Why the push to install Juncker is so damaging
If Jean-Claude Juncker is crowned president of the European Commission, it will be a major blow to David Cameron. Britain’s prime minister made a mistake in drawing a red line over the appointment of a federalist politician from a tiny country, who shows little understanding of the crisis of legitimacy facing the EU. But the German (and to a lesser extent) French newspapers have been full of anti-Cameron rhetoric, arguing that this is the latest in a series of British attempts to stymie EU integration; Cameron is beholden to eurosceptics on his right, who cannot be allowed to control the pace of that integration. This is wrongheaded and hypocritical. The battle for Juncker is not a principled fight in defence of democratic accountability, but a combination of power grab by the European Parliament and power-broking by national governments.
Britain is not the one spoiling the federalist party. Cameron and his finance minister, George Osborne, have repeatedly said that the eurozone needs to become more of a federation. They have not tried to stop the eurozone from mutualising more debt or creating a system of transfers between its member-states – both of which would make the currency union more stable. The eurozone member-states themselves decided to carry on with a fiscally decentralised currency union and technocratic central governance without real democratic legitimacy. This is because creditor countries refused to provide the credit needed to make such a system work, and neither they nor debtor countries were willing to accede to the political union that would be needed to run it.
Cameron’s strategic error was more modest: he and his advisors imagined that the process of eurozone integration would be faster than has proved to be the case, and they hoped that, along the way, they could negotiate some reforms of the EU that would make the EU more palatable to British voters. In recent months, they have lowered their ambitions from a broad renegotiation of Britain’s membership to more modest reforms. In his March 16th article in the Sunday Telegraph, Cameron listed his reforms: less red tape; more free trade deals; a longer period before migrants could claim benefits; the removal of “ever closer union” from the EU treaties; and more powers for national parliaments to block EU rules. This is hardly Europe à la carte, or the fundamental transformation of the EU that Cameron and his spokespeople argue it is. This is precisely because they realise that Britain is marginalised, and in no position to dictate terms.
Cameron’s proposed reforms are not in any way inimical to the interests of the eurozone: they are minor tweaks that would allow him to say that he has made the EU more open and liberal. They would have negligible effects on European economic growth – unlike a better system of eurozone governance, which Britain is no obstacle to. Britain shares next to no blame for the economic and political crisis in the EU; responsibility for this lies in the eurozone. Indeed, Britain is one of the innocent bystanders – chronically weak demand in its biggest export market is a major problem for the UK economy. The mishandling of the eurozone crisis has also made it much harder for the British government to counter eurosceptic arguments. And now Britain is unable to influence decisions that have profound implications for the country because those decisions are now the product of trade-offs within the currency union.
Britain’s European strategy is not uniquely driven by its domestic political constraints. Similar calculations are made in all member-states. If German Chancellor, Angela Merkel, does indeed back Juncker it will not be because she considers him the best man for the job, or because she believes that it is the democratic thing to do. It will be because it will create fissures in her grand coalition and draw criticism from the country’s media if she does not. Her coalition partner, the centre-left SPD, meanwhile, is angling for a senior appointment for their European leader, Martin Schulz, in return for backing Juncker. The Socialists in the European Parliament are backing Juncker in an effort to expand the powers of the Parliament. If they were properly accountable they would be concentrating their efforts on fighting for policies their voters favour. Such motivations notwithstanding, the majority of German media and punditry has portrayed the issue as a battle for European integration and democracy against British nationalism, which is absurd.
Merkel’s vacillation over the issue – initially signalling understanding for Cameron’s position and then coming down strongly behind Juncker – may be a sound tactical move in terms of Germany’s domestic politics, but it is bad European politics. Matteo Renzi, the Italian prime minister, is considering signing up to Juncker’s candidacy in the hope that Italy will be allowed to relax austerity. And Juncker is very popular among the smaller countries in the EU because he has been an outspoken advocate of their rights. Some of the small member-states that act as tax havens are keen on him because his home country Luxembourg is a tax haven and Juncker’s federalism does not stretch to clamping down on tax avoidance. None of them are driven by purer, more European motives than the British. Neither is the British public uniquely eurosceptic. Euroscepticism is rising across the EU, especially in France, the Netherlands and among the Nordic countries. For example, confidence in the European Parliament in many member-states is no higher than in the UK. And if the appointment of Juncker had the same toxic connotations in any of these countries as it does in Britain, they would have worked equally hard to thwart his appointment.
The key point about this affair is not whether Cameron’s strategy has been a good one (it has not). The most important aspect is that it has given a brutal demonstration of where power lies in Europe. The message to British politicians is that EU member-states – even those fellow reformers such as the Netherlands and Sweden – would rather risk pushing Britain out of the EU than cause some temporary problems for Merkel. Merkel, in turn, would rather risk making Cameron’s position untenable than temporarily upset her coalition partner or the German media. The UK is not alone in its self-interest, but simply much less adept at cloaking it in pro-European language. If it does end up leaving the EU, the blame will not be Britain’s alone.
The appointment of Juncker would be the wrong way for the EU to respond to the strong showing of eurosceptics and populists at last May’s European Parliament election. It suggests that governments are not listening to their electorates’ concerns, and risks further undermining already very low popular confidence in the Parliament (turnout at the recent election was up just 0.1 per cent on the all-time low of four years ago). If Europe is to address these concerns, governments will have to accept that the current state of affairs is unsustainable. An opportunistic power grab by the Parliament followed by opaque bargaining between governments resulting in the appointment of a Brussels fixer will erode the legitimacy of the EU, not bolster it. Finally, the prospect of exorcising the UK from the EU may feel good to some governments and commentators, but it won’t make it any easier to address Europe’s problems.
Simon Tilford is deputy director and John Springford is senior research fellow at the Centre for European Reform.