Miguel Poiares Maduro
Former Advocate General at the European Court of Justice in Luxembourg (from 2003-2009), Miguel Poiares Maduro is the Director of the GGP and, since October 2009, he has held the Joint Chair in European Law with the Robert Schuman Centre for Advanced Studies and the Department of Law at the European University Institute (EUI). He is also the Co-director of the Academy of International Trade and Investment Law of Macau. Read more..
The focus is on the democratic challenges raised by the current crisis in the Euro system and the governance proposals to address it and strengthen the EU in general. But the report goes further in the connection it establishes between the crisis and democracy: rather than simply addressing the democratic consequences of the crisis and the alternative solutions being put forward, the report places democracy at the heart of the crisis itself. My thesis is that the origins of the financial and economic crisis of the Euro system are state and market based democratic failures that the original regime of Euro governance did not adequately address. It is only by fully understanding the democratic character of the crisis that we can appropriately understand the extent of the democratic challenges faced by Europe and the role of the European Union in this context.
I argue that the future governance of the EU must depart from a revised justification of the project of European integration: a justification that focuses on the democratic and social challenges faced by the Member States and the EU value in addressing them. The EU should not be constructed as a challenge to national democracy but, instead, as offering renewed possibilities for democracy and social justice where Member States can no longer offer them. In this context, it is fundamental for democracy to be linked to a theory of justice in the EU. Citizens should be able to understand the benefits flowing from the process of European integration but also why those benefits come with certain duties towards others. Rights must be complemented by political empowerment and civic solidarity for the Union to be able to develop a genuinely legitimate form of economic and political governance.
The report starts by providing a democratic explanation for the crisis and the Union’s failure in successfully addressing it so far. The origin of the crisis can be found in the democratic failures of some Member States and the externalities they imposed on others but also in the incapacity of national democracies to control excessive cross-border capital flows. The Union’s failure to solve the crisis is, instead, imputable to the diffuse character of its political authority and its excessive reliance on national politics. The latter are incapable of internalizing the consequences of the interdependence generated by the Euro and integrated markets. As a consequence the Union cannot, de facto, govern and its policies are prisoner to national politics. The real EU democratic deficit is the absence of European politics.
The second part of the report discusses two models of governance for the Euro area as I review some of the proposals put forward so far. One model has at its core the Stability Compact. The other complements the discipline enshrined in the compact with instruments of financial solidarity and debt mutualisation. For example, either through the ESM or jointly issued bonds Member States insure each other’s debt. For reasons detailed below I have serious reservations whether such models can work. Their dependence on a permanent negotiation with national democracies (and the multitude of actors therein) will prevent them from providing the certainty that markets require. As to democracy, they are bound to put national democracies on a collision course. Some states will perceive themselves as shouldering others (and their moral hazard) while the others will feel that they are being governed by the former. A key finding of this report is that financial solidarity in the EU must be detached from transfers between states and related, instead, to the wealth generated by the process of European economic integration.
My alternative proposal departs from the previous idea. It requires an EU budget capable of providing the Union with the necessary financial muscle to address and prevent future crises. This budget would dispense with the need for national democracies and their citizens to insure each other. Their liability would be limited to contributions to the EU budget resulting from EU own resources. These resources, in turn, are linked to EU generated wealth: economic activities that the EU enables and have mostly benefited from the internal market. The legitimacy of these resources is further enhanced by linking them to forms of revenue that have made use of increased economic mobility to lower their tax burden at national level. The proposal suggests using the enhanced EU budget for two fundamental purposes: a stability fund providing collateral to state issued debt when necessary and subject to an adjustment program; and new EU policies aimed at addressing asymmetries in the economic and monetary union. In addition, I argue that the Union needs more than simply new policies. It needs to change the nature of its policies so as to improve how they “communicate” with citizens and increase their capacity to induce real systemic reforms in Member States. These changes would also allow the Union to complement the increased discipline it can impose on Member States through positive incentives. The final pillar of the model proposed addresses political integration. Rather than on institutions, my focus is on politics. By transforming the character of politics at EU level we will be able to infuse its institutional system with real democratic potential. I try to explain how to do it.
