Thursday 28 November 2013

A Strong Europe?: What the Grand Coalition has in store

Two months after the German elections the Grand Coalition deal between Merkel's CDU (and their sister party, the CSU) and the SPD has been signed. It's not a done deal until the SPD membership has endorsed the coalition treaty, and there is some resistance to it given their anti-Merkel election campaign and the frequency with which Merkel's coalition partners have the political life sucked from them. Still, the SPD leadership are likely to have their way, and with a membership vote on the deal the coalition will have a firm foundation for the next 4 years.

The headline policies, such as the minimum wage and reduced pension age (SPD) and road tolls for foreigners (CSU) have tended to be driven by the junior partners of the coalition. It's been suggested that the leadership style of Merkel's CDU (focusing on her leadership rather than policy) may have worked well in the campaign, but was a weakness when it came to coalition negotiations. So how is Germany's Europe policy shaping up?

The coalition agreement can be read here (PDF - in German), with the European policy at pp.15, 156-167.

Eurozone and the Single Market

The big one and, despite the hopes that the SPD may have moderated the austerity-centric policy, there is really no change here. In fact the strongly conservative tone is startling - there's plenty of talk about reducing debt and deficits and working on competitiveness, but when you turn to the "social Europe" section the rhetoric is pretty much repeated: austerity is the only way to ensure a social Europe seems to be the message.

On banking union there is little new. Yes, there must be banking union, and, yes, private banking debt must be separated from public debt (with banks taking the hit first). However the deal underlines that releasing funds under the European Stability Mechanism (ESM) or otherwise will remain subject to a vote by the Bundestag and emergency credit lines are a last resort only. The agreement both stresses that there will be no common liability at the European level since budgets are a national competence, and that budgets must be effectively overseen and co-ordinated at the European level. (It appears that the joined-up thinking demanded of Brussels has not similarly been applied here...). The SPD's leanings towards Eurobonds have apparently been stamped out altogether for the purposes of coalition.

On the future of emergency credit and the "reform contracts" that are supposed to accompany them, the German government supports the contract idea, though such deals must be "democratically legitimised". Presumably this means that the national parliament of the bail-outee will have to ratify the contract before being lent money.

Interestingly, the agreement states that there will have to be changes to the treaty basis of the currency union - a bit hint in favour of treaty change.

The new German government will support the completion of the single market, to which you can add the usual talk of both requiring further harmonisation to help create a level playing field and also ensuring the reduction of red tape, etc., etc., that always bolted on statements about the single market these days (and apparently copy-pasted here for emphasis). The stand out policy here is on posted workers, which should be "developed" to ensure that posted workers work under the same pay and conditions as nationals of the host country would.

Social Europe

Not much here at all. Under this heading the austerity rhetoric is repeated, perhaps on the basis that since times are tough austerity will have to stand in to reduce the number of policies, ironically causing a policy deficit in the process. There's not much here that isn't already long-standing policy at the EU level. Youth unemployment is bemoaned (the answer is held out to be structural reform and making free movement of this young educated workforce easier). Social and wage dumping are to be fought, and the new government will be supportive of tax harmonisation, which will have the alarm bells ringing from Dublin to Helsinki.

Money from the European Investment Bank has been promised for several types of projects and policy. Honestly, so many people have promised EIB money for so many things at this point that I'm starting to wonder if the next financial crisis will be when it collapses. It seems that when the EU budget is so small and you're cutting it, the answer is to promise to get the EIB to lend money for it. Just wait til the Europarty manifestos come out....

EU Democracy and foreign Policy

Enlargement, while supported, will face a tougher Germany: criteria must be more strictly applied, and Turkey's accession process won't "automatically" end in membership. Berlin also wants to beef up EU foreign policy through its humanitarian and development aid policies - and even military planning. It foresees a close cooperation between the EU and NATO here, which is probably something that would happen to a certain degree, directly or indirectly, though the neutral Member States may not be so happy with this.

When it comes to EU Democracy, there is nothing new: more education about Europe and supporting a more uniform electoral code seems to be the extent of the coalition's thinking here. There's not even a mention about how the 2014 elections can be used, never mind how they might affect the formation of the next Commission. Berlin will, however, want to see German on a more equal footing with French and English as a working language of the EU - it will be interesting to see how it pushes for this in practice.

