Year LIV, 2012, Single Issue, Page 3
Time to Transfer
We have decided to make this year’s issue of The Federalist a special issue devoted entirely to reflections on the institutional reforms that are necessary in order to prepare for the birth of the United States of Europe. Accordingly, the “Documents” section contains two of the landmark contributions to this debate over the past 25 year (two essays by Francesco Rossolillo, one from 1986 and the other from 2003); the issue also includes two new essays, one by Giulia Rossolillo and the other by Domenico Moro.
It would probably be useful to begin by trying to explain why we have chosen this particular moment to devote an entire issue to this topic. As Francesco Rossolillo’s two essays show, the federalist movement (and, with it, our journal) has always spearheaded efforts to work out and indicate the political-institutional conditions that will allow Europe to advance towards federation. Indeed, throughout the process of European unification, the role of the European Federalist Movement (MFE) has always been, on the one hand, to clarify the nature of the power situation created in the wake of each step towards integration and, on the other, to identify the institutional objectives to be reached and the critical points that needed to be (or ought to have been) exploited in order to move the process forward. Driven by the pressure of the current political and economic crisis, Europe is today on the threshold of a real opportunity to complete the process of its own unification and, in so doing, save the entire European edifice from collapse. At this critical historical juncture it is clearly imperative to make the federalist voice heard in the debate, drawing on the experience that federalists have acquired during long years spent reckoning with the problems and impasses that, still today, prevent Europe from taking the road to political unity.
Essentially, we analyse two aspects: the framework that has been created within the European Union and the decisive points on which to focus in order to advance. The starting point for the first of these analyses is the observation that political unification of the eurozone is fast becoming a prominent issue in the debate, and that this is down to Germany, which has realised — in this sense it is ahead of the other European countries — that the instruments Europe needs in order to find a way out of the crisis are not so much financial and economic as political and institutional. That said, it has to be noted that, for the moment, Germany is alone in adopting this stance and has yet to translate it into clear, concrete proposals; therefore, it still has to try and win the consensus of its European partners and develop appropriate institutional formulas.
This realisation on the part of Germany, prompted by the worsening crisis, has been extremely rapid. Until just two years ago, before the first bailout of Greece, Germany (like all the other EU member states) saw the European Union, with its 27-member single market and “Community method” of operating, as an adequate and stable framework. For Germans, monetary union had ceased to be a political question (a question of peace or war, and therefore a step towards the European Federation), as it had been under Kohl, and was merely seen a necessary technical transition enabling the European market to function efficiently; as such, it needed nothing more than the rules of the Stability Pact to govern it. But, as has already been shown on numerous occasions, also in The Federalist, the explosion of the debt crisis forced the European governments to acknowledge the inadequacy of the community method; within the space of just a few months, it also became clear that the framework of monetary union (restored to its status as a political enterprise) had to be distinguished from that of the broader single market, thereby paving the way for a break with Great Britain and with the other countries that do not want to join the euro. But none of this has lessened the danger for the single currency. Indeed, the intergovernmental method, until now used to compensate for the structural weaknesses of the community method (for a detailed analysis of these weaknesses, see the essay by Giulia Rossolillo in this issue) and recently also as the basis of a break with the old framework, has now too gone as far as it can go and — inevitably — reached an impasse. The crucial steps discussed in the run-up to the European Council summit of June 28-29, 2012, i.e. the creation of a banking union and a fiscal and economic union, cannot be tackled using this method; in short, the intergovernmental method is not capable of resolving the decisive issues, namely, solidarity, political credibility, and democratic legitimacy.
On the solidarity front, the current examination of possible new European instruments, like the ones just mentioned, has been prompted precisely by the realisation that measures like the granting of financial aid to countries at risk of bankruptcy and the creation of “firewalls” against financial speculation (the first form of solidarity imposed by the crisis) are no longer enough, and that what is needed is a way of “mutualising the debt”; but such a solution, in the current institutional framework, would spell disaster: the markets are the first to doubt — precisely because of the current framework — Germany’s capacity to guarantee the debts of the entire eurozone and they would be bound to react to this solution with a speculative attack of unprecedented severity. Hence, there arises the problem, highlighted by German chancellor Angela Merkel, of ensuring that joint liability and joint control always go hand in hand, but it is a problem that neither the fiscal compact Treaty nor the Treaty establishing the European Stability Mechanism can resolve. Furthermore, in the current setting, no-one, neither the markets nor the non-European powers, would trust in the soundness of a “common European debt,” mainly because “the present Europe” has absolutely no political credibility: it lacks the capacity to envisage a new (desperately needed) cycle of development (which it would in any case be incapable of initiating using the current, still exclusively national, instruments). Furthermore, with no foreign policy and no international negotiating power, Europe has ceased to be a responsible force in the world. Finally, the issue of Europe's democratic legitimacy is becoming dramatic. The citizens are growing increasingly disaffected with a system that is not working and that, perceived as extraneous, seems to be constantly imposing sacrifices on them; in addition, there are the intolerable delays and contradictions caused by the fact that democratic control is exercised at national level, albeit now more in form than in substance, while decisions are taken at European level.