Throughout, the report highlights elements of a possible political strategy to promote these proposals. In my view this is the right path forward and the one more likely to gather the support of EU citizens in the different Member States. I have no doubt that some of what has already been suggested in the previous paragraph might be enough to label my proposal as impossible. But, as explained in more detail below, the question soon to be faced by European politicians is which, among several impossible proposals, may be the easiest to present to their citizens. I believe that this is the proposal put forward here. Not least because it links the developments argued for with a clear and convincing justification for the process of European integration. Furthermore, it does not require amending the Treaties (though it could benefit and be enhanced by Treaty amendments). Most of the suggestions put forward do require unanimity however. But I am also convinced that in all those cases recourse to enhanced cooperation is possible. I am naturally available to provide further clarification.
When the Euro was created it was presented as a big achievement of European integration but the rationale behind it was never fully articulated to European citizens. It was perhaps thought that any attempt to do so would engulf the project of the Economic and Monetary Union in endless political debates about the nature of European integration and the impact of the single currency on national sovereignty. Instead, the Euro seemed an ideal way to deepen European integration in the usual way: as a technocratic regime disciplining (but not replacing) national democracies. The governance regime emphasized this technocratic dimension of the project with a focus on the role of the European Central Bank and its insulation from political pressures. Economic and fiscal politics was left to the Member States which were deprived of their role in monetary policy but, for the rest, were supposed to comply with certain limited rules that proved to be too weak to prevent the current crisis. The hope was that the model could protect both national and EU different legitimacies by a strict separation between the technocratic and political dimensions. The price to be paid was leaving outside Euro governance fundamental dimensions of economic and fiscal policy impacting on a monetary Union. This was necessary so as to preserve space for national politics.
This separation has failed. We have found out that a European Monetary Union cannot be fundamentally dependent on national politics. Yet, though many now recognize the political dimension of the Euro project and call the present crisis a political crisis, we are far from articulating exactly what that means and its consequences. In order to think right about the future democratic governance of the EU we have to clearly understand the political and democratic dimension of the current crisis.
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Miguel, thanks for offering me the chance to chime in on this discussion, even if a bit late relative to the other participants. There are elements in your report that I like; however, it probably won’t surprise you that I ultimately can’t accept some of your basic premises nor am I convinced that your core proposals are feasible.
I agree that Europe suffers, as you put it (p.5), from a ‘political gap: the scope and level of politics has not followed the scope and level of political problems in Europe’. This is indisputable. You call this Europe’s ‘most important democratic deficit’ and it is clearly manifesting itself acutely in the effort to resolve the Eurozone crisis. I’ve argued for slightly different terminology to describe this gap: I call it the ‘democratic disconnect’. The substitution of ‘disconnect’ for ‘deficit’ is not merely semantic but points to why I’m not ultimately persuaded by your institutional prescriptions.
A ‘deficit’ approach implies that the democratic challenge in the EU, as your report suggests, is primarily one of institutional/political engineering, focusing, as you put it, on ‘a reorganization of European political spaces’ with an eye to a hoped-for ‘emergence of a European political space’. The deficit approach seeks to move the level of democratic politics to the European level (notably through politicization of the Commission, greater empowerment of the European Parliament, and the creation of a genuine European budget worthy of the name), precisely so that the ‘scope and level of politics’ will now match ‘the scope and level of problems in Europe’.
In contrast to this functionalist approach, the ‘disconnect’ approach focuses, in a more socio-political/socio-cultural vein, on a basic reality in Europe. For better or worse, Europeans continue to experience the locus of democratically legitimate governance as fundamentally national, even as the functional demands of interdependence, as your report suggests, may well demand the shift in regulatory power to the supranational level.
