The European Union is planning a major overhaul of its institutional structure and the way it is supposed to function in the future. The envisaged reform includes the further strengthening of the EU’s diplomatic service, the creation of a pan-European foreign ministry and even plans to create a European army. While these foreign policy proposals seem like adding to the core reforms the Eurozone crisis has made necessary, there are also new plans involved that could help the currency union become more sustainable in the future.
Chief amongst them is the introduction of a Eurozone Parliament, a parliamentary sub-chamber of MEPs coming from Eurozone countries. This is an idea I have been putting forward in publications and talks since February this year and it is great to find it in actual reform proposals. Why do we need another parliament you might ask? Let me make the case in a bit more detail. My idea rests on three pillars: the necessity to democratise the Eurozone, ideas for an ‘English Grand Committee’ and the need to create a ‘federal’ budget to have potentially more means to balance asymmetric shocks. Let me explain these three elements in turn.
It is becoming increasingly obvious that the Eurozone crisis can only be resolved in a positive way by major further integration steps. Given the magnitude of these reforms and the political fallout from the failed crisis politics of the last few years, it should be equally obvious that such major new integration steps also represent the limit of the elitist integration process. Not only do the integration steps themselves need strong democratic approval but the new, even more powerful, governance structure must also have a much stronger permanent democratic dimension to it. And given that the key institutional reforms will be around the Eurozone, it follows that a democratic institution for the currency union, whether you call it a Eurozone Parliament or a Euro Group in the European Parliament does not matter, is urgently needed. Such an assembly would also mirror the Euro Group in the Council of the European Union that already exists.
This argument leads to the question of how to meet this need. Do you need a completely new parliament, in which also national parliamentarians are involved? I do not think so and a look at the UK experience is very instructive in this context. The process of devolution in the UK has raised the so-called West Lothian question. The West Lothian question basically addresses the issue of why Scottish MPs are allowed to vote on matters that only affect England, whereas vice versa the corresponding Scottish matters are dealt with in the Scottish parliament and are thus outside the influence of any English MP. One of the suggestions to resolve this issue was an ‘English Grand Committee’ in Westminster, in which only English MPs vote on English laws. My version of a Eurozone Parliament was the application of this basic idea to the European context.
Once you have such a parliamentary assembly it can also assume functions national parliaments perform. An obvious issue to address would be the much criticised fact that there are no significant fiscal transfers or automatic stabilisers on the Eurozone level that could help to counteract asymmetric economic shocks. There will not be social security transfers or anything like this on the Eurozone level but I nevertheless think that it would be a good idea to have an additional Eurozone budget democratically run by a Eurozone Parliament. Such a budget would be additional to the normal EU budget and could be financed through new taxes, for instance a Eurozone-wide financial transaction tax (FTT). Such an additional annual budget could further politicise parliamentary discussions and make investments with the macroeconomic health of the whole Eurozone in mind possible. It would also help to improve the general infrastructure in the Eurozone and thus help to create growth.
For these reasons I think it is very welcome that the idea of a Eurozone Parliament has made it into the political realm. Some of the proposed reform measures seem like a step too far at the time being and are not related to the most needy area for institutional reform: the Eurozone. But I hope that the Eurozone Parliament has a realistic chance of actually seeing the light of day.
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Traditionally, the MEPs argue that, while they are elected in only a single Member State, they each represent the public interest of the entire Union. I suppose that is an empirical question: Do MEPs chose the interest of the EU over the interest of their MS when they are in conflict?
This is precisely the category error that has done so much damage to the task of achieving democratic legitimacy for the EU. The Eurozone for the sake of this argument is no different from the EU. As Barroso makes clear in the Guardian today, he (plus EPP integrationists) is calling for a Federation of European Nations not a federalised single Euro state. The European Parliament despite good intentions, many excellent MEPs, and treaty powers has not and cannot replace the Bundestag, Assemblee nationale, Cortes etc as a source of electoral representative legitimacy. Partiicpation in each EP election has declined since 1979. The prioritym should be to associate the 9,500 national parliamentarian in the EU with the EP to fofer a double democratic legitimacy. Creating a Eurozone parliament will alienate those nations that for honourable internal democratic reasons cannot join the Euro (Poles, Danes, Swedes) and further strengthen the centrifugal or Balkanizing forces in Europe. The theory is perfect. The idea is noble. But as Kant wrote recently from the crooked timber of European national politics nothing as rational and straight as a Eurozone parliament can be successfuly built.
Thanks for your reply Denis. I agree that national parliamentarians should link up much more with the EU level in various ways (or get the opportunity to) and what I suggested should not take away any rights of national parliaments. Similar to national parliaments I argued that a EZ Parliament ought to have authority over a new, additional budget, which could be one additional element in the effort to balance the Eurozone.
Given the scale of further integration needed to make a political union work (see here: http://www.social-europe.eu/2012/07/can-the-eurozone-be-saved/) we simply need a stronger permanent democratic dimension.
Some of the Twitter reactions also seem to suggest that the EU “should remain one”. I think this is wishful thinking as it is not one now and will be even less so in the future. Nobody in Berlin from any major party believes that the tried and failed one size fits all approach can go on. Finding a systematic new construction with several permeable levels is the task in my view…