Do we need a Eurozone Parliament?

Last February (on Twitter) I floated the idea of a Euro Group of MEPs with additional decision-making powers, especially over a Eurozone budget that should be on top of the normal budget, to help balance out the Eurozone politically and economically:

I later expanded on this in a summer blogpost:

There is a Euro Group in the Council but none in the European Parliament. I think it is time to change this. A Euro Group in the EP – consisting of all MEPs from Eurozone countries – could run a Eurozone budget (on top of the normal EU budget) and take spending decisions with the overall macroeconomic health and strategic inetrests of the currency zone in mind. The Eurozone budget could be generated by new taxation (especially a new financial transaction tax levied across the Eurozone would be a good start). There should also be a rather short budget cycle – not the long-term framework the overall EU budget works under – which should create more political debate about investment and spending priorities and could thus make parliamentary business more interesting.

I did get some feedback about this but haven’t heard about the idea until today I read that it got some traction among some European governments under the name of a ‘Eurozone Parliament’ (are they secretly reading SEJ?):

Eurozone heads of state and finance ministers now routinely issue statements or take decisions for the 17 countries using the euro, creating a de-factor two-speed Union in the Council.

Some eurozone states have proposed that the European Parliament adapt by allowing a smaller group of MEPs to hold votes on legislation, relating to eurozone countries only – thus so creating a ‘eurozone parliament’.

I still think this is a very good idea and could help to democratise the Eurozone. But then I read on and noticed this reaction by Hannes Swoboda, leader of the S&D group:

Hannes Swoboda, chair of the Socialists & Democrats in the European Parliament, dismissed the notion out of hand. “The idea of creating a eurozone parliament is absolute nonsense and would be counter-productive,” he said. ”The euro is our currency, there is no need for a parliament at currency level. We have the European Parliament and national parliaments to work on the issues at hand, which they are doing,” he added.

He was joined by the co-leader of the Green group:

“The establishment of a eurozone parliament would be more of a hindrance than a help,” said MEP Rebecca Harms, co-president of the Greens/EFA. ”It would blur the institutional architecture of Europe and undermine the community method,” she told EurActiv, stressing that the assembly as a whole should be responsible for democratic oversight and legislation for the eurozone.

Their statements might well have been shortened but the quotes above do not contain a single credible argument against the introduction of this. The current institutional structure is obviously not working well and the European Parliament is surely not in the driving seat in Eurozone matters (neither are national parliaments). This is also not about blurring the institutional architecture but about making it clearer. If the EP is meant to be further empowered in Eurozone matters it needs a Euro Group, a Eurozone parliament or whatever you want to call it. If you think this should be a job for the whole of the EP (including non-Eurozone MEPs) read up on the West Lothian Question.

  • http://www.Steven-Hill.com Steven Hill

    Hi Henning, I proposed a Eurozone Parliament in my article “Europe 2.0: A Blueprint for Redesigning European-level Parliamentary Democracy” published in April 2012. That article was published — right here on Social Europe Journal! Here’s the link: http://www.social-europe.eu/2012/04/europe-2-0-a-blueprint-for-redesigning-european-level-parliamentary-democracy/

    I emailed that article out to my contacts at the European Commission and other parliamentarians and media leaders in Europe. And a shorter version of my SEJ article was published in May by the Guardian, “Europe needs a democratic redesign if greater integration is to succeed,” http://www.guardian.co.uk/commentisfree/2012/may/24/europe-democratic-redesign-integration-succeed. In that one I also call for a Eurozone Parl. That article got picked up and linked to by a lot of other websites.

    So who knows if they actually are getting the idea from SEJ. I tend to think that it’s at that point in the crisis where the logic of such a step just makes complete sense. Who knows, perhaps our putting the idea out there early played a small part in nudging the idea along.

    Steven

    • Henning Meyer

      Hi Steven, I fully agree. Quite a lot of these folks are also reading SEJ but the key point is that the idea – and we both agree that it’s a good one! – has made it into the actual political process. So let’s keep an eye on it and see whether it’ll be put in practise. That would be great!

      • http://www.Steven-Hill.com Steven Hill

        I think it was almost inevitable to come to this point in the discussion, as long as integration was proceeding forward (as opposed to falling apart). Because at some point the leaders were going to have to grapple with the clear fact that, while the current structures are adequate for a loose confederation of member states, they are inadequate for a monetary and fiscal union. It’s really pretty simple at this point: if Europe wants any kind of monetary union, that monetary union needs to have its own political institutions that can oversee its fiscal and (eventual) transfer union.

