Federalism

Questions about a deeper European integration

This post contains my answers to a questionnaire by JEF Europe’s PC1 (Institution and Governance) on the topic of a deeper European integration.

Please, do not refrain from commenting and participating in the debate ahead of the European elections!

Pierre-Antoine KLETHI 

1) Do you think European member states should try to overcome the current crisis by seeking for deeper European integration? If some states would not be willing or able to take further steps, should those who are, continue deeper integration?

1st question: yes! Member States have started doing this by discussing and implementing some forms of solidarity (EFSF, ESM, banking union…).

But we still need to address further problems in the functioning of the Eurozone:

  • Increase and facilitate free movement of workers, because workers’ mobility is a key element of a monetary zone. The aim should be a European
  • Further coordination (rather than harmonisation) of economic policies.

We need to insist on subsidiarity and on the fact that deeper integration does not mean a multiplication of regulations!

2nd question: yes! A multi-speed Europe already exists in the form of enhanced cooperation and opt-outs. We have anyway already a multi-speed Europe: look at the Schengen area, at the Euro area…

2) Do you think European integration should be an integration “à la carte”, allowing member states to choose, whatever field of common policy they want to join (absolute free choice), or should it be an integration of different levels, each with a particular legal framework, allowing member states only to choose between the levels of integration (free choice of level)?

“A la carte” would undermine the idea of common destiny and would even undermine the functioning of the EU’s most successful (so far) project: the Single Market. So, it should be rejected.

Differentiating “à la carte” from “free choice of level” may be difficult… However, I believe that allowing different levels of integration is necessary, at least in the short and medium term, in some policy areas because of the differences between Member States and of the principle of subsidiarity.

We need to think about how to solve this…!

3) Do you think it would be feasible for all member states to achieve the same level of integration?

We need to distinguish “technically / socially / economically feasible” and “politically feasible”.

In the 1st case, my answer is: yes! A progressive convergence of economic and social standards shall be taking place thanks to the Single Market and the fundamental economic freedoms.

In the 2nd case, I’m afraid I must answer: no. Some Member States do not want to go further, at the moment. They should not be forced to go further, as long as it does not create problems such as integration “à la carte” or the widely discussed social dumping. On the other hand, of course, those who want to further integrate should be entitled to do so!

4) What should be the purpose of deeper integration and which competences should be transferred to a deeper integrated Europe (e.g. economic, social, environmental, security and foreign policy)?

1st preliminary issue: What should be addressed by public regulation/funding (and what should be left to private initiative)? This question is often “forgotten” in debates about a federal Europe.

2nd preliminary issue: subsidiarity. What can the EU do better than MS or local authorities? What is the added-value of the EU?

Also a preliminary remark: more integration does not mean imposition a national model at European level to prevent the so-called “fiscal dumping”, etc.

Some ideas regarding economics and social:

  • We need a European budget partly funded with self-defined resources (to be determined; however, a bit more thinking than just putting “carbon tax” and “FTT” would be appropriate…). This budget should be used, in particular, to invest in projects involving more than one Member State (be it for infrastructure, education, training, employment…).
  • NB: No need to say once more that the EU or the Member States should spend more if we do not know more concretely where the money should come from!
  • More coordination of national budgetary policies at least in the Eurozone. Ideally, the fiscal compact would be integrated in the EU treaties.
  • We can think about tax coordination. Fighting tax fraud could be an issue.
  • A pan-European minimum wage is conceivable, provided it is calculated as a percentage (identical in all Member States) of each Member State’s average wage. There cannot be a single, uniform minimum wage all across Europe; this would be an economic non-sense.
  • More coordination of workers’ rights.
  • Solving intra-EU cross-border tax issues exclusively through European regulation rather than bilateral tax treaties.
  • Further harmonise consumer protection.
  • In general, everything that can stimulate free movement, especially of workers.

Environment & energy:

  • Transfer all matters that have a potential cross-border nature.
  • Finally implement the Single Market for Energy: investments in cross-border networks and determine a pan-European energy mix.

Justice:

  • Finally create a European Prosecutor Office, preferably with the participation of all Member States.
  • Actively support Member States were the judiciary is a bit weak / under-performing.
  • Further facilitate the mutual recognition of other Member States’ judicial decisions in order to better fight cross-border crime.

Foreign and Security Policy:

  • Develop a framework (kind of European guidelines) for a European foreign policy. Member States would be free to pursue their own diplomacy within this framework.

5) Should a deeper integrated Europe have its own budget (e.g. with the financial capacity to mitigate economic shocks) or the right to levy taxes?