Overall, very disappointing, if not entirely unexpected. For those of us on the left, the agreement's European paragraphs appear to contain no "social democratic handwriting". For those hoping for a change to Germany's Eurozone policy there is not only nothing, but a vigorous restatement of that nothing. For those looking for renegotiation there is an encouraging hint here, though the passage on social standards and the attitude towards the posting of workers will - or should - worry some British politicians who perhaps project too much of themselves into Germany's pro-single market outlook.

Wednesday 27 November 2013

EU Budget: a victory for the Council

The passing of the EU budget last week by the European Parliament was definitely a win for the Council and the fiscal hawks amongst the Member States. For the first time the EU budget will be cut, and cut by €35 billion (3.5%) over the next 7 year period (this "Multi-annual Financial Framework" allocates the budgets for 2014-2020).

While the European Parliament was able to wring a few concessions from the Council, given that it supported an increase, it's hardly a sign of parliamentary muscle. The centrist alliance of the European People's Party, the Liberals and the Socialists and Democrats bloc were key to passing the budget (537 to 126 votes), with the Greens, United Left and the Eurosceptic Europe of Freedom and Democracy group being the main opponents. The centrist alliance made a few demands that were mostly reflected in the concessions.

In return for its support, the Parliament got:

- Protection of EU funds for research, humanitarian aid and border controls from cuts;
- Retention of unspent funds by the EU, so that these can be used elsewhere (instead of returning to Member States);
- Agreement to ensure the payment of existing commitments under the 2013 budget;*
- Review of the EU's own resources (money directly received by the EU rather than given by the Member States).

The cut in the budget was also reduced from the level demanded by countries such as the UK.

The rationale behind the cuts is that the EU budget needs to reflect the austerity of the Member States - a bizarre idea if the austerity currently practised is supposed to be a policy of necessity rather than ideology, since the EU as an organisation has no debt or deficit. This is because the EU cannot borrow money. The "need" for the EU to reduce spending for the same reason as the Member States is therefore an ideological position rather than an actual attempt to balance a budget or EU public finances. The end result is a reduction in the already low fiscal transfers from the EU in investing in the poorer regions of the EU - taking away an important, if small, support at a time when money is being sucked out of vulnerable economies. So much for solidarity.

It is even more perplexing when a supposedly centre-left party takes this approach.

* The EU budget in 2013 seems to be in a similar position as in 2012, with Member States ironically happy to sign up to spending commitments and then not budget properly for it...

Tuesday 12 November 2013

The European Cloud - Europe's Response to the NSA Scandal?

Negotiations over the EU-US trade deal reopened yesterday, demonstrating that the NSA affair has not halted progress here despite the calls from the European Parliament for talks to be suspended. At the same time the Parliament's Civil Liberties, Justice and Home Affairs Committee (LIBE) continues to hold sessions on its inquiry into the spying allegations. Neelie Kroes, the Commissioner that heads the Digital Agenda policy, has said that while the spying revelations are shocking and unacceptable, the spying will probably continue - "Let's not be naive". Instead Kroes argues that Europe should focus on building its digital infrastructure and single market in the internet.

In the EU the spying scandal does not look like it will produce any sharp changes in policy direction, but rather an acceleration of existing policies as the Commission and others capitalise on the political fallout from the affair. For the Data Protection Regulation this has already meant a reversal of the bill's dilution that had been brought about under the influence of lobbyists, and for Kroes it means pushing the European Cloud.

The European Cloud Strategy was adopted by the Commission last year, aiming to boost European cloud computing by sorting through problems of technical standards, data portability, clear cloud computing contracts and user trust. The policy is mostly economically focused, noting that cloud computing can generate jobs and economic growth while providing opportunities for cost-cutting for small and medium businesses. However, cloud computing concerns issues of data protection as well as copyright issues. As the EU works through its data protection reforms, the fact that 85% of cloud computing services are US based will surely raise concerns not only over how much the EU needs to do to catch up in this market, but also over how effective European privacy rules will be in practice.

With European expert groups meeting on how to approach cloud computing contracts and a European Cloud Partnership mulling commercial strategy, the technical discussions seem removed from the headlines in the media, but the Commission probably does see this as part of the solution (as well as using the crisis to promote its policies). First, the Commission's strongest in the single market, so boosting European internet businesses so European consumers (and others) have an alternative to the US-based cloud is one of the few things they can actually do, so they would be naturally inclined to favour this policy. Second, the best way for Brussels to exert its regulatory power in an area (and one of the few ways it can exert any power) is to have a strong market in that area and then come up with high standards for it, setting the pace in the global marketplace.

