This EU Won't Work

Benoît Hamon is the Socialist Party’s candidate in the approaching French presidential election. Poll results do not give him much of a chance of reaching the deciding vote but he has some interesting views on the EU which we think are worth sharing, and commenting on. Hamon is also a member of the Party of European Socialists, in the European Parliament, whose statement we commented on recently (see Dreaming of Eutopia). He was a MEP between 2004 and 2009, so has some direct experience of the EU.

In a speech in Brussels recently, Hamon is reported as saying that he loved Europe but feared for its future. It is not recorded whether he said ‘Europe’ or ‘the European Union’. He is regarded as being from the far left of his party and, in the same speech, said that the, “status quo of austerity and free trade will lead to the dislocation of Europe in the mid and long term”. We can reasonably interpret this as meaning the EU rather than Europe.

The EU Observer reported his speech here, noting a list of socialist preferences for France.

Of more immediate interest to us is the draft treaty he is working on which, if taken up, would considerably improve the democratic performance of the EU.

“France likes to complain, but it’s more constructive to put a proposal on the table. It would be difficult for EU leaders to caricature that France is complaining, but lacks an alternative governance model for how to make Europe more social and democratic“.

Hamon himself acknowledged that his proposals are not viewed favourably by the EU executive. We will touch on that after outlining some of the main points in the draft treaty, which is linked from the EU Observer report. 

We summarise the draft treaty not because there is any likelihood of it being adopted but because it illustrates how a more democratic regime could be introduced within the EU and points up the reasons why such reforms will not be made. We quote from the document, commenting only where we think we must.

His document is entitled, Draft TREATY ON THE DEMOCRATIZATION OF THE GOVERNANCE OF THE EURO AREA (“T-DEM”)

Explanatory Statement

In addressing the Euro area crisis, Member States have built a « Euro area governance » system which … has contributed to the consolidation of austerity policies across the economic and monetary union.

The significant strengthening of the executive capacity of European institutions in the field of economic policy has taken place in the absence of any parallel development of parliamentary control.

As for the national Parliaments, the TSCG [Treaty on Stability, Coordination and Governance] only acknowledges their limited advisory power in its article 13.

This imbalance deeply hurts the EU Heads of State or Government’s commitment to « respect for and maintenance of representative democracy », which they solemnly declared to be an « essential element of membership » of the European Union in the Copenhagen Declaration of the European Council of 8 April 1978, and which they have constantly renewed since then.

As it increases European citizens’ estrangement from the European project, this deficit of democratic legitimacy carries the risk of a breakup of the European Union. 

… the possible adoption, in a short timeframe, of an international treaty that seeks to democratize the governance of the Euro area (hereinafter « T-Dem ») signed by the Member States whose currency is the euro, which puts « democratic conditionality » at its core, shall be considered.

The objective of the present draft treaty is twofold. On the one hand, it seeks to guarantee that convergence and conditionality policies, which currently are at the heart of the governance of the Euro area, are carried out by institutions which are democratically accountable, both at the European and at the national levels. On the other hand, it allows that the next necessary steps towards deepened fiscal and social convergence and economic and budgetary coordination within the Euro area, will not be decided upon without the direct involvement of the representatives of national Parliaments.

The critique, of which the above is a summary, would not endear the authors or their proposal to the leaders of the European Union. The final paragraph directly contradicts the central aim of the EU project, which is to establish a supra-national government safely distanced and protected from the vagaries of national and international electorates. We can applaud both the critique and the wish for such reform, without any expectation that any of it will be carried out, or even seriously discussed. The EU’s leaders have immunized themselves against both criticism and demands for reform. We agree with the authors that “this deficit of democratic legitimacy carries the risk of a breakup of the European Union.” We believe that this is more than a risk, but in fact a high probability.

