Thoughts on the European Constitution, part II

 

Angela Merkel's speech in the Bundestag on December 14 was remarkable. She is really going full speed for the EU constitution, and this is something that France and its political elites are totally unprepared for. We knew before that Merkel favoured a tight timetable - a solemn declaration in March, a decision on an inter-governmental conference in June and a conclusion of the conference under the Portuguese EU presidency before Christmas 2007.

 

She now says that it would be a "historical failure" to drag this process into 2009. At present there is no enthusiasm from France for an expedited process, given the uncertain outcome of the presidential elections, and especially the stance take by Segolene Royal on this issue. The fundamental dilemma is that the French electorate - or rather the French National Assembly - might only be in a position to accept a mini-treaty, as proposed by Nicolas Sarkozy, one that entails only the most important institutional changes - voting rights, size of the Commission, functioning of the Council, the EU foreign ministers, citizens' initiatives.

 

The trouble is that Germany - and some others of the 18 countries that have already ratified - are unlikely to accept such a deal, and I do not expect that they will be easily convinced to change their position. Please see below for a more detailed discussion about the various options of how the constitution could be amended.

 

The situation gives rise to three important questions:

 

1. Is the Constitution necessary for the EU to achieve its policy objectives in the next decade or more?

 

2. What happens if Germany fails to set a date for an IGC?

 

3. What are the governance alternatives to a Constitution?

 

 

The constitution, in its currently stalled draft, is far from a perfect document, as most people would acknowledge, but it is by far the most coherent legal text the EU has ever managed to produce. Of course, it is conceivable that the present system of governance continues for a while, but it lacks democratic accountability, it is convoluted, inefficient, not suited to 27 members, let alone 30. The answer is that the EU needs the constitution not so much to create more integration, but to make the existing integration work better.

 

It is particularly important for the euro area, a monetary union that is not only geographically distinct from the EU, but likely to remain so for a long time if not forever. Yet, the present treaties only allow the euro area to co-operate on the basis of enhanced co-operation, an arcane legal procedure first introduced in the Amsterdam treaty but fraught with so many obstacles that it has so far never been used. The euro area is a monetary union in bad need of a formal economic policy - not a counterweight to the ECB as several senior French politicians have unwisely put it, but as a kernel for a common economic policy touching on issues such as the co-ordination of economic reforms and the creation of a common tax base.

 

If Germany fails to set a binding date for an IGC - an event with a non-trivial probability - I would suspect that the process to find an agreement would initially continue. The ball would pass into the hands of the French presidency in the second half of 2008. It would be the last chance in reality for a deal during the present term of the European Parliament and the European Commission, which ends in 2009. If agreement is reached, it may still be possible to ratify the Constitution by 2009, possibly 2010. But if there is no agreement by the end of 2008, the prospects that a deal will be reached eventually recede.

 

It is at that time - and probably not earlier - that the pro-integrationists, still a majority among EU members, will consider alternatives to a Constitution. No matter how you look at this, it is very difficult to envisage a scenario that would not fragment the EU in one way or another. Whether the pro-Treaty countries find a way to implement the Constitution among each other, or whether the euro area is going to declare itself part of a new core Europe that acts outside the legal constraints of the EU is difficult to predict at this stage. But one should make no mistake: If the Constitution fails for good, the EU will continue happily ever after on the basis of the current treaties.

 

Thoughts on the European Constitution, part I (edited, from last week)

Here are some of the options for a new EU constitution:

 

1. Do nothing, and hope that all problems in Europe will be solved once Jacques Chirac has gone. In many respects, this was really what the European Council decided at its June 2005 summit. This theory was based partially correct assumption that the French No Vote was a protest vote against Chirac, and that the French election in 2007 would clear the air. The trouble with this view is that the referendum was a legally binding democratic vote. There is no way you can present the same constitution to the French people twice without any material changes. It would almost certainly get rejected again. Also, there is no way you can ratify the Constitution by parliamentary procedure after the same or similar text failed in a referendum. Otherwise, the referendum would be farce. Senior German officials - and Luxembourg - have stuck to this position until quite recently. They took the view that since some countries had already ratified the Constitution, it would be wrong to ask them to ratify a different text again. Well this is tough luck.

