Why isn't there a group for small states?

Yesterday I noted that in Ireland:

"All the political parties involved have trouble articulating a vision on Europe, and on making alliances to achieve their vision."

It annoys me that not only is the EU political universe centred on the Franco-German engine, but that politically, this is simply accepted. The economic crisis has made this alliance - the erstwhile "Merkozy" - even more influential than ever in recent years, and is justifiably a cause for concern in smaller states to see the EU institutions sidelined and the direction of the EU set via summitry. I'm not so well placed to talk about other small states, but in Ireland there seems to be a certain fatalism on the part of both the government and the opposition: the government never seems to think much about forming alliances or advocating at least a general vision for the EU that it wants to see, and the opposition, which often point to the similarities of self-interest between Ireland and the rest of the EU Member States/Irish people and the ordinary people of Europe, never outline a realistic political strategy for building an alliance/coalition around their ideas. (Indeed, it seems that the Governor of the Central Bank in Ireland is the only one advocating a vision of European Union - yesterday he proposed a "Banking Union").

There is an informal grouping of states called the Visegrád group - made up of Poland, Hungary, the Czech Republic and Slovakia. It may not be as visible or as influential as the Franco-German alliance, but it does have some cohesiveness on the EU stage (such as its own Battlegroup). So why, now that there are so many small states, given the number of small states and the increasing political weight of the big states?

A grouping of small states could give them a bigger voice on key issues and help ensure that the institutional balance is fair to states of all sizes. Static groupings of states might only be suitable for certain basic positions such as state equality - it would be hard to maintain coherent political positions between small states such as Finland and Portugal on the way forward in the Eurozone, for instance - but it would be a good step in securing the place of smaller countries in the political life of the Union. While Hollande's comments rejecting the Franco-German duopoly probably indicate a willingness to lead an occasional counter-German alliance rather than a complete break from the alliance, smaller Member States should be making the most of the opening to see how far a new fluidity in the politics of the Council will go.

For Ireland especially this could prove a good starting point: it's time to start thinking not just about what kind of EU we want, but how we need to work with others to achieve it. We need to have a more pro-active approach.

European Faultlines

Last year I blogged about the European outlook of the Dutch government. With the Eurozone crisis still rumbling on, some of the faultline themes are well established: the degree of fiscal union and the role of the ECB, the core versus the perciphery, austerity versus stimulus, Eurozone members versus non-Eurozone members, etc. Apart from the left-right question of austerity versus stimulus, most of the major questions are about integration and institutions: how much do we integrate, how do we integrate, and what will be the consequences of integration. So a lot of the old instutitional debates are being revived in the background.

First, intergovernmentalism and supranationalism remains a big question. The influence of France and Germany in the crisis is obvious, and in some ways justified given the financial commitment they are making on behalf of their citizens, but it does means that the debate on the solutions to the crisis are incredibly narrow. It may be better for Greece to remain in the Eurozone deal despite the devestating effects of austerity than to default and bring in an automatic and deeper austerity as the Greek government fails to be able to finance its government spending. However it's not necessarily the best policy for Greece or for the Eurozone: yet it remains up to discussions in certain Member States to come to that conclusion before anything changes rather than an open pan-Eurozone debate permitting a more dynamic an informed action. This is particularly the case as the deepening crisis in Italy and elsewhere is connected to the need for recapitalising and reforming Europe's banking and financial sector.

The European Council has gone some way to tackling this crisis, but the constant summits has meant that the Commission and Parliament are being sidelined. Since the treaties don't really provide for the EFSF (and the EFSF is probably contrary to the treaties, but sovereign states are quite practised at rewriting the rules), the Commission and Parliament are very limited in what they can do. But it would be a mistake to think that only the Commission and Parliament want more power for themselves: it is in the interest of many Member States for treaty changes to transfer powers to the Union more properly to deal with these crises. For small Member States, majority voting and a strong Parliament and Commission are safeguards against the overpowering influence of the big Member States, while for non-Eurozone Member States, it is better to anchor the Eurozone within the wider EU in order to prevent a core Eurozone from driving internal market and other policy. This level of integration would require a new treaty with sufficient fiscal and political union elements to work - if the institutions can't deal with the crisis even with a treaty change, then the European Council, dominated by the big Member States, would again step in.

Second, the European Council as an institution is asserting itself over the Commission, in a way that has similar big-versus-small states implications, as well as challenging the newly empowered Parliament. (We're lucky that Tony Blair didn't get the European Council Presidency) The Commission and Parliament will probably continue to grow closer together (or, the Commission will try to co-opt the Parliament in its battle with the Council, while the Parliament tries to co-opt the Commission in its battle with the Council).

