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  • European commitment and gender balance

    In this blog entry I offer a few remarks about the EU top jobs, the next European Commission and the president-designate.

    EU top jobs

    An extra European Council meeting is just behind the corner, 16 July 2014, in order to fill the top jobs (on the intergovernmental side) for the next term: the EUCO president and the chair of the euro summit (now Herman Van Rompuy), the high representative for foreign affairs and security policy (now Catherine Ashton) and the chair of the euro group (now Jeroen Dijsselbloem).

    Next Commission

    The upcoming meeting offers Jean-Claude Juncker, the proposed president of the European Commission, an opportunity to discuss priorities with the national leaders, as well as the suggestions by the member states for appointment of members of the Commission.

    In addition to the treaty criteria of general competence, European commitment and independence, as well as the expectation of irreproachable performance of duties regarding each commissioner, we can expect Juncker to bring up the gender balance of the future Commission, subject as a body to a vote of consent by the European Parliament.

    The Council (of ministers), by common accord with the president-elect, adopts the list of persons proposed for appointment to the European Commission, but we can expect the European Parliament to protest if presented with a heavily male-dominated line-up.

    The probable first choices of the member states point to a possible conflict with the EP. Juncker can point out the danger of rejection, but he can also try to cajole the member state governments (and the Council), by promising heavier portfolios for female candidates and qualified appointees.

    President-designate

    Ahead of the European Council, the proposed president of the European Commission, Jean-Claude Juncker, meets the political groups in the European Parliament today and tomorrow. The EP vote on his election is scheduled for 15 July 2014, and he needs the support of a majority of the MEPs, meaning 376 votes.

    If successful, Juncker would meet the European Council as president-elect of the European Commission.

    Ralf Grahn

  • European Council 2013 on competitiveness

    In the previous blog post we saw president Herman Van Rompuy presenting, in the publication The European Council in 2013, how the European summits were engaged to enhance competitiveness, promote free trade, to develop the single market and to ease the regulatory burden.

    On the other hand, we have heard British demands, from prime minister David Cameron and Europe minister David Lidington, presented as if the European Union was doing nothing, or nothing right (with the possible exception of free trade deals and cutting red tape). The UK government is still calling for profound, but nebulous EU reform and renegotiation of Britain's membership.

    I see no other recourse, than to scrutinise the conclusions of the European Council in order to gain a more detailed view, although I highlight mainly issues most closely connected with EU competitiveness, free trade, single market reform and cutting red tape.

    European Council on competitiveness

    The latter part of the publication The European Council in 2013 (from page 25) contains the 2013 European Council (EUCO) conclusions and the statements by heads of state or government, handy to have in one place.

    I am just going to concentrate on the points relevant to the competitiveness theme, for you to savour.

    EUCO conclusions 7-8 February 2013 (from page 27)

    * Heading I Trade (paragraphs 1-8)
    * Heading III Multiannual financial framework (MFF, EUCO's offer to the European Parliament regarding the long term budget 2014-2020) (paragraph 19 and the detailed document, pages 30-48, with heavy emphasis on growth, jobs and competitiveness, including the EU2020 strategy, especially the sub-heading 1a on pages 32-33, supported by actions for economic, social and territorial cohesion under sub-heading 1b, pages 33 to 37)

    EUCO conclusions and euro summit 14-15 March 2013 (from page 49)

    * Priority status to supporting youth employment and promoting growth and competitiveness (European semester), implementation of the Compact for Growth and Jobs (page 49)
    * Heading I Economic and social policy, paragraphs 1 to 14, announced future thematic European Council discussions relevant to growth, jobs and competitiveness: energy; innovation; digital agenda and other services; defence (industry); and indutrial competitiveness and policy (paragraph 10)
    * Rules of procedure for the organisation of the proceedings of the euro summit, relevant to the euro area countries and the non-euro adherents to the Treaty on Stability, Coordination and Governance in the Economic and Monetary Union (TSCG), from page 53

    EUCO conclusions 22 May 2013 (from page 55)

    * Competitiveness, jobs and growth, affordable and sustainable energy, as well as the combat against tax fraud and tax evasion were highlighted (page 55)
    * Heading I Energy, including the internal energy market and investment in intelligent energy infrastructure (paragraphs 1-9)

