On Monday October 8th, 2012, Daniel Cohn-Bendit MEP, Co-Chair of the Greens in the European Parliament (EP) and Guy Verhofstadt, Chair of the ALDE (Liberals & Democrats) in the EP, came at LSE to discuss the future of Europe and to advocate the “post-national and federal Europe” they present in their new book, For Europe.
Guy Verhofstadt: “It’s a political crisis”
According to the former Belgian Prime Minister, the current crisis is more political than economic. Indeed, “we have a single currency, but not the instruments: economic union, fiscal union, common bond market, political union”.
He recalled the example of the United States of America, which started as a confederation in 1776, before choosing federalism at the Convention of Philadelphia which paved the way for the Constitution of 1787. A very important feature of the federalisation process is that decisions were taking at a majority, instead of unanimity.
Furthermore, the USA introduced a common currency only after creating a common treasury and a common debt. In Europe, we did the opposite, so we have to fix it up now.
Looking at the figures, the Eurozone as a whole is less indebted than America and Japan (88% of GDP in average against 102% and over 200%), but pays much higher interest rates (an average of 5% against around 2% and around 1.5%)! Guy Verhofstadt said that the problem is that, in Europe, “we have different strategies, different finance ministers”. Moreover, “in small bond markets, you pay higher interest rates”, because of a lower degree of liquidity. So, his message to the European Council is: “It’s the liquidity, stupid!”
The leader of the ALDE also said, very truly in my opinion, that “a monetary union is a question of trust, not only of figures. And trust was destroyed within a few weeks” by political errors.
Daniel Cohn-Bendit: A federal Europe as a means to regain sovereignty
The French-German MEP (elected already twice in both countries!) stated that “in 30 years, none of the European Nation-State will be part of the G8. The Nation-States are losing their sovereignty to the markets.” So, he asked: “Do we want this or do we want to regain sovereignty?” For example, to regulate climate change, you need a critical size and strength.
He explained that “when the Nation-States came out in Europe, it was because people said that if you have a market, you need political power to regulate the market. Now, the market is on European scale, so you need a bigger regulation body / State. For us, it’s the EU. It’s to defend our way of life, our culture.”
What is a federal and post-national Europe?
Daniel Cohn-Bendit insisted strongly on the fact that a federal Europe is not a centralised, antidemocratic super-State. On the contrary, according to him, it is “intergovernmental Europe like today is the undemocratic super-State. A lot of economic decisions are taken without supervision of the EP. And lots of decisions are taken at unanimity, which is undemocratic as only one country can control legislation (via its de facto veto right).” So, “the idea of federal State is to democratise Europe.”
The Member States are not supposed to disappear, but there should be “a new balance of sovereignty between the European one and the national one”.
Guy Verhofstadt stressed the fact that “federalism is the possibility to organise a public authority in a country where you have different cultures, languages, religions…” He underlined that China, the USA or India were also examples of an entity in which there is a huge diversity, leading to multiculturalism. So “a part of sovereignty should be put on continental level instead of national level”.
With a European State, we would have a European government, a European Parliament (2 chambers), a European passport, maybe even a European army (it would enable to cut Defence spending). On the Common Foreign and Security Policy (CFSP), Daniel Cohn-Bendit added that “our current armies are not adapted to today’s world” and lack efficiency. Furthermore, “in the UN Security Council, France and the UK never use their veto right”. And additionally, “why do we need 27 embassies in Kuala Lumpur?”
In fact, according to the former Belgian PM, we face a make-or-break decision: “or we lose the euro and go back to a confederation of Nation States or we go towards a federal Union, the US of Europe”.
Daniel Cohn-Bendit added that “the Nation-State exists because it provides physical protection, education, social protection… We see, in some countries, that it cannot provide all this anymore, so we suggest a federal State. The federal State should guarantee a benchmark for the Welfare State and let the States organise themselves within this framework.”