Third, there is the Eurozone/Non-Eurozone divide. It's not a clear divide between those states, but a divide on whether or not to include them and how far to include them. The fear is that closer integration within the Eurozone will mean that non-Eurozone countries will have less say within the EU generally, as Eurozone countries co-ordinate more. Ireland, the Netherlands and Finland want to include the rest of the EU as much as possible: for the Netherlands and Ireland this is about including more free market-orientated countries, but it's also about diluting the influence of France and Germany and strengthening the position of the small states. For non-Eurozone countries to secure the position, it would be better to ensure that new institutional changes are committed to the treaties in a way that limits the consequences of the change to the Eurozone as much as possible (though multispeed Europe will mean that some Member States will end up with more political say than others). As long as the changes are reached ad hoc through the European Council and the Eurozone Group, the more exclusive the decision making will remain.

However the UK may be the spanner in the works. While ensuring the position of the non-Eurozone members means that the focus on treaty change should be on limiting the scope for Eurozone decisions to affect the internal market without some general EU involvement, the UK moves to gain further opt-outs could push Eurozone members to make any new treaty Eurozone-only. The UK may find that it cannot count on non-Eurozone countries for support in getting new opt-outs if they feel it could damage their chances of securing their positions in the EU.

The Irish Finance minister has given a speech at the IIEA last week outlining some of the Irish positions on the EU and the Eurozone which reflect some of these faultlines:

Citizens will have to drag Europe closer to them

There's an interesting article in the New York Times (hat-tip Grahnlaw), "E.U. Elites keep the Power from the People", reporting on criticism from Habermas and others on the EU's democratic deficit:

"“The process of European integration, which has always taken place over the heads of the population, has now reached a dead end,” Mr. Habermas said at a forum hosted by the European Council on Foreign Relations. “It cannot go any further without switching from its usual administrative mode to one of greater public involvement.”

The political elites “are burying their heads in the sand,” he said, adding, “They are doggedly persisting with their elitist project and the disenfranchisement of the European population.”

Those who agree with Mr. Habermas often cite the behavior of José Manuel Barroso, president of the European Commission, the Union’s executive, and Herman Van Rompuy, president of the European Council, which represents the 27 member states.

During these past months, both have failed to explain to a wider public what is happening to Europe and the euro. When they give interviews, they tend to address an elitist audience. Neither reaches out to citizens. “I doubt if they ever thought of doing town-hall meetings,” said Pawel Swieboda, director of DemosEuropa, an independent research organization in Warsaw.

“They don’t bother to do such meetings because they don’t have to stand for election,” added Reinhard Bütikofer, a German and leader of the Greens in the European Parliament."

I agree. However, the solution seems to be changing the Treaties, and this doesn't really address the problem. While Treaty change can help (for example, giving the Parliament the sole respobsibility for electing the Commission without Council input, and severing the national backgrounds of Commissioners from national nominations), the biggest and most urgent challenge has nothing to do with institutional tinkering.

The EU is already formally democratic. The Parliament is directly elected and has almost equal power with the Council, the weakness being mainly in the area of foreign affairs. This is real power, with US Vice President Joe Biden making the trip to implore the Parliament to pass the SWIFT Agreement between the EU and US last year. The Parliament elects the Commission (just like the government is in many national parliamentary systems), which is nominated by the Council. The Council consists of the elected national governments, and the European Council - the Member States' heads of government - direct general policy. So in all the main legislative institutions, offices are either directly or indirectly elected.

But despite this, the main focus on EU politics is the summitry that takes place every few months or to combat crises - an increasingly common event. Summits are the face of the remote decision-making that's going on. Member States gather together, not all with an equal say in practice, and hammer out compromises based on haggling over national interests, instead of working out what would be the best solution for the EU or Eurozone as a whole. If this sidelines the Commission, then it definitely sidelines the Parliament: after all, how can they reject emergency agreements made at a European Council summit? These summits could even be sidelining the ECB, which has been one of the most influential players in the crisis so far.

If the EU is formally democratic, then the problem is that it isn't functionally democratic. The addage that in democracies the electorate get the government they deserve doesn't quite apply as there hasn't been much political competition yet at the European level. That might change at the next election, with the PES considering running a primary to select a candidate for the Commission Presidency. Political competition is what's necessary to bring the EU closer to citizens. The EU can't be sold or airbrushed into people's lives: people need to be engaged on European issues, and we have to talk about these issues from the perspective of arguing for EU or Eurozone policies.

We're in the middle of a massive crisis, but when it comes to the solutions, we are talking about national solutions to European problems. When Irish politicans talk about Eurobonds, they're thinking of the next five years and Ireland's interest rates, not how to make the Eurozone work - without even thinking about what fiscal union means, and how it should be run, how can it be properly debated or sold to an electorate? These conversations with ourselves mean that we're talking past each other on a European stage, rather than properly discussing what are our best collective options. Which is why working on giving substance to the Europarties is much more important than institutional tinkering. Citizens need to be engaged with the issues - using citizens' assemblies would be a good way of involving people and informing them on the options ahead.