In this setting, no intergovernmental solution (unless it is clearly intended as a startup stage in a process destined to lead to radically new institutional balances) will ever be acceptable, let alone workable. And this is why Germany, adopting a new and significant choice of terminology, has begun to draw its partners’ attention to the need for a new step: that of transferring sovereignty.
In politics, this expression is never used casually: sovereignty is the source of power and in democracies it lies in the hands of the people. Therefore, to propose transferring sovereignty to European level is to raise the possibility of superseding the national framework, not only from the power point of view, but also in terms of democratic guarantees and the identity of the sovereign people. This solution is an alternative to the traditional one, which is to give Europe new competences and create mechanisms (sometimes competing ones) for managing the relative powers; indeed, it is a truly radical proposal whose message is that Europe can survive if, and only if, it becomes a state. This, today, is no longer the “federalists’ slogan”: it is also the design of Germany, a country that, strengthened by a keen awareness of its own recent history and federal structure (and thus able to conceive of the existence of a federal European people, united but comprising different identities and retaining the capacity for self-government at national level), as well as by the vigorous internal constitutional debate that has always accompanied the European integration process, does not fear incorporation into a federal European framework. Obviously, this does not mean that the United States of Europe can be brought into being simply through a single sensational decision at the next European summit, or at the ones after that. When the economic crisis erupted, Germany and France proved able to initiate only a gradual strengthening of European cohesion (this is partly because of the nature of the crisis which, being financial and economic, did not constitute the immediate threat to security that, according to Francesco Rossolillo, is what it will take for governments to make the radical decision to enter into a federal pact, and partly because it caught the eurozone countries unprepared, both politically and culturally); but, as shown by the acceleration of the debate in Germany, the time has now come, even within the context of a gradual building of political unity, to indicate clearly the institutional model that is required and to set out the steps necessary in order to reach it. This has now become the essential condition for any further progress; in the words of Mario Draghi: “The eurozone member governments must together and irreversibly define their vision of the economic and political construction which will sustain the single currency.”
From this perspective, the interventions of the EU institutions contribute little. The entire work of the Commission and the European Parliament, even though these organs should be developing proposals for the eurozone alone, is conditioned by the idea of preserving the Community method and the Community framework. Their proposals are always underpinned by a desire for the eurozone to remain a subgroup within the Union, governed by ad hoc rules, but controlled by the institutions of the 27-member EU, and they make no provision for transfers of sovereignty. The European institutions, in short, are failing to recognise that the choice to break with Great Britain is definitive and that there is now an urgent need to redefine the functioning of EU institutions so that they can play a role in the new “concentric circles” framework already outlined by the new Treaties; at the same time, they are also failing to appreciate the urgent need to re-establish the foundations of coexistence in Europe, which can no longer be based on relations between sovereign member states (acting as their citizens’ intermediaries), but must instead be directly legitimated by the citizens of Europe, even though the latter continue to be organised (also) into nation-states.
