Wednesday 8 August 2012

A much needed referendum debate

Sigmund Gabriel of the German opposition SPD (PES) has called for Eurobonds as a necessary part of the solution to the Eurozone crisis, and for the referendum required to permit German participation. Although Gabriel is just one of the Troika that heads the SPD (Steinbrueck and Steinmeier are the other two), the - increasingly frequent - judgments from the German Constitutional Court in Karlsruhe have made it clear that further integration may require a referendum. So there has been a bit of a debate lately on when and how a referendum should be held over Europe - notably coming from the Finance Minister.

The German Constitution can be changed by the German Parliament (which is why it could be argued that the independence of the Bundesbank from political interference and pressure is slightly mythical), but Karlsruhe has essentially stated in its Lisbon Treaty Judgment that at some point a referendum would be needed. So despite the outcry from the governing parties that the SPD are being irresponsible in backing Eurobonds:

"Merkel spokesman Georg Streiter said the a German referendum "lies a very long way in the future"..."

Any fiscal union will need explicit consent from the people of the Eurozone, and there has to be an open political debate about the alternatives with competing proposals. The step-by-step approach that has been taken so far (in Europe generally, but in Germany and by Merkel especially) has a corrosive effect on the confidence in national and European political leadership and ability, and in the idea that there is a solution. What we have now is a strategy that breeds cynicism, to the extent that it's hard to know if there is a strategy at all and we have to engage with a new type of Kremlinology centred entirely on the contents of Merkel's head! Without even a debate on the future of fiscal union, it's hard to see any political deal produced at the end of this process being accepted after all the suspicion and bickering that will likely continue for another 2 years, if not longer.

So the debate is necessary for any plan to have a hope of working. Speaking in favour of Eurobonds is not the same as making an open commitment to Eurobonds to be introduced as soon as possible (the SPD are still quite close to the government on conditionality, but with more solidarity); it needs to be part of a deal that covers conditions and democratic oversight. It cannot be a technical fix introduced at breaking point, but the product of an open political process. Utopian to hope for given all the summitry, but necessary if we're to have any hope of creating a workable compromise.

Note: Juergen Habermas' (et al) article in the Frankfurter Allgemeine Zeitung (here in German) has been linked to the SPD's move, and Habermas will be involved in the SPD's manifesto for the next German elections. Other interesting articles on the SPD's website on Eurobonds and meeting their Spanish counterparts here and here.


  1. I perfectly agree that the strategy of doing-just-slightly-less-than-necessary-in-the-very-last-moment has exhausted the confidence in European leaders and that we need an open, democratic political process in order to bring about the fiscal union necessary to overcome this crisis. However, I'm not so sure whether the idea of a national referendum in Germany is the best way to get there. As I wrote here in a more detailed manner (and in German), national referenda tend to provoke only national debates, leaving aside the legitimate interests of people from other (Eurozone or EU) countries. What we need now is not a German debate about national European policy, but a European debate about how the European Union should look like in the future.

    So instead of a German referendum, I would prefer to have a German constitutional convention convoked in order to change the German constitution (which would also be fine for Karlsruhe) - and a European Convention in order to work out a new EU Treaty, which then could be ratified by a pan-European referendum. This would be as democratic a solution as any other, and instead of fostering only national debates, we would have a common European one.

  2. True, there needs to be a pan-European debate (when it comes to Ireland I've complained that not only are we not debating the long term for fiscal union, but the government doesn't seem to have a vision or strategy at all - though some ministers are talking about the need for the redesign of the EU). Still a national debate would be an improvement in Germany since there seems to be little discussion outside of Merkel's tactics, though there are some interesting debates going on in some sections of the media.

    I'd be for an elected EU convention on where to go from here. It's a good idea and would hopefully stimulate an ongoing debate during the elections and the debates within the convention - the lack of engagement and prior election to the convention that drew up the Constitution was a major weakness - followed by national opt-in (rather than veto-wielding) referendums.