    EUCO conclusions 27-28 June 2013 (from page 58)

    * Highlighted youth unemployment, the endorsement of country-specific recommendations (CSRs), progress towards the banking union; welcomed Croatia as a new EU member from 1 July 2013 and congratulated a Latvia ready to adopt the euro on 1 January 2014 (page 58)
    * Heading I Youth unemployment (paragraphs 1-3)
    * Heading II Growth, competitiveness and jobs, touching practically all the bases mentioned by the UK government, reducing the burden of business regulation included (paragraphs 4-11)

    EUCO conclusions 24-25 October 2013 (from page 63)

    * Underlined s efforts to increase growth potential, enhance job creation and boost European competitiveness, focusing on the digital economy, innovation and services (page 63)
    * Heading I Digital economy, innovation and services, stressing the need for an integrated digital single market by 2015 and an integrated telecoms market, as well as the establishment of a copyright regime for the digital age, not to forget digital skills and data-driven innovation and research, plus services and trade (paragraphs 1-22)
    * Heading II Economic and social policy, including youth unemployment, finance for small and medium-sized enterprises (SMEs), and regulatory fitness (REFIT) aka simplification (paragraphs 23-32)
    * Heading III Economic and monetary union, weighted towards competitiveness and the social dimension of EMU, as well as banking union (paragraphs 33-44)

    EUCO conclusions 19-20 December 2013 (from page 69)

    * Emphasised defence, the single resolution mechanism (SRM) and progress in implementing the Compact for Growth, Jobs and Competitiveness (page 69)
    * The defence discussion – Heading I Common security and defence policy – contained elements regarding cost-effective public finances, as well as aspects of industrial, commercial, innovation and competitiveness policy, the European Defence Technological and Industrial Base EDTIB(paragraphs 1-22)
    * Heading II Economic and social policy: the member states and the EU pledged to promote sustainable growth, jobs and competitiveness in accordance with the five priorities set out in the Annual Growth Survey (AGS), to implement the Compact for Growth and Jobs, complete legislation under the Single Market Acts I and II, and the European Council called for a reduction of the burden of regulation through the implementation and further development of the REFIT
    programme, to name a few (paragraphs 23-27)
    * Under heading III Economic and monetary union, the leaders recalled that the Europe 2020 strategy and the European semester constitute an integrated process of policy coordination to promote smart, sustainable and inclusive growth in Europe, but called for strengthening in the euro area, through contractually agreed partnerships (paragraphs 28-40)
    * Under heading VI External relations, the European Council welcomed the new Trade Facilitation Agreement, agreed at the WTO Bali conference (paragraph 44), and welcomed progress regarding the Association Agreements, including the Deep and Comprehensive Free Trade Area, with Georgia, the Republic of Moldova and Ukraine (paragraphs 47-48)
    * Under the heading VII Other items, the European Council welcomed the Council's reports on the implementation of the internal energy market and on external energy relations (paragraph 49)

    Invitation

    The publication The European Council in 2013 documents that every EUCO meeting last year paid attention to some or all aspects of EU competitiveness, free trade, single market reform and cutting red tape.

    I invite you, dear readers, to tell me what the European Council failed to do, or approached in the wrong way, to earn the constant UK demands for profound reform and renegotiation, without a clear British agenda in the public domain.

    Ralf Grahn

  • Van Rompuy on EU competitiveness 2013

    Against the background of the UK Europe minister David Lidington's calls for EU competitiveness, free trade, single market reform and cutting red tape, we continue to explore the reality of European Union efforts.

    European Council in 2013

    After two publications authored by the European Commission, our exploration of EU activities to enhance competitiveness takes a more intergovernmental turn. In order to remain at a suitable altitude for an overview, we opt for the annual report from the European Council (EUCO), where the presidents and prime ministers representing the member states convene to provide the EU with the ”necessary impetus for its development” and to define general political directions and priorities.

    Through the web page for Council publications, you can find useful, free booklets and compilations. The one suited to our needs is The European Council in 2013 (pdf, 75 pages; available in 23 languages).

