N. 57 December 2011 | The break with Great Britain opens a new phase in the European process

The United Kingdom's self-exclusion from the agreement through which France and Germany intended to start strengthening the monetary union represents a huge political split, which is crucial to make the progress needed by the european process.

Only time will tell whether the outcome of the Brussels summit on 8/9 December 2011 goes down in history as a turning point for the European Union. However, one thing is already clear: Britain’s self-exclusion from the proposed new treaty, which Germany and France are presenting as the start of a new strengthening of monetary union, represents a split of enormous political significance, and it could open the way for a new phase in the European process.

The importance of what has happened cannot be understated. The UK has always opposed a political deepening of Europe. Despite having failed to prevent the birth of the euro, the UK has nevertheless continued to exercise a power of interference and veto in the management of monetary union and, as Europe has enlarged, it has, over the past ten years, striven hard to move the Union away from the original political design of its founding fathers and towards a vision of the European process as the construction of a single market.

The failure of the British project is due, primarily, to the way in which economic and political power relations have evolved in the world. Events have proved that Europe cannot hope to thrive while remaining in a perpetual state of political minority. The simple sharing of competences (even basic ones, like currency), entrusting them to bodies that can only be defined technical, given that they have no political power and are therefore just extensions of the member states – which have continued to be the true holders of sovereignty –, has been shown not to work. In this framework, which has basically left the exercise of government at national level, the Community institutions have been effectively emptied of their potentially supranational prerogatives and reduced – both the Commission and the European Parliament, albeit in different ways – to subsidiary organs, without political influence or driving force.

The crisis has made it quite clear that it is impossible to maintain this confederal model of integration in the presence of a monetary union that has made its members inextricably interdependent and obliged them, driven by the Franco-German engine (but in particular by Germany, the eurozone’s largest economy and thus the bearer of the greatest responsibilities and burdens), to start moving towards closer forms of union, with a view to relinquishing large slices of their sovereignty. The UK appears to have acknowledged this and decided on a split that will not affect the single market, but could have dramatic effects on Europe’s political evolution.

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Now, following Britain’s break with Europe and the creation of a new framework around the project of monetary, fiscal and budgetary union, much political work nevertheless remains to be done in order actually to build the new Union. The problem is not so much that of the limitations still presented by the measures agreed upon for tackling the sovereign debt emergency (these limitations, important as they are, are a concern shared, in general, by all the financial markets); rather, the crucial point is what it implies for the Europeans in particular: namely, the need, in the short-medium term at the latest (i.e. within no more than a couple of years), to go beyond the new stability pact and create a true fiscal union and a full political union.

The agreement reached lays down new rules and indicates the instruments by which these can be imposed on the states: the latter, having subscribed to them, lose to an extent their power to decide their economic and budgetary policies and accept the possible consequences in the event of their default (i.e. automatic sanctions and receivership). In the past, failures to respect the Maastricht criteria on debt and deficit ratios were “remedied” by ad hoc exemptions agreed, each time, by the national governments themselves. Instead, what we are talking about now is something quite different: a substantial transfer of sovereignty that, this time, will have to be real in all respects, in order to protect the entire group of countries signing up to these new rules against attacks by the markets. On the positive side, this will undoubtedly strengthen mutual surveillance systems between countries; however, unless there is a true leap forwards towards political unity, it will not provide a solution to the problems of solidarity and development, or to that of the democratic legitimacy of the new European system.

The first issue, that of solidarity, is patently clear: unless a common state framework can be realised, the exercise of solidarity in Europe will have to go on being based on voluntary cooperation between countries that, while interdependent and integrated, have different degrees of development and different budgetary resources and production capacities. This situation will leave the stronger economies feeling that they are actually part of a highly unbalanced “transfer union”, which threatens to jeopardise their own strength and solidity: as a result, however many arguments are advanced on the reciprocal benefits, within a single currency area, of supporting the most vulnerable members, large sections of public opinion will be bound to react negatively. The presence of differences between the countries is an objective fact, and however hard the weakest countries strive to bridge, at least in part, the competitiveness gap that separates them from the strongest ones, unless there is a profound political advance, things are bound to grind to a halt, blocked by the issues of consensus and legitimacy.

As regards the question of development, the Europeans have long known – ever since the time of the Delors Commission’s White Paper – that it is only through a single plan that they can once again become competitive on the world stage, and above all, succeed in starting a new cycle based on a model that is sustainable and capable of exploiting the potential of the knowledge-based economy. But the failure, to date, to carry through the plans that at various times have been adopted provides a clear demonstration that, in the absence of resources and capacity to govern at European level, projects are either largely ignored or bent to the national needs of the different countries, not least because it is known that in a single market each country’s investments mainly benefit its partners.