The tension between the functionally appropriate locus of regulatory ‘power’ and the still-national locus of democratic ‘legitimacy’ has defined the process of European integration for sixty years. I would suggest, moreover, that it will continue to define the integration process in the struggle to find a solution to the Eurozone crisis. Your proposal, in effect, seeks to overcome that tension through institutional/political engineering; that is, through an exercise of political will, or at least a concerted process of political persuasion, convincing Europeans that it is time to diminish the space for national democratic politics and shift its locus to the supranational level. Just as in the past, I question whether that is possible in today’s Europe, and this difficulty will almost certainly shape the nature and extent of efforts to resolve the Eurozone crisis.
On one level, you might argue that are positions are not that far apart. As you put it in the report (p.5): ‘Any move towards deeper political and economic integration should be grounded on a choice by citizens and not presented to them simply as the unavoidable consequence of the Euro. It is fundamental for citizens to understand that the need for further political integration is the democratic answer to interdependence and not a mechanical necessity imposed by the logic of integration’. I could not agree with this statement more. But then you state further down the same page: ‘The bedrock of European solidarity [and hence also the process of democratization you seek] will not be a pre-existing cultural or social identity. It will be an awareness of the benefits of European integration and that those benefits must come with duties too’ (p.5). I do not doubt that European integration comes with duties, even if the process remains grounded in democratic legitimacy on the national level (this was my basic point in an earlier blog post, ‘Fault, Not Solidarity: A Normative Argument to Save the Eurozone’, EUtopialaw.com, July 30, 2012). But your claim that democratic legitimacy is possible on purely instrumental grounds (as evidenced by your repeated invocation of the ‘benefits’ of integration, e.g., pp.1, 5, 7, 10, 12, 13, 17), rather than on the basis of a shared democratic identity, strikes me, from a historical perspective, as wishful thinking.
In this regard, I admit that I am hopelessly old-fashioned. As I argue in Power and Legitimacy (p.11), democratic identity builds ‘on more than what Max Weber called “the directly economic disposition of goods and services.”’ Or to reach even further back into the scholarship on this question, we could paraphrase Ernest Renan: ‘A community of interest is assuredly a powerful bond among [peoples]. Do interests, however, suffice to make a [democracy]? I do not think so. Community of interest brings about trade agreements, but [democracy] has a sentimental side to it; it is both soul and body at once; a Zollverein is not a patrie’.
Of course, you attempt to construct a theory of distributive justice on the basis of your functionalist, instrumental reasoning. But to me the question is whether distributive justice alone is sufficient to establish democratic legitimacy. My ‘Fault, Not Solidarity’ post also entailed a concept of distributive justice and yet explicitly grounded that theory on the democratic choices of individual states. So to me the question is whether it is possible, given the broader attachment of most Europeans to maintaining national forms of democracy in a historically recognizable sense, to construct a supranational form of European democracy on the instrumental grounds you pose.
Here I would recite the argument I set forth in my Daimler Lecture at the American Academy in Berlin last spring. I fully agree that European integration has done much, and could do more, to augment ‘input legitimacy’ at the supranational level (‘government by’ Europeans in the Lincoln sense). I also agree that it has done much, but certainly could do more in this crisis, to augment ‘output legitimacy’ (‘government for’ Europeans). But what the process of integration has not yet achieved is the strong sense of socio-political/socio-cultural identity between supranational institutions and the average European on the street (‘government of’ Europeans). In that latter regard, as your report repeatedly and rightly suggests (e.g., p.2, 6, 18-19), the process of European integration is still experienced as a fundamentally ‘technocratic’ construct. It is technocratic not merely in design but also in its socio-political/socio-cultural foundations, perceived as distant, bureaucratic, and emphatically not the institutional expression of self-rule within a coherent political community conscious of itself as such.