    Van Rompuy on growth and jobs

    President Herman Van Rompuy offers a bird's-eye view or synthesis, dealing with recovery, a stronger eurozone, growth and jobs, the EU in the world, democracy and interdependence, and future renewal (pages 5-23).

    The section on growth and jobs (pages 10-14) is of particular interest to those, who want to check on progress regarding competitiveness, employment, especially youth employment, and the European single energy market, as well as shortcomings of the single market and the need for smarter business regulation (page 12):

    Apart from energy, too many other sectors of the single market still fall short. Not least on services, the digital economy, the telecom sector and transport infrastructure – all areas where breaking down barriers would make a significant difference. To help boost the benefits for businesses, single market rules should be light and fit for purpose – this is a matter of common sense for all European Council leaders, and one that we recalled on several occasions this year. The purpose of joint rules is precisely to reduce red tape; when we get it right, it’s twenty-eight sets of rules out, and one in.
    A level playing field for all.

    Paradoxically, when it comes to the online and telecom economy, Europe is still a truly fragmented market.

    According to Van Rompuy, the seven year long term budget (MFF 2014-2020), which represents just one percent of EU GDP, is a modernised, realistic budget, focussed on the most pressing needs and geared to the future (page 13).

    In the international summary, Van Rompuy mentioned the efforts to negotiate (comprehensive) free trade agreements with major world economies (page 16):

    In the margins of the Lough Erne G8 in June, together with President Obama, we launched transatlantic free trade negotiations – a promising and powerful enterprise likely to create hundreds of thousands of jobs on both shores of the Atlantic. The European Union is also closing a deal with Canada, and working on agreements with Vietnam, India, Indonesia, Mercosur and Japan.

    Evaluation

    Dear readers, it would be interesting to read your informed views on the priorities and efforts of the European Council last year.

    My own impression is that Van Rompuy was highly conscious of the needs to create stability in the eurozone and the wider European Union, as the prerequisite for growth, and that he tries to engage the nationals leaders to enhance competitiveness, promote free trade and to roll out the single market where it still remains more of an ideal than a reality.

    Given the aims, his silence regarding the Europe 2020 (EU2020) strategy for smart, sustainable and inclusive growth was puzzling.

    [Outside the competitiveness theme, EU foreign policy stands on clay feet, and a less serene picture of international events might have been more realistic. The sections on democracy and renewal were profoundly conservative, defending the best of all possible worlds, without forward vision.]

    Ralf Grahn

  • Reinventing EU competitiveness?

    Competitiveness requires more comprehensive action than negotiating free trade agreements, clearing single market obstacles and cutting red tape. Membership of the EU, or even the maligned eurozone, does not exclude world class competitiveness.

    We must ask what the European Union fails to do, to earn the constant stream of nagging from prime minister David Cameron, Europe minister David Lidington and the rest of the UK government about the lack of profound reform.

    When a politician calls for ”more” or ”better”, he can either reinvent the wheel or, in a more cooperative spirit, acknowledge what has been achieved and ongoing work. In his speech, Lidington made a few concessions to continuing efforts (trade, business regulation aka REFIT), but let us take a closer look at what the European Union does in the world outside the pages of UK tabloids and broadsheets.

    I invite you to follow me on this reading tour, in order to see for yourself. We begin in this blog post.

    European Commission 2010-2014

    The European Commission tries to inspire the EU member states to enhance competitiveness, to reinforce public finances in order to enable growth and jobs, and to promote business through international trade deals and internal market reforms.

    The Barroso Commission recently published an overview, near the end of its five year term. The publication is downloadable for free in 24 languages; the English version: European Commission 2010-2014 – A Record of Achievements (pdf, 63 pages).

    What we gain from president Barroso and each commissioner hailing main achievements and highlighting a few concrete projects, is a reminder of the breadth of activities of the Commission to improve life in Europe and beyond, on an EU budget corresponding to one percent of GDP.

    The good thing is that the publication is easy to read. However, this self-promotional brochure lacks critical discussion and rigorous examination, meaning that we have to look elsewhere for the sources to feed an informed debate citizens, interest groups, businesses and governments should contribute to, or at least call for.