Oddly, institutional tinkering is the sexy and glamorous side to ideas to tackle the democratic deficit. Hard graft within political parties and outside them in civil society to make them more responsive to European issues - and to make them fulfil their political function as a way of enabling citizens to influence policy - is a much more substantial task, even if it doesn't yet the attention of another constitutional treaty.

"But we signed up to a free trade area!"

More and more I see the argument that the EU should be turned into a free trade area, and I thought I should try to create a short reply.


"But we signed up to a free trade area!"

This is also argued with "common market", with it clear that a free trade area (like NAFTA, for example) is meant. But there's a big difference between a free trade area and a common market (a.k.a "single/internal market").

A free trade area simply reduces tariffs and import quotas between countries - this was the aim of the European Free Trade Area,* which the UK helped found in opposition to the EEC, and then left to join the EEC. FTAs don't cover the free movement of goods, people and services that a common market consists of.

The issue with free trade areas that they only reduce tariffs between members, so members can have different tariffs with third countries. This means that some goods might try to get into the free trade area via FTA country A (which has lower external tariffs) before moving on to country B (which has high external tariffs). This lack of control means that some countries prefer a customs union, which is like a FTA but with common external tariffs.

A common market is much more than a FTA because it not only deals with tariffs and import quotas, but also deals with the free movement of goods, services, establishment (freedom to set up businesses throughout the common market), capital and people. This requires some restrictions on the law-making of member states (they can't legislate for import quotas, discriminate against goods from outside the country with different tax rates, etc.), and requires common law making so goods, etc., can move freely without being blocked by different technical standards. This common law making and standards means that there would need to be a common court and law-making institutions in any case. That's why the EU needs to have institutions, but NAFTA doesn't.

Leaving a common market means that a country and its citizens would loose free movement rights. While it's true that there will still be trade between the EU and ex-members (the EU has FTA agreements with Chile, Mexico, South Africa, etc., so I don't see why an ex-member wouldn't get one as well), without common laws, the ex-member would move away from the common standards of the common market, and more and more non-tariff barriers would block trade. Citizens of the ex-member country would also loose their free movement rights.

Having a common market also means that there needs to be a common trade policy with third countries, and the free movement of persons creates pressure for there to beco-operation and common rules on cross-border crime, but foreign affairs and justice and home affairs are other debates.

Since the EEC was aimed at creating an common market, joining countries never signed up for a free trade area.



*Confusingly, the EFTA is now a single market because its member countries are linked up to the EU's single market via the European Economic Area (or via 120 bilateral agreements in the case of Switzerland).

Back from RIO

It's been pretty quiet on the blog recently because life has been very busy lately. Apart from exams, papers, and general work, I've just been on a RIO Trip. Unfortuneately it isn't as glamourous as it sounds, as RIO stands for "Recht der internationale organisaties", which is Dutch for "Law of the international institutions".

The trip consisted of visiting a lot of European organisations in Strasbourg, Luxembourg and Brussels, and entailed an exhausting amount of presentations and travelling, and, as was pointed out, an unknown number of bars. The EU and the Council of Europe naturally featured on the list, but so did other less well known organisations and institutions within the EU and outside of the EU umbrella. The lasting impression is of a Europe that has embraced an extrodinary depth of co-operation and integration, the scale of which rarely strikes you until you've seen the many different forms of co-operation - and I'm sure we only saw a quick overview. The commitment of the people involved in these institutions is also impressive: again and again, we met people who were genuinely enthusiastic about their subject area, whether it was the prevention of torture or the regulation and safety of the skies.

The positions of the other, non-EU, organisations was interesting as well. In a continent full of international co-operation, the EU looms large as the Europe, and the other organisations are adjusting their roles in the face of the EU's success. From conflicted self-assertion and resignation (Council of Europe), to a vision of providing expert advice (Commission on Navigation of the Rhine), to that of enthusiastic service provider (EuroControl).

Notable exceptions from the trip were the Council and the EP. The Council was dropped because of the European Council summit which occured while we were in Brussels (so ironically I was close by but didn't know what exactly had happened until I got back home). The EP was dropped because, apparently, they're just bad at handling visitors and left a bad immpression on the last RIO trip - which is a shame, because the EP is, for me, the institution that communicates best online.

So to get back into the swing of blogging, I think I will cover some of the institutions and organisations and my impressions of them.