I think it would be feasible and should be welcomed, but various issues need to be solved in order to implement this:

  • Who would be in charge of collecting the said taxes? Probably the tax collection services of Member States… but what about paying them for this task? And will they be as committed to collecting European taxes as they are to collecting own domestic taxes?
  • European taxes to finance this deeper integrated Europe’s budget must not result in an increase of the overall tax burden, if we want the idea of own budget to be accepted by citizens and business and if we want to avoid undermining the competitiveness of our economies. But how do we “force” Member States to reduce their tax intake to offset the creation of European taxes?
  • What would European taxes be? A financial transactions tax (FTT)? A carbon tax? Or should we transfer the whole VAT receipts to the EU?
  • Would this budget be entirely financed by European taxes or would we keep some national contributions?
  • What would be the procedure to adopt the budget? Surely, the EP should have a greater role than now, if less money comes from the Member States’ pocket…

6) Do you think member states should have to fulfil certain political, economic or legal conditions to take part in a deeper integration?

A Member State wishing to take part in deeper integration should surely fulfil some political conditions:

  • Have a general record of implementing European legislation in time with little or no delay.
  • Show a broad consensus for and commitment to a deeper integration (to be demonstrated through a referendum on the issue).
  • Respect all the acquis communautaire.

As to economic conditions, I realise that it may be a bit “unfair” to reject potentially interested countries on economic grounds even though they are politically motivated to be part of a deeper integration, but, at the same time, we need to learn the lessons of the Eurozone’s birth… So, there definitely needs to be some degree of economic convergence if a deeper integration (which would necessarily have an economic component) is to work in the longer term.

7) Do you think a deeper integrated Europe should have its own institutions (e.g. Government, Parliament, Federal Senate) or just sub-units of the existing EU-institutions (e.g. Commissioner for deeper integration within the European Commission, a new parliamentary commission for deeper integration within the European Parliament) or should it function without particular institutions beside the existing EU-institutions? If you think a deeper integrated Europe should have its own institutions, what institutional system would you propose? How should democratic legitimacy be assured within this institutional system?

I do not support the idea of own institutions, because it would institutionalise a “multi-speed” Europe and this would, in my view, durably and visibly damage the ideal of an ever closer Union involving all its Member States.

On the other hand, having no particular institutional settings for a deeper integrated Europe would not be a good solution either. Indeed, especially if we want this deeper integrated Europe to be more democratic, there needs to be some parliamentary control of the “government” of a deeper integrated Europe.

So, I think:

  • Sub-units would work well within the EP. This specific EP committee (made up only with MEPs from countries participating in the deeper integration) could supervise the overall activities related to the deeper integration. But I also believe that the existing committees should discuss the matters (otherwise, the new specific EP committee would be overwhelmed). Of course, in these committees, only MEPs from the countries participating in the deeper integration could vote (but everyone else should have the right to participate in the debate).
  • The existing Commission should serve as a “government” in a process of deeper integration. I do not think a specific Commissioner would be necessary, because the Commission is already supposed to represent the EU rather than the Member States.
  • A specific Council (like the Eurogroup for the Eurozone) would represent the Member States.

8) What would be the dangers of multi-level integration? How could Europe as a whole overcome these dangers?

Various “dangers” could arise from a multi-level integration. Here are 2 which immediately come to my mind:

  • A negative impact on Single Market cohesion, if MS part of a deeper integrated Europe introduce mandatory social or environmental standards that are stricter than those of the EU as a whole. This could be addressed by ensuring a very close coordination between those participating in the deeper integration and those not participating. Moreover, rules adopted by those participating in the deeper integration could not violate EU rules on free movement.
  • The risk of marginalising the existing EU and the Member Statesthat do not want a deeper integration. This can be addressed by regularly reminding that the deeper integration process is open at any time to any Member State who meets the conditions (to be precisely determined), and also that those not participating may freely adopt some measures which are binding for those participating in the deeper integration.

9) How could interested member states achieve a deeper integration? Should it be realised outside the Lisbon Treaty? Does the whole EU need a new treaty that goes further than just permitting “enhanced cooperation” as foreseen by the Lisbon Treaty in Article 20 TEU? Do we need a Convention to elaborate a new treaty?

My suggestion would be to use, as a first step, the possibilities offered by enhanced cooperation. This would test the will of Member States to effectively progress on the path of deeper integration without launching a lengthy procedure of changing the existing treaties.

If the current “enhanced cooperation” is not sufficient, I suggest trying first a limited treaty change to remove the obstacles to deeper integration of some Member States only. This, I believe, would not require a convention as it would be a limited change. Alternatively, of course, if all Member States agree on transferring certain powers to the EU, this change could be written in the treaties. Maybe a referendum on the issue would be worth organising, if it is an important issue. But we need to be also very careful about referendums for several reasons, including: 1) very often the information provided to citizens distorts reality; 2) voters are tempted to use such opportunities to express themselves as a tool to express dissatisfaction with their domestic government.

