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...

EU Budget Deal: Progress, from a Psychological point of View?

The EU institutions (Commission, Council and Parliament) reached a deal on the Multi-annual Financial Framework (MFF) that plans EU budget spending for 2014-2020. The MFF is not absolutely final since it has to pass a Parliamentary vote in September, but the deal does mark the end of the parliamentary revolt against the deal cut by national leaders. Politically, it's been a very charged budget, with arguments for cuts in a time of austerity, the European Parliament flexing its muscles over the budget, and the resignation of the parliamentary rapporteur on the MFF after the Irish Presidency mistakenly announced a deal last week.


So what's in the deal?

The cuts agreed by the Council remain: for the first time, the EU Budget will face a real terms cut of €85 billion, reducing the budget over the next 7 years to €960 billion. The focus on cuts meant that the parts of the budget prized by national governments were protected at the expense of more discretionary spending. The deal softens this by:

- Permitting the front loading of up to €2,543 million in 2014-15 for youth employment, research and Erasmus and apprenticeships and pro-SME policies, to be split as:
            - €2,143 million for youth unemployment;
            - €200 million for Horizon 2020, the EU Framework Programme for Research and Innovation;
            - €150 million for Erasmus; and
            - €50 million for COSME, a programme for the competitiveness of SMEs;
- Allowing for voluntary contributions by Member States by up to €1 billion to the €2.5 billion pot for aid for the most deprived;
- Unspent money will in an annual budget will be retained by the EU for spending on other projects, rather than being returned to the Member States;

- There is a concession to the idea of the MFF being subject to review and revision, but it seems very vague.

Is this, in the words of EP President Martin Schulz, progress "from a psychological point of view"?

The deal has shown that the EP has made some progress in shifting the MFF back towards some spending that is not the preserve of a national carve-up. There are national vetoes behind agricultural spending, cohesion spending and rebates, but no single Member State has a defining interest in EU projects that tackle unemployment, research or competitiveness. Can you imagine a British Prime Minister saying that they've cut some of the rebate in order to protect spending on unemployment programmes? The EP has demonstrated some value in trying to balance the budget more in the direction of spending for programmes that all of Europe benefits from, but that don't deliver specific national receipts of money.

That said, the concessions aren't a major victory for the Parliament - particularly on the aid for the most deprived and on MFF review, where the concessions appear so vague and woolly as to be practically meaningless. However, it is notable that a right-leaning European Parliament has not held out for reducing or eliminating the cuts to the EU budget. Despite the unprecedented level of power over the budget, the Parliament hasn't been as pushy as it might have been. From my point of view on the left, the deal is a defeat: it doesn't really deliver that much in terms of research and employment projects, and it buys into the idea of austerity despite the EU Budget not being in deficit. Cutting from common programmes to symbolically satisfy austerity is daft, and it undercuts further the ability of common European spending to offset, at least to some extent, the economic damage caused by national austerity.

Still, the fact that a right-wing EP largely endorsed the budget direction set by the European People's Party-dominated Council is not surprising, though it's another sign that the Parliament does act along ideological and party lines, which is important for the upcoming elections next year. Party and policy do matter in the EP.


Party Positions

The EP still has to vote in the MFF in September if the Framework is to be passed, so the positions of the European political groups matter. What are they?

Supporters:

The European People's Party (EPP; centre-right) probably support the deal, though they do not have a specific press release at the time of writing. Since they are the largest group in the Parliament and dominate the Council and national governments, they will probably support the deal. EPP parliamentary leader Joseph Daul supports current Eurozone/EU economic policy, but also insists on flexibility and a review clause in the MFF. I think EPP support can be assumed.

The European Conservatives and Reformists group (ECR; centre-right, but further right than the EPP), have welcomed the deal, and have complained that the European Parliament tried to obstruct it. Since they have got the cut in the budget they wanted, and the cut is a big win for David Cameron, they're not likely to vote against.

Qualified Supporters:

The Alliance of Liberals and Democrats (ALDE; centrist, and economically centre-right) have welcomed the deal, but want to secure some of the details before giving support, such as on the legal basis of the MFF (to secure the Parliament's power), on money for the Digital Agenda and on the review clause.

The Socialists and Democrats group (S&D; centre-left) have welcomed the deal as an improvement for youth unemployment schemes and Erasmus, but will discuss their position next week.

Though only qualified support has been given, I imagine that now that the EP has finished its negotiations as a whole and that there have been some concessions, these groups will largely support the MFF.

Opposition:

The European Greens (Green) have condemned the deal as only consisting of cosmetic changes when the overall budget is still being cut.

United Left (GUE-NGL; left-wing) also condemned the cuts to the budget, and hit out against EP President Schulz for only seeking agreement with the two biggest political groups in the Parliament (EPP and S&D), keeping the rest of the groups in the dark.


While these aren't firm voting stances by the political groups, it looks like there will probably be a majority for the MFF, failing any last minute revivals of Parliament-wide opposition.

The Irish Presidency Work Programme

Ireland took over the presidency of the Council of the European Union at the start of the year, and last Wednesday Taoiseach Enda Kenny, leader of the Fine Gael-Labour (EPP-PES) coalition government, outlined the priorities of the presidency to the European Parliament. Sustainability, jobs and growth are the central mantra of the presidency, though the familar buzzwords didn't stop Kenny from attempting rhetorical flight in the Strasbourg chamber, enthusing about the European family.