So the real question is: Can your proposed process of political and institutional engineering convince Europeans that, even as the space for national ‘democratic’ politics diminishes, it is being replaced by something on the supranational level that can and should be experienced as ‘democratic’ and not merely ‘technocratic’? In this regard, I think your effective reliance on input and output legitimacy alone, without concern for democratic identity (‘demos-legitimacy’, as I have called it), significantly undermines the viability and feasibility of your proposals. Without a reasonable level of ‘demos-legitimacy’ among the various peoples of Europe, it is deeply unlikely that you will achieve the sense of solidarity needed to realize your ‘three pillars’ (‘an increased EU budget supported by real EU revenue sources; new EU policies and a different kind of policies; and more effective political authority supported by a European political space’, p.11).
There remains, then, the question of the survival of the Euro. As you argue in the report (p.11), ‘if we indeed want to save the Euro and the project of European integration, an impossible solution will have to become possible’. Perhaps, but as others have done (most famously Angela Merkel), you conflate the survival of European integration itself with the survival of the common currency. This strikes me as assuming what is fundamentally in dispute. Unwinding the Euro would no doubt be extraordinarily and painfully costly, and I’m not necessarily advocating that here. But it strikes me that, at this point in the crisis, with the high social and political costs of maintaining the Euro becoming clearer by the day, some retrenchment in the EMU is just as likely as its survival at all costs.
Indeed, rather than being essential to its survival, the survival of the Euro may increasingly come to be perceived as inimical to European integration, properly understood. Whether seen in terms of Joseph Weiler’s ‘equilibrium theory’, Kalypso Nicolaidis’s ‘demoicracy’, Christian Joerges’s ‘conflicts-law constitutionalism’, or my ‘administrative supranationalism’, Europeans may increasingly come to appreciate that there are limits to the scope of regulatory power that the process of European integration can legitimately sustain. For you, the guiding principle in integration should be member-state internalization of ‘the consequences of interdependence’ (see, e.g., pp.5, 7, 8, 10). But as you also repeated acknowledge, that interdependence (and therefore that internalization) is not simply an autonomous functional demand, something ‘in the air’, to which Europeans must conform. As Alan Milward long ago taught us, interdependence is a political choice, one that flows from the fact of integration itself. You apparently concur, as evidenced by such phrases as: ‘interdependence generated by the Euro and integrated markets’ (p.1); ‘interdependence generated by the Euro’ (p.3); and ‘deeper integration and the interdependence it creates’ (p.3). Indeed, as you write, ‘European integration generates a deep interdependence’ (p.5).
If this is so, then the choice in favor of interdependence via European integration (including EMU) must always be balanced against other values and choices. Interdependence is part of broader set of trade-offs. And one of the basic premises of those trade-offs to date has been the desire to preserve national forms of democracy in conjunction with the process of integration. The fundamental problem with the Euro is, as your report suggests, is that it has made the preservation of national forms of democracy increasingly untenable.
So you are entirely correct that ‘the democratic consequences of interdependence [must be made] visible to citizens’ (p.7). But do not be surprised if, when push really comes to shove in this crisis (that is, when the costs of saving the Euro become so great that the choice becomes one between your ‘three pillars’ and a retrenchment in the EMU), that the latter becomes the de facto choice, even if hypocritically dressed up in face-saving language of ‘saving the Euro’.
The Report offers some very interesting solutions for tackling the current crisis, particularly in the policy side. However, I think that its main weakness lies in its search for systemic congruence between policy proposals and democratic input. At certain points, the author seems to argue forcefully that democracy (or democratic procedures) will naturally produce the kind of policy outcomes he is favouring. Democracy, though, may produce a (limited) range of different outcomes (all of these legitimate) and not necessarily the outcomes preferred by the author.
