Year LXIII, 2021, Single Issue, Page 107
TOWARDS TRUE EUROPEAN DEMOCRACY*
My report focuses mainly on the role of the European Parliament in the institutional structure of the European Union, and the Treaty changes that are needed in order for true supranational democracy to take shape within the European Union.
I take as the starting point for my reflections the fact that there exists a fundamental contradiction between the importance attached by the Treaties to the principle of representative democracy, and the role that single Treaty provisions assign to the European Parliament, which, under Article 10 TEU, is the body that directly represents the citizens. Indeed, although this article states that “the functioning of the Union shall be founded on representative democracy”, and goes on to state that “every citizen shall have the right to participate in the democratic life of the Union”, the European Parliament clearly lacks many of the powers that parliaments traditionally hold, and does not have the power to rule on key choices affecting the lives of Europe’s citizens.
Indeed, even though, on the one hand, there are sectors in which the EP is placed on a par with the Council, and fully exercises its function as co-legislator, in others it has a very limited role, or no role at all.
This inconsistency is no mere accident, but rather reflects the way the European edifice was conceived by the founding fathers of the European Economic Community. While the project to create a European Defence Community flanked by a political community, had it come to fruition, would have given rise to a quasi-federal union, the EEC was instead built to be highly integrated economically, but based on states that conserved their sovereignty (albeit considerably weakened).
The EEC (now the EU) was thus conceived as an organisation capable of managing a market, but without a democratically legitimised government with the capacity to make political decisions. Its executive, the Commission, was and still is a technical more than a political body. Indeed, whereas, under the terms of the Lisbon Treaty, the European Council proposes to the EP a candidate for President of the Commission, taking into account the elections to the European Parliament (Art. 17, par. 7 TEU), meaning that the President of the Commission is an expression of the majority that emerged from the European parliamentary elections, the same cannot be said of the Commission’s members: although subject to the approval of the Parliament, these remain an expression of the choices of the individual member states and therefore do not form a politically homogeneous group.
In the EU, the member states still retain the role that (within a state) traditionally falls to the government, and they exercise it collectively within the European Council, a purely intergovernmental body.
In sectors where the decisions needing to be taken are of a technical rather than a political nature — essentially decisions relating to the single market —, the EU conceived as an acephalous organisation has actually worked well; inter-state cooperation has borne excellent fruits, and forms of governance managed by the Commission have taken shape. The so-called Community method ushered in by the ECSC has been developed to the full, leading to a significant increase in the Parliament’s powers compared with those of the ECSC’s Common Assembly. In these sectors, even though the EU has no administrative apparatus of its own or coercive powers to implement its rules, cooperation between states has given the best results imaginable: the obstacle of unanimity has been overcome, fundamental principles have been developed, such as that of the supremacy of European Union law, and the European Parliament has fully assumed the role of co-legislator.
The involvement of the European Parliament in these sectors is important, making it possible to move beyond the logic of competing national interests. After all, when a decision is taken by a body composed of representatives of national executives, wherein each, being answerable to the electorate in their own state, will naturally defend the interests of their country, the decision eventually reached will, by definition, be the result of a compromise between national interests; on the contrary, involving the European Parliament in the decision-making process allows a common interest of the European citizens to emerge, which the Parliament represents. The problem lies in the fact that the decisions in which it is involved (those relating to the development of the single market) are of a technical nature, and therefore relate to issues around which there is little or no scope for political public debate. In short, the European Parliament’s participation in decision-making processes is not a means of drawing the citizens into a debate on European issues.
Conversely, in sectors where the issues touch on national sovereignty and therefore demand political decisions (foreign and security policy being the prime example), the intergovernmental method is followed: decision making involves only the European Council and the Council, that is bodies composed of representatives of the national governments, while the European Parliament and the Commission are excluded from the process (or involved only in an extremely marginal way), and no provision is made for judicial control by the Court of Justice.
The Community method, being based on the concept of a European Union with no democratically legitimised government and only purely technical forms of governance, is in fact ill-suited to the management of sectors in which political decisions are needed — decisions that cannot be taken by a technical body like the Commission. Faced with the need to find mechanisms that would allow them to take common decisions without renouncing their sovereignty, the states’ only solution was therefore to assign this decision-making role to the bodies that represent them, primarily the European Council, excluding supranational bodies (the European Parliament and the Commission) from the process.