    • George

      I just read through your Guardian piece which was full of governance reform ideas but I couldn’t find any reference to a Eurozone Parliament. Where exactly in the text did you propose this?

      • http://www.Steven-Hill.com Steven Hill

        George, it’s the parliament for what I call the United States of Europe, distinguishing it from the current European Union. See my next comment, which I just posted.

      • http://www.Steven-Hill.com Steven Hill

        George, to clarify further: in the Guardian piece I outline four components of a new European political structure. Then two paragraphs later I wrote: “But we also have to deal with the current reality of a two-speed Europe. It seems most likely that a 17 (or so) member core will be the entity that adopts the above-proposed federal structure initially, as the momentum of economic union drives the need for a more streamlined political union. For the sake of discussion, let’s call this new entity the United States of Europe.”

        So that’s what I call the euro zone political structures, including a Parliament but also a Prime Minister and even an elected (largely ceremonial) president who would have a Europe-wide constituency.

        And then I go on to discuss the relationship between this newly created USE and the current European Union, and the historical precedents for such an inside-outside institutional arrangement (I have a few more examples about that in the longer piece on Social Europe Journal). It would also make sense to construct the USE-EU bilateralism so that individual states could migrate from the EU-27 into the US of E when it made sense.

        Many of the ideas in the shorter Guardian piece are fleshed out more fully in the longer version on Social Europe Journal. http://www.social-europe.eu/2012/04/europe-2-0-a-blueprint-for-redesigning-european-level-parliamentary-democracy/

        Steven

      • George

        Sorry Steven but this is too much of a stretch for me. This does not read like a proposal for what is now considered as a Eurozone parliament.

  • http://www.Steven-Hill.com Steven Hill

    And I agree with you Henning, the statements by the leaders of the S&D and Green groups shows how they are really stuck to the flypaper of old ideas. The EU’s current political institutions have several severe defects, and what they boil down to is this: while the current structures are adequate for a loose confederation of member states, they are inadequate for a monetary and fiscal union. It’s really pretty simple at this point, if Europe wants any kind of monetary union, that monetary union needs to have its own political institutions that can oversee its fiscal and (eventual) transfer union.

    The European Commission, which is an increasingly powerful body endowed to be both the chief executive as well as the primary legislative body of the European Union (since it alone has the power to initiate European-level legislation), is not directly elected and in fact is four times removed from “We the Voters”.

    Unlike the American model, which has a clear separation of powers between the executive and legislative branches, the indirectly elected commission has been invested with both functions, and the European parliament – the only body elected directly – is very much a junior partner.

    Any credible redesign of governance structures must account for all these factors. So here’s my back-of-the-napkin proposal for redesigning European-level political institution to create a more democratic and streamlined European governance (this is drawn from my Guardian and SEJ articles, which I gave the links to in my previous comment). The current euro zone would be turned into a “United States of Europe” with its own parliament, structured accordingly:

    1) A European parliament with two chambers, one directly elected by voters such as the current European parliament, with the number of representatives per member state a close reflection of each state’s population (so the more populous member states would have more representatives).

    2) A second chamber selected by member state legislatures (as the EU’s Council of Ministers sort of is now). The number of representatives should mostly be proportional to the population of each member state, but with a few additional representatives granted to low population states so that they are not overrun by bigger member states.

    (WARNING: don’t make America’s mistake of granting equal representation per member state in this second chamber. That has resulted in a US Senate where conservative, low-population states often strangle legislation supported by the majority of Americans, resulting in minority rule and contributing to the current US paralysis.)

    3) This European parliament would then select a prime minister of Europe, who would in turn nominate her or his cabinet, with one cabinet member each from a member state (similar to the current process for selecting the European Commission), to be approved by the first parliamentary chamber.

    4) A largely ceremonial post of president of Europe would be directly elected on a continent-wide basis (as German chancellor Angela Merkel and others have proposed), as a step towards forging a Europe-wide identity. Eventually this directly elected president could be invested with more power if that better matched the zeitgeist.

    This kind of streamlined structure would do much to simplify continental governance for European citizens, as well as to clarify lines of authority and make decision-making more efficient, transparent and democratically accountable.

    It also would deal with the current reality of a two-speed Europe. It seems most likely that a 17 (or so) member core will be the entity that adopts the above-proposed federal structure initially, as the momentum of economic union drives the need for a more streamlined political union. For the sake of discussion, let’s call this new entity the United States of Europe.

