Ton
van den Brink, Associate Professor, University of Utrecht
The
recent ‘Five Presidents’ Report’ contains far-reaching proposals to deepen the
EU’s Economic and Monetary Union (EMU), which have been analyzed here. These proposals also have far reaching consequences for national
parliaments. The much needed democratization of the EMU requires national
parliaments to be assigned with stronger rights than the proposed intensification
of ‘dialogues’.
What
is at stake for national parliaments? The report proposes to come to a ‘system
of further sovereignty sharing within common institutions’ (p. 5). This system
would include, inter alia, a further Europeanization of economic policy
coordination, aimed at economic convergence of the Euro area. To that end, the
European Semester would be restructured and national ‘Competitiveness
Authorities’ would be set up in the Eurozone Member States. The proposals to
establish a Fiscal Union include the creation of an advisory European Fiscal
Board and a common macroeconomic stabilisation function to ‘better deal with
shocks that cannot be managed at the national level alone’. This last element
is similar to the tax authority proposed by German Minister Gabriel and French
Minister Macron as part of their plea for a radical integration of the Eurozone. It is unclear,
however, how the more long term perspective of creating a European treasury
would relate to national treasuries.
There
are more unclarities which make it difficult to assess how national parliaments
would exactly be affected. The European Fiscal Board would, for instance, only
have an advisory role. The general direction of the proposals is, however,
clear. The proposals would increase control of EU institutions over national
policies. Thus, a further Europeanization of economic policy making would be
the result. Second, the technocratic nature of decision making would be
strengthened. The further expansion of ‘rule-based cooperation’ and the
mandates of the new bodies would significantly contribute thereto.
Europeanization
and technocratization pose challenges for national parliaments. These are not
addressed, even though the report underlines that democratic legitimacy and
accountability should be the corner stones of the EMU. The proposals in this
regard do not add much to the already existing ‘six-pack’ and ‘two-pack’
arrangements and in any case do not extend beyond ‘streamlining’ procedures and
the strengthening of ‘dialogues’.
The
answer to these challenges cannot be the European Parliament, at least not the
European Parliament alone. It is true that the executive federalism that may be
witnessed in the field of economic policies requires a better position for the
European Parliament as well. But the European Parliament cannot substitute
national parliaments in economic policy making. First, there is no real
solution for the role of the European Parliament - representing citizens from
28 Member States - in decision making on measures that are limited to the Euro
area. Second, a substantial part of economic policy making is country specific.
This will remain so, even though the Five Presidents’ report contains proposals
to strengthen the euro area wide dimension of economic policy making. National
parliaments certainly qualify as the most obvious institutions to exercise
democratic control over the country specific part of economic policy making in
the EU. Thirdly, national parliaments’ constitutional rights are affected in a
very concrete manner by the proposals. Thus, strengthening their role would
also contribute to compensating that loss.
Taxation
and budget rights are among the most concrete constitutional rights that are at
stake for national parliaments. The right to decide on the national budget
implies budget autonomy. The German constitutional court, in its decision on
the constitutionality of the ESM-Treaty, ruled that: ‘Deciding on public revenue and public expenditure is a fundamental
part of the ability of a constitutional state to democratically shape itself. In
this context, the right to decide on the budget is a central element for
shaping opinions in a democratic society’.
Thus, the German constitution (as
well as the constitutional systems of many other Member States) would not allow
the national budget right to be relinquished altogether. Although the German
constitutional courts accepted the possibility of – even significant –
limitations to national budget autonomy, a suspension thereof for at least a
considerable period of time, would be considered unconstitutional by the German
constitutional court. The creation of a Macroeconomic Stability Function would
need to pass this test before it could be created. What is more, the Court made
it clear that it had formulated only minimum conditions and stressed the
discretion of the German legislature ‘to weigh whether and to what extent, in
order to preserve some discretion for democratic management and
decision-making, one should enter into commitments regarding future spending
behaviour and therefore – correspondingly – accept a restriction of one’s
discretion for democratic management and decision-making in the present’.
Closely
related (but in various constitutional systems recognized as a separate right)
is the right to decide on taxation. The constitutional significance of this
right, as well as its “sovereignty-sensitivity” have made it impossible thus
far to come to supranational taxes. The feasibility of a Euro area wide treasury
– whatever its exact form – is, thus, highly questionable.
The
position of national parliaments is also at stake with regard to macroeconomic
policies, which have redistributive effects. Specific national constitutional
guarantees are generally lacking in this area, but a Europeanization of these
policies is still particularly troublesome. This has to do with the lack of
common substantive principles or rules. Unlike fiscal policies – which are
‘rule-based’, such as the 3% rule - macroeconomic policies are essentially political
decisions, e.g on how labour markets and pension systems must be reformed and
whether and how national investment climates must be improved.
In
this light, the proposals from the Five Presidents’ report are too meagre for
national parliaments to ensure effective democratic control. It has to be acknowledged
that - should all of the plans indeed be realized - national parliaments would
be limited in their national decision making capacities on fiscal and economic
policies. This limitation of decision-making power should be compensated by
adequate accountability rights. It would therefore be far from sufficient to organize
plenary debates between the EP and the Commission and streamline the
interaction between the Commission and national parliaments and between the
European Parliament and national parliaments.
The
relationship between the Commission and national parliaments should be the
starting point for strengthening the position of the latter. It is one thing to
get the EU Commissioner to the national parliament to discuss country-specific
recommendations, but without the possibilities of sanctions this remains an
empty shell. The rules that have been developed in the context of EU
legislative procedures (most notably with regard to subsidiarity scrutiny) may
offer inspiration here. The right to make the Commission reconsider a
legislative proposal could, for instance, be applied in the context of economic
and fiscal policies as well: the national parliament at issue could be
empowered with the right to object to country-specific recommendations which
would lead to obligation for the Commission to reconsider these. In case of the
macroeconomic stabilisation function the existing mechanisms of cooperation
between national parliaments in the context of subsidiarity scrutiny could
offer inspiration. This could be linked to the right of assent for - a
qualified majority of – national parliaments.
The
exact shaping of national parliaments’ rights is, however, essentially a second
order issue. To get to that issue, it first needs to be acknowledged that a
genuinely democratic EMU requires national parliaments to have more at their
disposal than the right to be informed and to take part in economic dialogues.
Barnard
& Peers: chapter 19
Photo credit: www.clivebates.com
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