Treaty Resolutions (selected)

RESOLVED to reiterate, against a succession of economic, political and social crises, the importance of the European integration process undertaken sixty years ago with the establishment of the European Communities…

NOTING that the imbalances of this « Euro area governance » currently confront the European Union with a situation of democratic emergency…

DESIRING to strengthen the democratic accountability and the effectiveness of the of the institutions of the « governance of the Euro area », so that they can better carry out the duties entrusted to them,

RECALLING the Five Presidents’ Report on « Completing Europe’s Economic and Monetary Union » from 22 June 2015, and its Part V on « Democratic Accountability, Legitimacy and Institutional Strengthening » …

RESOLVED to build the convergence and conditionality policies specific to the Euro area around institutions that are democratically accountable at the European and at the national level, in order to fully contribute to achieving the values on which the European integration process is founded,

The Member States of the Euro area, signatories of this treaty, 
REITERATE their obligation, as Member States of the European Union, to regard their economic policies as a matter of common concern, as well as their responsibility to set up mechanisms ensuring European solidarity ;

DECIDE to strengthen the democratic nature of the decisions taken in the framework of the goveranance [sic] of the Euro area.

This is where we part company with the proposal, though we applaud the sentiment behind it. We cannot accept “the importance of the European integration process” as we believe it to be misguided. However, we acknowledge that the authors are proposing reforms to the ‘Union’ and so can be expected to stick to its central objective, federal government, even though they do not say this explicitly.

Treaty Articles (selected)

   Article 2. The Parliamentary Assembly

By this Treaty, the Contracting Parties establish among themselves an Assembly called « Parliamentary Assembly of the Euro area » (hereinafter referred to as ‘the Assembly’).

   Article 3. Functions

1.The Assembly shall, jointly with the Euro Group, exercise the legislative function and shall assume functions of political control as laid down in this Treaty.
2. It shall work in close cooperation with the European Parliament.

Article 4. Composition

The number of members of the Assembly shall not exceed 400. It shall be composed, for the four fifths of its members, of representatives designated by national Parliaments in proportion to the groups within them…

Article 5. New Members

The other Member States of the European Union can become signatories of this Treaty as from the entry into force of the decision of the Council of the European Union taken in accordance with Article 140(2) TFEU [Treaty on the Functioning of the European Union] to abrogate their derogation from adopting the euro.

   Article 12. Exercise of legislative competence within the Euro area

1.…the Assembly and the Euro Group … shall adopt legal provisions to foster sustainable growth and employment within the Euro area, social cohesion and better convergence of economic and fiscal policies.

2. The Assembly and the Euro Group, acting in accordance with the ordinary legislative procedure, shall vote on the base and the rate of the corporate tax which contributes to the Euro area budget.

3. The Assembly and the Euro Group, acting in accordance with the ordinary legislative procedure, shall adopt the provisions with a view to pool public debts exceeding 60 % of each Euro Area Member State’s GDP.

   Article 13. Ordinary legislative procedure

1. The Euro Group and the Assembly shall jointly adopt the legislative acts applicable within the Euro area governance.

   Article 14. Budget of the Euro area

3. The annual budget of the Euro area shall be established by the Assembly and the Euro Group.

   Article 17. Appointments

After hearing them, the Assembly shall vote on the candidates chosen for the Executive Board of the European Central Bank, the Presidency of the Euro Group, and the Managing Direction of the European Stability Mechanism.

   Article 22

Within five years, at most, of the date of entry into force of this Treaty, on the basis of an assessment of the experience with its implementation, the necessary steps shall be taken, in accordance with the Treaty on European Union and the Treaty on the Functioning of the European Union, with the aim of incorporating the substance of this Treaty into the legal framework of the European Union.

Note that this treaty would apply to members of the eurozone and would thus exacerbate the worries of states that have reservations about a two-speed or multi-speed EU, because non-members would not experience the benefits of enhanced democracy. Non-eurozone states would have to adopt the euro in order to benefit (see Article 5 above).

Articles 12 and 17 would give direct access to decision making to representatives of national parliaments and to the appointments of senior EU bureaucrats, though the Parliament, the Council and the Commission are not mentioned. 

If you wanted to reform the European Union to make it democratic, this is how it might be done. However, for us it falls between two stools. On the one hand it retains too much of the current ideology and on the other it contradicts at least one central feature of the project. ‘Nice try’ we might say, except that would undervalue a brave attempt to rescue the project from itself. We would prefer a different project, without the regime – however reformed.