A really new treaty would be necessary only if we go beyond “simple” policy convergence to create a new institutional setting just for those participating in a deeper integration process. In this case, of course, a convention would be necessary. However, let us note that it would represent a kind of “break” with the non-participating EU Member States… We also need to remember that Member States are bound by EU law, so that the prospective new treaty could not include rules incompatible with those of the EU. To sum up, I am in favour of a deeper integration within the existing EU framework.

10) How can cohesion be assured within the different levels of integration, especially regarding smaller or economically weaker states that are not able or those states that are not willing to meet the deeper integrated Europe criteria?

I strongly believe that cohesion would be best supported by a deeper integration, as this would reinforce and accelerate the process of economic and social convergence in Europe.

The cohesion policy already represents a major EU policy (including in terms of spending). I consider that no special help from EU funds should be granted to Member States which are not meeting the criteria to participate in the deeper integration process. Indeed, all EU Member States should be treated equally, regardless of their political opinions. However, within the framework of the deeper integrated zone, it is very clear that Member States would be allowed to establish a higher degree of solidarity between them, e.g. through a common budget available for matters specifically related to the deeper integration.

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4 thoughts on “Questions about a deeper European integration

  1. You make very valid points. Indeed the referendums of the 2000’s were colored by national politicians seeking domestic gains. This is unlikely to change given the dependence of officials in Brussels on their affiliate national parties. ‘Brusselization,’ in reality, has not yet occurred, even for the Commission. But this alone should cause one to pause before transferring more powers to these self-same officials (which may not be a problem if reform of the European Parliament had accomplished its goals, but it has not). And indeed the EU did not create the crisis in Spain (which was a real estate bubble similar to what was seen in the US) or Greece (caused by an unsustainable nepotistic welfare-state system). Yet the ECB in Frankfurt, when faced with two alternatives (austerity or Keynesian-inspired stimulus) outright rejects one of them (guess which), and in so doing necessarily imposes a particular economic ideology (which many scholars have argued reflects German historical memory of hyperinflation) and which creates debate even between France and Germany, the two largest contributors. There is probably no saving Greece at this point (nor should it have ever been allowed into the Eurozone), but it is necessary to remember that by subscribing to the Euro one gives up the possibility of manipulating exchange rates to reflect the real state of one’s economy, whereby a cheaper currency may (or may not) induce foreign direct investment, which may still be an option for Spain, Portugal, or Italy (which may also benefit thereby by increased export competitiveness). I gave serious pause to recommenting on this, and still am not sure that I should have, as I feel your weblog’s goal is laudable and you strike me as an intelligent, informed person. Widening and deepening probably are the only way to responsibly manage the Eurozone crisis, so overall I actually agree with premise. However discussion about EU citizens, who have become much more informed about the EU precisely because of the crisis, should never be left out. The average voter will never be fully informed about the issues and will always be subject to manipulation – this does not make them completely ignorant. If voters in the constitutional referendum were manipulated by fears of unchecked bureaucracy in Brussels, they are still cognizant enough to realize that EU political decision-making is distant from them (which it is), representing the basis of that fear. As to your last point, I must simply disagree: the strength of Germany’s economy relies on its exports, which will be more profitable in nations pegged to the Euro which is often not a true measure of these nations’ economies (being considerably weaker), thereby artificially increasing the value of German exports which cannot then be moderated via tariff or trade restriction under the terms of EFTA. The Eurozone does indeed work to the advantage of the exporting nations – increasing the trade deficit of the periphery nations. Feel free to moderate or delete this comment if you wish. I chose to study the EU because I feel that it can be a model of social progression, and I still believe that this is possible. But one must be realistic about the challenges to this.

    • Thank you again for continuing the debate. You shouldn’t fear sounding ignorant; the quality of your replies is far above the average of debates I sometimes take part in. Furthermore, everyone is entitled to have an opinion. What is important is to look for information and be ready to accept the confrontation with other arguments. I’d also like to add that I never delete comments in a debate, except when they are not relevant to the topic discussed in the article.

      It is true that national affiliations still play a (too) important role in EU institutions. I don’t know for sure about the Commission, but it is a fact in the European Parliament, unfortunately. On the other hand, some sociological studies show a form of what you call “Brusselization” because of the daily contact between these people from different origins. So, a sense of common belonging nevertheless arises and may help to balance the “national roots”.