In a sense, Kroes makes a good point. It is hard to imagine that the Franco-German push to put transatlantic spying on a "legal footing" will do much, if anything, to reduce actual levels of spying. Improving the market position of the EU would help provide an alternative and allow the EU to stamp its data protection philosophy on to the global economy more effectively - and the political impetus behind such an economic policy is unlikely to fizzle out as quickly as the focus on spying may do.

However, this isn't enough - we should and need to push more forcefully to ensure that security services here and in the US are more politically accountable. It is not enough that what they do is legal: after all, it would hardly solve the problem to provide that legal backing wherever it's currently lacking. Rather we need to have a more critical approach to the demands of security for ever more information and resources, and to have a real debate over how we balance safety and security and civil liberties.

Because while we can never have total security, we can run out of privacy.

Monday 11 November 2013

The European Green Primaries Open

The primaries of the European Greens opened yesterday, and anyone in the EU over 16 and who supports Green values can register and vote in them. The primaries will be open until January 28th.

Four candidates are running: José Bové, Monica Frassoni, Rebecca Harms and Ska Keller. They've already gone through two stages before the open primaries - first they have to be nominated by a national party of the European Greens, and then get the support of at least four member parties. This threshold is lower than the PES's (of 6 member parties), and coupled with the maximum limit of 8 supporting member parties, probably encouraged more candidates to come forward and be selected.

The primaries will select 2 leading candidates for the European Greens who will represent them in the election campaign and in debates with other Europarty leaders.

The Candidates

José Bosé is a French Green MEP who has been in the European Parliament since 2009 and is Vice-Chair of the Agriculture and Rural Development Committee. He got into the Green movement as a farmer in France and has campaigned against nuclear power and GMOs. He is against fracking. Bosé is anti-globalisation and campaigned for a No vote in the French referendum on the Lisbon Treaty. He has criminal convictions for destroying GMO crops and a McDonald's in France.

Monica Frassoni is the current co-president of the European Green party. In the last parliamentary term (2004-9) she was a co-leader of the Greens/EFA group in the European Parliament, but did not retain her seat in the election. She supports a "Green New Deal" and is a European Federalist. There has been some controversy over Frassoni running in the Italian elections on a list that competed with the Italian Greens (the Left Ecology Freedom list), which caused the Young Italian Greens to demand her resignation from the European Greens co-presidency.

Rebecca Harms is a German Green MEP who currently leads the European Green/EFA group in the European Parliament in debates (along with Daniel Cohn-Bendit). Harms was a landscape gardener before becoming a politician, and has also led the Green group in the Lower Saxony state parliament between 1998-2004. She got into the Green movement through the anti-nuclear campaign in Germany (over the infamous nuclear waste dump in Gorleben) and has spoken on energy transition and climate change in the EP. Harms supports further EU integration. As co-chair of the European Parliamentary group, she'll probably top the primary.

Ska Keller is a German Green MEP and the candidate nominated by the youth wing of the European Greens. She grew up behind the Iron Curtain and has worked on cross-border solidarity in her home on the Polish border. Keller is a member of the Committee on International Trade and a substitute on the Committee on Civil Liberties, Justice and Home Affairs. Her specialisms in the EP are migration and EU-Turkey relations, and she is for better protection of refugees.

It's great to see an open primary get off the ground. Probably inspired by the French Socialist presidential primary that engaged people from outside the party, the European Greens will hope to get people interested first in the primary, and then in supporting the member parties come election time. It will be interesting to see how many participate.

If you're interested in voting, you can vote here.

Friday 8 November 2013

Merkel, Automaticity and Commission Independence

"I don't see any automaticity between top candidates and the filling of posts," says Merkel, pouring cold water over the idea that the winning Europarty's candidate will become Commission president. Apparently the Merkel who argued for a directly elected Commission president just a few years ago was merely exhibiting the naivety of youth (merely CDU policy?). The European People's Party may be suffering from Merkel's new-found reluctance to engage in candidate-selection or manifesto-building.

Article 14(1) of the Treaty on European Union (PDF) states that the European Parliament "shall elect the President of the Commission". Digging deeper into the Treaty, the actual mechanism is that the European Council, acting by qualified majority and taking into account the results of the European elections, nominates a candidate, who the European Parliament can elect or reject (Article 17(7)). So Merkel's correct that the European Council isn't required by treaty law to nominate the winning party candidate, but that's not to say that a political convention of nominating the winning candidate cannot - or shouldn't - evolve. Just as it's now accepted in the British system that the Queen appoints the winning party leader Prime Minister (although it may get more complicated if coalitions start becoming a regular feature), it should become accepted practice for the European Council.