In his speech to the European Parliament, Kenny outlined a large work programme, from CAP and CFP reform to collective copyright management and data protection. The Data Protection package is one of the biggest legislative changes and a flagship policy of the Commission. There's been worries that the law won't be passed before the parliament ends, causing the draft to lapse and the work to go to waste, so there will have to be a big push from the presidency to make progress here.

Interestingly, while he stressed the need to pass the 2-Pack of legislation (which I’ve written about here) and the importance of the European Semester, Kenny also expressed a willingness to engage with the Parliament on the democratic deficit – let’s see if any constructive measures make it to the statute books.

A major topic was, of course, breaking the link between sovereigns and banking debt, with the banking union and progress on the implementation of the Single Supervisory Mechanism. On trade, Kenny looked forward to the authorisation and opening of negotiations with the US, along with negotiations with Japan, Canada and ASEAN.

Finally, Kenny couldn't help plugging Ireland's big tourism campaign - The Gathering!

 

You can see a list of the measures behind these priorities here.

Council Transparency and VoteWatch

BY CC DrabikPany.

Last week I was at the (re)launch of the VoteWatch website, which now covers Council votes as well as European Parliament votes. The Council votes on display are put together using information already publically available, though it’s currently not machine readable so the information needs to be collected manually.

A lot of the comment so far has focused on the rates of voting no in the Council (and that the UK and Germany seem to vote no the most, while France and Lithuania always voted with the majority). There are some debates over what this means (including that it’s more indicative of being able to play the political game beforehand if you can agree to the text when it comes to the vote), but I agree with Ronny that the rates of voting no are very small. In fact, only in 35% of cases where there is qualified majority voting and not unanimity, were there any dissenting votes (90% of votes are run on the QMV procedure - you can read the VoteWatch report here). So while I might be surprised that Ireland is in agreement with Italy a lot of the time, and in 100% agreement with Germany in the area of the environment, it’s only to a slight degree, since (near) unanimous agreement is the rule rather than the exception.

The panel discussion covered some interesting questions, such as the transparency of the political negotiations in the lead up to the vote and the transparency of amendments. It turns out that there are several shadow or practice votes in the Council groups working on the legislation, which generally see closer results than the final vote, and that amendments are proposed in many ways – formally submitted in writing, submitted in an informal style, and introduced orally, which may make it difficult to record in the same way the European Parliament records its amendments. (It was also noted that amendments are whittled down in number and merged in negotiation before being put to the vote. However, the Council is nowhere near this level of transparency yet). It could also be argued that with an array of groups working on legislation and several shadow votes, it would be difficult to keep track of everything and to judge its influence. After all, it seems to be a question of how negotiations should be led, and if these shadow votes are aids to negotiation, perhaps they should continue to be held in secret, especially since their significance individually is hard to measure.

A lot of the debate centred on whether the greater transparency of the Council votes via VoteWatch – and it is a great blow for transparency of the EU that the painstaking work of bringing these votes together in a readable way will be carried out finally – will affect how the Council operates. Will it withdraw more into the background? Will Member States change their voting habits (more likely to vote against in some cases, less likely to vote against where popular measures, such as lower roaming charges, are at stake?)?

The tension at the heart of the Council when it comes to transparency is diplomacy versus democracy. While it’s true that negotiations and diplomacy are a part of parliamentary life, when it comes to the Council it’s of a different class altogether. The justification against transparency is that there are key negotiations at stake and that the Member States should be free to pursue them. There should be some space for confidential negotiations, like in any legislative body, but there’s the rub: the Council is operating as a legislative body. Where the Council acts like an upper house of a parliament, we should expect those levels of transparency and clarity of procedure.

There won’t be a groundswell of public concern for this, and we should focus on pushing the boundaries of transparency under the current structure, but where the structure of the Council presents arguments that something should be kept secret for negotiation’s sake, we should be willing to ask: why should it be structured this way? Does it need to be secret at so many stages? Aren’t you legislating for us?

Deal on the European Protection Order Directive

The Council and Parliament have reached a deal on the European Protection Order Directive, originally proposed by Member States, ensuring that it will sail through the first and second legislative readings. The EPOD is aimed at protecting people subject to protection orders under their national criminal law, while allowing them to exercise their free movement rights (draft legislation PDF here). The Directive would apply to protection orders made by national authorities under criminal law (there's a separate measure dealing with civil law), which impose restrictions on persons that pose a risk to another such as:

"(a) a prohibition from entering certain localities, places or defined areas where the protected person resides or that he visits;

(b) a prohibition or regulation of contact, in any form, with the protected person, including by phone, electronic or ordinary mail, fax or any other means; or

(c) a prohibition or regulation on approaching the protected person closer than a prescribed
distance." [Article 5]

Protection orders would be issued normally by Member States under their national law, but if the person they are meant to protect resides in another Member State or wants to move to another Member State, they can request a EPO to extend the protection in the original national protection order so they are covered in their host Member State. So the proposed EPOD works on a modified mutual recognition model - the national measures made in one Member State are recognised and enforced in another Member State, though in this case a request for a European version would need to be made, and then the executing Member State would transpose it via a national measure. The Directive would only apply to victims/potential victims of crime, and not witnesses, so it isn't part of some European witness protection scheme.

From a legal perspective, this modified route to mutual recognition is quite interesting, and shows some movement on the use of mutual recognition measures by allowing for the difference in Member State's legal systems (a mix of criminal, civil and administrative measures). I haven't taken a close look at the jurisdiction/competence issues around the mini-Member State directives that will be EPOs, however. Hopefully the Parliament hasn't missed anything it might later regret...

Lovers' Tiff?