    This USE could co-exist with a more loosely confederated European Union of 27 member states (including the USE core), allowing the EU to retain its present governance structure (but with reduced powers). This two-speed structure would allow those using the euro currency to plow ahead with the political institutions that are necessary to properly regulate a monetary and fiscal union and maintain democratic legitimacy.

    And the EU-27 would be able to operate under much less pressure to integrate more than its disparate members are capable or willing (this should be constructed so that individual states could migrate from the EU-27 into the US of E when it made sense). There are historical precedents for such an inside-outside arrangement, such as the early British commonwealth and the current United Nations led by the Security Council core.

    Some of the assumptions built into this proposal include the following:

    Initially, it would be wise to empower member states’ legislatures in the federal legislature. That’s what a young United States of America did because each member state was sufficiently diverse to have legitimate state-based interests, and no clear-cut national interest or culture existed. In addition, buy-in was needed from the political elites of each member state, and many of these elites mistrusted the average voter even more than European elites do today.

    So while originally US voters directly elected the federal House of Representatives, the member states’ legislatures were given the power to elect the powerful federal Senate, as well as to elect presidential electors that chose the national president. For decades after 1790, both the member states and the elites played a significant role in selecting the political leadership of the federal government.

    Eventually America empowered individual voters over the state legislatures, both with popular direct election of US senators (though not until 1916) and with state legislatures agreeing to abide by each state’s popular vote in selecting presidential winners. So Europe should include an amendment process that allows the system to evolve eventually into direct popular election as a pan-European political consciousness and culture takes root.

    It is hard to imagine how the current EU political institutions will be able to continue governing both the EU-27 as well as an increasingly integrated eurozone. Truly, the times they are a-changing.

    • Henning Meyer

      I now read elsewhere (http://www.handelsblatt.com/politik/international/radikaler-reformvorschlag-eu-will-eigenes-parlament-fuer-die-euro-laender-seite-all/7100282-all.html) that the Eurozone Parliament under consideration in Brussels should also include national parliamentarians. Really not sure how this is supposed to work!

      Steven, I should read your piece again but your comment sounds like only the EZ would have a parliament and the rest of the EU would be a lose confederation attached to the USE. Would that mean existing non-EZ MEPs should go? If that is the case I don’t think this would go through. I would keep the EP as is but create an additional group of the EZ MEPs within it that decided on additional matters (EZ budget and regulation). One could talk about how such a Euro Group would interact with national parliaments but creating a new beast with a new building consisting on MEPs as well as national MPs seems too muddled to me.

      • http://www.Steven-Hill.com Steven Hill

        Henning, I agree, keep the existing EP as it is, and create a separate legislature for the euro zone. In my article, I call the latter the United States of Europe. Though I think in doing this there would have to be a rethink about which powers the EU would retain, and which would pass to the USE. But this would certainly help resolve the tensions of two-speed Europe, in which states like the UK really don’t want to go too much further down the integration pathway.

        Initially, it would be wise to empower member states’ legislatures in the federal legislature. Ihat’s what a young United States of America did because each member state was sufficiently diverse to have legitimate state-based interests, and no clear-cut national interest or culture existed. In addition, buy-in was needed from the political elites of each member state (and many of these elites mistrusted the average voter even more than European elites do today).

        So while originally US voters directly elected the federal House of Representatives, the member states’ legislatures were given the power to elect the powerful federal Senate, as well as to elect presidential electors that chose the national president. For decades after 1790, both the member states and the elites played a significant role in selecting the political leadership of the federal government.

        Eventually America empowered individual voters over the state legislatures, both with popular direct election of US senators (though not until 1916) and with state legislatures agreeing to abide by each state’s popular vote in selecting presidential winners. So Europe should include an amendment process that allows the system to evolve eventually into direct popular election as a pan-European political consciousness and culture takes root.

        I think those lessons, while they come from many years ago, are instructive for Europe today. So here’s the type of structure that I think makes sense for the USE parliament:

        1) A European parliament with two chambers, one directly elected by voters such as the current European parliament, with the number of representatives per member state a close reflection of each state’s population (so the more populous member states would have more representatives). A proportional representation electoral method should be used.

        2) A second chamber selected by member state legislatures (as the EU’s Council of Ministers sort of is now — Joschka Fischer has proposed something similar, I believe). The number of representatives should mostly be proportional to the population of each member state, but with a few additional representatives granted to low population states so that they are not overrun by bigger member states.

        (WARNING: don’t make America’s mistake of granting equal representation per member state in this second chamber. That has resulted in a US Senate where conservative, low-population states often strangle legislation supported by the majority of Americans, resulting in minority rule and contributing to the current US paralysis.)

