Year LVI, 2014, Single Issue, Page 154

 

 

FEDERALIST ACTION
IN THE PHASE OF DIFFERENTIATED INTEGRATION
*

 

 

The historical phase we are living through in Europeconfirms the federalists’ analysis that the monetary union has not been, is not, and cannot be the final stage in the process of European unification, but is, rather, a turning point, given that its failure would mark the definitive end of this process and usher in a return of nationalism and a crisis of democracy in Europe. The economic and monetary union is thus the framework that can and must be taken as the starting point for the construction of a federal political union in Europe.

The monetary union, although initially conceived as a framework that coincided with that of the European Union (albeit making provision for temporary derogations for some of the states, pending their attainment of the necessary requisites), has actually gradually been converted into a subsystem within the EU, due to the determination of some states to remain outside it. This has introduced a new complication into the battle to achieve the federal objective: that of the need to govern (and institutionalise) the differentiation existing within the EU framework.

The problems created by the member states’ different levels of political will to deepen their reciprocal integration actually date back to Great Britain’s entry into the European Community. But it was with the birth of the monetary union and the start of the process of enlargement to the countries of Central and Eastern Europe that they became so great as to force the EU to start seeking to address them in institutional terms in the Treaties. For the purposes of the federalist battle it is therefore crucial, first of all, to specify what is meant by differentiation (and what different types of differentiation should be taken into consideration); and to get rid of the ambiguity — and inaccuracy — created by the use and exploitation, in not only the legal but also the political field, of the different forms of differentiation and flexibility provided for in the Lisbon Treaty.

  

The Different Models of Flexibility.

As Giulia Rossolillo explained in a recent article,[1] ever since the time of the Maastricht Treaty, the differentiation debate within the EU has focused essentially on two different models, which reflect two different visions of the process of integration. The first, which finds its fullest expression in the Schäuble-Lamers report presented to the Bundestag by the CDU/CSU parliamentary group in 1994, sees flexibility as an appropriate instrument for ensuring that a homogeneous group of states, determined to take concrete steps towards greater integration, is able create a kind of core within the EU, and therefore potentially to act as a vanguard (open to all states wanting to be part of it) spearheading the integration process. The second model, illustrated in the same year by the then British Prime Minister John Major, envisages a kind of à la carte European Union, given that it interprets flexibility as an instrument allowing each member state to choose, in each field, whether to cooperate more closely with the other states or avoid more advanced forms of integration.[2]

The first model assumes that the states interested in differentiation will always be the same ones, even though the core group will remain open to new members; it also assumes that this group will, to an extent, be able to act independently of the states outside it. The second model, on the other hand, far from being based on the idea of giving rise to a sort of subsystem within the EU, seems, rather, to be driven solely by the intention of rendering the EU’s decision-making mechanisms more efficient, i.e. able to circumvent the right of veto that may be exercised by one or more states on specific matters.

This debate unfolded largely during the negotiation of the Treaty of Amsterdam and, as shown by the idea and definition of enhanced cooperations introduced by that Treaty, the second model is the one that prevailed: indeed, enhanced cooperations do not refer to a single pre-established group (each enhanced cooperation concerns a specific group of states); they must be authorised by the Council, and may be implemented only as a last resort, i.e. after having first exhausted every effort to reach an agreement among all 28 member states; enhanced cooperations must remain strictly within the spheres of competence of the EU; finally, they must preserve the existing institutional structure of the EU and therefore cannot create new organs. It is these characteristics, which remained the same in the Lisbon Treaty, that make enhanced cooperations instruments more useful for getting around the problem of unanimity in certain areas than for creating a subsystem within the EU. The Lisbon Treaty, by getting rid of the “last resort” condition, a kind of power of veto, actually facilitated the use of enhanced cooperations.[3]

Furthermore, the fact is that had the member states wanted to accept a model of differentiated integration that allowed the formation, within the Union, of a more closely integrated core group of states, they would have included in the Treaties provisions much more similar to those contained in the draft Constitution of the European Union presented to the European Parliament by the Institutional Committee in 1994 (the so-called Herman draft), which in fact was based on the establishment of a more integrated group of states within the Union and contained the provisions necessary for achieving this.

