How the Eurozone could avert disaster

What is the most important issue in European politics right now?

Not Brexit, that’s for sure. British remainers may regard the UK’s impending departure as the end of the world, but the world will carry on. Roughly 85% of the EU will carry on (measured by GDP). And, in answer to the above question, all of the Eurozone will carry on too.

This last one is the biggie because as complicated as Brexit undoubtedly is, it is fundamentally simpler than sorting out the Eurozone. Brexit is about finding the best way of loosening relationships, of different countries having less to do with one another’s affairs. The implied direction of Eurozone reform is precisely the opposite – which is what makes it so difficult.

Nations will have to sacrifice even more of their sovereignty and bind themselves even more tightly to the Euro and everything that the single currency implies. It will truly be a point of no return.

However, there can be no crossing this threshold without the consent of the people. In continually fudging the issue of democratic legitimacy, the European elites have already provoked a populist revolt – to which most of central Europe and now Italy has fallen. To go to the next stage – an unambiguous and irreversible commitment to a European superstate – in the same manner, would risk a populist takeover of the EU as a whole. This, by the way, is now the stated aim of the populist politicians already in power.

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The current euro-establishment has a limited number of options:

1. Carry on stalling

Well, it’s worked so far… and, who knows, the next Eurozone crisis could be a long time coming. Fingers crossed. However, not everyone in the Euro-estabishment is content with this approach – for instance here’s Guy Verhofstadt giving Donald Tusk a proper dressing down.

2. The Greek option

This involves making the necessary adjustments, but loading most of the pain on the weakest and most dependent member states. A populist revolt would be all but guaranteed, but confined to the target nations. And as with Greece, in the first Eurozone crisis, the rebels could be then be crushed – and, even worse, compelled to do their masters’ bidding.

Greece, however, was in a uniquely vulnerable position. It’s by no means certain that the Euro-establishment could strong-arm a larger, less traumatised nation. The outcome of the current stand-off between Brussels and Rome over the Italian budget is as yet undecided; but on the EU’s other big integration issue, i.e. immigration, Brussels has not prevailed against Warsaw and Budapest.

3. Legitimise change through national referendums.

After Brexit? They won’t be making that mistake again!

4. Leave it up to national governments to sort it out between themselves

If the Eurozone status quo is unsustainable, and the dissolution of the single currency unthinkable, then it follows that reform – meaning monetary and fiscal integration – must, at some point, happen. As for the details, those can be thrashed out by the various heads of government (who, after all, each have their own democratic mandates).

The trouble with that logic, however, is that the democratic legitimacy confered upon presidents, prime ministers and chancellors applies within the context of Europe’s various parliamentary systems and all the associated checks and balances. Eurozone reform, however necessary it might be, will require concessions whose importance goes far, far beyond the usual horse-trading.

A behind-closed-doors negotiation between heads of state might facilitate the grandest of grand bargains, but it cannot legitimate it. To press ahead in these circumstances would be political suicide for all the national governments involved – which is why they continue with option 1 (see above).

5. The Delatte option

In view of the problem with all the existing options, Anne-Laure Delatte¹ proposes an entirely new one in an article for VoxEU. This is her modest proposal:

“We need coordinated, representative decision-making to make Europe functional again.

But national governments are very reluctant to transfer sovereignty to non-national parliamentarians.  In order to go beyond this either-or logic of integration or sovereignty, we need to co-opt the members of elected national parliaments within a new, second, parliamentary chamber at the European level…”

In other words by bringing national parliaments together to settle important European matters, a European Assembly would have the legitimacy and/or relevance currently lacking in the existing decision-making structures of the European Union – i.e. the European Council (national governments sans parliamentary oversight); the European Commission (appointed, unaccountable viceroys); and the European Parliament (will never be trusted with the big decisions):

“A European Assembly would fix the inefficient asymmetry between the EU-wide interaction of heads of government and the domestic parliamentary check when they are back home. It would also create a direct interaction between national MPs who would have the double responsibility of representing their constituents in national arenas and in the Europe-wide body…

“The chamber’s regular meetings and public debate on European and domestic issues would be brought at the same level of attention. It would arguably increase transparency compared to emergency summitry prone to deal making behind closed doors.”

It’s a fascinating idea. The EU throughout its history, has only ever moved forward by means of institutional innovation. Faced with a problem of existential significance – the absence of a EU-wide democratic mandate for Eurozone reform – the solution has to be embodied within a new and democratic decision-making body.

