Year LX, 2018, Single Issue
CAN THE EUROPEAN UNION’S “DEMOCRATIC DEFICIT” BE FIXED THROUGH INSTITUTIONAL SOLUTIONS?
Democratic institutions, continually subject to challenge and change, are not static features of the political arena. European democracy has evolved substantially over the past fifty years in tandem with political developments. An expanding European Union is conferring substantial power on supranational institutions far removed from the people, if not fully independent of them.[1] This situation raises questions about the character of present and future democracy in Europe: who will do the governing and to whose interests should the governments cater when the people are in disagreement and have divergent preferences?[2] “Democratic deficits” can potentially derive from both the input and the output of the political process, in the first case meaning that citizens are not adequately represented in the legislative process, and in the second that policies do not adequately reflect voters” preferences.[3] Democracy needs to be based on consensus and participation, especially in Europe, given the size and variety of the political communities that form the EU. In the next paragraph, I analyse the “democratic deficit” concept in more depth, before setting it in the context of the European Union. Looking at the historical evolution of the European institutions and at their current structure, I argue that the “democratic deficit” in Europe lies in the lack of government for the people and government by the people. It is nevertheless necessary to define these two categories and identify their boundaries. To do so, I refer to Mosca’s[4] definition of political institutions, according to which representative democracy is a political system that offers the public some voice in the selection of the political elite, but cannot erase fundamental inequalities of power, with the result that societies differ primarily according to how their institutions provide for a “circulation of elites”; I then consider the current status of the European elites.
An analysis of democracy in the European Union needs to take into account two different relationships. First, there is the relationship between the citizens and the EU institutions, which is relevant to the issue of democratic representation (input): are the citizens of European countries well represented in the EU institutions? This question requires an analysis of the political arena generally, and whether it meets three basic conditions: 1) the existence of a public opinion, which makes the political process transparent; 2) the existence of a legislative process that does not involve too many levels of delegation, because delegation introduces noise; 3) the protection of minority rights.[5] With regard to this question of representation, it is crucial to understand that at European level it is not enough to have only national representation, meaning “all countries should be represented”; there must also be political representation, in the sense that members of supranational institutions should discuss issues from a political, rather than only a technical, perspective. The second relationship is that between the European Union and Europe’s national states: over the course of European integration, the national states have delegated competences to supranational bodies. However, since the complex system of the European Union means that supranational institutions create regulations, but the national states are still the ones implementing policies (output) in the areas most important for guaranteeing citizens de facto rights (i.e. the area of labour markets and that of social policies), it is crucial to understand whether the states can operate within the boundaries set by the European Union. Considering these two relationships together, and continuing to bear in mind Mosca’s definition, the question is: were the citizens of the European member states given the opportunity to vote on their representatives in the supranational institutions that set the rules by which their national governments must abide in acting on their preferences (and indeed on the very creation of these institutions)?
A brief historical excursus is needed in order to answer this question. Europe’s three main institutions, those that today hold legislative and executive power, namely the European Parliament and the Council of the European Union in the first case, and the Commission in the second, were originally created as European Coal and Steel Community (ECSC) institutions under the Treaty of Paris of 1951, albeit with different names and functions. The prime ministers of six European countries signed this Treaty and subsequently the Treaties of Rome. Thereafter, the institutions evolved over time and welcomed new members, until eventually, in 1976, a decision of the European Council introduced elections to the European Parliament by universal suffrage; the first such elections took place in 1979. Today, the President of the Commission is elected by the European Parliament on the proposal of the European Council, while the Council of the EU is made up of the national states’ representatives (nationally elected representatives holding ministerial posts within their own governments). Going back to Crombez’s basic conditions for representation,[6] it is fair to say that the vox populi was not central in choosing the elites that created the European institutions[7] and that the system they built is complex and characterised by a high degree of delegation. A fundamental step in Europe’s integration was the Maastricht Treaty, signed in 1992, which created the Economic and Monetary Union; thereafter, further steps were taken in this direction, too, leading to the creation of the European Central Bank, followed by the launch of the single currency. The ECB assumed control of the monetary policy of the countries that had signed up for the single currency, and the introduction of the euro led to convergence of interest rates across all the European states involved. Fiscal policy, on the other hand, remained in the hands of the national governments but was (in theory) subject to strict limitations.[8] Since then, sporadic and often inconsistent attempts have been made to align these national economies, which, however, continue to differ structurally, and in terms of the citizens’ priorities and preferences, with the result that policy output may diverge, as the eurozone crisis has indeed shown. In addition, to date, the sanctions that exist for violations of the strict fiscal policy rules have never been imposed.