Now Lisbon's in force, Parliament has nowhere to hide

1st December 2009, and the Lisbon Treaty is in force (well, it has amended the two treaties that make up the constitution of the EU, anyway). It's biggest innovations were the extension of Qualified Majority Voting in the Council and the increase of Parliamentary power - the two are pretty much in step. The European Parliament wasn't powerless before, but now it is virtually an equal to the Council, except in areas of unanimity, such as foreign affairs.

So now there's nowhere for Parliament to hide - it has to prove that it's deserving of these powers; that it's willing to go further in holding the to account, in staking out it's own position more clearly from the Commission and Council, and it must go further in transparency - both from itself, and from the Council and Commission. The Commission President's Question Time needs to become more focused as well: now MEPs have more power, they should prove themselves able to get a good handle on the different issues and ask the awkward questions - this doesn't mean ranting on about political points (I'm looking at you, Martin Schulz), but digging around and making sure you put Barroso and other Commissioners on the spot to open up the Commission to real scrutiny.

The hearing of the Commissioners in the run up to the vote in January must be rigorous, revealing, and truly testing for the Commissioners-designate. In particular, Baroness Ashton's positions on Iran, Russia, the Middle East peace process, energy policy, the Eastern Partnership, etc. must be made clear. Likewise, Oettinger needs to be pushed on how he wants to see the EU's energy policy develop; it's an important portfolio, and one that the Commission has proven quick to move on in Barroso I, with important energy market reforms and the implications of climate change politics - is Oettinger up to the job? The Parliament needs to be willing to reject the Commission if it doesn't correspond to its political views; it shouldn't just rely on there being someone who can be easily recognised as objectionable even through a lazy media glance - a list of good policy reasons should be enough. There doesn't need to be a rejection of the Commission just to ritually assert the Parliament's position, but they should make sure the opportunity to shape it doesn't pass them by.

Finally, and as a greater task, all the parties in the Parliament should work to make their mark outside the Brussels Bubble in the public's minds. Better Parliamentary debates help, and will hopefully entice the media to report on them more, but the parties need to make their presence felt more in the mainstream media and at grassroots level. The Citizen's Initiative could be an excellent way of doing this if done right: a campaign for a certain policy for the media to report on, co-operation across borders with common campaigns, engaging people in European politics ("We need your support! This is what we're trying to do for you in Parliament and the EU!") and it builds up at least some recognition of the Euro-parties (or at least the position of the national parties on European issues, which will be helpful in any case come election time).

The Citizen's Initiative requires 1 million signatures across borders, and the Euro-Parties are supposed to help express cross-border political debate. The link and the logic should be obvious, and the party to latch on to it and to runs campaigns well - and follow them up in Parliament effectively - would be laying good groundwork for the 2014 elections.

Now that Lisbon's in force, we deserve a better working Parliament - more transparency, scrutiny and engagement. There are no more excuses for not trying.

Who Does What Now?

A very quick description of who does what in the EU. (Since the EU is currently divided into 3 areas, or "Pillars" and not every institution has the same amount of power in each, the question of "who does what" can get confusing...):

The European Commission: A cross between a government and a civil service. This is made up of unelected Commissioners, with one appointed by each member state every five years under the current system. It can propose laws but it can't pass them, and this power is also limited to certain areas and certain circumstances (mostly Pillar 1, which is mainly about the single market and other technical issues). It is supposed to enact EU legislation and/or make sure that those who should be doing this, are. So if you read that "the Commission has decided...", it very rarely gets to decide anything: its main function is suggesting and drafting laws.

The European Council: This is made up of the heads of government (who are also heads of state in some cases), and they meet at least twice a year. This body decides the big political issues. The presidency of this body is taken on by each of the member states in turn for 6 month long presidencies under the current system.

The Council of the European Union: the main legislator. Made up of national ministers from whatever area the issue in question involves (agriculture ministers if the issue is the CAP, etc), although the vast majority of the work is done by national civil servants. NO major legislation can be passed without this body's say-so. Can ask the Commission to draw up legislation. The main institution in all legislative areas.

The European Parliament: made up of directly elected MEPs. In most of Pillar 1 they have an equal say on legislation (amending, rejecting or passing it) as the Council of the European Union, but in Pillars 2 & 3 (foreign policy and home affairs) they have no real say. Can ask the Commission to draw up legislation under Pillar 1.

The European Court of Justice: a Court which decides on issues of EU (or "Community") law. This includes constitutional matters (which institution has the right to do what), and interpreting Community law for national courts. Has little to no role under Pillars 2 & 3, however.

The Court of Auditors: the accountants. They check and investigate the finances of the EU and its institutions.


Note: the Council of Europe has nothing to do with the EU. It was a body born out of the federalist movement, but it is an intergovernmental body and is most famous for the European Convention on Human Rights and the European Court of Human Rights in Strasbourg.