A leap forward, increasing the EU budget with European own resources found in the new European fiscal union (the so-called Euro-Plus group) and launching a European policy geared at infrastructures and the strengthening of research, is already possible using the existing legal instruments. But the obstacle is political, because such a scenario implies a willingness to adopt instruments of supranational government, i.e. not instruments stemming merely from shared rules and discipline, as in the past, but rather ones that are geared at implementing a joint project for the development of the entire continent. Unless there can be a change of mindset, allowing Europe to become a real political community rather than the simple sum of national interests that it currently is, the attempt to achieve growth through policies at the level of the individual member states is destined to produce results that will fall far short of the potential of each single state, and far short of what is needed to overcome the crisis.

The last issue, that of the democratic legitimacy of the new European system, is also quite clear. First, there is a legal-technical problem: that of the need to reconcile the fact that an agreement (the Brussels one) which has deliberately stepped outside the framework of the Treaties has made an EU institution (the Commission) responsible for monitoring the eurozone with respect to the rules agreed (a problem that could formally be resolved by finding some legal loophole, but that also has political implications insofar as Great Britain is a member of the Commission). Second, and even more important, there is the political need to justify, before public opinion, the voiding of the prerogatives held by the respective national governments in the areas of budgetary control and the definition of economic policies. If the mechanisms of democratic control are destined to remain, for a long time to come, at the national level, how will it be possible to win consensus for the kind of interventions that are now needed – difficult, unpopular interventions, liable to be exploited by populist forces? What will it take to convince a state’s citizens to make sacrifices in order to support weaker countries? If it is true that, as everyone seems to agree, we are only at the start of a long period of austerity, it is unrealistic to imagine that the social and political cohesion that is necessary in order to implement the profound restructuring (financial, economic and production) on which new development depends can be achieved without a new democratic perspective and a new political framework for the exercise of democracy.

The crux of the problem – the issue that must be resolved in order to allow the process of European unification to make the decisive leap forwards that will allow it to overcome all its current contradictions and fragility – is, therefore, that of Europe’s democratic legitimacy, together with that of its renewed growth, based on new foundations. In what direction should we be moving? A European government endowed with limited but real powers and autonomous control of European own resources, legitimised by popular vote and accountable to a democratic European parliament with full legislative powers, can be created only by transforming the Council into an Upper Chamber, representing the states, and the Parliament into a Lower Chamber whose members would be elected according to a uniform electoral law and would represent the citizens of the new Union – in which, therefore, the democratic rule “one man one vote” would hold valid and the current democratic deficit denounced by the German Constitutional Court would be overcome. It can, in other words, stem only from a democratic constituent process through which those states that have agreed to give up their sovereignty over currency and are prepared to transfer their sovereignty over fiscal policy will build a new European sovereignty, enjoying the involvement and support of a very large section of public opinion. This will mean an end to the Community method, which, over the past twenty years, has claimed to be building a Union even among those that did not want to be part of it, and has only ended up justifying the coexistence of intergovernmentalism and parliamentarism and reducing the Commission to a merely technical supervisory body.

From this perspective, given that the federal outcome must be the culmination of the process of European unification if Europe’s unity really is to be rendered solid and irreversible, how can the interim government of the new Europe, recently announced by the national governments in Brussels, be made to evolve and grow in strength? How can the new mechanisms’ capacity for government be increased? How will it be possible to extend their prerogatives in the direction of development policy, and increase the support they may enjoy and, to an extent, the level of reciprocal solidarity they will generate? Is it possible, as suggested by Joschka Fischer for example, that in a transitional phase, the function of a provisional government, fulfilled by the Council of the “Euro-Plus group”, might be balanced by the exercising of control by a chamber composed of representatives of the budget committees of the respective national parliaments and EP representatives selected from among the MEPs of the countries that are part of the new framework?

This is, undoubtedly, a complex issue, but it is one that must be addressed without delay. And in order to do so, two things must be absolutely clear: the final objective and the need to overcome false and now entirely unworkable Community solutions. One thing is certain: in the wake of the Brussels summit, the governments, institutions and political parties can no longer use the obstacle of British vetoes as justification for their failure to advance in the direction of European federation. Time is running out: for all those who want to save the euro and who believe in the European project and in the possibility of turning the current difficulties into an opportunity to give Europe a new future of progress, the moment has come to give substance to this new reality.


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