On the Council of the European Union's website a document called "Relations with the European Parliament (July 2011)" only has an image of a shredded piece of paper next to it.

Hopefully given the positive vision of the Polish Presidency, Warsaw can relight the spark of passion and return Brussels to its natural state of a lovers' paradise. ;)

Division of Labour: Subsidiarity and National Parliaments

Subsidiarity. If you're still reading, congratulations; your courage in the face of EU jargon is impressive.

Subsidiarity is the principle that decisions should be taken at the closest possible level to the public, where that decision can be meaningfully taken. It's a principle that everyone will find attractive and agree with - how could you possibly be against? I support the idea, but when Nosemonkey asserted that giving subsidiarity true meaning and force would improve the EU and its legitimacy during the first Bloggingportal event panel, my first thought was a bit sceptical:

"Subsidiarity is probably one of the most tricky #EU legal concepts - how can you define it?"

Jon Worth replied:

"@EuropeanCitizen Subsidiarity is a conveninent cover for doing what you want to do, at whatever level #EU #EUuk - or am I too sceptical?"

Keeping decision making power at the lowest level possible where it would be effective is clearly a political ideal, and how to impliment it in practice causes a lot of difficulty. Since I study law, my mind immediately jumped to the European Court of Justice - after all, it is the institution which interprets the Treaties and which would rule whether or not the EU was acting within its competence or not. To my knowledge, the ECJ has not once found a breach of subsidiarity, and I am not aware of there being a test for subsidiarity, simply because it is so political it defies easy judicial interpretation.

I don't want to be misquoted here that subsidiarity is meaningless and the ECJ does nothing to limit EU power, because there are other, better, legal tools for doing so. The other 2 legal principles are those of conferral (the EU only has powers given to it by Treaty) and proportionality (EU actions must only so as far as is necessary to achieve their aims). (See Article 5 TEU). The Tobacco Advertising cases (I & II) are good examples of these principles being used (though arguably proportionality should have been more thorough), and the key point was that the internal market concerns cross-border trade, so the EU can only rely on those law-making powers to create laws that ease cross-border trade, not for health or for goods that would be fixed and not cross borders. These principles are either straight-forward or there is good judicial experience in the Member States to draw on to inform how they should be used. But when it comes to subsidiarity, what does it add to the judicial decision-making, and how could it be applied?

Subsidiarity is political, so it would be best enforced through political channels. The Lisbon Treaty gave the national Parliaments the ability to force the Commission to reconsider proposals if enough of them (at least 9) considered the proposal to breach the principle of subsidiarity. (See Protocol 2 of the Treaties). The time limit of 8 weeks is too short for it to be very effective, however, given the amount of co-ordination and co-operation that needs to take place among national parliaments. It does give them a useful tool which could be used effectively when the national parliaments organise themselves (which will take time and depend on their political will), but the time limits need to be extended. Open Europe has made this point, and it's a good one.

At the moment the Commission does a "check" on its proposals - do they conform with the Charter of Fundamental Rights, do they conform with the principle of subsidiarity, etc. The ECJ is likely to take political decisions on subsidiarity as being within the legislative discretion of the EP and Council and focus on other legal questions, but challenges from the national parliaments may force the ECJ to take it into account more (though it will be a long time, since it will more likely decide on procedural issues and on other legal grounds rather than face the difficult and politicised task of defining subsidiarity). Effective political channels are the best way of making subsidiarity more meaningful.

A last point on the role of national parliaments in the EU. At the Bloggingportal event, Mat Persson of Open Europe remarked that their role should be expanded beyond subsidiarity checks. To me, and I'm open to correction, this means national parliaments having a legislative role in place of or parallel to the EP. I'm completely against this. It would be good for national parliaments, through their committees to keep tabs on and control the votes of the national ministers in the Council, but becoming the "second chamber" of the EU would be damaging to transparency and accountability. Though the EP is not loved and turn-out is falling, it does, at least, provide an open, full-time forum for debates on EU legislation and scrutinising the executive.

National parliaments, on the other hand, tend to have little time of EU affairs, and their effectiveness varies from country to country on the powers they do have regarding the EU. Separate debates in 27 (or more) arenas in different languages would mean that the debates will become harder for the public to follow. Inter-parliamentary deals (alliances and deals made in now smokeless rooms) would be even more decisive for the legislative process. Though the EP has a low turnout and political organisation on a continental scale is more difficult, at least it provides the possibility of influencing the way EU legislation is dealt with and of expressing opinions more directly to the EU institutions about what they should be doing. Having the national parliaments take over would damage the transparency and accountability the EP provides (or potentially provides), and could even reduce the EU's legitimacy.

Those Pesky Parliamentarians

Tsk. Those parliamentarians, eh? They clearly don't know how politics works; you don't have to pay any attention to the projects you set up or even actually pay for them, you just announce them to great communique-filled media fanfair. If they don't work, well, sure, that's the Commission's fault, isn't it? Can't they just sit back and enjoy their gravy train...?

So the budget talks have failed. On one hand, it's not the end of the world: the 1/12 rule means that the previous year's budget is carried over on a monthly basis until something is agreed. There's even a mechanism allowing the monthly budget to be added to, in the case of monthly fluctuations. On the other hand, it means that the new projects launched by the EU - not just the Lisbon innovations, but the initiatives of the European Council - are not really being taken care of. Money will be found, but budget by default is not a particularly satisfying outcome.

What were the issues? The 2 major issues were the EP's role during the Multi-annual Framework (the multi-annual budget of the EU), and the existence and procedure for a flexibility reallocation mechanism - essentially 0.03% of the EU's GNI that can be tapped into in the case of unforseen spending needs. As the EU cannot borrow money and must stick to its budget, this has been a useful tool in the past for covering crisis expenditure.