        3) This European parliament would then select a prime minister of USE, who would in turn nominate her or his cabinet, with one cabinet member each from a member state (similar to the current process for selecting the European Commission), to be approved by the first parliamentary chamber.

        4) A largely ceremonial post of president of USE would be directly elected on a continent-wide basis (as German chancellor Angela Merkel and others have proposed), as a step towards forging a Europe-wide identity. Eventually this directly elected president could be invested with more power if that better matched the zeitgeist.

        This kind of streamlined structure would do much to simplify continental governance for European citizens from euro zone states, as well as to clarify lines of authority and make decision-making more efficient, transparent and democratically accountable.

  • Aidan OSullivan

    Hi,
    Its important to remember many MEPs already vote on legislation which does not affect their constituents e.g. Schengen, JHA etc.

    But if the eurozone is moving towardd real fiscal union etc, then yes that is something different. Some MEPs have called for a sub-committee of the ECON cmmt for the Euro and then only eurozone MEPs to vote on resulting legislation at plenary.

    Maybe worth thinging about, but I would like to hear more reason from those against.

    As regards institutions, we already have what we need. The Commission the executive where the President will be elected at the European electionss from 2014 backed by European parties and manifestos.

    The EP is like the House of Representatives. The Council is like the Senate and Commission like White House (without foreign/military policy).

    Having a real European campaign in 2014 is key….

    • http://www.Steven-Hill.com Steven Hill

      Aidan, your comparisons to the US political structures stretch reality. And the differences are not minor. In the American system, legislation is initiated by either the House or the Senate. While the White House certainly can find legislators to introduce their legislation, they have to go through either of those chambers. And it has to be approved by both of those chambers. The White House itself cannot initiate legislation

      In the EU, the only body that is permitted to initiate European-level legislation is the unelected Commission. The commission is both the chief executive as well as a legislative branch. So unlike the American model, which has a clear separation of powers between the executive and legislative branches, the European Union has invested the functions of both branches into the hands of the Commission, with the Parliament – the only body that is elected directly – very much a mini-me partner.

      While of course a Prime Minister in a parliamentary system also is not directly elected, but instead is selected by the MPs who themselves are directly elected, in the EU system voters are FOUR TIMES removed from the selection of the powerful executive branch. That’s because voters directly elect their national members of Parliament, who in turn elect the 27 national heads of government, who in turn sit on the European Council; this body then nominates the European Commission and its president, subject to the approval of the European Parliament (whose members are directly elected). So national parliaments, which are the closest to the voters in each member state, are reduced to the role of a kind of electoral college while the heads of state who actually nominate the chief executive of the E.U. comprise an electorate of a mere 27 voters. The average voter is four times removed from the chief legislative and executive body of the European Union, which is the European Commission

      Despite the recent Lisbon Treaty endowing it with a bit more power, the European Parliament is still less than a full legislature, as it can only pass, amend or reject the Commission’s legislation, not initiate it. See http://www.europarl.europa.eu/aboutparliament/en/006ff89b2c/Introduction.html.

      Another mini-me partner in this unique European tricameralism is the Council of Ministers. Similarly restricted to passing, amending or rejecting the Commission’s legislation, this council is composed of of 27 national ministers, one for each of the member states. But to confuse matters further, the exact membership of the Council depends upon the topic. When discussing foreign, economic or agricultural policy, for example, the Council is composed of the 27 national ministers who oversee that policy area for their member state. On the one hand, this structure is kind of innovative, or at least different in its quirkiness, compared to how most other representative governments have always been structured; on the other hand, it means this Council has a constantly rotating configuration of “representatives,” each siloed in their respective issue, with connection to only the narrowest of constituencies that cares about their single issue, undermining transparency, accountability and coherence across issues or a focus on the big picture.

      Nice try, but this is a flawed design. As I wrote in another post, this kind of design was fine for a loose confederation of states. But for a monetary union, which is endeavoring to have both a fiscal and eventually a transfer union, it is inadequate. Yet it seems inconceivable at this point that members of the EU who are not members of the euro zone, especially the UK, are going to be willing partners in a major redesign. Hence, two-speed Europe is a fait acompli, and it’s necessary to redesign these political institutions for the euro zone initially, making it possible that when certain conditions are met (including joining the euro) a state could migrate from the EU to the United States of Europe.

      Steven Hill

  • Henk van Dijk

    Hi,
    Although I understand the caveats against this proposal, it seems at least a temporary solution against the critisism at this moment about the lack of democratic control in the decisions made to overcome the euro crisis.