and EP Group Chairman] Martens and Daul.

"At the same time, we are well aware that the European Commission has raised issues on some pieces of legislation and is currently examining the English and French translations to determine if they comply with EU law. [...] Needless to say, the EPP will back the Commission’s recommendations that will ensure Hungary’s full compliance with EU law.""

The EU cannot work if we don't stick to our common values: what happens to the trust that cooperation and common rules have to be founded on to work, if we don't feel that some members aren't following the same basic standards? It's an issue that we need to be strong enough to take on. Not only when it comes to Hungary, but for all members.

Sunday 8 January 2012

"The European Citizen" - Three Today!

The European Citizen has now been going for three years! This year has been the quietest so far on the blog, even if it's been packed full of crises in the real world. Still, some of 2011 in the EU has been reflected here.

First, there was the long-awaited Irish election as the government collapsed over the need to go to the EU and IMF for loans to keep the country running. Along with Stephen Spillane, I helped follow it here and on MSN.ie with a blogging round-up series. The new governing parties have come up with a lot of constitutional reform ideas, and with the new constitutional convention coming up this year, delivery will be a key issue. Internationally, the EU was taken by surprise (like everyone else) by the Arab spring.

In the UK one of the most memorable debates was over prisoners' voting rights and (suggested from some quarters) withdrawal from the European Convention on Human Rights. I backed the loosing side in the AV referendum in April: British ethusiasm for First Past the Post is still confusing for me, though perhaps I just grew up in a different political atmosphere (Northern Ireland/Ireland), where the (proportional) Single Transferable Vote would have to be pried from voters' cold, dead hands (what voter would want to give up the power proportional representation gave them?). I also blogged about the debate on parliamentary sovereignty in the UK Parliament and what the difference is between a free trade area and the common market. But then it's sometimes hard to understand what kind of Free Trade the Tories believe in...

Citizenship was a big issue legally in the Court of Justice in Luxembourg - with the Zambrano case promising a new approach, before the law was cruelly reversed (if it ever had been changed) in McCarthy. This was probably the most legal I got all year! Old, more political chestnuts returned, like debates on European democracy and the values of referendums on the EU.

Barroso delivered his Commissarial Speech in September, showing just how much the EPP have shifted leftwards (or at least, how far their leaders have) - this was perhaps symbolised by the revival of debate around a Financial Transaction Tax. I also followed the PES and attended their Re:New conference (You can read my posts here, here, and here).

The year's end highlighted the two central questions we'll face this year: how many member states will join together and integrate further (sparked by the UK's veto and it's effects), and what kind of Eurozone do we want - and how will the left respond to the New Fiscal Compact?

This year I hope to be a bit more active - it looks like there'll be plenty to cover.

Hope you've a good 2012!

Friday 6 January 2012

Send in the Junior Ministers

Given the talk about the UK and the infamous veto and what it means for British diplomacy, it might be worth puzzling over the French use of its Junior Ministers.

French EU Affairs minister Jean Leonetti made a strong prediction for the Financial Transaction Tax being passed this year as France and Germany had decided it:

"He added: "France and Germany have already agreed on it. And I believe the new Italian government, with which we have been in contact, is not opposed. Twenty six out of 27, in fact all the EU countries except Great Britain have no objections to the idea, and except Sweden, which had a bad experiment in this area.""

This obviously will rub the other Member States up the wrong way, but it's not the first time France's junior ministers have mouthed off, and last month saw a big spat between the UK and France over the UK's credit rating. It's an astonishing way to do politics, and you have to wonder at the tactics behind it (or the political control and coherence in the heart of government). Britain might have shot itself in the foot last month, but France would be a fool if it thinks this behaviour won't impact on its diplomatic success.

Hungary for change

Last year when Hungary was taking over the rotating Council presidency, the Fidesz government was bringing in a controversial media law which we launched a blogging action over. Though the law was revised after discussions with the EU, EU law in the area is mostly market-based. This time around the independence of the Hungarian Central Bank is under threat and is the source of a dispute between Hungary and the IMF:

"Hungary, the EU's most indebted eastern member, already saw its credit rating downgraded to junk in December and initiated talks for a standby loan from the International Monetary Fund (IMF).

But the centre-right government led by Viktor Orban has pursued controversial legal changes to some of the country's independent institutions, including the central bank and media bodies, prompting IMF negotiators to walk out of talks.

The laws came into force on 1 January, prompting tens of thousands of people to take to the streets on Monday and repeated warnings from the EU commission that it may take Hungary to court."

The markets haven't reacted well to Hungary's course either:

"The forint fell to 319.4 against the euro, a record low after a gradual depreciation of 20 percent in the last six months, while 10-year bond yields spiked to 10.5 percent, the highest since April 2009."

At the moment Orban's government seems intent on sticking to it's course despite protests and pressure from the EU and IMF - perhaps the plan is to use the bank to print more money to avoid the necessity for the IMF loan. Fidesz's two-thirds majority in the Hungarian parliament allows it to change the constitution, and it's been making full use of the opportunity. Orban has made it clear that he sees these changes as the end-point of Hungary's post-Communist path:

"In Orban's view, the new legal text "marks the end of the country’s transition to democracy from Communism" - as he explained in an interview with the Magyar Nemzet newspaper on 24 December.

Foreign journalists are "right when describing what happens in Hungary not just as simple governance, but a regime change," he told the newspaper.

"They say this in a disparaging way but I think this is a compliment. We Hungarians have failed for over a hundred years to show western Europe our own virtues.""

It seems pretty odd to be portraying the rapid expansion of executive power as an anti-Communist evolution, particularly when former Communist dissidents are protesting against Fidesz's constitutional changes. Orban's rhetoric also smacks of Hungarian exceptionalism and is reminiscent of the talk of differing values and rights from the media law debates last year (not that anyone explained how Hungarian rights should differ from those set out in the European Convention on Human Rights or the values in the EU treaties).

As the EU deals mostly with internal market, security and environmental matters, and the Council of Europe's Convention and Court of Human Rights deals with human rights law and standards, the EU isn't well equipped or experienced enough to deal with Member States drifting away from the standards required for membership. Article 7 TEU gives us a nuclear option of sanctioning a Member State who risks breaching the values of the EU, but it would require a four-fifths majority of Member States and a majority in the European Parliament, which is unlikely to be reached (and would need to be focused on the health of Hungary's democracy and media rather than the central bank).

It does raise an interesting question though: what "red lines" should the EU have for Article 7 action, and how much constitutional change can be brought about before the EU starts questioning whether a country is still membership material?