The budget increase of 2.91%, agreed on by the Member States, was accepted by the EP (which wanted a 6% increase), in return for a place at the Multi-annual Framework negotiating table. This would entail a political agreement - an interinstitutional agreement to clarify the procedure which is ambigous in the Treaties as to the EP's role. The ministers claimed that they did not have the mandate to negotiate such an agreement, to which Anne Jensen MEP expressed surprise at the press conference, pointing out that the Member States were aware of the issues the EP would raise in advance. On the flexibility matter, this ran into trouble when the UK pressed for the money under this mechanism to be released after a decision reached by a unanimous Council vote (rather than the current QMV).

"Failure to agree on the reallocation flexibility endangers the financing of programmes such as ITER, an international project to design and build an experimental fusion reactor in France, a source explained.

Another payment which now appears to be in jeopardy is a commitment to pay 190 million euros to banana-producing countries following a decision to discontinue preferential import tariffs. Similarly, 300 million euros of compensation to Bulgaria for having closed down four of its nuclear reactors also hangs in the balance." [EurActiv]

So the EP may have wanted more say, but it appears that some Member States attempted their own power grab as well.

The Parliament's demands to be at the table during the Multi-annual Framework talks included a demanded commitment to look at the issue of the EU's own resources. This is being reported as meaning an EU tax - which is the most high profile and obvious option - but that in itself seems little reason to block agreement. Whatever you think of the idea of an EU tax (and I've argued before that it's an option that has points to be considered), unanimous support is needed in the Council, which is unlikely to occur, so committing to considering the broad issue of own resources (shifting some of the budgetary burden from national budgets to some economic activity) isn't really that dangerous.

So Parliament wanted an increase in the budget to help pay for initiatives the EU started (including ones started by the European Council), and were willing to settle for the number member states agreed on; wanted a place at the table when the multi-annual budget is being discussed (since they are equal with the Council with regard to the budget); and a continuation of the flexibility mechanism.

Sound unreasonable?

PES September Seminar: Primaries

The PES Primary Campaign activists have been invited to the September seminar of the PES in Brussels. The seminar is the beginnning of the internal PES debate on the Presidental candidate selection process. It's great to see this worthwhile campaign not only getting recognition from the party, but also being invited into discussions on how to shape the election process.

There are still many important questions on how a primary would be carried out:

"We will shortly provide details for supporters to give their ideas on what Desmond and José should present to the seminar in Brussels. We want to start a debate amongst PES activists and supporters on how they think the selection of our candidate should be organised. How should candidates be nominated? How should they be selected? Who should get to vote in the primaries? How should those votes be counted? Should the votes be weighted like the QMV votes are weighted in the European Council?"

Personally, I think that the voting should be internal to the party, to ensure that the PES and it's policies have a greater voice in the election. A criticism of the EP from Simon Hix, is that while the EP actually represents the average EU voter quite well, representing the average voter isn't really the point of the parliament. In the same way, the PES candidate should be selected by PES members, so that party membership has value (what better way to encourage participation in the Europarties than to give membership a real meaning by opening up opportunities for participation?), and that the candidate represents a truly "PES face" in the election. As for the internal electoral system, that's a more complicated question.

Thinking aloud, the candidate should be selected on the vote of the party members (without special weight attached to MPs, Councillors, MEPs), but I think that votes should be weighted to increase the say of the member parties of smaller member states. Otherwise it could lead to the debate and participation of the smaller states being neglected. On the other hand, the weighting needs to be carefully balanced, so that the majority needed isn't so great that only bland "all things to all people" candidiates are chosen. When it comes to nominations, I think that several methods could be used: a certain number of MEPs, MPs and members as supporters could be required to nominate someone for the primaries (perhaps the "voting value" of MEPs, MPs and members could be "translatable" at the nomination stage (e.g. 1 MEP = 15 MPs)).


Finally, an interesting question is how this would impact on the border make-up of the Commission. Since a coalition is likely to almost always be needed to elect the Commission President, what form will coalition politics at the European level take? Would PES coalition partners be satisfied with commitments to certain legislative proposals in the Commission's manifesto - or will coalition partners hold out for seats around the Commission table itself? Since the EP has to approve the whole Commission, the EP has the power to force the issue if the member states remain wedded to picking their own political favourites for the Commission; while there has to be a Commissioner member from every member state, it is not a requirement that each member be from the governing party of their member state. Even at a basic level we could ask, if there's an EPP majority in the Council, but a PES-led coalition majority in the EP and PES President of the Commission, then why should the Commission be conservative by majority? The Commission has votes on proposals it puts before the Council and EP, so why should a PES (or EPP) President be outvoted by an EPP (or PES) majority in the Commission? Afterall, the Commission is accountable as a body to the EP.

It's a question for the future, since we don't even have primaries yet. But it's an important issue, so I think we should keep it in mind. As the Commission becomes more accountable to the European Parliament, and its membership a question at the European elections, the rationale for allowing its membership to almost automatically mirror the Council's will be increasingly undermined.

Taxing Europe

There's been some debate on introducing some form of European tax over the last few days. Prompted by EU budget commissioner Janusz Lewandowski's interview with the Financial Times Deutschland that "the feelings on the idea of an EU tax had changed in national capitals", the debate seems to have been prematurely started by the Commission. (See the Commissioner's defence of the idea; and the supporting member states' vague arguments). While there are suggestions about a financial tax or environmental, CO2-based, tax, there are no firm, detailed proposals yet, and therefore the Commission seems to be left without a clear basis on which to argue for a tax, simply because it doesn't really know what it might propose come September.