The Report fails also to provide a convincing response to one of the challenges it identifies: the Union failure to solve the crisis is imputable to its excessive reliance on national politics. Being this the diagnosis, the Report does not deliver a credible solution. In procedural terms, the Report argues that most of the policy solutions proposed requires unanimity and this rule by itself guarantees national politics informing individual decisions. But in substantive terms, the Report does not respond the basic question: why would national politics be bypassed in favour of some short of broader European politics? It is true that, as the Report argues, interdependence makes polities painfully aware of their interdependence and the ability of other polities to externalize the effects of their democratically decided policies. Whilst perceptions of national politicians may be affected by this, they will do so instrumentally, i.e. always taking as the starting point the way in which interdependence and externalities affect their own national polity and, hence, led by domestic politics consideration. In this situation, we may have, of course, European policy but it may be sub-optimal vis-à-vis the kind of solutions the Report proposes. In other words, whilst Maduro’s policy solutions seem to require a significant leap forward, he does not explain the mechanism that will transform domestic oriented politics into something different. He operates more in the domain of rational proposals than in the arena of not so rational politics.
The future of EU Governance: a reaction to Maduro
R. Daniel Kelemen, Rutgers University
Professor Maduro has produced an insightful, thought-provoking paper. While generally I agree that the EU should move in the directions he suggests, I would add some qualifications to his analysis. First, the notion that increasing the EU’s ‘own resources’ budget would help shift perceptions away from the notion that one state is insuring the liabilities of others is not entirely convincing. Citizens would likely continue to see their states as either net contributors or net beneficiaries – even if revenue went directly to the EU.
Second, I agree with Maduro that EP party groups should present candidates for Commission president before the EP election. Indeed, the EP has already moved in this direction, demanding that the Council’s nominee for Commission President reflect the partisan outcome of the EP election. While a Commission President with more democratic legitimation from the EP will be in a better position to negotiate with governments regarding Commission appointees, I do not think it feasible to force a government of one partisan orientation to appoint a Commissioner of a different one. Therefore, the Commission will continue to be composed of people from a variety of partisan orientations so long as governments are appointing Commissioners.
Finally, while Maduro’s proposals present an intelligent road map for deepening the EU, they ignore the fact that this deepening will increase the chance that one or more member state (ie, the UK) exit the union in years to come. I am not convinced that variable geometry or enhanced cooperation can resolve all the tensions between a Union seeking to deepen and particular member states unwilling to do so. Perhaps this is inevitable and – one might argue – not a bad thing. In any case, all proposals regarding deepening economic and political union need to deal squarely with the issue of what will happen with states who are unwilling to go along.
The report is an insightful contribution to the current debate.
However, it is –in my opinion- problematic at least at two points,
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First of all with regard to its diagnosis: According to the author, one of the two principal causes of the crisis was “the democratic failures of some Member States and the externalities they imposed on others”, i.e. through irresponsible fiscal policies and underlying economic problems.
This is not accurate. Only Greece fully corresponds to this description, and Greek economy is very small to trigger a crisis by its own. On the contrary, Ireland and Spain had stronger fiscal positions and smaller public debt than many other countries of the Eurozone.
Moreover, I think the argument is flawed for another, more crucial reason, related to the intrinsic functions of the EMU. A single currency, by definition, does not allow currency fluctuation, even when individual countries in the monetary union would benefit from changes in relative values. Therefore, all other things being equal, in a time span and due to the inability of devaluation, a product produced by the weaker economy is becoming more expensive than a similar one produced by the stronger. In consequence, the trade deficit between the respective states is increasing. (This happens not only in monetary unions with single currency but any time a weaker economy pegs its currency to a stronger one, as in the case of Mexico and Argentina vis-à-vis the US $). For this reason, economists, such as M. Feldstein, have from the beginning warned that the euro would inevitably lead to persistent trade imbalances between the more competitive core countries –especially Germany- and the less competitive countries of the South. Therefore, the deficits of the latter are just the other side of the coin of the surpluses of the former.
Hence, the current economic imbalance of the Union is indeed an externality, but not one imputable to national politics of the profligate states but, instead, one imposed to them by the inherent dynamics of the single currency. The same trend is happening in a Federation: There is a flux of capital from weaker to stronger subnational economies, e.g. from Wyoming, to New York. But then, at the end of the economic year, the fiscal union mechanisms ensure through taxes and transfers a partial compensation of Wyoming’s losses. The structural funds in the EU could play a similar role, but they cannot, due to their limited resources.
