British negotiators are seeking to hammer out a mutually acceptable deal with Brussels and other EU states ahead of the forthcoming membership referendum. Andrew Tyrie has submitted a proposal which, he argues, would enable Britain and other states more control over what EU policy applies to them, more freedom from the centre of the union, and more democratic accountability, without requiring treaty change. He suggests inserting a new body to scrutinise legislation and restore some power over decision making to national parliaments.
Tyrie’s idea might, in theory, solve some of the problems confronting David Cameron, but many will question the chances of the proposal being taken up in practice.
Tyrie’s arguments include:
Recent Treaty changes, notably at Lisbon, have weakened the role of national governments through the Council in EU law-making. This role must be restored, and a counterweight built to integration.
This should be through the new body under the auspices of the Council , with high-quality staff and led by Commission-level political appointees, and with a mandate to monitor and help enforce subsidiarity. It could be called the European Subsidiarity Council.
The new organisation would advise the Council on new legislative proposals. Its recommendations would enable the Council, by qualified majority vote, to require that the measure be withdrawn on subsidiarity or proportionality grounds.
It would also subject the EU’s existing stock of law and regulation, the acquis communautaire, to continuous review on subsidiarity and proportionality grounds; it can bring transparency to the unacceptably secretive process of ‘trilogues’ which have, in recent years, become central to EU law-making.
Britain is seeking to renegotiate its relationship with the EU. The Union itself is in the midst of an economic and legitimacy crisis. The two developments are linked.
This article does not seek to identify all of Britain’s demands in renegotiating its EU membership. Nor does it seek to address all the arguments for and against Britain’s EU membership; that is the subject of other assessments. The judgement in an EU referendum will have to be made on much wider criteria than the concerns addressed here. Its primary focus is instead on a much narrower, largely institutional but crucial issue: to identify the means by which the “ratchet” embodied in the commitment to “ever closer union” can be ended. It should give way to—mixing metaphors—a demonstrably two-way legislative street.
In March 2014, David Cameron set out seven priorities for renegotiating the terms of the UK’s membership of the EU in the event of a Conservative Government after the May 2015 General Election. It is implicit in this list (and has been more clearly stated elsewhere) that a successful outcome to the negotiations would include the repatriation of significant powers from Brussels.
Such an objective needs reinforcement. It needs to form part of a wider package of negotiating aims. There is little point in reclaiming national control over specific areas of policy if action is not taken at the same time to address the institutional pressures within the EU towards further accretion of powers to Brussels. These pressures, coupled with an opaque decision-making structure that greatly inhibits effective accountability to national electorates and institutions—the EU’s ultimate source of legitimacy—is a cause not only of British disenchantment but also of a wider nationalist resurgence that has been gathering pace in many European countries.
Tackling the legislative ratchet effect embodied in the commitment to “ever closer union” should involve not just placing more effective constraints on future EU interventionism, but also asking searching questions about the continued justification for some parts of the existing corpus of EU law (the so-called acquis). An ever closer union is neither necessary nor desirable; an ever more effective union is essential. The EU’s institutions must be reformed in order to enable (and, crucially, encourage) it—in many areas—to do less, better.
It may be argued that the current Juncker Commission is moving in this direction. The Juncker team has certainly been more cautious and consultative in its approach than previous Commissions. The Regulatory Fitness and Performance Programme (REFIT), begun under the previous Commission, aims to simplify and alleviate the impact of regulation. The First Vice-President of the Commission, Frans Timmermans, has set up a Regulatory Scrutiny Board, an overhaul and replacement of the Commission’s current Impact Assessment Board, with strengthened capabilities and senior independent members.
These developments are to be warmly welcomed. However, it remains to be seen whether they will provide durable change. It may turn out that they reflect little more than a combination of individual personalities and the political circumstances of the time, notably the strong performance by anti-EU parties in the May 2014 European Parliament elections.
Ending the “ratchet” will require much more. Stronger legislative mechanisms are needed that allow a legislative two way street. This article proposes measures that enable policy decisions to remain with Member States unless there are compelling reasons for them to be taken at the EU level. In Euro-jargon, this approach is known as subsidiarity. Attempts to make it meaningful have been thwarted, partly by integrationists, for a generation. While a repetition of the 1990s experience with subsidiarity cannot be ruled out, this need not be so. The history of the concept of subsidiarity demonstrates its ambiguities; what is needed is the political will to give it substance and institutional support. That political will did not exist 25 years ago: it may well do so now.
This article sets out how, for the first time, to give subsidiarity, and the important allied principle of proportionality, teeth—how to require the EU to shed powers and policy responsibilities which can and should lie with the Member States. Continuous review of the acquis communautaire is essential. It has been a damaging absurdity that EU measures have not already been subject to periodic re-examination and, where appropriate, scrapped, although there has recently been some progress. The work involved in such a re-examination will, in turn, require powerful institutional machinery to support it. It is important to consider how this machinery may be assembled.