With the citizens never having been able to choose, other than in a very indirect way, the elites representing them at supranational level, the lack of a European public opinion is a striking feature of the EU. That said, over time the institutions have evolved in a way that has given the EU an institutional framework that is not fundamentally undemocratic, by which I mean that a system consisting of a bicameral legislature and an executive can function democratically. The issues on which the democratic deficit debate has often focused in recent years, such as the precise composition of the institutions and the voting mechanism used within the Council, are interesting and important, but they do not fundamentally affect the institutional framework.[9] What is crucial, therefore, is the question of the “circulation of elites” within this framework. The behaviour of the elites, which translates into EU decision-making, is actually influenced more by what they consider to be national interests than by class conflict[10] or any other forms of social division that might be present within national societies. One reason for this is that the differentiation between delegation and subsidiarity within the EU is so complex that it becomes impossible to trace clear lines of accountability. As a result, the citizens are left struggling to understand Europe’s multi-level political dynamics, and the whole process of governance is left looking less than transparent. Furthermore, given the European Parliament’s limited powers, competition between political parties standing in European elections is not really meaningful as they shoulder no concrete responsibility for common policies, and elections therefore end up being fought on national issues. Accordingly, rather than pressing for circulation of elites at EU level, a first step would be to actually empower them. The fact that there exists no underlying sense of collective European identity, no European-wide political debate, and no European institutional infrastructure able to ensure the political accountability of those who hold political office at European level means that there is actually a triple deficit that seems impossible to overcome,[11] especially if we consider the failure to solve any of these problems prior to Europe’s eastward enlargement, since when they have only been exacerbated. In short, within Europe’s political organisation, there is no government by the people.
Moving on to the second aspect, that of policy output, or government for the people,[12] the importance of the subsidiarity principle emerges clearly if we ask the question: do the regulations passed by the highly delegated and technical European elites leave enough political and, more importantly, economic room for national or local policy-making? The democracy issue is less clear cut here than in the case of the need for government by the people, but nevertheless if the institutions were to pursue policies granting economic and social rights, then concerns over democratic representation should at least diminish. However, various problems immediately emerge: Europe’s capacity for positive integration is systematically limited by the plurality of national interests, which reflects the diverse identities present within the nation states. For this reason, European-level policy is strongest in the field of negative integration, where the Commission and the European Court of Justice have not encountered political obstacles in expanding the scope and intensity of market competition; for this reason, the policy options open to the governments of Europe’s capitalist economies have been considerably reduced, yet without this reduction being offset by a commensurate increase in the capacity for government at European level.[13] This rather broad statement is concretely illustrated by the Maastricht Treaty, which transferred monetary policy power to a non-elected body, the ECB, allowing it to set interest rates autonomously. The Treaty also laid down strict fiscal policy rules that leave the national governments little room for budgetary manoeuvre, especially in emergency situations, as the eurozone crisis has shown.[14] From the perspective of the balance of power between the EU member states, it should be remarked that the introduction of the euro has placed macroeconomic performances at the top of the European institutions’ agenda. Since the crisis, the difficulty of accommodating different economic structures and different types of welfare programme has been reflected in the formation of two opposing blocs, the northern European countries, headed by Germany, versus the southern ones. As the balance of power has favored the imposition of northern economic rigour, the southern nations have been left with even less scope for intervention. It is not my intent to support a “sovereignist” position here, but the analysis presented in this paragraph shows that the “move to the market”[15] is a consequence of the lack of scope for positive integration in the EU. In addition to that, in the wake of the crisis, diverging economic cycles have made it even more difficult to pursue government for the people.