Therefore, I doubt if even the increase of the European Budget, resulting from own resources, could solve the problem without EU to become a “fiscal union” in the former sense. And, of course, a fiscal union requires not only much closer political interdependence between states but, most of all, a sense of solidarity founded on a common identity, which is far beyond the actual state of the Union.
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And that brings me to the second and stronger objection. Maduro welcomes the recent trend of “constitutionalizing” budget discipline through the Fiscal Compact, “not only as compatible with democracy but even protecting it.”
I think this is not defensible, for two reasons. First, exactly because the crisis was not created by the irresponsible policies of some member states, any further improvement of supervision mechanisms is going to be counterproductive, especially when it is coupled with the perpetuation of draconian austerity measures that deepen recession in them.
There is a second, more profound reason. As has shown brilliantly the recent work of JHH Weiler, due to the depth of the current crisis, the legitimacy of the European policies needs to draw from the legitimation reserves of the national institutions, so as to result later on to a higher degree of political integration. On the contrary, the Fiscal Compact and the imposition of corrective measures in case of budgetary imbalances will undermine the Keynesian potential of member states and finally put in cause one unique element of the European Model: the Social State principle.
This is not problematic only on constitutional, dogmatic principles (the Social State is a structural principle of the constitutional order of the majority of the Member States, exempt, in many of them, even from the revision process) but also –and basically- because it will destabilize the national democracies at a moment where they face multiple and serious problems and failures of their own.
I feel uncomfortable about transferring competences to the EU at the moment. The need for EU action does not come from the nature of fiscal or economic policies, but rather from national political failures – irresponsibility even. For the EU to take control looks like one part panic and one part avoidance, and my fear is that it allows Member States to maintain the dysfunctional political practices which created the problem in the first place. This will bring a higher price even than an unresolved debt bubble. After all, bad politics have created what might be called the tragedy of southern European youth for decades now, with young Italians and Greeks being forced to emigrate to experience freedom to work and develop themselves, and that politics will create greater social problems and inexorable economic decline if unaddressed. At the same time, the inability of Northern states to face any share of responsibility, to perceive their role as anything more than good neighbour or self-interested lender, and not also as guilty party, raises questions about what kind of political blindnesses are lurking there and waiting to explode into the next crisis. The challenge, it seems to me, is to get states to reform themselves, and create domestic politics which can rationally address the needs of citizens and offer them decent prospects. I see the role of the EU as honest broker, keeping North and South engaged, and helping develop a shared political language. It can contribute ideas, and it can nudge, but it should precisely not take control, because that is infantilising. It should do, in fact, what it has always done best and most, even without intending to, which is to help Member States to transform themselves. That is exactly the opposite of taking over Member State tasks whenever they make a mess of them.
