What impact will the EU reform treaty have?

Written by Hugo Brady [1], 17 October 2007
From Financial Times

The European Union’s 27 member states expect to approve a ”reform treaty” in Lisbon on Friday, whose birth pangs have caused the bloc perhaps more distress than any episode in its 50-year history.

Yet European leaders regard the treaty as an essential starting point for strengthening the EU’s internal mechanisms and extending what they view as Europe’s benign diplomatic, commercial and cultural influence across the world. With its borders extending from Russia to North Africa and its power as a business regulator felt everywhere from California to Taiwan, the EU needs to adapt, the leaders argue.

So how will the new treaty change the future of Europe? How does the treaty differ from the ill-starred constitutional treaty sunk by referendums in France and the Netherlands in 2005? What effect will the new majority voting rules have? And what impact will a full-time president and strengthened foreign policy figurehead have?

Hugo Brady, research fellow at the independent think tank, the Centre for European Reform answer your questions on Friday October 19. Mr Brady formerly worked in the political division of the Irish Department of Foreign Affairs and as a researcher on the constitutional treaty at the Institute for European Affairs in Dublin.

I am very interested in learning about how the new treaty will impact businesses, particularly the Charter of Fundamental Rights. How does it affect businesses and why is Britain ensuring that it won’t become legally binding in the UK?

Maren Lincoln, Germany

The reform treaty brings little change in economics or finance, unlike the Single European Act which was committed to creating a genuine single market. The short answer is: the charter of fundamental rights will change nothing in practice were national law is concerned.

The charter is addressed to EU institutions, bodies and agencies, but the treaty articles that govern its application state that nothing in the text can be interpreted as extending, modifying or creating new powers or tasks for the Union. Furthermore, the articles state that the charter does not apply to national governments, parliaments or courts when they enact, implement or interpret national law. Laws in most of the areas that British policy-makers and businesses worry about, such as social and employment legislation, are usually made at national rather than EU level.

The charter mainly consists of rights and freedoms that EU countries have signed up to in various other documents, such as the European Convention on Human Rights. It adds some aspirational ‘principles’, such as the right to job training and health care, but specifies that these will only have meaning in so far as they are already applied and practiced in the individual member-states. For example, the ‘right to strike’ will not create new worker entitlements beyond existing national labour laws.

Nevertheless, some UK businesses worried that such principles might serve as a loophole to undermine its liberal job market. The treaty now includes a special protocol (not strictly speaking an opt-out), underlining that the charter does not create new social or labour rights and cannot be used to strike down British laws. Many of Britain’s trade unions are not happy about this protocol but the reality is the charter would not have changed anything even if the extra protocol had not been secured.

How will the new President of the European Council be appointed, who will elect him/her and to what extent does the appointee have to be independent from the heads of state on this body? What will the role of this new office be in the context of binding the Council in international affairs?

Michael Perman, London

Under the new treaty, the EU governments will choose a full-time president who will chair their meetings for a term of two and a half years, renewable once. This will partly replace the present, unworkable system where a different EU leader chairs the meetings every six months. The idea is to improve the coherence of EU discussions and decisions. The person cannot be a serving national politican of any kind and will be elected by a qualified majority of the European Council.

Until 2014, to get a qualified majority a nominee needs a) a simple majority of the member states; b) that majority must include countries representing 62 per cent of the EU’s population; and c) that majority must be able to assemble weighted votes of at least 232, out of a total allocated votes amounting to 321. The largest countries – Britain, France, Germany and Italy – each has 29 votes; Spain and Poland have 27 each; and the other less populous countries all have fewer votes, with the scale ending at Cyprus, Estonia, Latvia, Luxembourg and Slovenia, each with four, and Malta with three.

After 2014, the EU will calculate a qualified majority differently. A future nominee need only win the votes of at least 55 per cent of the members of the Council, comprising at least fifteen of them and representing Member States comprising at least 65 per cent of the population of the Union. Much simpler.

It is a good question as to what role the Council president will have in international affairs: one of the unanswered questions in the treaty is how that person will interact with the new High Representative for Foreign Affairs and Security Policy. But since the Council president will have no executive powers except his/her powers of persuasion (it is expected that the person will be a respected former statesperson), it is likely the High Representative will make all the running in terms of representing the EU in foreign policy when all 27 member-states agree. The treaty seems to support this interpretation; it says he/she will “ensure the external representation of the Union on issues concerning its common foreign and security policy, without prejudice to the powers of the High Representative of the Union for Foreign Affairs and Security Policy.”

Why are the older EU members (Britain, France, Holland, etc) appearing more sceptical about the new reform treaty than the newer members (Lithuania, Hungary, Poland etc)? Is it because the dream is over for the older countries and the newer members more starry-eyed?

Gordon Cardigan, Edinburgh

It is difficult to compare and contrast attitudes across the EU on the reform treaty right now. This is because ratification debates have not yet started in most countries; the treaty will only be signed on 13 December. Most countries have their own individual take on what the EU means for them and this greatly influences how any new treaty is received. Of the older members, Britain has always had an uneasy relationship with the EU since joining in 1973. Parliamentary ratification of any EU treaty here is always an intense episode in domestic politics. Ireland, which joined the same year, is still the most pro- European country amongst the 27 and usually ratifies by a comfortable public vote.

