On the limitations of the European Parliament

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In a September 24 speech for the Jacques Delors Institute titled “After the Greek psychodrama what improvements for the EMU?”, Pierre Moscovici, the European Commissioner for Economic and Financial Affairs, Taxation and Customs, noted the following:

And as for the European parliament, well, what can we say? It was the great absentee in the Greek crisis. But then, to whom should it have turned? To the Commission in its capacity as negotiator? To the president of the Eurogroup, who is not answerable to it? To the IMF, which is even less answerable to it? Or to the European Stability Mechanism, which is a purely intergovernmental organisation? And the secondary question is this: how much weight did the European parliament carry in the Greek crisis by comparison with the German Bundestag or the Finnish Eduskunt?

Mr. Moscovici is not trying to degrade the overall role of the European Parliament (hereinafter referred to as EP or Parliament). He is merely reflecting on the peculiarities of the European Union, as made manifest in the Greek crisis.

In this article, I outline the inherent limitations of the EP, all of which are predicated on the very nature of the EU as an inter-state-treaties-based system, a quasi-confederal formation.

No legislative initiative

The Parliament does not initiate legislation. It can only react to legislative proposals. These typically come from the European Commission in the form of reports that are then subject to amendment by the Members of the European Parliament (MEPs).

The procedure, as seen from the EP’s perspective, can be outlined as follows:

  • the Commission sends its proposal to the two co-legislative institutions, the European Parliament and the Council of the European Union (not to be confused with the European Council);
  • the Parliament appoints a rapporteur;
  • the rapporteur is a MEP who usually belongs to a certain political group (the EP does not have typical parties, but political families of national parties, so that e.g. Mr. Orbán’s party is in the same group as Ms. Merkel’s);
  • the other groups designate their shadow rapporteurs;
  • the rapporteur, together with the shadows, is tasked with coordinating the efforts for amending the Commission’s proposal;
  • any MEP can table amendments, though generally the shadow rapporteurs are the ones to inform the position of their group;
  • the draft legislation is presented to the Committee competent on the subject;
  • once approved it is brought to plenary for a vote;
  • the adopted text is then sent to the Council;
  • meanwhile, the Council follows a parallel procedure for amending the Commission’s proposal; if it agrees with the Parliament’s text, it adopts it as is, otherwise it sends its own text to the Parliament;
  • where disagreements between Parliament and Council arise, the proposed legislation may undergo a first and second reading; should differences of position persist, a phase of trialogues is initiated, formally referred to as the “Conciliation Committee”, which is set up to streamline negotiations between the two co-legislators in the presence of representatives from the Commission;
  • the end product, once voted upon, becomes law of the Union.

This is an outline of the ordinary legislative procedure, which used to be known as the “codecision procedure”.

There are certain cases where the Parliament does not have the powers of the co-legislator. In those instances it can only provide its consent to a given proposal. One such area of policy concerns the budget of the EU, which is decided on a multi-annual basis and consists of contributions from the Member States of the Union (the EU does not have its own fiscal capacity, to raise taxes or issue debt). This budget, the Multi-annual Financial Framework (MFF), is largely determined by the Council and is presented to the EP in the form of a Council regulation. The Parliament is asked for its consent in accordance with Article 312 of the Treaty on the Functioning of the European Union.

The fact that the EP does not have a legislative initiative implies the following:

  1. its own-initiative reports are not legally binding on the Commission, the Council, or the Member States, meaning that they can be dismissed without any further notice or formal reason;
  2. the EP cannot review legislation that is already in force, for it can only react to a proposal for repealing a certain piece of law.

No control over the legal bases

The Parliament cannot review the primary law of the Union. The EU is founded on inter-state treaties, meaning that only the contracting parties, the Member States, can make such a change.

Apart from not being able to modify the primary law, the EP cannot amend the legal basis of any of the institutions envisaged in the Treaties. For instance, the Parliament cannot review the mandate of the European Central Bank, which is currently tasked with pursuing a medium-term inflation target of close but below 2% (no matter that unemployment is reaching record highs).

[see analysis: On the institutional independence of the European Central Bank]

Further, the EP cannot instruct the European Council to make its meetings public, nor can it scrutinise any of its individual members. National leaders are accountable to their respective parliament and electorate. The same goes for the Eurogroup.

In short, the democratic control exercised by the Parliament leaves much to be desired. One might even question whether “control” can indeed be used in this context.

To be fair though, the EP partakes of a limitation that is germane to the EU as such, for if the Union were to be seen as an otherwise self-regulating state, it would be one where its primary law remained exogenous. The EU cannot amend its own “constitution”. Neither its executive (Commission) nor its legislative (EP and Council) functions have such authority, be it separately or jointly. The Union qua “state” is therefore heteronomous with respect to the Treaties.

[see analysis: Why not inter-governmentalism?]

No full fiscal powers

As was already noted, the Parliament cannot determine the budget of the Union. This power is held by the Member States. The implication is that the Union’s general direction is largely predetermined.

In a typical republic the budget is determined on an annual basis and is approved by the deputies. The power over fiscal issues does not concern a mere vote at the end of the year, but rather entails the capacity to shape the specifics of policy, to direct resources where necessary, to adapt to evolving circumstances and, most importantly, to alter the very stance of fiscal policy (e.g. make it expansionary).

Yet the EU is anything but a “typical republic”. Its budgetary framework is multi-annual and, given that it is the end product of inter-governmental bargaining, is not susceptible to substantial [year-to-year] alterations.

A parliament manqué

The European Union will need to be drastically reformed—become a constitution-based federal democracy—in order to enable the European Parliament to function as a genuine republic’s house of representatives (with the Council of the EU transformed into a Senate consisting of elected members).

If, ceteris paribus, the EP gets involved in the various bailout programmes, such as the third one to Greece, its presence will be mostly symbolic. Some loud and vociferous MEPs may enjoy a greater media presence, yet the Parliament’s inherent limitations will decisively hamper any serious effort to exercise democratic control over the various technocratic entities tasked with substantiating the specifics of such programmes.

As far as formalities go, I see no real problem with the EP’s participation in any bailout programme. That would somewhat improve the democratic legitimacy of the whole venture. Still, one had better remain aware of the constraints imposed on this institution so as not be made into conflating form (the Parliament’s involvement) with substance (the exercise of democratic control).

Meanwhile, the European Parliament can’t even decide unilaterally on its own permanent seat, hence the sad ceremony of travelling from Brussels to Strasbourg to hold plenary sessions at least twelve times per annum.