Thoughts on the UK-EU negotiations

2016-02-06

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The forthcoming meeting of the European Council will focus on the Union’s negotiations with the United Kingdom. It will be the culmination of a long diplomatic process to reach a viable compromise between all sides. Its stated objective is to lay the foundations for the UK’s continued membership in a reformed European Union.

On February 2, President Donald Tusk sent a letter outlining his position on the matter. It is accompanied by—and serves as an introduction to—a series of draft documents concerning the content of the topics under discussion. There are four broad areas of policy covered, namely: (i) sovereignty, (ii) economic governance, (iii) competitiveness, (iv) migration.

Prior to examining each of those items, and notwithstanding the public debate in the UK, two overarching themes are worth highlighting:

1. The flexibility of the Treaties: it is often claimed that the primary law of the EU is too descriptive and, hence, too restrictive in terms of the manoeuvring space it offers. The assumption is that any kind of legal-institutional change in the Union inevitably has to be accompanied by a corresponding amendment to the Treaties. This belief, while partially true, is not aligned with the evidence: the EU, especially the Economic and Monetary Union, has undergone substantial reform in recent years despite these presumed rigidities. The same holds true for the negotiations in question. British demands are to be satisfied by an amalgamation of intergovernmental agreements and marginal amendments to some of the Union’s secondary legislation. No Treaty change is necessary, at least not for the purposes of accommodating the most immediate concerns of the UK government.
2. The primacy of intergovernmentalism: the outcome of these negotiations will likely stand as a template for a future Treaty reform. The elements of the EU-UK settlement will be incorporated in primary law, perhaps with some minor refinements or additions. This is not peculiar to the present case, nor does it constitute a departure from the modus operandi of rule formation in the EU. Heads of state or government meet behind closed doors to agree on a deal that serves each side’s national interests. In the process, there is no direct input legitimacy from citizens that represents the interests of the Union at-large. The end product is an inter-state bargain that has not been subject to widespread deliberations and open to public scrutiny.

Minor and tokenistic reforms

Proceeding to the specifics of the draft package of the renegotiation, we may suggest that it is mostly a reframing of existing rules and norms. Major reforms are only part of a vague promise to amend the Treaties once that [admittedly cumbersome and multifaceted] procedure is initiated. To put it succinctly, the draft agreement is anything but a repatriation of sovereignty, if by “sovereignty” we do indeed refer to the capacity of a state to unilaterally act on policies that affect or apply to it.

Ever closer union

Much has been said about the notion of “ever closer union”: a phrase that is, according to my reading of the Treaties, devoid of substance and abstract enough to be interpreted in multiple ways. Yet this has been one of the totemic issues in Mr. Cameron’s campaign to keep his country inside a reformed EU. The argument is that the UK should be exempt from any explicit or implicit obligation to transfer further sovereignty to the European level, all while allowing other Member States to pursue ends they may have in common.

Though the demand for national control over sovereignty is reasonable, the way it is propounded therein is rather unconvincing. The kind of two-tier (or two-speed/multi-speed) Europe that Mr. Cameron effectively asks for already exists. Since the Treaty of Maastricht in the early 1990s European integration has been pursued, sometimes tacitly, in accordance with a variant of the idea of enhanced cooperation: of coalitions of the willing making steps forward in harmonising their policies, while offering ad hoc opt-outs to those not eager to participate. The very creation of the euro is predicated on this rationale: some Member States are part of the single currency, while others are formally exempt or have de facto excluded themselves from adopting it.

A similar point can be raised on other aspects of integration, such as migration, where the Schengen Agreement does not encompass the UK. On civil liberties, this Member State enjoys a special status on the application of the European Charter of Fundamental Rights. Additionally, as per Protocol 21 of the Treaty on the Functioning of the European Union, the UK maintains the right to opt in or out of any policy that falls within the scope of the area of freedom, security and justice. Furthermore, the country is not a signatory to the Fiscal Compact (Treaty on Stability, Coordination, and Governance in the Economic and Monetary Union), which is an integral part of Europe’s economic governance. The same goes for the treaty establishing the European Stability Mechanism, which is the fiscal backstop of the Economic and Monetary Union.

The gist is that the talk surrounding the notion of “ever closer union” rests on exaggerations and/or misinformation. This is, for the most part, a matter of symbolism. Offering the UK a formal exemption from it will cost nothing to other Member States and, most importantly, will have no ramifications whatsoever for the integration process in general. Though perhaps not widely acknowledged, “Europe on demand” is standard practice. This is even admitted by the European Council in their draft agreement on the UK package (pdf download):

Recalling that the Treaties, together with references to the process of European integration and to the process of creating an ever closer union among the peoples of Europe, contain also specific provisions whereby some Member States are entitled not to take part in or are exempted from the application of certain provisions or chapters of the Treaties and Union law as concerns matters such as the adoption of the euro, decisions having defence implications, the exercise of border controls on persons, as well as measures in the area of freedom, security and justice. Treaty provisions also allow for the non-participation of one or more Member States in actions intended to further the objectives of the Union, notably through the establishment of enhanced cooperations. Therefore, such processes make possible different paths of integration for different Member States, allowing those that want to deepen integration to move ahead, whilst respecting the rights of those which do not want to take such a course [my emphasis].

Subsidiarity and the “red card” procedure

The EU already has a Subsidiarity Control Mechanism (SCM) for enabling national parliaments to formally object to the introduction of European legislation. Its legal basis is Article 12 of the Treaty on European Union as well as the corresponding Protocols No. 1 “On the role of National Parliaments in the European Union” and No. 2 “On the application of the principles of subsidiarity and proportionality”.