Of the countries that joined the EU in 2004 and 2007, many had already ratified the more ambitious constitutional treaty so the more modest reform treaty is likely to be less controversial there. However Poland and the Czech Republic are already accomplished Eurosceptic countries despite only being members for a few years.

Much of the debate on the reform treaty has been on how different – or not – it is from the failed constitution. So is it essentially the same document – as I suspect? If not what are the key differences?

Alan, Sheffield

The constitutional treaty was two things: a) a constitution for the EU that ripped up and replaced all previous EU treaties with a single text that had constitutional trappings and b) a set of reforms that member-states have agreed for years are sensible and consensual changes to the EU’s decisionmaking rulebook, its foreign policy machinery and the role of the EU institutions in fighting terrorism, crime and illegal immigration.

The reform treaty keeps many of the changes mentioned in (b) but disregards all of (a). And many of these have been watered down or altered in some way. For example, the Poles wanted a delay to the introduction of the new voting system and other safeguards about family law. Britain wanted guarantees that the Charter of Fundamental Rights would not change its laws or labour practices. Denmark changed several clauses in the treaty (for example, on space policy) which it considered involved a transfer of sovereignty. In the case of Britain and Ireland, the treaty is a different bargain, since both will be able to stand aloof from future co-operation on fighting terrorism, crime and illegal immigration if they choose. This is an area where the treaty goes furthest for most other member-states who ratify (not Denmark though, which has opted-out of this policy field for many years).

For me, the reform treaty is essentially a post-enlargement version of the Amsterdam Treaty. Consider the similarities: both very similar in their aims and form: amending treaties that try to improve decision-making, strengthen foreign policy co-ordination and allow greater co-operation in justice matters. Both also strengthen the ability of national parliaments to scrutinise EU legislation although the reform treaty goes much further by giving national assemblies the right to formally block the legislation if a third of them dislike it.

How much will the changes in the treaty cost the taxpayers of Europe?

Henry Nicolson, Maidstone, Kent, England

The reform treaty is about changing how the EU does things, not what it does or how much money member countries give it. One of the most major institutional changes, the merging of the foreign policy jobs and overseas missions of High Representative Javier Solana and Commissioner for external relations, Benito-Ferrero Waldner, will actually save money by merging many offices and posts, particularly abroad.

Discussions on the EU’s budget have been consciously kept completely separate from this process because they are just as tough, if not more so, than negotiations on treaty change. Next year, the member-states are due to have difficult discussions over how the EU should modernise its spending although spending ceilings have been fixed until 2013. As an illustration, the entire EU budget for 2008 will amount to just over 80 per cent of that of Britain’s National Health Service budget in the same year.

What are the implications of the reform treaty for membership of Macedonia and other candidate countries?

Yusuf, Skopje

There are important implications for all current candidates for EU membership. The Nice Treaty says that the EU must review its decision-making rules once it enlarges to 27 countries, which happened in January this year. So no further enlargements can take place until a treaty reforming the EU’s rulebook is ratified by all member-states.

The hysteria of the debate in the UK over the EU depresses me. The advantages and disadvantages of any particular idea get lost in a storm of bizarre paranoia. It seems certain that this “Brusselsis- trying-to-control” mentality will do serious damage to the European project at some point in the long term, to the detriment of us all. Have you seen any evidence that the UK is taking this danger seriously?

Donal Quinn, Dublin

The UK debate over ‘Europe’ is passionate and, at times, intensely hostile. That is because the domestic debate in Britain over whether membership is actually in the national interest has never been properly resolved and has been ongoing since accession in 1973. (The vote over the Maastricht Treaty alone was the best attended ever in British parliamentary history.) However such treaties do deal with the balance of power between memberstates and the EU institutions and are rightly the subject of intense popular debate.

It is a political reality that were Britain to vote not to ratify the treaty, it would put its membership and the EU itself into something of a crisis. It is difficult to know what would happen then: many eurosceptics here feel confident of a renegotiation but it is hard to imagine what further concessions could be offered to Britain, given that it has already secured wide-ranging opt-outs, caveats and guarantees in the reform treaty.

Some opposed to the reform treaty’s ratification point to the example of Switzerland or Norway, countries which enjoy prosperity and respect outside of the EU. These countries are participants in the single market, but are not allowed to vote on the rules applying to the market. As one of Europe’s largest markets, this status is unlikely to sit comfortably with Britain. Neither would it relish not being able to weigh-in in EU foreign policy debates despite being one of Europe’s most powerful countries. And it would be ironic for it to leave the EU just when the Union - partly thanks to the recent enlargements - has started to evolve in a non-federalist, Atlanticist and economically liberal direction.

Ireland would be particularly affected by a UK exit; membership of the EU has done much to bring Anglo-Irish relations to a new level of amity and partnership. As the only other fully common law country in the union, it would also lose a valuable partner in debates on police and justice co-operation.