      The choice between austerity or Keynesian-style stimulus is first of all a choice for governments, rather than the ECB. What a central bank can do, when governments have made their choice, is to choose a monetary policy that amplifies the effects of the fiscal stimulus (through an expansive monetary policy). However, the ECB has no mandate to focus on growth, but only on inflation targets. That being said, the current core inflation rate is particularly low in the Eurozone, leaving some margin to the ECB for more expansive action.
      On the other hand, I must say that I’m not in favour of a loose monetary policy like in the USA. I just read that at the end of the QE programme of the Fed, the Fed will hold bonds worth 22% of the American GDP. In other words, this is debt-fulled growth. And debt inevitably needs to be repaid… So, the US simply shift back in time the moment where they’ll have to face tough choices and an economic adjustment. Others suggest to allow higher inflation to solve the debt issue, but this will come at a cost for workers, as their real wages will drop., and for savers, as the real value of savings will fall quicker, Is it a fair redistribution? I don’t believe it…
      More generally, I don’t believe in the impact of monetary policy on mid- and long-term growth: in my opinion, it only brings “artificial” growth and there is a price to be paid later (in the form of bubbles exploding, like the housing market in the USA in 2007-2008)…

      Regarding the perception of the EU, I agree that it is seen too far from citizens. There is an urgent need to bring the debate on European issues and with European politicians closer to the people to catch their attention. EU institutions are guilty of insufficient and not always adequate communication. But citizens are guilty as well: guilty of not paying sufficient interest in politics in general, guilty of not participating enough in European elections…

      I agree with you that the Euro advantages Germany for its exports within the Eurozone… up to a certain point. If other countries get too indebted, like Greece, then they probably cannot afford anymore lots of German products…
      However, for exports outside the Eurozone, Germany is not in a more favourable position than the other Eurozone members, in terms of monetary policy. So, the Euro cannot explain alone the strength of Germany’s exports and the weaknesses of other countries’ economies.

      Finally, yes, the EU can be a model of social progression. I think a lot has already been done, but I agree that much more also remains to be done!

      Best regards,

      Pierre-Antoine KLETHI

  2. My apologies if this makes me sound ignorant… but it appears to me that, as per usual, what is being left out of discussions about EU widening and deepening is the stance of the citizens of the European Union. There was some reference to referendums, but only in the context that “very often the information provided to citizens distorts reality; voters are tempted to use such opportunities to express themselves as a tool to express dissatisfaction with their domestic government.” First, without real national-level public discussion on European Union politics, which has not thus far been adequately addressed by the EU, national politicians will always have the opportunity to spin the issues for their own gain. Second, while European Parliament elections are generally considered ‘second-order elections,’ very often voters (such as the French ‘non’ and the Irish ‘no’) are indeed focusing on the EU, its bureaucracy, lack of transparency, and commitment to a certain economic model which does not, in fact, reflect the interests of many of its citizens. Finally, several referendums were held during the treaty revisions of the 2000’s – most of these replied ‘no’ to further treaty revisions and widening and deepening. Traditionally, the issue was addressed merely by repackaging the issue and repeating the vote, rationalizing the results rather than accepting them. As always, the issue to be addressed is the connection between Brussels and the rest of the continent, otherwise ideas for economic reform will prove largely ineffectual (see for example developments in Greece or Spain, where EU-imposed economic reforms have not decreased unemployment or raised GDP significantly, only created ill-will and talk of secession from a union seen as protecting the economic interests of the northwestern ‘core’ nations). Again, I hope I don’t sound ignorant, and I’m sorry this post came out so long, but I believe that your survey left out some important issues that need to be addressed. Thank you for allowing me to share my opinion.

    • Thank you very much for your comment!
      I share with you the idea that the EU needs to become closer to its citizens. And even if I criticise the conditions in which referendums are held, I do recognise that it is a tool for decision-making in a democracy.
      So, regarding your first point (lack of proper national-level public discussion on EU policies), I totally agree.
      Regarding the second one, I still believe that voters do not enough take into account the EU policy issues and use these elections as a national tool to express a judgment on national policies and politicians. Indeed, European elections are still handled at national level, with national political parties determining the lists of candidates. This is not sound.
      Regarding the results of the referendums in the 2000s, they precisely illustrate my points: some politicians deliberately lied to people for domestic political gains and at a high cost for Europe.
      Europe needs to be better explained to citizens, and there are too many populists out there who use this ignorance of most citizens to stir up irrational fears (see, e.g., Farage and UKIP about immigration/free movement within the EU).
      Finally, regarding the “EU-imposed economic reforms”, they were not imposed by the EU. National governments were free to refuse any reform… and to see their economy collapse. The root of the current problems in Greece or Spain is not the reforms suggested by the EU (in exchange of financial assistance which represents an unprecedented effort of European solidarity!), but the economic mismanagement by domestic governments over decades. Of course, the adjustments are painful, and surely the EU could have suggested more incremental steps to reduce debt, but I remain deeply convinced that the return to sound economic management was necessary. And, by the way, pain in Greece has so much increased because the government did not (properly) implement the reforms agreed upon in the 1st memorandum…
      So, you shouldn’t see the EU as a tool to protect the interests of the ‘northwestern core nations’. As I said above, the financial assistance represents unprecedented solidarity. Moreover, it is in the interest of these better-off countries that the rest of the EU gets better (and they know it!).
      Best regards!

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