Why the European Constitution is not as dead as it appears

 

The European Union does not have a happy history with referendums. When Ségolène Royal, the French Socialists’ presidential candidate, recently proposed a referendum on the European constitution in 2009, did she unwittingly sound the death knell for the project?

I do not believe so. In fact, I would think there is a reasonable chance that the EU may end up with a constitutional treaty before the end of the decade. The good news is that we are no longer living in the black-and-white world of a year ago, when we faced a straight choice between the old draft, rejected by the French and Dutch electorates, or nothing at all.

 

What are alternative options?

There is the mini-treaty, proposed last autumn by Nicolas Sarkozy, Ms Royal’s main opponent in the forthcoming French presidential elections. Mr Sarkozy had calculated that this might obviate the need for a second referendum and could be quickly ratified by parliaments.

There are a number of problems with Mr Sarkozy’s proposal. For a start, he may not win the election. Second, he might shift his position before election day, having come under pressure from Ms Royal’s clear endorsement of a plebiscite in 2009. But there are also problems with his proposal on grounds of substance. A mini-treaty is bound to grow in size once subjected to political negotiations. Mr Sarkozy picked his favourite cherries from the old draft: an EU foreign minister, “super-qualified majority” voting, reinforced co-operation, citizen initiatives and the right of the European parliament to elect the president of the European Commission. This is not an unreasonable selection, but I doubt whether Angela Merkel, the German chancellor and current holder of the EU presidency, or other European leaders favour exactly the same list. There are good reasons why European treaties always end up as large as they are.

The Germans do not much like the idea of a mini-treaty, but senior officials have become more open-minded. I suspect that if it came to the crunch they would rather have this than nothing at all. If Mr Sarkozy wins, this may well become the basis for future negotiations.

If not, a different kind of treaty is needed. Just as a mini-treaty intended to solve the problem by means of reduction, one might alternatively decide to solve it by means of addition – through a treaty plus X. The French Socialists have been demanding an extended social rights charter, for example. But this is unrealistic for the same reason that Mr Sarkozy’s redux version does not work. The present treaties contain a careful political balance between libertarian and socialist positions across the 27-member block. Simply moving along the social/liberal political axis in either direction is just as impractical as Mr Sarkozy’s simplification.

Fortunately, there are more intelligent ways to add to the existing text without alienating others. For example, one could focus on those areas of integration that include France and the Netherlands, but not the UK and Poland – in other words the eurozone. Indeed, there is currently an agitated debate in France about economic governance in the eurozone. Some French politicians have been questioning the European Central Bank’s independence. Others are demanding a more formal role for the euro group, the informal assembly of eurozone finance ministers. Another interesting idea I heard recently would be a formal change in the treaty to pass the responsibility for exchange rate policy directly to the euro group. Exchange rate policy is one of those grey areas where the competences between the central bank and the politicians are not clearly delineated. I could even imagine a social protocol for the eurozone only.

This is where Germany comes in. While Germany was not part of the French problem, Ms Merkel may well become part of the solution. Of course, she is not going to compromise on the ECB. She will certainly not pay any attention to Ms Royal’s proposal to force the ECB to target both price stability as well as economic growth and social progress. The Germans tend to react allergically to such ideas.

But if you leave out the ECB, there may be more room for compromise than meets the eye. Germany may be more flexible when it comes to strengthening the role of the euro group, or even on exchange rate policy. Since the UK is not a member of the eurozone, nor in a rush to enter, there is no need for the UK to threaten a veto.

Should we be concerned about a referendum? Ms Royal’s endorsement of a referendum does not surprise me. Every French politician I have spoken to – from the left or the right, pro- or anti-constitution, has been telling me that it would be neither possible nor desirable to avoid it. Of course, a new referendum would have to be carefully prepared and yes, referendums are inherently risky. While a No vote would probably end the constitutional debate, it is also true that a Yes vote might strengthen the EU’s fragile self-confidence.

This still leaves the difficult question of whether the UK and the Netherlands could ever ratify a treaty. It is quite possible that they may not. But from the perspective of the German presidency, however, it is best to deal with one problem at a time. The French problem has to be solved first.

Email: munchau@eurointelligence.com

© Financial Times Limited

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