With the creation of the single currency, however, this neat distinction between the Community method, applicable in the field of the single market, and the intergovernmental approach, to be used in sectors at the heart of state sovereignty, became somewhat blurred.
The European single currency is an instrument designed to eliminate the obstacles to freedom of movement linked to the existence of different national currencies. But at the same time, it carries strong political value, given that a state’s currency constitutes one of the key elements of its sovereignty; basically, the creation of the single currency has led the process of economic integration to evolve to the point of encroaching on the powers held by the state. As a result of its ambiguity, the euro was a toothless currency from the outset. Its creation saw monetary policy decision-making power transferred to the Central European Bank, while decisions on economic and fiscal policy (and other closely related policy areas, such as social policy), being areas at the heart of state sovereignty, were entrusted to a purely intergovernmental method involving coordination of national policies. But no currency founded on divergent economic and fiscal policies can ever work; and what is more, the intergovernmental instruments created to coordinate these policies, such as the Stability and Growth Pact, also failed to work, as the economic-financial crisis of the last decade has clearly shown us.
As mentioned, the distinction between the Community method and the intergovernmental method has grown increasingly unworkable, and it has become glaringly apparent that the EU’s power to decide autonomously on monetary policy has to be accompanied by the power to support the currency through autonomous fiscal resources.
This is the context in which to address the need to strengthen the role of the European Parliament. Indeed, although fiscal power, and with it the capacity to decide on the state budget, is traditionally a key power of any parliament, the European Parliament lacks this power; and even though, pursuant to Art. 314 TFEU, the European Parliament plays a key role in the procedure for approving the annual EU budget and is also required to approve the multiannual financial framework, which the Council then adopts unanimously, the EP actually has very little power to define the amount and type of the Union’s own resources, being merely consulted in this regard. The European Union is thus the only organisation in the world to have a parliament that is elected by direct universal suffrage, but lacks one of the key powers of such an assembly.
As things currently stand, decisions on own resources, i.e., establishing the amount and type of resources that are to finance the EU budget, must be approved unanimously by the Council, after consulting the European Parliament; to enter into force, the decision must then be approved by all the member states, acting in accordance with their respective constitutional requirements. It should be noted that this mechanism interferes quite significantly with the Union’s ability to effectively exercise its competences: the need for a unanimous decision between the member states, on the amount of the budget and the resources funding it, leads to very lengthy negotiations between the representatives of the states, each determined to contribute as little as possible to it. Moreover, these are hardly the circumstances in which it is possible to foster a higher common interest, able to guarantee the citizens, at European level, the public goods that are no longer within the reach of the individual member states.
From this point of view, the approval of the Next Generation EU programme (NGEU), which allows the EU to issue debt guaranteed by the EU budget, seems to offer new opportunities to strengthen the role of the European Parliament, which would be the first step in the construction of a federal union.
The need to guarantee repayment of this debt has seen the EU budget ceiling temporarily increased to 2 per cent of European GNI. However, to prevent the burden of this increase from falling on the states, there are plans to introduce new own resources.
Even though the NGEU was conceived as a temporary measure, to address the economic consequences of the pandemic, and even though it envisages no mechanisms for the introduction of new own resources other than those already in place (within which the EP has no real role), there can be no doubt that it further underlines the contradiction that exists between, on the one hand, the EU’s need to have at its disposal the means to deal quickly with crisis situations and guarantee solidarity at European level, and, on the other, its impossibility to procure these means autonomously, whether or not an agreement (which can only ever be a poor compromise) is reached between its 27 member states.
The NGEU therefore needs to be made a permanent instrument, and the Treaties need to be amended in such a way that the European Parliament and the Council have the power, through an ordinary legislative procedure, to decide on the Union’s resources, which will thus no longer depend on the unanimous will of the member states.
