03 April 2015

The European Union suffers from a democratic deficit!

The great majority of European citizens believe that they live in a democracy. It is true that a “democratic regime” is one of the formal preconditions for joining the Union. One is then tempted to opine to the following syllogism: If a country joins the EU then it is a democracy; as 28 countries have joined, the EU is a Democracy!

Though this affirmation is subject to a broad consensus, it is form rather than substance: applied to the EU it falls apart because the sum of 28 democracies does not constitute a “democratic” whole.
 
This confusion is all the apparent that the position taken by many “democratic” political movements are similar to those of extremist parties when expressing their vision of Europe’s future. Indeed, one should recognise that “nationalist” parties that promote Treaty changes ranging from “a leaner EU” to “EU’s total dismantlement” are far more coherent than proclaimed “Europhile” parties that advocate a thoroughly reformed EU on the unspoken condition that it reflects exclusively their own views and protects their interests. As long as politicians will manipulate successfully public opinion by defending the primacy of “national interests” over the “Union’s interests”, European democracy will be thwarted and no constructive breakthrough is possible.
 
A second source of confusion derives from applying the narrative concerning democracy indifferently to the European Union and to the Economic and Monetary Union. While an “intergovernmental” structure (confederation) was perfectly compatible with the preservation of the democratic legitimacy of each of its members, a “supranational” (federation) became mandatory once the decision was taken to pool fundamental attributes of sovereignty such as the currency or defence. In the latter case, the democratic legitimacy of the “Federation” becomes as essential as that of its federated entities failing what, the Union exits the realm of democracy. It also mandates the existence of appropriate institutions (such as the ECB endowed with EMU’s monetary sovereignty, but alas still deprived from any legitimate political counterweight) as well as a clear definition of the hierarchy of norms by which decisions/regulations taken “democratically” at federal level hold sway over those taken at a lower levels, in full compliance with the principles of subsidiarity.
 
The juxtaposition of two incomplete systems of governance within the European Institutions has become paralysing. Facing the constraints of equal treatment, EMU Members have conceded to others exorbitant prerogatives by depriving EMU of the decisive weight that it should wield within a European Confederation. This situation fosters the creation of asymmetric “majorities” in which the dissensions between EMU Members become apparent. The European Capital Markets Union – conceived to encompass all 28 Members – is a clear example: due to purely political considerations (the UK Commissioner is in charge), the project foregoes the undeniable advantages that would derive from limiting its ambit to the Eurozone, weakening commensurately its efficiency.
 
Furthermore, the absence of a federal structure within EMU exacerbates tensions, severely complicates the imposition of sanctions and undermines the necessary solidarity that is a condition of its success. It is clear that the Greek problem would be infinitely easier to deal with if EMU had sufficient autonomous resources and a budget and that the authority of the “federal level” was accepted by all. Similarly, it is wrong to ascribe France’s incapacity to implement reforms, or to blame the scorned “austerity policies” on the intransigence of “Brussels”, a concept purposefully left vague which is supposed to designate some sort of “supranational authority”, devoid of any democratic legitimacy but which – in reality – is inexistent.

By default, an unjustified exercise in translation often assimilates “Brussels” to the Commission whose “intergovernmental” composition (1 Commissioner per country) belies its supposedly collegial modus operandi. “Brussels” can also – miraculously – mean “Frankfurt” when aim is taken at the ECB! In reality, the Commission only exercises the powers conferred on it by the Treaty, which include implementing decisions taken by the Council and – for matters subject to co-decision – by the European Parliament. The Commission has no latitude to pursue autonomous economic or budgetary policies (it lacks in any case the resources to do so) and is restricted to implement decisions taken elsewhere. Its only freedom lies in its exclusive and considerable power of initiative as well as in the interpretation of its mandate, similarly to the ECB which has shown remarkable flexibility in navigating the legal and regulatory framework to which it is subject.
 