Arguably, the Euro Crisis is the outcome of a vicious circle of negatively reinforcing financial market failure, Eurozone states’ spending irresponsibility, flawed EMU design and heterogeneity of Eurozone economies. Miguel Poiares Maduro identifies yet another key to the EU’s current malaise: caveats of democracy in Europe. He points out that national democratic sovereigns are not only blind towards the mutual dependencies they created by co-living with others in a single market and sharing a common currency; moreover they have failed to give themselves collective powers strong, legitimate and just enough for safeguarding their common goods. I could not agree more with this diagnosis. The solution Maduro offers for redressing these wrongs is ingenious since it combines different ideas that sum up to a virtuous circle of positively interacting political reforms: By tapping Single Market benefits the EU gets the common revenues that are urgently needed for making EMU sustainable but independent from the domestic politics of ‘donor states’; contention about these new EU level redistributive policies is used to engender a European political space, building on competing European parties, first order European parliamentary elections and a Commission Presidency supported by the parliamentary majority. I do not doubt that these changes below the threshold of treaty reforms indicate a way forward out of the crisis. The new European political community would be capable of saving the Euro without sacrificing democratic standards. Equally important, it would dismantle the new ‘wall’ that has already split intergovernmental Europe into core and periphery (infamously labelled ‘GIPSI’ countries) and that ultimately threatens to destroy the Union. Yet, regarding the viability of this formula as the basis of a new European political-institutional settlement, I still have some doubts: Although I can envisage that ‘donor states’ such as Germany be convinced to endorse a new common revenues scheme for the EU that would take burden from their shoulders, how do they overcome the ‘isolated tables’ stance of euro-outsiders, governments as well as organized banking and business interests and their resistance against spill-overs from the EMU into Single Market taxation? Moreover, accepting that European political parties will live up to the tasks of putting alternative transnational party programs together and run competitive election campaigns on the same policy issues across the different member states, must Euro-policy makers not be prepared to also deal with the rise especially of those parties who want more political powers not for Brussels but to be returned to national parliaments? And how does the high level of European party political fragmentation (which is likely to persist) reconcile with the rationale of effective and legitimate majority governance of the EU/Eurozone? I assume that the parliamentary Euro-polity (like all complex societies) would most likely attain the features of consociational democracy built on multi-party or even grand coalition government. How will compromised Euro-governance programs stand the popular contest of European elections? For reversing the paradoxical trend of less and less European citizens caring to turn out for elections the more powers the European Parliament gets, I believe, representative democratic reforms from above are necessary but not sufficient. They need to be complemented with democratizing practices from below. These would provide citizens with more deliberative forms and direct democratic incentives for participating in European elections (for instance, coupling them with plebiscites on contested EU policy issues) as much as in between, in ordinary EU politics and policy making.
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I welcome this imaginative contribution to a debate that is urgently required. I fully share the view that the EU is conventionally badly misrepresented as a means to undermine national democratic processes, when in fact the starting point should be the democratic failings of states – which, in current conditions of ever deepening interdependence, cannot satisfy their citizens’ preferences through unilateral action and which, moreover, have the tendency to externalise costs. The EU can be a corrective to these inadequacies at State level and it is here – as a forum for managing the interdependence of European states – that it should find its legitimacy. But national politicians, tethered to national political processes and national electorates, are hardly likely to make such arguments, while there is no adequate space for real “European politics”. It is, as the report observes (p.15), a Catch-22. I would add – sensitive to the poisoned debate in the UK – that it is a Catch-27 too: I suspect that there is wide variation across the members of the EU in their readiness to confront and act on the challenges mapped in this excellent report.
Might the EU declare its independence from its Member States?
It sounds absurd, of course. What is the EU but a transnational organization that has been built out of the repeated consent and pooled sovereignty of its Member States? To suggest it could declare its independence from Member States is to suggest something conceptually impossible.
And yet two of the proposals suggested by Miguel Maduro’s policy proposals would, if adopted, amount to such a declaration. If political parties at the European level were to become detached from Member State parties so that they had a truly pan-European character, the EU would become more independent of its Member States than it is at present. If these European parties were then to put forward competing candidates for the presidency of the European Commission, then the severance of Member State politics from European politics would be complete. Member state citizens might vote for members of European parties that would then put forward competing platforms for the Commission president. But Member States as such would be cut out of that loop. They would be present in the Council, of course, but the Commission and the Parliament would be less dependent on the national elections of national leaders than they are now. In fact, that seems to be one of the points of the proposal.
Generating an independent tax base for the EU would have the same effect: cutting Europe lose from financial dependence on its Member States. Here, too, taxes would fall within the Member States – on their corporations and financial institutions, for example – but not on the Member States as such. The proposal envisions that Member States would be cut out of the financial loop, just as they would be cut out of the political loop.