The Commission is going about this the wrong way.

Jon Worth has written on how more direct taxation could be better than the current situation, where most of the budget consists of national contributions, by introducing transparency and accountability into how the EU is funded. It is obvious that the value of the tax depends on the tax and the goals it serves. Along with the sensitivity of the tax issue when it comes to matters of national sovereignty, we can say straight away that any tax proposal needs:

1. To be well thought out and planned. Arguing just that a tax might be a good idea is, at best, a naive way of discussing the issue. Without a clear tax proposal, it will come across simply as a desire for taxation powers for the sake of them, and it leaves the debate so open-ended and vague, that it is hardly the best way to have a good, rational, debate on the pros and cons of a policy. And that's without the poor reception of European political debate in the media.

2. To have a principle and goal behind it. The examples of financial transaction tax and CO2 tax are good, since they have some principle and goal to them, and they show where the tax burden will fall. In this way, we can talk about the pros and cons, the impact on society and their goals for society. Vital to any EU tax proposal is the element of added value. In other words, the EU needs to show that it can add value through the tax in question. Jon Worth has highlighted that aviation fuel tax is a good example, as planes can pick (within limits) where they refuel, and having an EU-wide tax would make it more effective. Any EU tax needs to be shown to be principled, goal-orientated, and one where the EU can add value because otherwise there is little reason to give the EU these powers. Since tax proposals need unanimity (and probably also need to pass an Irish referendum), people need to be convinced that the issue is at heart a European one, before they decide that it's better off being done by the EU rather than their member state.

3. To have a clear place within the EU structure. Does it add to or (partially) replace the national contributions of member states? Connected with point 2, the proposal should show where and how hard the burden of the tax will fall. This would provide certainty of the effect, and open up another side to the debate. At the moment, the budget is largely decided on by intergovernmental negotiations and sizing up the member states' economies in relation to each other. More direct taxes fall more transparently on certain types of activity and have a social and economic rationale that can be more easily open to debate and control. It could also lead to restructuring the tax system - member states could reduce taxes that fall more directly on citizens (though the degree would be tiny, considering the size of the EU budget), and CO2/financial taxes would shift it onto more specific groups for a more specific rationale.

In other words, the utility of direct taxes versus contributions needs to be highlighted and argued. If it can be argued and shown by supporters that a direct tax would lighten the "general burden" and instead have social utility, as well as making how we pay for the EU more transparent, the supporters would be on firmer ground. At the moment certain member states resent having to contribute a certain amount, and having a clear tax on (a) certain type(s) of activity would be a more rational an just way of distributing the burden. Also, an argument that making the EU responsible for more of its resources would make it more responsible with its spending (it depends on the structure, of course, but if spending and taxing is based more on principle and social utility determined through political debate rather than intergovernmental horse-trading, then it will arguably have to think and debate more openly on its priorities. Of course, intergovernmentalism in the budget is here to stay for a long time no matter what).

4. Any tax proposal has to be linked with proposals on the institutional mechanisms. Just as people wouldn't want the EU to tax if there wasn't an added European value to the exercise, so they wouldn't want the EU to have taxation powers unless there were clear limits on the areas and amount of taxation, as well as measures ensuring more democratic control over it. This would mean that the tax would have to be open to constant review and oversight by the European Parliament (with real control and influence on the subject, and there would need to be clear information on how much is raised where, from whom, and in what context [i.e. X from Austria, from airlines, because there where Y flights/Y% of flights from there]. Also, the Council would need a strong say and oversight role too. Above all, the taxation power given to the EU, if any, needs to be limited to the policy pursued.

Obviously this would mean that the debate would be very complex, but in my view the key point is that any taxation proposal needs to win support outside of national governments (particularly in the Irish, and perhaps UK cases, where referendums would be ratification methods). This can only be done if it can be shown that the issue is one that can be dealt with better at a European level and that the power will be limited. The debate we're having at the moment, while showing some of these elements, is nowhere near coherent or organised enough for there to be a rational, relevant debate.

The wider argument is that the internal market means that there are activities that have social and economic consequences, and it should be possible to make decisions on what is economically and socially important to us. Taxation policy, even if limited in scope, is a way of shaping the way we live. It is a tough issue, and a complicated and sensitive issue, so if we're going to debate it, let's do it right.

Belgium Assumes the Council Presidency

Today Belgium takes over the rotating Council Presidency from Spain. The rotating presidency chairs the Council committees in the different policy areas (justice and home affairs, economy and finance, etc.) apart from the foreign affairs committee, which is chaired by the High Representative for CFSP, Baroness Ashton. What will make this presidency interesting is the fact that there isn't yet a federal government in Belgium since last month's elections. In the elections the Flemish nationalists came first, and the French speaking Socialists second. Given that they're not exactly ideological allies, it will probably take several months before they can form a coalition. Like the Czech presidency, the Belgian presidency will have a caretaker government run the presidency.

It will be interesting to see how much the European Council President, Van Rompuy (a former Belgian Prime Minister), will fill the void left by the stalled federal government. The President's Belgian roots might make it easier for the caretaker government to let this be "Van Rompuy's Presidency". Whether this could lead to a more permanent empowerment of the E.Council presidency is harder to say - even a country as pro-integration as Belgium will want to preserve the role of the rotating presidency to a large degree, and Poland has big plans for its presidency in 2011, so it's likely that any inroads that Van Rompuy makes would be quickly recaptured by an assertive member state government with a vision.