    General report 2013

    For those interested, the EU Bookshop offers a huge amount of freely downloadable publications about the EU. At a suitable overview level, we have the latest annual General report on the activities of the European Union 2013 (pdf, 231 pages), available in 23 languages.

    The report accounts for main proposals and decisions in readable language, offering references to sources for further study.

    There is reason to point out the parts we are particularly keen on, in relation to competitiveness.

    Competitiveness stands on the foundation of sound public finances, wisely allocated, and functioning public and financial institutions:

    Chapter 2 Towards economic, fiscal and banking union; from page 18

    Enhancing European economic governance and reinforcing Europe’s growth agenda 21
    Financial assistance: details of programmes for Ireland, Greece, Spain, Cyprus and Portugal 28
    Strengthening economic and monetary union for the future 34
    A strong financial framework for Europe and a banking union for the euro area 36
    Consumer protection in financial services 42
    Financing the future: securing sustainable public revenue through improved tax policy coordination 45

    Chapter 3 Towards economic recovery, growth and jobs; from page 48

    EU policies for growth — Europe 2020 51
    An open and fair internal market 73
    The contribution of trade to economic growth 95
    Agricultural policy, and fisheries and maritime policies 97
    Budget 102

    In exchange for about a hundred pages of reading, you get a fairly comprehensive view, from a Commission perspective, of the EU activities most closely related to the quest for competitiveness.

    On the whole, the European Commission seems to be doing what it can, within the constraints of the treaties, the budget, the member states and the European Parliament.

    The General report on the activities of the European Union 2013 is a good foundation for further exploration.

    Ralf Grahn

  • What is competitiveness, Mr Lidington?

    When the government of Britain is betting continued membership on competitiveness reform by the European Union, the situation is serious enough, at least politically.

    Growth and jobs are important for us EU citizen regardless. For our own sake it is worth looking at how the European Union contributes.

    We saw the UK's Europe minister David Lidington calling for EU competitiveness in his Berlin speech.

    Global competitiveness

    Since we're talking about it, it might be a good idea to know what we are talking about.

    What is competitiveness?

    With calls for an open EU ringing in our ears, we must take a world view.

    Let us turn to The Global Competitiveness Report 2013-2014, from the World Economic Forum (WEF) (pdf, 551 pages).

    The latest report covers 148 economies, with global rankings assessing over a hundred indicators. The WEF has grouped these elements of competitiveness under twelve headings (pillars):

    institutions; infrastructure; macroeconomic environment; health and primary education; higher education and training; goods market efficiency; labour market efficiency; financial market development; technological readiness; market size; business sophistication; and innovation.

    The pillar components are on display on one page for each country. Albania, the first country alphabetically, offers a detailed listing on page 101.

    Our first observation is that, important as they are, negotiating free trade agreements, clearing single market obstacles and cutting red tape seem to represent a selective angle on competitiveness, rather than a comprehensive approach.

    If we go to the country ranking, the Global Competitiveness Index (GCI), we find the EU member states in the following positions among the 148 economies:

    3 Finland, 4 Germany, 6 Sweden, 8 Netherlands, 10 United Kingdom, 15 Denmark, 16 Austria, 17 Belgium, 22 Luxembourg, 23 France, 28 Ireland, 32 Estonia, 35 Spain, 41 Malta, 42 Poland, 46 Czech Republic, 48 Lithuania, 49 Italy, 51 Portugal, 52 Latvia, 57 Bulgaria, 58 Cyprus, 62 Slovenia, 63 Hungary, 75 Croatia, 76 Romania, 78 Slovak Republic, and 91 Greece.

    Our second observation concerns the wide variation between EU countries: from world class to third world standards. The United Kingdom honourably ranks in the top ten, but membership of the eurozone does not prevent three countries from scoring higher (or four, if we widen to EU membership), with less noise.

    Competitiveness and EU membership are not mutually exclusive.

    Ralf Grahn

  • David Lidington confronts EU competitiveness

    After the selective foreign policy participation appetizer and what looks like Cameron's self-betrayal over Juncker, we get to the UK Europe minister David Lidington's menu of market courses, intended to prove that there is, indeed, a positive British agenda for EU reform.

