It is hard to see how proposals for European democracy could avoid being either just cosmetic or contradictory
guardian.co.uk, Tuesday 7 August 2012 18.08 BST
As the inherent flaws of the eurozone refuse to go away, political leaders are faced with a stark choice: create something that is more like a state and euphemistically call it "political union" – or abandon the currency. But the former poses deep problems for European democracy, while the latter looks like it would be an economic disaster.
So far, the essence of the EU's working has been one of commonly agreed – depoliticised, if you like – rules, voluntary rule-following, and sanctions in case of rule-breaking. For the single market this logic largely worked. But it has not functioned well for the currency union: financial markets no longer believe in voluntary rule-following.
One possible response: dismantle or at least shrink the eurozone to such an extent that rules become credible (even though advocates of a "neuro", a northern eurozone, tend to forget that "northern" chancellor Gerhard Schröder, in alliance with France and Italy, was instrumental in first weakening the rules in 2005).
Or, alternatively: centralise supervision, instead of relying on self-monitoring (as has famously failed with the Greek state); toughen sanctions and take decisions on whether to apply sanctions out of the hands of nation states. When European elites – German politicians in particular – now talk about political union, this is what they are thinking about: weaken legislatures, the ones in the south in particular, and establish close supervision of national budgets by supranational, unelected institutions such as the European commission in Brussels. The EU would take on characteristics of a state.
The political logic of this proposal is plain. Angela Merkel has gone on record as saying that if the euro fails, Europe fails. German politicians have insisted that Germany's national interest is inextricably tied to the project of European integration – hence Europe cannot fail. Yet it is politically unacceptable for a German government just to keep paying, that is, to sign on to a "transfer union" without thorough checks on the nation states receiving money. Thus "political union" is a desperate fix: being unable to undo the currency union, deeper European integration is the only choice. It is not the stuff of conspiracy theories to assume that some avid supporters of a European federal state wished for this very scenario all along: they knew the euro would not work and thus necessarily lead to "more Europe".
Yet one problem that has plagued the eurozone will probably come back to haunt it even with political union: rules based on numbers such as a 60% public debt to GDP ratio seem essentially arbitrary and are legally hard to enforce. Fiscal coordination is a realistic hope; optimal fiscal consolidation cannot be determined by either eurocrats or markets, no matter what the economics textbooks say.
n any case, the question for now is: are German politicians serious about this? Some observers think they are not: according to them, demanding a further transfer of traditional nation state powers to Brussels will be unacceptable to France; and the Germans know this. But this way they can blame the failure of the eurozone on Paris. Still, there are signs that Germans do mean what they say – and hope it will happen: finance minister Wolfgang Schäuble has claimed that within five years Germans might have to vote in a referendum on a new constitution that allows for more power in Brussels; the president of the constitutional court has voiced similar expectations. This is in itself extraordinary: the constitution, together with the deutschmark, was the great symbol of postwar German success. First the Germans were asked to surrender the mark for what is effectively a softer currency; now they might be asked to bid farewell to what has been the longest-lasting constitution in modern German history. But they might well do so – if asked nicely and provided with good arguments.
Yet good arguments cannot come down to "the markets made us do it". Nor will it be plausible for European elites to claim that they initially wanted the euro in order to create a federation, but that they now have to create a federation in order to save the euro – when many Europeans might not want such a thing. There is as yet no sense of how political union could be democratically legitimate. Its advocates admit that deeper integration requires more supranational democracy, since national parliaments will necessarily be weakened. But it is hard to see how proposals for European democracy could avoid being either just cosmetic or contradictory. Electing the president of the European commission would not mean much if that person cannot change the rules; but if the rules are politicised, then this undermines the whole project of making markets believe in their stability. Legitimacy and effectiveness pull in different directions. In any case, it is a bad omen that the group of politicians working on proposals for European democracy does not even include the president of the European parliament – the only European institution which, as of now, citizens do elect directly.
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