If we want to save the EU, we need a structural reform
As we approach the end of one of the most turbulent years of our lifetime, reflections over the challenges we faced (and will continue to face) are joined by hopes for the year ahead. Swamped by a once-in-100-years public health catastrophe and an economic shock, these hopes are indispensable in order to imagine the world after COVID-19. One such hope is the re-thinking of the functioning of the European Union for it to continue to serve its fundamental purpose, which is to promote peace, the EU values, and the well-being of its peoples.
It is a paradox, but while the pandemic has hit Europe hard, it is also giving the EU an unprecedented opportunity — one much needed after Brexit. It’s an opportunity to show why it exists and what it stands for. The unanimous agreement reached by EU national leaders on July 21st regarding the budget-and-recovery package is one of the biggest collective acts that the EU has been capable of expressing during the last several years. It certainly is the biggest moment of glory so far for EU Commission President Ursula von der Leyen. However, this very achievement has rapidly shown all its fragility when, in a dispute that is still currently unresolved, Poland and Hungary challenged the link between the disbursement of that budget and Member States’ compliance with the rule of law.
The ‘moment of truth’
In her 2019 political manifesto “A Union That Strives For More”, von der Leyen stated that “we must defend our common values and uphold the rule of law.” She also said that the EU is a Community of Law and that “there can be no compromise when it comes to defending our core values.” In the political agreement on November 10th between the European Parliament and the Council, the release of a €1.8 trillion budget and coronavirus recovery package was agreed to be conditioned upon the respect of the rule of law.
On November 26th, Poland and Hungary issued a joint declaration vetoing the release of the budget and requesting that if the EU wants to make a link between the rule of law and the budget, it should do so by amending the bloc’s founding treaties — which they can veto. Both countries are currently being investigated under Article 7 proceedings for breaching several of the EU fundamental values due to lack of independence of their judiciary systems, attacks on freedom of the press, and insufficient basic governmental checks-and-balances
The initial agreement had been positively received by the financial community as a tangible sign that the EU is capable of rapid and cohesive action to build the economy back. Thus, the end of this stalemate, together with the outcome of the Brexit process, is seen as a crucial task for the new Commission to pass the credibility test.
Diagnosing the EU disease
To overcome a deadlock that is delaying the release of urgently needed money, various compromises are likely to be on the table, including diluting the rule-of-law mechanism or negotiating an intergovernmental agreement to get around Poland and Hungary’s vetoes. But both solutions would open the door to future similar compromises, significantly weakening von der Leyen’s position, as well as that of Angela Merkel, who is currently holding the EU Presidency.
One would think that it is precisely in cases like this — when some isolated Member States deviate from the rules they themselves had subscribed to upon joining the Union — that the EU is most needed. Yet because of the procedural unanimity required on budget matters, the majority of Member States can be held hostage by a rebel minority. Unless Hungary and Poland waive their objection (which they could do to secure their portion of the Corona budget, worth around 4% of their national GDPs) any compromise that water down Member States’ obligations to abide by the rule of law will signify that the EU has no credible way to prevent a few leaders from pursuing their own interests by ignoring the severe economic challenges hitting their own citizens as well.
Arguably, the current crisis over the Corona budget has not been caused by the Commission’s rule-of-law conditionality proposal. Rather, it is the inevitable consequence of the many years of EU politics that failed to put the protection of democracy and the promotion of EU fundamental values on the agenda as high priority items. For example, EU leaders could have done a lot more to isolate Hungary’s current Prime Minister Viktor Orbán many years ago, before he built a regime inside the EU that many consider authoritarian, and managed to demonstrate that one can get away with championing undemocratic values while still continuing to enjoy EU’s generous subsidies.
The EU needs more powers if it is to survive
This week Věra Jourová, EU Commission Vice-President for values and transparency (whose resignation was asked by Orbán in September in a letter to von der Leyen), will unveil the European Democracy Action Plan. The Plan is supposed to announce binding rules on the transparency of political advertising and election integrity, and on tackling digital misinformation.
Jourová has also championed the introduction of an annual rule-of-law audit of all 27 member countries, which should demonstrate that the Commission is not targeting Hungary or Poland in particular. But she is also on record several times stating that the Commission is not “a prosecutor” and that the issue of the rule of law cannot be “be solved by a lonesome sheriff.” Indeed, the Commission can propose measures but, under the current governance system, it does not have the teeth to truly enforce them. And because the rule of law is a proxy for questioning the entire European project, the Commission’s lack of sufficient powers on this matter is in reality an issue for the very existence of the EU.
Many leaders talk of the need for a profound institutional renewal of the Union. Alas, few are actually prepared to truly engage in a process that will lead to a new balance of powers between the EU and national authorities. And yet those pro-EU leaders, together with the Commission, should be the ones to champion a stronger Europe, a Europe that can impose “its way” over the Member States that may, perhaps for a limited period of time, have governments that do not conform to those values. One concrete reform the dispute over the Corona budget has shown to be particularly necessary is the extended use of the Qualified Majority voting over unanimity.
A stronger Europe is no longer optional
Irrespective of how the Brexit saga will conclude, the UK’s decision to depart has left the EU weaker, smaller and poorer. To be sure, the EU should be a space of freedom, and countries should be able to join if they fulfil certain conditions, as they should be able to leave, like the UK has democratically decided to do. But public opinion does not see this Union as a solid club of democracy, peace and prosperity, and Brexit has worsened that sentiment. Throughout Europe, people have gotten used to anti-EU parties and leaders whose narrative is no longer seen as subversive or extreme. The EU has been weak for a long time and has left a huge space to its critics instead of promoting its own agenda.
May 9th this year marked the 70th anniversary of the Schuman Declaration which, by creating the European Coal and Steel Community, symbolizes the first instance of participating states voluntarily giving up part of their sovereignty to an organization at the European level.
The appointment of Ursula von der Leyen and her vision to breathe new life into the European Union represents a unique opportunity to make the EU again a home of every citizen who stands for democracy, safety, freedom, and rights. Her proposals on climate actions, work protection, fiscal policies, gender parity, and fair economy are ambitious and do have the potential to “strengthen the EU brand of responsible global leadership”, as she herself has said. Working hand in hand with the Head of the European Council, and in ever closer dialogue with the European Parliament, von der Leyen can and should steer Member States’ leaders towards deeper integration by transferring more powers to the EU. The Commission must also gauge support among civil society organizations to educate the public about the benefits of the EU, and the downside of not having one.
Assertively using the budget as a tool to combat the erosion of democracy is a laudable decision. But arresting the downward spiral of confidence in the EU requires EU institutions, and particularly the Commission, to assume a strategic, decisive and systematic exercise of leadership.