As regards the monetary union, on the other hand, the drafters of the Maastricht Treaty seem to have been inspired by this latter model offlexibility,designed to accommodate a stable group of states ready to “advance more and go further” than the others. This choice was determined largely by the fact that the flexibility envisaged for the monetary union, as indicated earlier, was meant to be temporary (whereas enhanced cooperations are designed to be permanent); indeed, the EMU was an exception to the principle of institutional unity which enhanced cooperations instead are designed to respect: the thinking was that the institutions created for the management of monetary policy would, in due course, embrace all the EU member states, thus restoring the EU’s institutional unity. However, as it became clear, over the years, that some states would never be prepared to give up their monetary sovereignty, and thus that the third phase of EMU was never going to include all the member states, there emerged a growing trend towards the establishment of an institutional structure specifically for the eurozone (as shown by the creation of the Eurogroup, the establishment of the ESM, the questions raised by the European Commission’s Blueprint in 2012 and by subsequent communications, as well as the resolution adopted by the EP in December 2013).

 

Reflections on a Political Level.

Following the indications on the completion of monetary union contained in the Commission’s Blueprint and in the plan drawn up by the four European presidents, there can no longer be any excuses for not knowing what needs to be done in order to turn the eurozone into an economic and political union. But the will to implement the four unions road map within a specific time frame continues to be lacking, and to date there is still no coherent plan for addressing the problems of how to create a fiscal union (now recognised as the necessary first step that will make it possible to start the process of consolidation/completion of the EMU) and ensure that this is democratically controlled. Unless this will emerges and an adequate plan is developed, the eurozone, faced with the internal and global challenges of the future, will find itself totally devoid of substance and credibility.

The basic problem is that every form of cooperation between states, once the drive to establish the minimum conditions for establishing and strengthening mutual trust has been exhausted and unless it serves to pave the way for significant transfers of power, ultimately comes down to nothing more than a modus vivendi whose sole function is to keep sovereignty at national level in a classic framework of international collaboration. This is nothing new to federalists. It is the lesson taught by Kant in his Perpetual Peace: the Preliminary Articles cannot contribute to the organisation of peace unless they have, as their ultimate objective, the Definitive Articles whose aim is to establish peace between states. Kenneth Wheare, reflecting on the “constitutional” nature of the Commonwealth would have reached the same conclusions: at the start of the last century, the members of the Commonwealth, in deciding that the institutional development of their community of states should be based on permanent voluntary cooperation, implicitly ruled out any prospect of evolving towards a federal model.[4]

Returning to the issues and problems of interest to us here, it is no coincidence that in the 1990s the Europeans, in order to create the single currency, i.e. to transfer to European level a key national power yet without creating a new state, had to go beyond the logic of simple cooperation. In short, decisions were taken, outside the framework of the EMS agreements reached in the course of the previous decade, which impacted on an area central to the lives of individuals and of states: the exercise of monetary sovereignty.

 

The New Dynamics of the Process of European Integration.

As we have already said, although the EMU was conceived as a temporary differentiation within the EU, it has taken on the characteristics of permanence: the idea was that all of the member states would — indeed should — eventually join it, but it is now clear that this will not happen in the foreseeable future. And this is precisely why, without constant exceptions to the principle of institutional unity, the present differentiated union will never be able to work in the long term (and indeed would already be unworkable now). This aspect of the single currency experience has become so central to the survival not just of the eurozone, but also of the countries whose economies are linked to it, that it is greatly undermining Great Britain’s braking strategy: put quite simply, a strengthening of the eurozone’s institutional framework is now in the UK’s interests too.

All this explains the various developments that there have been in the past three years in terms of Treaty modifications, new Treaties, the introduction of new institutions and bodies, the actions of the ECB, and the UK’s increasing self-exclusion from any new moves towards deeper integration.