Transforming the European Union into a federation would of course entail other changes to the competences of the European Parliament; these would include, for example, a strengthening of its role in other sectors within the EU’s sphere of activity, primarily that of foreign and security policy, from which it is currently completely excluded. However, fiscal competence is the mother of all competences, so to speak, and its acquisition by the European Union is the crucial key that would allow this organisation to move from its current confederal status to the federal form desired and envisaged by Europe’s founding fathers. Inserting this crucial piece into the puzzle is the only way not only to render the Union truly autonomous (within its spheres of activity) from the member states, but also to create a true supranational democracy, in which the body that represents the citizens, the European Parliament, is really able to make key choices affecting their lives. Moreover, with the European Parliament finally empowered to take decisions in an area of fundamental importance for the life of citizens and businesses, we would finally see the unfolding of a real debate between political forces at European level on the fundamental choices for the future of our continent, and this is the route that will lead to the formation of true European political parties.
This transfer of fiscal competence to the European Parliament would need to be accompanied by the development of a stronger bond of trust between the European Parliament and the Commission, and the gradual transformation of the latter into a government representing the majority political forces within the parliament. The Treaty changes that would be necessary in order to take the first decisive step in a federal direction would therefore have to include a new procedure for appointing the Commission — a procedure that would emphasise the political nature of this body and deprive the states of the power to choose its members.
But this aspect will be dealt with by another of the congress speakers.
* This report was delivered as part of the Commission 1 section (Reforms for a Federal, Sovereign and Democratic Europe) of the 30th MFE National Congress, Vicenza, 22-24 October, 2021.
 Actually, the number of seats in the European Parliament assigned to each member state is decided according to a criterion of degressive proportionality, which means that the less populous states are over-represented compared with the more populous ones (for example, a Maltese MEP represents ten times fewer citizens than a German MEP does). This feature, which is unusual for a lower house, has been criticised by the Bundesverfassungsgericht, especially in its June 2009 judgment on the ratification of the Lisbon Treaty.
 On this point, cf. S. Fabbrini, Sdoppiamento. Una prospettiva nuova per l’Europa, Bari, Laterza, 2017.
 As remarked by B. Bertrand, Intégration politique et intégration économique: la dialectique des intégrations, in S. De Rosa, F. Martucci, E. Dubout (sous la direction de), L’Union européenne et le fédéralisme économique, Brussels, Bruylant, 2015, pp. 119 ff., p. 132: “aujourd’hui… l’intégration économique touche le noyau dur des compétences régaliennes en matière économique: monnaie, déficits publiques, fixation du niveau des dépenses publiques dans les Etats membres. Ce qu’on appelle économique est profondément politique. L’intégration économique a atteint un tel degré qu’elle semble faire partie de l’intégration politique.” On this point, see also S. Fabbrini, Which European Union? Europe after Eurocrisis, Cambridge, Cambridge University Press, 2015, p. 22.
 The ECSC provides an example of partial autonomy of the supranational level from the member states; indeed, its High Authority was able to impose levies on the production of coal and steel, which were paid directly by companies into the ECSC budget. However, given the centrality of the High Authority in the institutional structure of the ECSC, and considering, too, that the Assembly was appointed in the second instance, and not by direct universal suffrage, this representative body of the citizens, contrary to what should happen today with the European Parliament, nevertheless played an only marginal role in this area.
 In addition to the “tax” on non-recycled plastic packaging waste, already introduced among the EU’s own resources, in December 2021, the Commission proposed the establishment of three new own resources consisting of revenues from emissions trading, from the carbon border adjustment mechanism, a contribution based on the share of the residual profits of profitable multinational enterprises re-allocated to member states under the OECD/G20 agreement (cf. Proposal for a Council Decision amending Decision (EU, Euratom) 2020/2053 on the system of own resources of the European Union, COM(2021) 570 final, 22.12.2021; Proposal for a Council Regulation amending Regulation (EU, Euratom) 2020/2093 laying down the multiannual financial framework for the years 2021 to 2027, COM(2021) 569 final, 22.12.2021). As stated in a Communication from the Commission on the same date (Communication from the Commission to the European Parliament, the Council, the European Economic and Social Committee and the Committee of the Regions, The next generation of own resources of the EU budget, COM(2021) 566 final, 22.12.2021), the Commission intends to propose, by the end of 2023, a second set of resources (such as a “Financial Transaction Tax and an own resource linked to the corporate sector”).