EU needs an overhaul
All across Europe, people are fed up with the European Union. The eurozone's difficulties explain much of the disenchantment. But some of it stems from the fact that, despite five major treaty revisions over the past 30 years, the EU's policies and institutions look old-fashioned, tarnished and in need of an overhaul. A report from the Centre for European Reform suggests a series of reforms that could make the EU more accountable and improve its economic performance.
A strong and independent European Commission is essential to the well-being of the EU. The Commission battles in favour of the single market, the rights of the smaller member-states and the wider European interest. Yet its standing in many national capitals has diminished.
One reason is that the Commission sometimes pays insufficient heed to subsidiarity – the idea that the EU should not become involved unless strictly necessary – and proposes too many or too-detailed rules. Its proposals this year to set quotas for women on company boards, prevent restaurants serving olive oil in re-usable bottles, and ban menthol cigarettes – only the last of which will be adopted – breached most definitions of subsidiarity.
Another reason is that many national governments think the Commission has become too dependent on the European Parliament – a body which invariably pushes for ‘more Europe' and sometimes cajoles the Commission into proposing rules desired by MEPs.
We urge the heads of government to reinforce the Commission's independence by appointing strong commissioners in 2014, with a specific mandate to avoid dependence on the Parliament. To symbolise the Commission's equidistance between governments and MEPs, we would give the European Council the right to sack the Commission, as the Parliament already can.
A key principle of EU reform should be to make power more clearly accountable. Given the complexity of EU decision-making, it is not always evident who is responsible for taking decisions and how they can be held to account. We do not think that giving more power to the Parliament – a body whose own legitimacy is questionable – would enhance the credibility of the EU as a whole. But we suggest that a greater role for national parliaments in EU governance could improve accountability as well as help to police subsidiarity.
The existing ‘yellow-card' procedure enables a third of national parliaments to club together and ask the Commission, on grounds of subsidiarity, to withdraw a proposal. This should become a ‘red-card' procedure, so that if half the parliaments clubbed together, the Commission would have to withdraw a measure. On a similar basis, national parliaments could ask the Commission to repeal existing laws that are redundant.
We would also like to see a forum of national parliamentarians meet occasionally in Brussels. Rather than duplicate the legislative work of the European Parliament, this body would monitor the European Council and ‘inter-governmental' policy areas, such as foreign policy. Meeting in reduced format, with only parliamentarians from eurozone countries, the forum could vet eurozone bail-outs (there is currently no supervision of these at EU level). The more national parliamentarians become involved in the EU, the more likely they are to take a European perspective.
The EU's ability to develop coherent external policies matters hugely for its reputation and effectiveness in other parts of the world. But the high representative for foreign and security policy and the other commissioners dealing with external matters sometimes work at cross-purposes. The European External Action Service, which should be the motor of EU foreign policy, has a bumpy relationship with the Commission, which controls most of its money. We argue for more co-ordination of the EEAS and the relevant parts of the Commission, to ensure that their strategic priorities are better aligned. We would also give the EEAS the freedom to set its own rules and procedures, so that it can act more speedily.
An overarching theme of our report is the need to improve Europe's potential for economic growth. At the EU level, the best way to increase competition, productivity and employment would be to extend the single market in services. The EU should start by liberalising those services that are most easily traded – such as business services, IT and telecoms services, construction and transport. We also call on the EU to harmonise laws in areas like consumer rights, intellectual property and privacy, so that pan-European e-commerce can take off.
The EU's emissions trading scheme has failed to encourage investment in low-carbon technologies or curb carbon emissions, because the carbon price is too low. We propose reforming the scheme to raise the price of carbon. But we also recognise the limits of what a carbon market can achieve. We therefore urge the EU to emulate the US and Canada by using regulation to ensure that power generation produces less carbon.
Free-trade agreements (FTAs) stimulate economic activity, and to its credit the EU currently has several under negotiation. However, FTAs with democracies such as Canada, Japan and India are being or will be delayed by the EU's insistence on linking them to a process of monitoring human rights in the country concerned. When these countries realise that the EU is unlikely to make the same demand of the US in the forthcoming Transatlantic Trade and Investment Partnership – knowing that the Americans would not tolerate such monitoring – they are likely to be even less willing to bow to the EU. We would end that linkage and promote human rights through other diplomatic methods, such as making EU aid conditional.
These and other proposals in our report could help to make the Union more effective and accountable. Some of them would require amendments to the EU treaties, but most would not. Many cynics and pessimists regard the EU as unreformable, but we disagree. Any move to ‘repatriate' significant powers to the member-states would almost certainly fail. But many governments, as well as businesses and civil society, would support a serious agenda for reform.