    In particular, Lidington wanted to refute the following ”misconceptions”, of which the positive agenda is the first theme:

    * The idea that the UK has no positive agenda for Europe;
    * The nonsense that the UK somehow does not respect European democracy;
    * And, finally, the suggestion that it is the UK that is somehow changing the rules and moving herself away from the rest.

    Competitiveness

    The second positive aim mentioned by Lidington was European competitiveness, (almost) right up the alley of the EU's official treaty objectives, 'a highly competitive social market economy' with an 'internal market', Article 3(3) TEU.

    In this vein he called for 'an ambitious trade agenda beyond our borders', including securing a Transatlantic trade and investment partnership (TTIP) with the USA and completing the international trade deals currently on the table.

    Lidington also wanted a true internal energy market and generally a free market (single market) within Europe’s borders. For the sake of growth and jobs, the single market in services, especially business services, needs to become a reality. The same goes for the digital economy.

    One set of regulation beats confronting 28 national ones, but the tenor is to free businesses to innovate rather than to pile on more regulation (light touch).

    Building bridges to the German hosts, Lidington referred to a DIHK (Deutscher Industrie- und Handelskammertag) report ”on our tables today”. Maybe it was Europapolitische Positionen 2014 der IHK-Organisation (European Policy Positions of the Organisation of Chambers of Commerce and Industry), Europe in the New Decade, recently published in English. An excerpt with key DIHK demands is freely available.

    Lidington commended the Barroso Commission for free trade agreements (FTAs) being negotiated and for efforts to simplify business regulation (REFIT), but he wanted more ambition in securing international trade deals, completing the single market and improving the business environment.

    He pleaded for EU intervention or new legislation only where strictly necessary, leaving decisions to the national level whenever possible, as he interpreted the outcome of the European Parliament elections (maybe the light touch of voters who stayed at home, or the votes of those who hate immigrants).

    EU's genetic code

    One of the easiest tasks for a politician doing public speaking is to call for ”more” or ”better”, but obviously Lidington is on a right track, and the challenges he mentions are relevant for the whole European Union.

    The aims he mentions are part of the EU's DNA, enshrined at treaty level. Let me just briefly mention a highly competitive market economy, the common commercial policy to liberalise international trade, and the internal market (single market) to ensure the free movement of goods, persons, services and capital.

    The means to achieve the goals need to be commensurate with the objectives, but the European Union exercises only the powers conferred by the treaties. Proposed legislation must pass the subsidiarity and proportionality tests, meaning European level law only when it is a better option, but not more intrusively than necessary.

    Since what Lidington calls for is already part of the genetic code of the European Union, with regard to markets, the crucial question is how successfully the EU enhances its international competitiveness in practice.

    This opens up a huge field of investigation, divided into a number of issues, even if we remain at the overview level of reports, guidelines and plans during our quest to understand what the EU is doing, and how.

    Growth and jobs are important enough, so let us embark on a comptetiveness tour of EU reform.

    Ralf Grahn

  • Was Cameron betrayed? (Updated)

    A number of European Union countries share Britain's drive to expand free trade and to improve the EU single market, especially in new fields, such as digital and other services and energy. Germany, the Netherlands, Nordic and Baltic countries and some Central European members would be sad to see the United Kingdom drift out of the EU.

    However, practically all of them are firmly wedded to the EU. Almost all of them are current or future members of the eurozone. If the euro area has produced little economic convergence, necessity pulls the governments towards increasing political integration.

    Few of these governments are bold enough to call for a United States of Europe, as the prime minister of Italy Matteo Renzi, but most of them show some sort of respect for the elements of EU level democracy, such as their Europarties and the European Parliament.

    They watch the worsening political climate in the UK with regard to the EU and continuing obstruction from Britain with growing exasperation.

    Cameron's challenge

    Despite the support from almost all centre-right and centre-left governments and members of the European Parliament for Jean-Claude Juncker to lead the European Commission, prime minister David Cameron worked hard to block the proposal, expending much political capital to end in self-inflicted defeat.

    In the end Cameron was supported by only one other prime minister (Hungary's Orban) among the 28 heads of state or government last Friday.