I can see why Angela Merkel has difficulties with this. The PES candidate is from across the political isle and would cost her the ability to nominate a friendly CDU/CSU candidate as a Commissioner, losing her power within the Commission and patronage within her own party. Other Member States may start to have difficulties with it as well, either simply because they don't like the winner or because they realise that their own power to nominate Commissioners could be undermined if a coalition is needed to elect the Commission and its president - a coalition that may include Commission portfolios as part of the deal...

It could be argued that this democratisation of the Commission leaves it too dependent and close to the European Parliament. Article 17(3) TEU states:

"In carrying out its responsibilities, the Commission shall be completely independent. Without prejudice to Article 18(2), the members of the Commission shall neither seek nor take instructions from any Government or other institution, body, office or entity. They shall refrain from any action incompatible with their duties or the performance of their tasks."

The nomination of Commissioners (that can be rejected by the Commission President) is the only exception to this independence rule. So the argument is that giving the Parliament such a big role would damage the Commission's independence.

But the Commission is already, by treaty, responsible to the European Parliament and can be voted out of office by it (Article 17(8) TEU). Despite the complicated nomination-and-election procedure, there is clearly a tendency towards political accountability to the Parliament and the electorate. The means are there to make the Commission more democratic, and the opportunity should be seized. The concerns over the "independence" of the Commission are therefore more a defense of the status quo than anything.

The principle that the Commission consists of representative of all (or a representative rotation) of the Union's nationalities is a kind of consociationalism - a way of making sure that all groups feel that they are represented. But why should the nominees to this office be so naturally assumed to have the political colour of the nominating Member State? Surely this ends up replicating the political balance of the Council, rather than the Parliament? It seems odd to stress the dangers to independence of the Commission from a Parliament that can hire and fire it, but not the political influence that comes from basically replicating a snapshot of the political balance of the Council in the Commission.

The Commission will always be sensitive to the political make up of the Council and Parliament, since it has to get their consent to pass legislation. Independence therefore should be seen more strictly, as concerning direct instructions from governments and outside bodies and propriety in office, rather than independence from the Parliament and the electorate. Political accountability matters, and we need more of it in the EU - so come the election the new Parliament should make a stand on the issue of who the European Council nominates. It should be the winning candidate.

Thursday 7 November 2013

Martin Schulz: Political, Left-wing and Federalist

Yesterday Martin Schulz, the President of the European Parliament, was announced to be the Party of European Socialists' candidate for the Commission Presidency.

So who is Martin Schulz? A former binder and book-shop owner, Schulz's only experience in political office outside of the European Parliament was at the local level as a councillor and then mayor of Wuerselen in Germany. He was elected to the European Parliament in 1994, was head of the PES/S&D group between 2004-2012 and has been president of the Parliament since 2012.

This experience is both a weakness and a strength. The current trend for Commission presidents is for them to be selected from the ranks of former prime ministers, and it's easy to see why. Name recognition, executive and diplomatic experience and (for members of the European Council) an understanding of national leaders. While Schulz doesn't have this, he clearly knows the EU institutions inside out and currently leads one. Speaking German, French and English and having lead a multi-national political group in the Parliament for 8 years, he should have a good grasp of EU political issues, how the institutions work (and how to work them) and how to build coalitions at the European level. Compared to a former prime minister who is offered the job, Schulz clearly sees the Commission presidency as the top job in his career and will probably be more politically ambitious in the role.

As a more openly political Commission president, a Commission lead by him would probably be more combative. Schulz sees wants the election to be a battle of ideas. As president of the European Parliament for almost 2 years, he hasn't actually voted on many of the most recent and controversial policies (as it's not the role of the president), but he has been a vocal president (no doubt with an eye on the upcoming campaign). In the last few months he's called for immigration reform (and wants Germany to take more refugees), supported pausing the trade talks with the US over the spying affair, supports a smaller Commission, sees the balance between large and small Member Sates shifting too much towards the larger ones, and is anti-austerity and wants Eurozone reforms (including a Currency Commissioner who chairs the Eurogroup). 