 

2. Just as insane is the proposal for step-by-step implementation of the existing constitution - through parliamentary ratification procedures as opposed to referenda. The idea, proposed by some members of the Convention, like Pierre Moscovici, the French socialist in the EP, was to pick the Constitution apart, and implement various parts seperately over time. The fatal problem with this idea is that there will be no agreement on where to start.  The Constitutional Treaty that was drafted during a Convention, and later finetuned in an inter-governmental conference, was a finely balanced compromise that could easly fall apart once you open the package, even if you only were to sequence it. With 27 member states such diplomacy would become exceeding difficult.

 

3. A mini-treaty. This idea was proposed, among others, by Nicolas Sarkozy, the French interior minister, and possible successor to Chirac. Sarkozy propses

- the election of the Commission president by the European Parliament,
- the creation of a European minister of foreign affairs,
- the replacement of unanimity by a "super qualified majority";
- reinforced cooperation;
- and citizen initiatives.

He also want to cut down the Commission, and later to get national parliaments involved in the decision-making processes. But the mini-treaty, which is vigorously opposed by the European Commission, and many of the former delegates of the Convention, would have the same fundamental problem as proposal number two above. If you open the existing text, you easily unravel the entire project. If it had been easy to agree on a short list of priorities, the Convention would surely have been to do this a few years ago.

4. This leaves only one structural alternative - Not a Treaty Minus X, but a Treaty Plus X, in other words not a mini-treaty, but a maxi-treaty. This proposal is based on the following consideration. First, it would be too risky to open the entire package. It might unravel. In any case, it was never clear what the French and the Dutch objected to specifically. So it is not that easy to decide what to take out. So instead of taking something out, why not add something that addresses specific problems.

So what could a Constitutional Treaty Plus X look like. I am sure there will be many proposals. An interesting proposal came recently from the UK Liberal MEP Andrew Duff, who wants keep the essential elements constitutions, with some minor technical changes, plus a strengthening of policy areas that woefully overlook or ignored in the Constitution.

1. the eurozone should be more autonomous, allowing for policy co-ordination in a formal sense, and the Lisbon Agenda should become part of the Constitution.

2. A formal declaration should be drafted to highlight the social dimension of European integration.

3. upgrading of environmental and energy policies, and separation of agriculture and fisheries

4. The Copenhagen criteria for EU enlargement should be formally included

5. A revised financial system, based on transparency and accountability

I like the idea to strengthen the euro area institutions. At present, the euro area is a monetary union with a central bank, a fiscal rule with a more or less credible enforcement procedure. But this is it. There is no formal procedure to give the euro area governments the means to take political decisions on economic policy among each other. In theory, they could use the so-called enhanced co-operation procedure, which was first introduced in the Amsterdam Treaty in the late 90s. But it is so complicated that nobody has ever used it. The Constitution would make it easy.

How realistic Is a Constitution Plus X? Merkel has asked two of her most trusted lieutenants to start the diplomatic process to broker a deal at the June 2007 summit. The Germans want a short IGC during the Portuguese presidency which should complete its work by the end of 2007. It is no surprise that Jose Manuel Barroso, the Portuguese EU Commission also likes the idea, since it will give him importance and visibility during this process.

Some observers have raised the objection that both France and the UK will have new leaders in the second half of 2007, and that they might not be ready to confront such a controversial subject right at the beginning of their tenure. But I suspect this may be part of Ms Merkel's calculation. Gordon Brown, the presumptive successor of Tony Blair, and the next French president may want to put this issue behind them, which made life difficult for both their predecessors. The good news is that they may both be in a position to get a better deal than what their respective predecessor brought home two years ago.

I am not making predictions except to say that this issue is not nearly as dead as some commentators believe. Whether a second attempt to agree and ratify the Constitutional Treaty will succeed, is another matter. It is certainly risky. But then, all the big Treaties of the past were. If I was forced at gunpoint to place a bet, I would say that the EU will probably have a constitution ratified by 2009. The alternative would be a propose that would almost certainly lead to fragmentation.

 

 

 

 

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