    Unsubstantiated rumours and innuendo fed the British anti-Juncker campaign, eagerly propagated by domestic media. No wonder that secessionists and public opinion greated Cameron's souring of EU relations as an act of heroism.

    Cameron's election prospects may benefit at home from opposing an 'alien' Continent, but this is hardly the stuff European 'reform' coalitions are made of.

    Perhaps the effects in Europe are of little import, given the domestic climate. If the Conservatives or UKIP win the 2015 general election, Great Britain is heading for an in/out referendum in 2017. After the charge of the Cameron spin brigade, withdrawal from the European Union is a bit more likely than it would have been without the attack.

    The European leaders were unable to prevent PM Cameron from throwing himself on his sword, when he directly challenged their Europarties, the European Parliament and citizen-voters of the EU.

    They can only try to accommodate reasonable British concerns, despite rising political cost among their own populations, increasingly fed up with unending UK antics.

    Despite dark hints about betrayal from perceived European allies, this much should have been clear even to a 10 Downing Street enamoured with its own cleverness, before forcing the issue:

    If the EU countries must choose between Europe and Britain, they must always choose Europe, as Churchill would have realised by now.

    Update 3 July 2014, about 13:20 EEST: After Britain's threats to leave the European Union, 66 percent of Germans and 68 percent of the French can envisage an EU without the UK.

    Ralf Grahn

  • David Lidington tackles ”misconceptions”

    The European Council 26-27 June 2014 conceded that some countries may halt on the road to ever closer union, provided they allow for the rest to proceed unhindered, something Britain has still to learn. Currently, the United Kingdom is far from a fully contributing member state of the European Union, so what more – meaning less – does it want?

    ”EU reform” and renegotiation

    Indirectly, 'respecting the wish of those who do not want to deepen any further' seems to contribute to a definition of the ”EU reform” and renegotiation package UK prime minister David Cameron keeps on demanding, without offering more than a few slogans about content.

    Part of the British agenda points to less, at least relative to other EU member states, meaning more exceptions.

    Then there is the question of a possible positive agenda. The emerging core of the EU, the 18 (soon 19) countries of the eurozone, plus the pre-ins, need to create a robust, effective and accountable economic, monetary and political union worth the name.

    The loudest battle cries from the UK government concerning all have been: for competitiveness, for free trade and for the single market.

    David Lidington

    Just before the European Council, the minister of state for Europe, David Lidington, spoke in Berlin about the UK's priorities for EU reform, wanting to tackle head-on some of the ”misconceptions” about the UK’s approach to the European Union and the government's approach to European reform.

    In particular, the Europe minister wanted to refute the following ”misconceptions”:

    * The idea that the UK has no positive agenda for Europe;
    * The nonsense that the UK somehow does not respect European democracy;
    * And, finally, the suggestion that it is the UK that is somehow changing the rules and moving herself away from the rest.

    ”No positive agenda”

    Foreign policy

    In the area of the common foreign and security policy, Lidington mentioned issues where Great Britain has chosen to work with(in) the European Union: Ukraine, Iran, Kosovo and Serbia, as well as generally to spread democracy, human rights and the rule of law in the wider Europe.

    Let us note that the United Kingdom has been adamant in requiring unanimity in the main questions regarding foreign, security and defence policy (Articles 23-46 TEU), choosing 'ad hoc' when to use the EU as an instrument for its perceived national foreign policy interests.

    We see no indications of an effective, unitary foreign policy, or a European defence for the future, despite the American exodus.

    How about a permanent seat for the European Union in the UN Security Council, replacing France and the UK?

    ***

    After the warm-up part of Lidington's speech, we move on to more serious stuff (from a UK angle).

    Ralf Grahn

  • Anatomy of Britain in Europe

    We saw that the heads of state or government, as Jean-Claude Juncker earlier, were willing to apply the principle of 'live and let live' with regard to Britain, provided it worked both ways.

    The Mauritshuis in The Hague has just reopened after renovation, part financed by the European Union. Let me therefore recall Rembrandt's painting The Anatomy Lesson of Dr Nicolaes Tulp, before I start dissecting the United Kingdom as a member of the European Union, using normal membership as the measure.

    Legal exceptions, historic experience and current attitudes form the basis for a few suggestions.