It also explains why enhanced cooperations, which have actually been applied to a very limited extent and in areas not critical to the exercise of national sovereignty, offered little help in handling the emergencies thrown up by the crisis and now look unlikely to be a determining factor in defining in the new institutional framework. Theyhave shown themselves for what they are: tools allowing the implementation of differentiations that may indeed be permanent, but that refer to single policy issues; furthermore, these cooperations remain open to all the member states, even those that could potentially wish to sabotage them. Thus, what they actually represent is the point of convergence of the will and interests of different groups countries: those interested in getting around the unanimity problem in order to press ahead more quickly, but without surrendering sovereignty; the many that did not want to see a consolidation of the principle of institutional differentiation that was introduced with the EMU; and those that, like the UK, wanted to go on exerting their influence, from within the European institutions, in order to curb any federal acceleration, yet without being again pushed out of the frame. Designed to preserve the institutional unity of the EU without resolving the problem of sovereignty in crucial areas, they leave the states, both those that participate in them and those that do not, plenty of scope for working around them, and they are not designed to promote the construction of institutionally homogeneous subgroups within the EU. Indeed, under the Treaty provisions on enhanced cooperations (Art. 327 TFEU), it is still possible for a single state to denounce any undue impact, on its national policies, of policies pursued in the framework of an enhanced cooperation. For example, in the case of enhanced cooperations on fiscal matters, i.e. the crucial area whose developments will determine the future of the EU as a whole, all the MEPs would continue to be required to vote on all legislative proposals, including those relevant only to the countries sharing the single currency. Furthermore, under the current Treaties, the MEPs elected from eurozone countries would continue to be unable to decide independently, i.e. without the involvement of all the other MEPs, on changes to the EU rules applicable only to the euro area. It would thus take an amendment of the Treaties in order to introduce differentiated voting rights (either through recourse to the simplified Treaty revision procedure, which would allow further intervention on Art. 136 or some protocol changes; or through a profound revision of the Treaties) and/or a new Treaty and a Convention.[5]

 

What Tools are Needed in Order to Advance on the Path to Union?

To identify — when the appropriate time comes, but in any case within this European parliamentary term — the instruments that need to be used in order to move forward, it is worth recalling once again the two key points that still constitute the main goals that should guide the action of the European governments and institutions in tackling and managing the crisis. The first of these points, as we have said, is the objective of the four unions, which are increasingly emerging as the differentiated institutional solution for the economic and monetary union. The second is, instead, the need to create an additional fiscal capacity for the eurozone (with all that this implies in terms of creating a related ad hoc budget/fund and in terms of democratic legitimacy). It is in this context that it becomes possible to fight:

   to transfer a part of national sovereignty to the European level (as requested by the President of the ECB, Mario Draghi[6]);

   to resolve the question of the democratic legitimacy of the European Parliament within the context of differentiated integration.[7]

The debate on these issues is very advanced at European level, both among certain government leaders (such as Schäuble), and within think tanks such as the Eiffel Group and the Egmont Institute.[8]

For this reason, federalist militants and the UEF sections must equip themselves with the theoretical and technical tools needed to obtain a deeper understanding of the nature of this debate, so that they can try and help to clarify, at different levels, the ends and the means, in the full awareness that:

   the future does not depend on the EU Treaties alone (a solution to the sovereign debt crisis was sought and has been implemented outside this framework);

   the working of the economic and monetary union cannot be based on a single institutional framework at European level (the bodies of the ECB and the ESM act without the involvement of all the member states, as does the Eurogroup);

   the consolidation over the past twenty years of different levels of state participation in the EMU (i.e. with/without opt-outs and special status), added to the process of enlargement, has made it indispensable to pursue a deepening of the institutions through strong differentiation within the EU.

 

Towards Federal Union.

The guidelines decided by the Congress of the EUF and the collaboration with the JEF are the ideal channels through which to translate these reflections into actions. The guidelines, it should be recalled, sum up the issues and challenges on the table:

   the creation of a federal union starting with the eurozone (the objective to be pursued in the present historical phase);

   the creation of an ad hoc budget for the eurozone financed by genuinely autonomous own resources and subject to democratic control by the eurozone MEPs (the means to be used);

   the convening of a constitutional convention with a mandate to draft a federal constitution and to establish rules to govern relationsbetween the countries of the eurozone and the rest of the European Union (the method for ensuring the involvement, in the process, of the citizens and their representatives in the national and European institutions).