Meaningful subsidiarity should be accompanied by a number of other improvements to the EU’s legislative process. Legislative proposals from the Commission should, in most circumstances, carry automatic sunset clauses. The scope for challenge by national parliaments should be enhanced. There should also be an end to the current practice by which Commission proposals, once initiated, can remain on the table for years. Proposals not enacted within three years, or by the end of a Commission term, should lapse.
Our proposals would create a counterweight to the Commission’s integrationist purpose which, quite reasonably, they have been seeking to fulfil since their creation. The proposals would also do something to restore the balance of power between EU institutions, largely by bolstering the Council. The provisions of the Lisbon Treaty have seriously weakened the Council, a development partly aggravated by its own negligence and internal wrangling. Strengthening the institutional weight of the Council, and of the national parliaments that stand behind its members, is essential. The European Parliament has an electoral mandate and performs a crucial role of scrutiny and challenge; nonetheless, legitimacy—in the sense of a commitment by a country to EU membership and its institutions—ultimately flows from Member States and their electorates. This remains the case with all the EU’s powers, however much is delegated by Treaty to innovative supranationalist institutions.
In creating that counterweight, this paper proposes the establishment of a new body under the auspices of the Council. Its role would be to monitor the operation of subsidiarity and proportionality on behalf of the Council and of national parliaments, and to carry out the necessary rolling review of the acquis. The new body should be led by at most a handful, preferably no more than three, of senior people—politicians, former ministers or experienced domestic parliamentarians or, possibly, civil servants. They should be appointed by the Council on single, relatively long, non-renewable terms. Once appointed they should be operationally independent of the Council. They should be supported by a high-calibre staff, much of which should be seconded from the domestic civil services of Member States. The body could be called the European Subsidiarity Council (ESC).
A Council impact assessment unit should also be established and incorporated into the ESC, creating a more powerful Council capability to challenge legislative proposals. An adverse report on a Commission proposal should trigger a Council procedure to require its withdrawal. The ESC’s reports could also support national parliaments’ ability to scrutinise and challenge measures through the yellow card procedure. Nonetheless, the effectiveness of the ESC would not depend on such challenges; nor would the card procedure substitute for it.
The ESC could also play an important role in reform of the “trilogue”, the informal process by which differing versions of a legislative text (from the Council and from the relevant European Parliament Committee) are aligned. The current operation of the trilogue is unacceptable. It may often achieve its aim of speeding up decision-making, but at great cost. It is opaque, secretive and without any treaty foundation. Reform is essential on each of these grounds.
The Council should agree that texts or positions adopted by them should only be reopened through the trilogue process by unanimity. Any text agreed in trilogue should be reviewed by the ESC. An adverse subsidiarity or proportionality report should mean that the Council would not sign off the text, triggering an open conciliation process and scope for review by national parliaments. A procedure of this type can prise open the trilogue to more democratic scrutiny in Member States.
Scrutiny of Community action after policy is agreed and enacted is also currently inadequate. The European Court of Auditors is a sleeping giant. Its generally worthwhile reports are often ignored, not least by many Member States who—rather than the Commission—are often the worst offenders with respect to the unaccountable (and sometimes worse) use of EU funds. The ECA should be invigorated—and emboldened—by the acquisition of new responsibilities, resources and a more streamlined leadership. Its capacity to search for value for money in EU spending should be greatly enhanced and its corporate governance made clearer and more effective. It should also assume overall responsibility for the work of the EU’s anti-fraud agency, OLAF, which also needs greater investigative powers and resources.
These measures do not seek to address peculiarly British interests and concerns. Nor will the proposals be without allies. It is now widely recognised that a crisis confronts the EU as a whole and its Member States.
That some of the proposals address areas that seem arcane and impenetrable reflects an EU decision-making process that is itself obscure and complex, often accessible only to lawyers, technocrats and well-heeled lobby groups. This is a major part of the problem. The distance between decision-making and the electorate, coupled with the accretion of power at the EU level, has created a crisis of legitimacy. The Eurozone’s flaws—now exposed—have deepened it. It is unacceptable in the 21st century that only the unelected—the Commission—can initiate legislation.
Much of the EU’s democratic shortcomings derive from the priorities of early post-war Europe. It was—and in many respects remains—a noble project. With an eye to the catastrophes of the interwar period, the early institution builders of the six original Member States were on their guard against what they saw as demagogic nationalism. As a result, they gave disproportionate weight to technocratic, even opaque solutions. Their overriding priorities were Franco-German co-operation, the rebuilding of prosperity and the development of an economic counterpart to NATO as a bulwark against communism.