The satisfying radicalness of the proposed changes comes from the fact that they solve the democratic deficit problem by making Europe more independent of the verbally warring parties who threaten to tear Europe apart. If Greece thinks that Germany is the new dictator and Germany thinks that Southern Europeans are too dependent on public funds, it may well be that the only way for Europe to survive this nationally personalized strife is to rise above it. Giving Europe its own politics and its own finances, and leaving Member States to squabble among themselves in ways that would be increasingly removed from core of Europe, just may be a way to save Europe.
But these two proposals don’t necessarily sit comfortably with the measures already taken to save the Euro. The European Stability Mechanism and the more intrusive monitoring authority that can police state budget limits don’t rise above Member States; they greatly limit what democratically elected governments at the national level can do to bring fiscal policy into line with citizens’ demands. The new fiscal architecture of the Eurozone subordinates state budgets to centralized control, and that has been done without regard to democratic demands at the national level.
The fiscal measures therefore pull in an opposite way from the proposals to bring more direct democracy and independent fiscal authority to Europe. Increasing fiscal restraint at the level of the Member States means that states cannot in fact meet the reasonable demands of their own electorates, which in turn limits how democratically responsive they can be. Publics virtually never vote for neoliberalism and yet neoliberalism is what European publics will get for the foreseeable future. In the meantime, a more democratic Europe will not be able to provide the services that democratic publics demand – for better health care, better schools, and more secure retirements.
What would happen if the Maduro plan were to be enacted? In declaring itself independent from the Member States, a turbo-charged politically and fiscally independent Europe will claim increased democratic accountability at the European level just as democratic accountability is being systematically removed from the Member States. Democratic publics may then reasonably begin to demand things from Europe that Europe will not be able to provide – and that may generate a new legitimacy crisis down the road.
I very much like the proposals to develop pan-European parties and a democratically accountable executive within the European Union. And I very much like the proposal to give Europe its own revenue streams. Both are clearly ways to strengthen Europe by freeing it from the zero-sum and acrimonious debates that have broken out between Member States within the Eurozone.
Combined with the fiscal measures that have already been introduced to rein in national budget deficits, however, Europe is likely to find a democratically cranky public clamoring for more from the EU than it can give. Where will a democratically empowered public go if it is blocked at the national level from getting what it demands? If the EU is more open to democratic accountability, thwarted democratic demands from the Member State level will wind up at the EU’s door.
The EUI proposals may be a welcome declaration of independence, but we should not be surprised for the declaration to be followed by a European revolution unless Member States, too, can respond to what their citizens want.
Miguel Poiares Maduro’s report, which was requested by the constitutional affairs committee of the European Parliament, is a contribution to the EU-wide debate on what is known as “A Genuine Economic and Monetary Union”. The implication of that term is that the Economic and Monetary Union that was set in place by the Maastricht Treaty and was hardly modified since then, has proved to be dysfunctional, mainly because of the imbalance between a very supranational monetary policy regime, and a very weak intergovernmental economic policy regime. This problem has been addressed, during the last two and a half years, by a series of piecemeal legislative reforms and extra-Treaty emergency measures, but the time has come to elaborate a comprehensive reform package that will set EMU on an entirely new footing and make it, indeed, more “genuine”. Maduro’s report proposes further steps in the European integration to reach that goal. His proposals are bold and imaginative; at the same time, he claims that they are “the more possible of all the impossible proposals”. As he rightly implies by that phrase, any reform proposals that are put on the table must not only be scrutinized on the basis of their intrinsic economic and/or democratic merits, but also on the basis of their political feasibility. In this respect, one clear obstacle is the position of the United Kingdom. Maduro’s proposals to create new fiscal resources for the European Union, allowing it to conduct a true stability and growth policy, require decisions which, under the current Treaties, must be approved unanimously by all Member State governments, and there is no prospect whatsoever that the United Kingdom, for one, will agree with the creation of new EU taxes or a major increase of the EU budget. This raises the question: Is it desirable and feasible to create new forms of European taxation by the “willing” states only, through enhanced cooperation? And is it possible for those financial resources to flow into a European Union budget which, at least for now, is meant to fund activities that will benefit all EU member states?