Reforming the Eurozone
Guy Verhofstadt echoed this idea of creating a framework in which the Member States would be free to implement their favoured policies. He indicated that “at the moment, we are trying to coordinate the economies in the EU, but it doesn’t work well. The problem is that it often was a soft, non-binding coordination. The other extreme is harmonisation (all have the same fiscal, social policies, etc.). But it doesn’t respect diversity. So, what we need is convergence: on European level, we should develop the framework within which the national economies can develop. We have to guarantee competitiveness and sustainability, but also social protection.”
Daniel Cohn-Bendit discussed the issue of the European budget. He deplored that “with a European budget equal to 1% of GDP, we cannot answer to the crisis. We cannot help Greece and give some social protection to the Greeks.” He warned that, “now, Greece is in a situation similar to Germany after WW1”.
Regarding the question of own resources, he indicated that “several Member States are in favour of own resources for EU. The Commission suggested 50 billion euros of own resources (financial transaction tax, carbon tax …)”. He also pointed out the behaviour of the UK government, declaring that Cameron’s threat of veto was “inacceptable” and noting that “the UK is against a higher European budget, but if it is done through enhanced cooperation, it wants a share of the benefits”.
Daniel Cohn-Bendit: “How to get there?”
Regarding the economy, the Green MEP focused on the mutualisation of debt: “one leg is fiscal responsibility; the other leg is solidarity”.
As for politics, he would like the emergence of a “true European debate” and a “European public opinion”. He supported the proposal to have 27 MEPs elected on pan-European lists, with the head of each list being the party’s candidate for President of the European Commission. But this was not discussed by the EP. So, Daniel Cohn-Bendit suggested that “with little changes in the electoral law, we might say that the candidate for President of the Commission can be candidate in all Member States, to campaign for his/her party in 27 Member States”.
He acknowledged that there are very different political cultures in Europe, e.g. the German model is very parliamentarian and the French model gives a lot of power to the executive. His solution is to have “two ballots: one for EP and one for President of the Commission”. So, the latter would be “much more legitimate than now and he would be the equal of heads of State and government”.
Furthermore, Daniel Cohn-Bendit called for “a new convention, to write a declaration of fundamental rights including following provisions: 1) Why Europe? 2) the structure of Europe and 3) the Euro for everybody.” Representatives of the EP and of national parliaments would work during two years and then, a referendum would be organised all across Europe. If a majority of people and States (so that little States are not marginalised) approve the text, the text is accepted. As for the States who say “no”, they “would have the opportunity to leave the EU”.
The Chair of the Green MEPs also rejected the idea of a Parliament just for the Eurozone, noting that only two countries (the UK and Denmark) have a true opt-out and that in other cases, such as the Schengen Area, there is no special Parliament because there were opt-outs.
On the topic of a “two-speed” Europe, Guy Verhofstadt wants to “go more or less in a single EU, including the Euro as single currency”.
The Greek situation
There were also some comments on the Greek situation.
Guy Verhofstadt regretted that Angela Merkel did not show enough commitment and earlier to solidarity in exchange for reforms. According to him, “Angela Merkel should have gone to Greece two years ago”!
He pointed out that “the real challenges in Greece are not tackled: market not opened, far too big public sector, clientelist system used by both parties.”
Daniel Cohn-Bendit underlined another problem: tax evasion. And also reminded that “European enterprises participated in the corruption in Greece: other countries benefited from the high Greek defence spending, so they said nothing”.
Finally, he highlighted the problem of nationalism, which is a big problem for the Greek society and politics.
Conclusion: The need for new prospects
Guy Verhofstadt insisted on the fact that “it is not enough to say to young people that the EU is a peace project, as they didn’t experience the war. We need to tell them how the EU can act positively for their future.”
As for Daniel Cohn-Bendit, he concluded the meeting by declaring that “we want a European Europe, not different nationalist views of Europe”.