And, precisely because the question of the action to be taken cannot today be reduced simplistically to a series of choices — between acting within or outside the framework of the Treaties, between supporting or not supporting cooperation in specific areas, and between calling a convention with or without a constitutional mandate —, we have to be ready to propose and exploit all possible means that might bind the states, governments and institutions to specific commitments to transfer to European level a part of national power in the fiscal field, and to do so within a definite deadline, thereby defining the manner and the time frame of the transition to federal union.

And we must do this knowing that in the battle to consolidate the monetary union through its transformation into a full, federal union, what is at stake as the Europeans face what is perhaps their last chance to play a leading role, is not only Europe’s destiny but also a part of that of the world.



* This is a report delivered by Franco Spoltore at the UEF Federal Committee Meeting in Brussels on December 13th, 2014 as an introduction to the work of the UEF Political Commission on “UEF strategy and future of Europe”.

[1] See, in this regard, Giulia Rossolillo, Financial Autonomy and Differentiated Integration, The Federalist, 56 (2014), pp. 9-32.See also Giulia Rossolillo, Cooperazione rafforzata e unione economica e monetaria: modelli di flessibilità a confronto, Rivista di Diritto Internazionale, 97, n. 2 (2014), pp. 359-360. Also interesting in this regard are the reflections by Thierry Chopin, Reforming the European Union: Which Methods? Which Options?, Questions d’Europe/European Issues (Policy Papers of the Schuman Foundation), n. 320, 7 July2014.

[2] The latter is a strategy set out in no uncertain terms by the British government at the end of the Thatcher years. Margaret Thatcher had been rebuked by her own party for not having served the Britain’s best interests in choosing to openly oppose every single development within Europe rather than seeking to exert a negative influence from within (Conservative Party conference, 11 October 1991).

[3] Wishing to deal, above all, with the aspects of unification most closely linked to the possibilities for creating a union starting from the eurozone, no reference is made here to the enhanced cooperation proposed in the field of foreign policy — which, in turn, differs in scope for startup and operation from the one proposed in the military field. These two types of cooperation, which are unconnected, may indeed still fit into an intergovernmental schema.

[4] Kenneth C. Wheare, The Constitutional Structure of the Commonwealth, London, Oxford University Press, 1963, pp. 128-129 and 135-136.

[5] The problem was in fact already clear in the mid-nineties, both at the level of the governments (Karl Lamers and Wolfgang Schäuble, More integration is still the right goal for Europe, Financial Times, 31 August 2014) and within the European Parliament, as shown by the project (not approved) connected to the Herman Report: Resolution on the Constitution of the European Union, 10 February 1994.

[6] Mario Draghi, Memorial lecture in honour of Tommaso Padoa-Schioppa, London, 9 July 2014.

[7] European Parliament resolution of 12 December 2013 on constitutional problems of a multitier governance in the European Union (2012/2078(INI)).

[8] Interesting, in this regard, are the observations made by the former representative of the Belgian Government to the European Union, Philippe de Schoutheete, when presenting a voluminous study by the Egmont Institute published in Studia Diplomatica, 66, n. 3 (2013), as indeed are the considerations of Stijn Verhelst, also of the Egmont Institute, set out in eloquently entitled studies, such as: Variable geometry union: how differentiated integration is shaping the EU, The sense and nonsense of Eurozone-specific Parliamentary scrutiny, A Eurozone Subcommittee in the European Parliament: High hopes, low results? These are available at the following links:

http://www.egmontinstitute.be/publication_article/vol-lxvi-issue-3-2013-variable-geometry-union-how-differentiated-integration-is-shaping-the-eu/;

http://www.uaces.org/documents/papers/1401/verhelst_s.pdf;

http://www.egmontinstitute.be/publication_article/a-beginners-guide-to-differentiated-integration-in-the-eu/.

It is also worth consulting the interventions of Janis Emmanouillidis

http://www.emmanouilidis.eu/topics/differentiated-integration.php.

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