While its presence may appear promising, its application leaves much to be desired. At first, a number of parliaments is required, typically a majority. Secondly, national parliaments tend to be in sync with their respective executive, suggesting that it is unlikely for a majority of them to effectively rebel against their own government’s decisions inside the Council of the EU. Thirdly, the SCM does not amount to a veto on European legislation, but only to a formal request for revising the draft law in question.

The idea of a “red card” procedure is to complement the existing mechanism with a veto-like capacity. Here too the details matter greatly, since a majority of parliaments will still be required, while the ultimate decision lies with the Council. This new instrument will partake of the limitations germane to the framework now in effect, unless a major overhaul takes place, which is not going to happen over the foreseeable future.

At any rate, the “red card” is in fact a departure from parliamentary sovereignty. Instead of transforming the Council into a genuine European Senate, one that receives direct input legitimacy and is subject to popular scrutiny as a body, it establishes an additional layer of inter-state politics without addressing the underlying causes of Europe’s sovereignty mismatch. National parliaments will not be [re-]gaining the positive right to decide on the content of certain classes of legislation, but only be allowed to exercise the negative power of collectively blocking a draft proposal.

What the UK gets out of this over the short-to-medium term is of dubious value. As concerns the prospect of the “red card” procedure becoming part of the Union’s primary law in a future Treaty amendment, it must be stressed that that would further reinforce the dynamics that contribute to the EU’s inability to deliver a well-functioning transnational democracy. It would be a step in the wrong direction, in favour of more complexity, opacity, and intergovernmentalism: elements that characterise the current state of affairs, the order that actually needs reforming.

Given the Council’s direction, a more suitable arrangement, albeit a suboptimal one, would be to formalise an interparliamentary assembly with delegates from the European Parliament and the national parliaments. This entity would be tasked with legislating on areas of policy that indeed stand at the intersection of the national and supranational levels, such as the surveillance of national budgets by the European Commission within the context of economic governance.

Migration

With respect to migration, the Commission has declared its intention to amend legislation on the free movement of Union citizens. Its aim is to eliminate the loopholes that allow individuals to abuse the system with impunity.

In principle, there is nothing untoward with correcting the structure of perverse incentives generated by a legal instrument, especially when that is in the common interest of the EU. We will, however, need to see the amendments that the Commission will put forward before arriving at a conclusion pertaining to their desirability.

What is more concrete at this early stage is the commitment to introduce transitional measures for limiting the freedom of movement of citizens whose state becomes a new member of the Union. Nevertheless, it is unclear what these would entail. As per the European Council’s statement:

With regard to future enlargements of the European Union, it is noted that appropriate transitional measures concerning free movement of persons will be provided for in the relevant Acts of Accession to be agreed by all Member States, in accordance with the Treaties. In this context, the position expressed by the United Kingdom in favour of such transitional measures is noted.

Competitiveness

As concerns the much-vaunted concept of “competitiveness”, European leaders stand firm in their eagerness to reduce the regulatory burden on business, even though what is included in their official document is rather imprecise.

The idea of simplifying a complex body of law is sound. Likewise, it is worth proceeding with the abolition of legal provisions that mostly cause bureaucratic sclerosis. What may raise doubts about the ultimate effectiveness of such initiatives is that the applied discourse reveals a potential misreading of the facts. It is guided by delusions of unfettered capitalism, while hinting at the myth of the rugged individual and industrious entrepreneur who struggles against the excesses of politicians.

The supranational level had better not engage in the ill-advised practice of micro-managing the economy. Still, there are all sorts of Union-wide legislative needs that merit European action. These would include health, environmental protection, consumer rights, and anything that guarantees the singleness of the single market. In short, standards have to be upheld and, where possible, strengthened.

Couched in those terms, it is necessary to guarantee that only superfluous pieces of legislation are repealed, merged, or otherwise revised; laws that have no negative implications on the functioning of the single market and on the general expectations of European citizens regarding the content of policy.

That granted, the desire to foster “competitiveness” is a safe and expedient way to persuade the business community in the UK (and elsewhere) of the benefits of remaining part of the EU. It also conveniently serves to obfuscate the institutional factors that hamper the EMU’s optimal operability, namely, the absence of effective mechanisms for addressing asymmetric shocks, implementing an area-wide fiscal policy, and complementing the efforts of the European Central Bank to reverse disinflationary pressures by means of supporting aggregate demand.

[also see: Can the ECB be held accountable for failure?]

An unconvincing compromise

It should be reiterated that all of the above are part of a draft agreement. Changes are still possible, though they would hardly constitute a substantive deviation from what is on offer.

Whether Mr. Cameron will be able to leverage this deal for the purposes of adding credibility to his “in” campaign remains to be determined. Those on the “out” camp will rightly express their concern that sovereignty will not be repatriated. The renegotiation preserves the status quo on areas of policy where the UK enjoys certain privileges, while on migration and competitiveness certain Union-wide reforms are being promised that in no way grant the right to any one government to arbitrarily impose unilateral restrictions.

The citizens of the UK will have to decide whether all of the above are sufficient to (a) reform the EU in favour of democracy and sovereignty, and (b) render the EU appealing for their country’s continued membership in it. It is not up to the present author to opine on the arguments that inform the British public debate. All that can be noted herein is that the content of this renegotiation delivers much less than what one would come to expect from all the discussion—indeed the hype—that “Brexit” receives.

[Minor complaint to the website administrators of the European Council: serving pdf files without a straightforward option for viewing their equivalent HTML versions constitutes a bad user experience. Consider revising it at the earliest opportunity.]