The Europe of 28 now needs to address an almost entirely different set of challenges. There is still much more to do to integrate the east of the continent into the family of western nations. One part of the formerly Communist world is still recovering slowly from a nationalist war in the 1990s which left over 100,000 people dead and over two million homeless. In another, a proxy war is being waged by an increasingly hostile Russia. Upheaval in the eastern Mediterranean and beyond is generating high levels of migration, challenging another great integrationist project, the Schengen zone. A partly self-induced economic and Eurozone crisis across the continent remains unresolved. It has the capacity to generate considerable further economic and political instability. The biggest challenge, in an age of reviving nationalisms and of reduced deference, is that an increasing number of citizens are asking the same questions of the EU as they are of any institution: whom does it represent, and what does it do for them?
The EU’s response must sometimes be to do less, better, often a lot less and a lot better; to establish institutions and mechanisms that will make this disciplined approach its default position, rather than a reflex towards ever greater integration; to restore some accountability through a revival of intergovernmentalism and a stronger role for national parliaments.
The European Parliament has an important part to play, but its ability to bridge the gap between citizens and decision-makers is limited by the absence—or at best very limited presence—of what some have called a European demos. The ultimate loyalties of certainly most, if not all, of the electorates in Member States appear to rest with their respective domestic political institutions. Nor should the EU and its institutions stand in the way of greater integration among smaller groups of states— the Schengen Agreement and the Eurozone are two current examples—provided that robust safeguards are in place to protect non-participants. The UK has availed itself of opt-outs from a number of such initiatives in the past and is likely to be able to do so in the future: numerous tools are available. Variable geometry is the result. Nor should such close co-operation be exclusive to the EU’s current membership.
As part of the British renegotiations, more democratic legitimacy can be provided, and greater common sense applied, to the EU’s decision-making machinery. This will probably require the creation of the ESC, a body capable, where appropriate, of reversing—and being seen by national electorates to be reversing and counterbalancing—the drive to “ever closer union”. A rebalancing is unlikely to be achievable in any single renegotiation of the EU’s powers and competences, however far-reaching. A “full and final settlement” is likely to elude an EU of 28. But a new body such as the ESC, acting on demonstrably reasonable principles as a powerful counterweight, may make further periodic re-negotiations, whether instigated by Britain or other Member States or their electorates, less frequent. This will require the ESC to be a powerful watchdog, capable of being heard by national parliaments and electorates, particularly since it will face entrenched vested interests.
The decision-making machinery by which the EU was constructed in the middle of the last century—of technocrats operating in opaque and little understood institutions—will need to give way, in the 21st century, to a form of decision-making which can be more readily explained to the electorates of Member States, one in which EU action and legislation is more demonstrably limited to those areas which domestic action cannot adequately address. Only that way can consent for that action be sustained across the Member States. This is in everyone’s interest. For if it is not achieved, if common sense decentralisation from Brussels is not possible and seen to be possible, then the sense of a loss of control over their own nation states’ affairs felt by many electorates will not be assuaged, still less removed. Whether sooner or later, the EU’s current crisis of legitimacy may pull it apart.
Would these proposals require Treaty Change?
The government has, on several occasions, made clear that, in its view, its proposals for EU reform would require treaty change. Any proposals for the British negotiating stance have to take into account whether or not they would require changes on a scale to require a new treaty to be implemented. For some of the major European states, treaty change is needed, but not yet; in the longer (though not very long) term, the deeper Eurozone integration required to shore up the single currency will necessitate a new treaty. However, there is no appetite for this within the time frame of the British renegotiation, especially given the high political risks associated with a French referendum on the new treaty in the run-up to the next presidential election (due in 2017).
Some of the proposals set out here could be enacted without treaty change. In other cases— such as the proposals for reform of the “yellow card” mechanism for national parliaments to challenge Commission proposals—it could be possible to act in two stages. Initial agreement could be through a political declaration by the Commission that it would act in this way; in the longer term, the reforms could be codified in the next round of treaty change. A more formal version of this approach is that adopted under the Edinburgh Decision and a series of related documents, following Denmark’s rejection of the Maastricht Treaty in its 1992 referendum. Leaders “meeting within the European Council” committed themselves to a series of exemptions for Denmark that would be given force in a new treaty when that was negotiated: a political commitment that would not require immediate treaty change. The Decision was lodged with the United Nations as an agreement under the Vienna Convention on the Law of Treaties, giving it force in international law (but not making it an EU treaty). The Decision came into force along with the Maastricht Treaty, and its provisions were incorporated as a Protocol to the next EU Treaty (Amsterdam). This approach could be applied to many of the proposals set out here.
Ending the ratchet: from ever closer union to a two way street by Andrew Tyrie MP is published on Thursday 17 September by the Centre for Policy Studies