The website of the Belgian presidency is here.

The Email Incident of 7th December 2007

The Activity Report of the Joint Supervisory Body of Eurojust for the year 2009 (PDF) was sent to the Council last week. I was taking a look through it to see if there was anything on preparations on data protection, particularly on anything SWIFT-related towards the end of 2009. The report does mention co-operation between Europol and Eurojust, and that the Lisbon Treaty will impact on data protection - however, the analysis of the impact of data protection provisions in the treaties will be in next year's report.

A section heading did jump out at me, though - "Email Incident of 7th December 2007":

"...a disruption of the e-mail service at Eurojust had taken place on 7 December 2007, as a side effect of an attempt to solve a problem caused by an accident in the use of the system the previous day. This incident had been investigated by the JSB in 2008 and a report presented to Eurojust. Eurojust’s final response to the JSB’s evaluation... was presented by the Acting Administrative Director of Eurojust, Mr Jacques Vos, at the meeting in February 2009. He outlined the measures that were being taken by Eurojust on the basis of the JSB’s recommendations to restore the trust of users in the integrity and inviolability of the e-mail system. Eurojust admitted that mistakes in judgement had been made at the time and recognised the considerable operational consequences that this incident created, but it was hoped to put this issue aside, to learn from it, to follow the JSB’s recommendations and to be better prepared to deal with future incidents."

What happened? Was it just a downed system? A hacker? Was information lost?

I looked up the previous year's report to see if it could shed more light on what exactly happened and what recommendations were made. The 2008 report (PDF) stated:

"Upon the request of the President of Eurojust, an ‘on the spot’ check was carried out at Eurojust on 17 March... The members of staff involved in this incident were interviewed and the log files were inspected. Subsequently, a report was submitted to the College of Eurojust on 24 April making several recommendations."

The report? "Confidential document."

It sounds like a security matter rather than a simple system failure, though I can't say for sure. I wonder how much information was lost, and how sensitive it was?

SWIFT II: European Data Protection Supervisor's Report to Council

The European Data Protection Supervisor yesterday sent a report (PDF) on the SWIFT II agreement (or TFTP agreement) to the Council. Given the criticism of the agreement from Parliament (though there is recent news of some agreed compromise), the EDPS report is interesting.

For example, at paragraph 5, the EDPS notes that the proposal does not see Article 16 TFEU (on data protection) as a legal basis, though the agreement and proposal note the data protection concerns. The report tersely notes: "...the EDPS reiterates that this agreement not only relates to the exchange of personal data, but also to the protection of these data. Article 16 TFEU is therefore not less relevant as legal basis than Articles 82 and 87 TFEU relating to law enforcement cooperation that have been chosen as legal bases."

The scope for future agreements on data protection and for a general agreement between the US and EU on data protection is discussed as well, particularly in paragraph 8. The EDPS recommends that the current proposal (agreement) be amended so that if there's a general agreement on data protection, it will apply - or at least get an agreement that it would apply to TFTP circumstances.

The EDPS takes a look at the question of privacy rights and the security question through explicitly rights-based language (Para 15):

"15. Against this background, the Commission proposal highlights the usefulness of the TFTP Programme, as put forward by the US Treasury and by the eminent person's reports. However, the condition laid down by Article 8 ECHR in order to justify interference with private life is "necessity" rather than "usefulness"."

The report goes on to flag up the same concerns that the agreement's critics in Parliament have highlighted: the retention of data for up to 5 years regardless of whether it's been extracted or if there's a "proved link with a specific investigation or prosecution.", and bulk transfers are the big concerns. In fact, paragraph 20 urges for a transitional approach to bulk data if it is to be used at all:

"...EDPS believes that solutions should be found to ensure that bulk transfers are replaced with mechanisms allowing financial transaction data to be filtered in the EU, and ensuring that only relevant and necessary data are sent to US Authorities. If these solutions could not be found immediately, then the Agreement should in any event strictly define a short transitional period after which bulk transfers are no longer allowed."

Also worth higlighting is the whithering criticism for handing the judicial oversight role to Europol:

"25. Moreover, Europol has specific interests in the exchange of personal data, on the basis of the proposed agreement. Article 10 of the proposal gives Europol the power to request for relevant information obtained through the TFTP, if it has a reason to believe that a person or an entity has a nexus to terrorism. It is hard to reconcile this power of Europol, which may be important for the fulfilment of Europol's task and which requires good relations with the US Treasury, with the task of Europol to ensure independent oversight.

26. Furthermore, the EDPS wonders to which extent the current legal framework entrusts Europol - especially without changing its legal basis pursuant to the ordinary procedure established by the Lisbon Treaty - with the tasks and powers to make an administrative request coming from a third country "binding" (Article 4.5) on a private company, which will thus become "authorized and required" to provide data to that third country. In this context it is useful to note that it is under the present state of EU law not evident whether a decision of Europol vis-à-vis a private company would be subject to judicial control by the European Court of Justice."

The report also criticises some aspects of the personal rights under the agreement when it comes to the correction/deletion of information. (As it's already turning into a long post, I'll let you read it [paragraphs 28-33], but it raises questions over the ability of people to exercise these rights). The EDPS also urges the inclusion of a sunset clause in the agreement to help encourage sustained work towards improving data protection under its provisions.