According to Moore,[16] the development of democracy is a struggle to do three things: 1) identify arbitrary rules; 2) replace arbitrary rules with just and rational ones; 3) ensure that the population has a say in the making of the rules with which they have to comply. Numbers two and three are the steps that European democracy needs to realise in order to ensure government both for and by the people. However, solutions will not be found overnight. The current development of a European Banking Union may be considered an important step forwards in terms of avoiding the problem of diverging scenarios in times of crisis, while also increasing supranational surveillance of the banking system (and, indirectly, of national finances). In this regard, however, a paradox arises: the northern countries are opposed to the mutualisation of debt that would be required in order to complete the Banking Union, since they believe that their southern partners should first manage to reduce their debts; but at the same time, the latter, to the extent that austerity policies continue to be implemented, find themselves with very little scope for achieving this objective without cutting wages and social protection. This issue is harshly debated both in academia[17],[18] and in the institutions. This specific situation sheds light on a bigger picture: Europe’s supranational institutions were created by European states and have since been maintained by them, yet the states are unwilling to assign further power to them. This is illustrated by the fact that the Council is currently the most powerful institution, and probably the least transparent. Increasing the powers of the European Parliament, or giving the President of the Commission greater popular legitimation, through direct election to this office, would reduce the powers of the Council,[19] and hence of the states’ rulers. The complex system of checks and balances in place within the EU means that there is little incentive to move in this direction, as the quest for democracy would be transformed into a fight for power. However, the “small steps” approach to integration will find itself increasingly challenged by the globalised context in which the EU finds itself having to operate. The states’ capacity to temper market competition with social protection[20] will be depleted as an effect of the growth of international integration, and the question of government for the people could well be reduced to little more than an electoral slogan.
In conclusion, the causes of the democratic deficit in Europe lie in the EU’s institutional framework. European high officials in Brussels, calling for an “ever-closer union”, convinced that there is no alternative to European integration, have continually encountered resistance to their governance in the real world.[21] Europe’s existential crisis is entirely institutional, and the debate hinges largely on a crucial question that puts even greater pressure both on the national states and on the supranational institutions: who will do the governing for the people in the future? But the aspect they overlook is the importance of government by the people.
Emilio Massimo Caja
[1] P.A. Hall, Institutions and the Evolution of European Democracy, in J.E.S. Hayward and A. Menon, (ed.s), Governing Europe, Oxford, Oxford University Press, 2003, p. 1.
[2] A. Lijphart, Patterns of Democracy: Government Forms and Performance in Thirty-six Countries, New Haven – London, Yale University Press, 1999.
[3] C. Crombez, The Democratic Deficit in the European Union: Much Ado about Nothing?, European Union Politics, 4, n. 1 (2003), p. 103.
[4] G. Mosca, The Ruling Class, New York, McGraw Hill, 1939.
[5] C. Crombez, op. cit., p. 105.
[6] Ibidem, p. 104.
[7] L. Hooghe and G. Marks, A Postfunctionalist Theory of European Integration: From Permissive Consensus to Constraining Dissensus, British Journal of Political Science, 39, n. 1 (2008), pp. 5-6.
[8] P. De Grauwe, Design Failures in the Eurozone: Can They Be Fixed?, London School of Economics Europe in question discussion paper series, 2013.
[9] C. Crombez, op. cit., p. 115.
[10] S. Hix, The Political System of the European Union, London, Macmillan, 1999.
[11] F. W. Scharpf, Governing in Europe: Effective and Democratic?, Oxford, Oxford University Press, 1999, p. 187.
[12] Ibid., p. 188.
[13] W. Streeck, From Market-Making to State-Building? Reflections on the Political Economy of European Social Policy, in S. Leibfried and P. Pierson, (ed.s), European Social Policy: Between Fragmentation and Integration, Washington, Brookings, 1995, pp. 389-431.
[14] Y. Dafermos, Debt Cycles, Instability and Fiscal Rules: a Godley-Minsky Model, Economics Working Paper Series No. 1509 (2015), University of the West of England.
[15] P.A. Hall, op. cit..
[16] B. Moore, Social Origins of Dictatorship and Democracy: Lord and Peasant in the Making of the Modern World, Boston, Beacon Press, 1996.
[17] A. Benassy-Quéré, M. Brunnermeier, H. Enderlein, E. Farhi, M. Fratzscher, C. Fuest, P. Gourinchas, P. Martin, J. Pisani-Ferry, H. Rey, I. Schnabel, N. Véron, B. Weder di Mauro and J. Zettelmeyer, Reconciling Risk Sharing with Market Discipline: A Constructive Approach to Euro Area Reform, Policy Insight n. 91 (2018), London, CEPR.
[18] W. Schäuble, Non-paper for Paving the Way Towards a Stability Union (2017).
[19] C. Crombez, op. cit., p. 117.
[20] K. Polanyi, The Great Transformation, Boston, Beacon Press, 1957.
[21] J. Zielonka, Is the EU Doomed?, Cambridge, Polity Press, 2014.