It's an open question how far he can take this combativeness from the Commission - the Commission still needs Council and Parliament approval to pass legislation. However, having an outspoken President could be a positive for small member states who want the Commission to do more to counterbalance the big countries, provided that they feel they can hang on to their Commissioners. Those who want an active Commission or to change the economic direction of Europe could see him as the man to pin their political hopes on, but Schulz will need to build broad support across Europe to get the votes he needs, and it might not be the biggest electorate in the world. Though with Eurosceptic parties established as the protest vote and rising in popularity, the PES probably can no longer simply rely on anti-incumbency sentiment to boost its vote. A more coherent anti-austerity vision may actually be the better than national parties simply going their own way. Politically and rhetorically, Schulz is to the left of several of the PES's member parties, though his main Eurozone and anti-austerity ideas are not too far outside the mainstream of the pro-integration centre-left.

How much Schulz's opinions will make it into the PES election manifesto remains to be seen, but Schulz has used the EP presidency to set out his leadership style: political, left-wing and federalist on the Eurozone and not afraid to annoy the bigger Member States. Whatever your political opinion, you can't accuse him of being another Barroso. Obviously this makes him an unlikely choice as the European Council's pick for the Commission, which makes electoral success all the more important for Schulz. He not only needs the PES/S&D to emerge as the winners of the election, but he has to be a visible and successful part of the campaign so that he can't be sidelined by the European Council. As I said yesterday, the lack of an open primary contest makes this more difficult.

Wednesday 6 November 2013

The Primary will not be Televised

Martin Schulz, president of the European Parliament, has become the candidate designate of the Party of European Socialists for the Commission Presidency. You didn't have to work for the NSA to know that Schulz wanted to run - it's been widely known for over a year that he has been the front runner in the centre-left camp - but the fact that his candidacy has pretty much been confirmed today was a surprise.

It certainly surprised me that the PES announced their candidate today. A few weeks ago I'd written about the PES primary process, so I thought that the nominees would be announced today, with a primary campaign being waged until the end of January. It turns out that out of all the names touted for the role - Helle Thorning Schmidt, Pascal Lamy, Margot Wallstroem, etc. - only one was nominated. So, with 19 member parties of the PES supporting him (out of 32), Martin Schulz has been elected PES candidate unopposed.

Bad for the PES, bad for Schulz

I'm sure Schulz is glad to have it in the bag, but the lack of a proper primary is a bad result for both Schulz and the PES. The primary race was going to be a way of connecting voters (or at least party members) with the European elections, which would boost the profile of the nominees and eventual candidate, make the elections more European (both within the national parties and in the media for the elections) and help energise and inform the grassroots for the election campaign. These factors would have supported and re-enforced each other. However, without a proper campaign, member parties are not so attached to their candidate and Schulz has lost out on the publicity that he will need (as a candidate who was never a prime minister and so not very well known outside the Brussels bubble). The PES have also heavily diluted out on their chance to boast about how democratic they are in comparison to the European People's Party's more intergovernmental horse-trading approach.

It is probably a sign of Schulz's success in his campaign for the nomination that he was the only candidate in the end. He will now spend the primary time touring member parties to talk to them and raise his profile. But it is a loss not to have a contest.


The good news is that the PES have a candidate! In a way this is a bit ridiculous to have something so basic as running a candidate to be a plus for a political party, but the PES failed to run one last year. Having a candidate will be a plus if placed within the campaign properly. Schulz is right to want a left-right debate in the elections, and it's the PES's best chance to win more seats. Especially within the Eurozone, the PES need to present themselves as the political group with policy alternatives, and a working alliance (demonstrated by having candidates for executive office) that can change things. The centre-left have done very poorly in polls nationally, and with the prospect of a strong Eurosceptic showing, simply waiting for voters to come to them as the party of opposition in most Member States will not work. (Whether Schulz is the best placed for this I'll leave til tomorrow).

The Merkel Factor

With Merkel re-elected, an PES win would complicate things. Schulz, as a German, would be taking the German slot in the Commission and despite the prize position, Merkel would probably be uncomfortable with loosing the power to pick a more CDU/EPP friendly person for the post. In fact, she has already spoken out against the winning Europarty candidate automatically becoming the Commission president. At the same time, the issue of Germany's Commissioner job has not come up in coalition talks between the CDU/CSU and Schulz's SPD (and Schulz has been involved in these talks). Having a CDU-SPD government should make the idea more realistic at the same time.