Overall the report echoes the concerns of the critical EP voices, while welcoming the changes make since SWIFT I. How much of an impact will it have in the Council? It's hard to tell how wedded the Member States are to the agreement, though it's interesting to note that the report mentions that the German Constitutional Court (Bundesverfassungsgericht) considers the retention of data over 6 months to be excessive, so it is possible that some Member States could share worries over the diminution of privacy rights of their citizens. What will be the extent of any agreed amendments be? Hopefully these clear calls will have a positive impact.

A Week as a Romanian S&D MEP

From 10th-17th April I was a Romanian MEP for the S&D group in the Model European Union 2010 event in Strasbourg, and it was definitely a memorable week.** MEU did an amazing job trying to recreate the whole experience of the EU political system: people played the roles of MEPs, Council ministers, interpreters, lobbyists and journalists. This post will be part report, and part MEP's diary for the week, but considering the number of roles and work and experiences that the event took in, its inevitably a snapshot from a (sometimes tired) MEP arguing for a few amendments in a sea of activity, as journalists filmed, took photos and published daily newspapers, interpreters strove to make sense of what MEPs were saying, lobbyists tried to persuade creatively (I even saw some €500 notes exchanging hands!), Council ministers maneuvered, and MEPs fought to make themselves and their opinions heard. And all in the grand setting of the Strasbourg Parliament building itself.

The two topics we had to deal with were a GMO Regulation proposal and the Returns directive proposal. Both went through the co-decision (or "ordinary legislative procedure" in today's Lisbon-slang), though due to time constraints (a phrase which became notorious over the course of the week), there was no conciliation committee at the end if the Council and Parliament failed to agree after 2 readings. Parliament started off with the GMO proposal, made amendments, then switched to the Returns directive to amend it and the Council's amendments, then finally switched back to the GMO proposal, as amended by the Council for the final vote to pass into law. (For the Council it was the same, just with the topics reversed). Before the simulation started, we had prepared for our roles - in the case of EP parties, we worked on common position papers - and in Strasbourg we had parliamentary procedure and debating workshops.

So this is my week as "S&D Romania".



**(In fact, two weeks: not only was there the event itself, but it happened to take place during perhaps the most news-filled week of the year, and then I had to take the scenic route home via Germany, the Netherlands and England. In February, when I went to The Hague, the Dutch government collapsed the day before I left. This time, there was the Polish plane crash, another plane crash, a French train strike, the biggest volcanic eruption in Europe for years, the grounding of nearly all European air travel, and the LibDems became popular in the UK. I'm expecting the US government to subsidise a trip to China for me any day now!)





In Parliament: Round #1: GMO Regulation.

The GMO Regulation aimed to regulated GM food and feed in the single market. It had been difficult finding out the Romanian S&D positions, and I'd done some research on GMOs in Romania, which had problems with contamination. The S&D as a whole wanted a lower threshold for contamination (which started off at 1% in the proposal, so something less than that) after which it would have to be labelled as a GM product. I lobbied for a small as lenient a threshold as possible for the position paper, though I was always going to be outvoted, so I tried lobbying for some sort of insurance against contamination, which was adopted as a negotiating position. Apart from that, we wanted stricter controls on GM and more frequent renewals for authorised GM, as well as more impartial scientific control over authorisation.

The Parliament (which took place in the S&D's party room in the Parliament building), consisted of 110 MEPs, and was dominated by the centre-right, like the real Parliament. The EPP had 42 MEPs to our 28. The Liberals tended to be the swing vote faction, and potentially decisive in passing amendments - though this only really struck us when it came to voting time!

Speech-wise the far left and far right were the stars, with loud (and at times worryingly charismatic) speeches on nationality and on the evils of capitalism. Lobbyists were also called in to be interviewed and questioned by Parliament. Though it started off easy-going, things got a lot harder when we realised that we had pretty much only dinner to draw up amendments, since we had a charity Gala that night. Our party split up into amendment groups, and I was in one on insurance. We ran into a few problems on what scheme to come up with and deciding on what would be the best way to phrase it so it would pass. We ended up with 2 good ideas but sadly - due to time constraints - we only put one forward. We proposed an insurance scheme that the authorisation holders would pay into to insure against the costs of any large scale damage caused by the crop even though authorisation conditions were complied with.

When Parliament opened again, there was a free-form secession, with MEPs running everywhere to make coalitions and sell their amendments. We tried speaking to some party leaders and any MEPs we could get our hands on (who were naturally delighted to be cornered on the issue of insurance!). Parliament then went through the amendments one by one, with MEPs introducing their amendments. There was a long debate on the threshold, the expense of labelling and on how often authorisation of GMOs should be renewed. When it came to the vote, I knew that we had the Greens and the United Left on our side for the insurance amendment, but that wouldn't be enough for it to pass. It could only pass if other parties split or MEPs rebelled against their party lines.

Luckily for us, the Liberals split (from what I could see of the red and green lights blinking on in front of their MEPs), and our insurance amendment passed by 56 to 52! (We only seemed to have all MEPs present for the final vote on Friday).

Unfortunately some good amendments that would have given the Parliament more oversight and control of the process were defeated, and the voting highlighted the need for more networking and lobbying. We then elected a Rapporteur to present the EP's amendments to the Council.


Round #2: Returns Directive.

A Council minister presented the Council's amendments to the Parliament before we quizzed him on the details. At this point most parties and MEPs seemed to switch to full human rights mode, and some of the right-wing parties acted slightly more left-wing (in some cases) than I expected. Once again the far-right EFD group and United Left had the most strident (and entertaining) speeches. [But a few of us weren't about to let them have all the fun, and we formed a kind of informal inter-party group. It's an old game, but we challenged each other to slip Father Ted and Star Wars references into our speeches in such a way as to make them seem a natural part of the speech. Though proclaiming that the Council might strike back may have been pushing it.]