This inertia on the part of the Commission and the European Parliament is serving only to strengthen the intergovernmental front (currently led by France with the support, among others, of Italy, even though Italy, by tradition, should, and could, play a decisive role in favour of federal unity) and encourage proposals whose aim, ultimately, is the creation of specific, but still intergovernmental, institutions for the eurozone (e.g. giving the Council, in restricted composition, executive powers and creating a chamber comprising representatives from the eurozone’s national parliaments which would have monitoring functions and also serve to impart democratic legitimacy — proposals that actually date back a long time: in this regard, it is very useful to reread Giscard d’Estaing’s 1995 manifesto, but also, for a more recent perspective, Joschka Fischer’s latest considerations). However, it must be stressed that such intergovernmental-type solutions cannot work, unless they serve as initial steps and are clearly part of the broad political design under discussion, because attempting to build European democracy by strengthening national control over common decisions actually serves only to impede the formation of a common European will and encourage a return to nationalism. Moreover, on analysing the current framework it is clear that the only possible source of democratic guarantees, in this initial phase, is a European Parliament capable of functioning according to a variable geometry approach and thus of operating in restricted composition (i.e. at the level of the MEPs of the core group of eurozone countries prepared to relinquish sovereignty). This is why it is essential that the MEPs of these countries realise how crucial it is for them to endeavour, within the setting of the European Parliament, to outline a new institutional framework for a concentric circles Europe, with a fully democratic federal eurozone as its core – a framework that could be proposed in support of the German appeal to transfer sovereignty to European level. It is, in fact, difficult to imagine that a European democracy can be built without the political forces and their representatives in the European and national institutions really realising the nature of the struggle it will take to accomplish this end and the challenges that will arise, and without them helping to raise public awareness in this regard. And this is precisely why the current debate, hinging on economic policy choices but failing to consider the political and institutional conditions that would make them possible, or prevent them, is such a sterile one.
Many dangers and obstacles still lie on the path towards the construction of a United States of Europe, and they must be addressed and overcome without delay. As indicated, our main intention, in putting together these key federalist analyses, is to contribute to the ongoing debate by highlighting several points that provide essential pointers as regards the choices that need to be made and the way in which to frame the necessary institutional reforms. In this latter respect, the proposals so far advanced by Germany are still very confused and ambiguous. Even though there is now greater awareness of the need to build political unity within the eurozone, it remains difficult to work out whether the new political framework, defined by membership of the single currency, should coincide with a core group within the broader European Union (which, in turn, would continue to coincide with the single market), or whether, conversely, the EU itself should shrink to encompass only the countries participating in monetary union. In the latter scenario, those not wanting to adopt the euro or relinquish political sovereignty, being excluded from the framework, would have to renegotiate, from the outside, the terms of their membership of the single market. It is, of course, still too early to say which of the two alternatives will ultimately become reality. It is also obvious that the two options, whichever prevails, prefigure very different types of institutional system. In the second case, the current EU institutions could become, after major reform, the institutions of the new federation; in the first case, on the other hand, institutions working with variable geometry mechanisms would coexist alongside separate institutions for the two areas. In particular — and this is the issue considered by Giulia Rossolillo in her essay and also the point made in the above reflections —, whereas the European Parliament (which it is hard to imagine duplicating, in the sense that it is difficult to imagine the election by universal suffrage of another, alternative chamber) is certainly an organ that could work on a variable geometry basis, it is unfeasible to think of creating an executive body or government that could serve both the federal core and the community-intergovernmental framework of the single market; therefore, the Commission could either evolve into the government of the federal core, in which case it would have to include only members from eurozone countries and be directly elected and legitimated by the European Parliament in restricted composition, or it could continue to be the institution that it is now and not play an executive role within the federal core. It is, indeed, the role of Commission and the proposals for an institution responsible for governing the eurozone that are causing the most confusion and ambiguity. This is shown by the various proposals currently being aired: some in favour of a stronger role for a restricted Council within the EMU framework, and others advocating direct election of the president of the Commission. Clearly the latter, intended to politicise and “democratize” the Commission, are, in the 27-member framework in which they have been conceived, contradictory and, for the moment, incapable of paving the way for a narrower EU, insofar as they do not seek to influence the composition of this organ.
It is therefore important to stress, first of all, that however the Europe of concentric circles is eventually structured, the framework within which institutional advances can today be made is that of the (enlarged) eurozone defined by the EMS and fiscal compact Treaties and, presumably, by the decisions that will be taken at forthcoming summits. Second, as highlighted by Domenico Moro in his essay, effective progress may be measured only in relation to the questions of a European power of taxation (and the institutions that will be entrusted with exercising this power) and the management of the European own resources generated as a result of its introduction.
In short, the need to start moving along the path that will lead the eurozone countries to the transfer of sovereignty is now unavoidable, given that this is the only context in which measures in the financial and economic fields (such as, respectively, the creation of the so-called banking union or euro-bills and France’s Pact for growth in Europe) can have any real meaning. The first evidence of the existence of a real political will in this sense will be provided by the establishment of an independent European power of taxation within the eurozone; but this will be possible only by developing innovative institutional solutions appropriate for this purpose and also, with a view to creating the first forms of democratic control and legitimacy, by starting to involve the MEPs of the eurozone countries in the endeavour.