The Council, composed of democratically elected representatives, takes most of its decisions under a thin veil of “unanimity” (eagerly dismissed by its member’s subsequent declarations) and takes great care to limit its responsibilities by delegating to others, be it the Commission for the implementation of the “European Semester” or the Eurogroup and Troika for handling financial rescue operations.
 
But it is undoubtedly within EMU that the “democratic deficit” is most apparent and damaging. The Maastricht Treaty, instituting the single currency, put in motion a process that was meant to be irreversible from the moment of its implementation on January 1st 1999. The procedure, masterfully orchestrated by the Commission, the European Monetary Institute (precursor of the ECB) and the participating Member States, should have been prolonged by the further integration of economic and budgetary policies necessary for the smooth functioning of EMU. The structural differences between the EU and EMU were initially expected to disappear with the progressive and compulsory extension of the Eurozone to all Member States.

A first breach occurred by granting derogations to the UK and Denmark, allowing them to remain outside of EMU; this weakened the pressure on other countries to converge especially now that the Euro’s survival is in question, inhibiting further the urge of potential candidates to join.
 
Initially one thought that keeping to objective rules (the Maastricht Criteria and the Stability Pact) would be sufficient to ensure the coherence between the economic and budgetary policies which remained the sole prerogative of participating members. Their frequent violation and the crisis of 2008 put an end to this myth: Countries were forced to bail out their respective financial systems before being forced in turn to rescue the weakest EMU Members themselves. It was a first demonstration of a lack of solidarity within EMU: indeed, at first the Council forced the weakest governments (Ireland, Portugal, Greece, and Spain) to increase dramatically their levels of sovereign indebtedness in order to secure the repayment of the claims held by the private banking sectors of the most powerful creditor countries (Germany, France…); these demands upset budgetary equilibriums and led directly to the subsequent “sovereign debt” crisis. It also presided over a massive transfer of private to sovereign indebtedness without reducing their overall excessive level which had caused the crisis in the first place.

It is therefore perfectly clear that in its present architecture and articulation, neither the EU nor EMU are capable of meeting effectively the political, economic, financial, social or military challenges they face. It is therefore hardly surprising that European citizens are seduced in ever greater numbers by the appeals of national-populist sirens; they flourish on the fertile bed laid by the financial crisis, endemic corruption and the disenchantment of the European dream. This badly decried Union has, nevertheless, brought peace to its citizens since 1945 and presided over unprecedented economic and social progress, including in Eastern Europe. Younger generations, however, take these accomplishments for granted having been spared the sufferings wrought by left and right extremist regimes as well as the culpable weakness of their democratic regimes counterparts during the first half of the XXth. Century. Repeating such a scenario is simply unacceptable. 
 
If Europeans which to preserve their model of civilisation in a globalised world, it is imperative that the EU be endowed with a responsible democratic architecture in the knowledge that it is in the interests of all concerned as well as the necessary precondition for effective solidarity. This implies necessarily important transfers of sovereignty to the EU which many Member States oppose, in particular France and the U.K. an attitude that crosses quasi all political party lines. However any attempt to impose solutions on the Union as a whole in the name of an erroneous conception of the legitimacy of rights anchored in “national democracy” is bound to fail.

The example of Syriza has demonstrated that far from generating the support of its European partners, its demands have been considered as a rather unsubtle form of blackmail. Whatever the amount of sacrifices endured, the Irish, Portuguese and Spaniards have understood that their efforts were the price to pay to benefit from the – often overdue - European solidarity. Greeks must now decide between following their instinct that pushes them to remain within EMU and being left out in the cold, a choice which – like several other crucial matters dividing Europeans – has the capacity of precipitating the disintegration of the EU.
 
Failing a strong demonstration of political will to the contrary, a return to “national sovereignties” will prevail by sheer inertia. The consequences will be dramatic for the great majority of citizens, in particular those who are already the most vulnerable.

Paul N. Goldschmidt, Director, European Commission (ret.); Member of the Steering Committee of the Thomas More Institute.
 

© Paul Goldschmidt