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At this point it behooves me to say that true democracy requires a demos. Representation, transparency, relevance and all those other things are necessary, but without a demos they are insufficient.

If from, say, a British perspective, you don’t believe that the voters of Normandy, Silesia or Jutland to be as integral to your conception of the common good as those from Devon, Yorkshire or Shetland, then you shouldn’t be sharing a democracy with them. The fatal weakness of the Eurozone isn’t ultimately a matter of monetary or fiscal policy, but the cold, hard fact that a Bavarian voter doesn’t feel the same way about a Sicilian voter as he or she does about a fellow German.

But, for the sake of argument, let’s assume that a pan-European demos can exist in parallel to each national demos. How, then, might a European Assembly actually work?

It could be composed of appointed delegates from each national parliament – this is how the European Parliament worked before the first direct elections in 1973. It is also how the Parliamentary Assembly of the Council of Europe (PACE) currently works. But I don’t think it would work for Delatte’s European Assembly.

The whole point of her idea is to confer the legitimacy of national representative democracy upon EU-level decision making. This wouldn’t happen if only a small sub-set of a nation’s MPs, with nothing more pressing to do back home, were delegated abroad. Most of the electorate in each country would not have a a directly elected representative in the new assembly. And, in any case, national governments that aren’t prepared to entrust more powers to the existing European Parliament, aren’t going to grant them to a glorified committee. Constituting a European Assembly on this basis would fail the test of legitimacy and relevance.

The only way that Delatte’s big idea could work is if entire national parliaments (or at least the lower chambers thereof) joined together to form the European Assembly. Of course, this would mean that the Assembly would have thousands of members – about 4,500 members if we use the German Bundestag as a yardstick for the number of citizens per elected member.²

Without Britain, this would fall to a bit less than 4,000 – but still bigger than world’s biggest legislative body, China’s National People’s Congress, which has 2,980 members. The European Assembly, containing all the parliaments of Europe, would be a legislature like no other. But, then, a functionally integrated European Union would be a state like no other.

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What sort of building would be required to accommodate so many representatives? Well, it wouldn’t have to be a mega-structure like the Nazi Volkshalle or the Palace of the Soviets (neither of which were ever built). A chamber for 4,000 or so parliamentarians could be accommodated in a space similar to that of the Albert Hall – grand, certainly, but not totalitarian.

Obviously there’d have to be a lot of associated office space, but the construction of such a complex would give the EU’s key institutions a chance to make a fresh start in a new home. Brussels could be left behind for a new European capital.

It would need to be somewhere more reflective the EU’s current geography, not that of the 1970s. The Franco-German compromise of the Low Countries will not do. So, somewhere in the middle of Europe, but still within one of the smaller member states (i.e. not any of the ‘big 5’).³

That leaves just one candidate – a great imperial city that’s been missing an empire for the last one hundred years: Oh, Vienna!

It really does fit the bill: German-speaking, as befits the EU’s teutonic engine-room, but not in Germany. It’s west of the old Iron curtain, but also close to the east and the south.

The utter nonsense of scattering the EU’s key institutions in different cities and countries (including the migratory European Parliament) could come to an end. With one eye on the glories of the old Europe, they could build a 21st-century Europolis on the banks of the Danube.

There’d be something to please almost everyone about the new location – even the Belgians, who could pull down the hideous Berlaymont and the rest of Brussels’ ‘European Quarter‘. The grey, glassy void at the heart of their capital city could be reclaimed; an extention to the Parc du Cinquantenaire would be nice.

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Of course, the French wouldn’t be happy – and they’d never let it happen. It is they who insist that the European Parliament continues to meet in Strasbourg as well as in Brussels (with the Parliament’s secretariat in a third location, Luxembourg). This shuffling back and forth, like some demented animal in a rundown zoo, symbolises everything that’s stuck about the European Union.

To avert disaster it needs to become unstuck. The words “ever closer union” imply forward momentum; the single currency has made it absolutely necessary.

That means understanding that what the European Union is struggling to become has no precedent. It is not an empire like the Hapsburg Empire. Nor a crypto-empire like the Soviet Union. And despite the language of federalism, it is not a European counterpart to the USA – which was built by those who’d left their old countries behind. In a United States of Europe, the old countries come as part of the package. In short, the super-state required by the single currency is something never seen before in human history; and if it is to remain a democracy it requires democratic institutions of a kind never seen before either.

Any half-hearted effort at reform will produce a half-democracy. The members of this project must be fully committed to it… or get out altogether and remain themselves.

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