Meanwhile, the insurance amendment must have been unexpected, and the Council asked for someone to be sent up to explain it. I volunteered, and got a grilling from the Dutch and Maltese ministers, whom I gave my best politician answers. The Council was sealed off from the public (and journalists and lobbyists), so it was only at lunch I could ask around to see how the amendment was fairing. The news wasn't good, though it seemed to depend on who was asked.

In the Parliament, however, the knives were definitely out as MEPs got ready to drastically rewrite the Council's amendments and the rest of the directive. Once again MEPs swarmed about the hemicycle trying to make alliances on amendments. I ended up talking to the EPP and ECR on rewriting a new article 15 that the Council had introduced. Worryingly, some parties became more fragmented towards the end and there were a few voting rebellions, though luckily the S&D group seemed to become more cohesive towards the end; article 15 seemed to be something we all generally agreed on though, and it passed with 104 votes.

It might have turned out to have aggravated the Council, though - from what I heard from the Council, they were always worried about what would and wouldn't pass through Parliament, while MEPs barely mentioned the Council. Council negotiations also sounded long and detailed, whereas MEPs were ruthless in cutting speaking time. Though the Council is more powerful and influential in real life, in the simulation sheer numbers meant that Ministers didn't have a big personal influence on MEPs, and didn't figure much in MEPs' political considerations, while the lack of the technical staff and advice meant that 27 people had to do the same amount of work that 110 people were doing in the EP. Perhaps having a team (1 Minister + aides) would help rebalance things and get more people involved?


Round #3: Final Vote.

The Council returned a heavily amended version of the GMO Regulation to Parliament, and the Minister presenting it had to deal with some typos in the text (which she did very well). It turned out that the insurance amendment had survived - thanks probably to QMV which meant there needed to be a super-majority to remove it. Though Parliament was unhappy with some of what was changed (and there were some serious typos), it was passed into law with 63 votes.


Overall MEU 2010 was a brilliant experience. It was hectic, meeting lots of new people, making speeches, working on amendments and alliances, and a full social programme with stuff to do every night (tours, parties, etc.). It was tiring but very rewarding, and I'd recommend it to everyone. The MEU 2010 website is here. I applied in January 2010, so I'm guessing that January 2011 will be the deadline month for participants next year. They also do national MEUs in some areas, so that might be worth looking into.

If you're wavering about going, then just go for it! I can't recommend it enough.

Depressing Proportionality?

Julien Frisch's recent article on Scottish Representation in the EP (in English; auf Deutsch) shows that, while the proportion of citizens to MEPs is the same in Scotland as elsewhere in the UK (except perhaps NI?), Scotland is underrepresented in comparison to small states of a similar population size such as Finland, which has 14 MEPs - more than double Scotland's share with 6 MEPs.

An independent Scotland within the EU would have more representation in both the Council and the EP, though I doubt that Scotland would get 14 MEPs in this scenario - most likely that the number of seats for other states would go down to fit in with the current cap of EP seats (736 is it?). Under Lisbon a similar system applies with the seat cap at 751 MEPs.

Grahnlaw responded with a post about the representation of citizens in the EP, which are based on degressive proportionality - small states are over-represented to the extent that the weight of your vote varies wildly depending on which country you are in. So if you live in Malta or Luxembourg, your vote counts more than that of a citizen in Germany.

Grahnlaw is right that this is all about representing the states rather than about finding a way of representing the citizens on the one citizen, one vote model. It is probably also true that with the system set up this way it will be almost impossible to reform it into line with this model. However, since the EU is primarily an Union of states rather than of peoples, I can't see much of an alternative to the way it started except a radical straight-to-federation Union, which still isn't politically possible.

That representation is tied up with representation in the Council makes the whole thing more complicated, but I don't think the fact that the two are linked is in itself bad or irrational. It's part of the debate in any federal or quasi-federal structure: what should be the representational balance between big and small states, and how should citizens be represented? My personal feeling is that there should be a minimum representation for states in the EP: national and state identity matter very much, and, though the Council is the proper place for national representation, there should not be the sense that small countries are being pushed out of the EP, which is one of, if not the, most legitimate institutions of the Union.

It would not be good if the people of small states became less trusting of the EP, and felt that it didn't represent them.

That said, "the one citizen one vote" argument is powerful, and needs to be addressed - here, I would say that as states become more equal in the Council (of course, veto thresholds would need to be raised), seats in the EP should be distributed more fairly, with the minimum allowance for MEPs per state cut down - e.g. to 2 per state. After all, if states' votes in the Council were less weighted according to population, then it would be more logical to make EP seat distribution more fair.

I should note that an important question here is one of identity, and of national representation versus individual representation - which is linked to ideas of national versus individual sovereignty, which I've mused about here and here. Since I come down so much on the side of individual sovereignty in my mini series so far, it might be surprising that I've stressed the need for some recognition of national identity in the EP. While I wanted to show with my first two posts that it is a mistake to nationalise notions of sovereignty and legitimacy (and that there can be adverse effects to concentrating these concepts into one identity), I still think that national identity is of great value - just that it shouldn't be of paramount value. Identities do matter in representation, and this should be allowed for in the EP and the overall EU structure (just not in the overpowering way it is now - I agree that citizens should be the most important group, rather than states).

And then, of course, representation in the Commission is another queston...



Edit: I've posted a few more follow up comments here. Sorry to divide things up like this.