    Opt-outs

    The United Kingdom has chosen to remain outside core areas and values through opt-outs (Wikipedia): the Schengen area of free travel, the economic and monetary union (euro currency), the Charter of Fundamental Rights, and the area of freedom, security and justice (AFSJ; police and criminal justice legislation).

    Verbally, PM Cameron's government seems to realise that the eurozone is the emerging hard core of European integration, but practical obstruction has dampened the effect.

    Through Statewatch we can see that the UK notified the EU on 24 July 2013 that it opted out of all acts of the EU in the field of police cooperation and judicial cooperation in criminal matters, under Article 10 of protocol 36 to the treaties, and that Britain now wishes an "opt-back-in" to a list of measures (16 June 2014, document 10168/14 limite).

    Due to overextended rules on national referendums, Denmark may have as many opt-outs as Britain, but researchers and responsible politicians see them more as impediments than as advantages. The United Kingdom is different in this respect: fiercly marginal.

    Budget rebate

    The UK also has a budget rebate (Wikipedia), paid by other member states and worth about €3.8bn, leaving the the current net contribution at €3.86bn (2012). Since the British rebate is about two-thirds of the the net contribution (the amount by which UK payments into the EU exceed EU expenditure returning to the UK), the country has a disincentive to use EU funds, which require local funding as well.

    Small wonder that the United Kingdom acts like a ”budget hawk”, willing to downsize the EU budget, including for the poorer countries its expansive enlargement policy has brought into the European Union (to pay for the rebate).

    Blocking progress

    In addition to the opt-outs and the budget rebate, we have a forty year history of UK participation in European integration, including treaty reform, paved with vetoes, blocking actions and red lines.

    The anti-federalist and anti-democratic rhetoric from the government, politicians, media and wide segments of public opinion is on the increase.

    The United Kingdom has not been a shining example of allowing those who want to deepen integration to move ahead.

    Referendum lock

    The referendum lock, officially the European Union Act 2011 (Wikipedia), means that any treaty amendment transferring powers to the EU is subject to a binding referendum.

    Since treaty amendments and new treaties require unanimity, the national referendum lock 'de facto' prevents the whole European Union from gaining new powers, given the political climate in the UK.

    In my view, there are three cases when a national referendum is justified regarding the EU: 1) accession, 2) secession, and 3) the quality leap to a democratic European republic (federation).

    Countries, such as Denmark, Ireland and now the UK, insisting on referendums in other cases, should not allow holding back the (rest of the) European Union. If exceptions are impossible, secession is preferable for the sake of the whole.

    EU referendum

    In January 2013, prime minister David Cameron promised the British people and in/out referendum on the European Union by the end of 2017, should the Conservatives win a majority in the 2015 general election.

    He asked for time to make the European Union ”fit for the 21st century”, based on five principles: competitiveness, flexibility, repatriating powers, democratic accountability through national parliaments as ”the true source of real democratic legitimacy and accountability in the EU”, and fairness for countries inside and outside the eurozone.

    Participation in the single market, and the UK's ability to help set its rules was the principal reason for membership of the EU, according to Cameron.

    For all their declarations about the importance of Britain as an EU member, the other countries know that treaty level progress with the UK is practically impossible (without escape clauses) and that Britain may not be a member anyway a few years from now.

    Anti-democratic

    In his statement to the House of Commons yesterday (30 June 2014) on last week's European Council meeting, prime minister Cameron could have admitted that he had missed an opportunity to allow those that want to deepen integration to move ahead.

    He could gracefully have conceded to the proposal that the lead candidate of the largest political group, Jean-Claude Juncker of the European People's Party (EPP), should be elected as president of the next European Commission by the European Parliament.

    Every time Cameron damages Britain's relations with EU members and institutions, he receives support from anti-EU backbenchers and media, smelling not the coffee, but approaching Brexit.

    Cameron was not prepared to budge, even after the 26-2 vote for Juncker, because he rejects the prospect of European level democracy.

    The Labour leader Ed Miliband is almost as minimalist, intergovernmentalist and exceptionalist as Cameron. Lately it has been difficult to find evidence that the chairman of the Liberal Democrats and deputy prime minister Nick Clegg is less parochial.

    If in power, the secessionist UKIP chair Nigel Farage would solve the problem for the European Union.

    Live and let live

    Until then, the UK political establishment should try a new, constructive approach to future EU level democratic government, accountablity, transparency and needed powers for the rest of the European Union.

    The British government wouldn't need to antagonise other member states or convert the public in continental Europe into more fervent Brexit supporters, when strong signals of 'live and let live' as a two way street could achieve better results and relations.

    Unless poisoning is in its nature, as in the fable about the scorpion and the frog.

    Ralf Grahn

  • Ever closer union – without Britain

    The member states of the European Union have been unwilling or unable to define the destination (finalité), but the spirit of the Churchill Zurich speech (1946) was clear: 'We must build a kind of United States of Europe', the first step in the re-creation of the European family being a partnership between France and Germany. He cast Great Britain and others into the role of friends and sponsors of the new Europe, as champions of its right to live and shine.

    The Schuman declaration (1950) evoked 'the first concrete foundation of a European federation indispensable to the preservation of peace'.

    The six original member states indicated the direction in preamble to the Treaty establishing the European Coal and Steel Community (ECSC; 1951) as 'the foundation of a broad and independent community among peoples long divided by bloody conflicts'.

    In the preamble to the 1957 Treaty establishing the European Economic Community (EEC) the members were determined to 'to establish the foundations of an ever closer union among the European peoples'.

    Today, in the Lisbon Treaty, 'an ever closer union among the peoples of Europe' remains the direction for the EU, according to Article 1 Treaty on European Union (TEU).

    European Council

    Last week the members of the European Council conceded that some countries might want to advance nowhere or regress, although the context makes it clear that it was agreed with the United Kingdom in mind (EUCO 79/14):

    27. The UK raised some concerns related to the future development of the EU. These concerns will need to be addressed.

    In this context, the European Council noted that the concept of ever closer union allows for different paths of integration for different countries, allowing those that want to deepen integration to move ahead, while respecting the wish of those who do not want to deepen any further.

    Once the new European Commission is effectively in place, the European Council will consider the process for the appointment of the President of the European Commission for the future, respecting the European Treaties.

    Respecting the wish of Britain and other potential laggards, who do not want to deepen any further, is one side of the bargain.

    This political outline does not serve EU reform, but British exceptionalism, if further exceptions are brought to the negotiation table.

    Remembering the centrifugal prime minister Cameron's effort to block the fiscal compact, the leaders also laid down the other side of the bargain: allowing those that want to deepen integration to move ahead.

    Juncker priorities

    The lead candidate of the European People's Party, which returned the largest number of MEPs, Jean-Claude Juncker, was vilified by British spin doctors and media as the most dangerous man (and drunk) in Europe and an arch-federalist to boot (federalism being a system for decentralised, democratic government).

    In reality, Juncker is a softly spoken, pragmatic centre-right politician, with an almost unsurpassed career as a national leader in his native Luxembourg and a patient deal maker on the intergovernmental side of the Council of Ministers, the European Council and the euro group. His experience of the European Commission and the European Parliament is more indirect.

    Juncker's priorities for growth and jobs aim to create a real digital single market, an energy union, a reasonable and balanced TTIP and continued reform of the economic and monetary union. Although the British government refused to talk to Juncker until the European Council proposed him (by 26 to 2), he already presented the foundations for an understanding with the UK:

    * As Commission President, I will work for a fair deal with Britain. A deal that accepts the specificities of the UK in the EU, while allowing the Eurozone to integrate further.

    * My red line in such talks would be the integrity of the single market and its four freedoms; and the possibility to have more Europe within the Eurozone to strengthen the single currency shared so far by 18 and soon by 19 Member States.

    Juncker also presented fairly mainstream priorities for reform on immigration, foreign policy and digital jobs.

    Since the government of the United Kingdom did not propose an alternative candidate, we do not know who would have been so much closer to their agenda of exceptionalism and narrowly defined market reform calls, as to merit such a vicious and counterproductive campaign against Juncker and the democratic lead candidate (Spitzenkandidat) system.

    Ralf Grahn

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