“Democratisation of Euro-Governance is the Solution!” – But what was the Problem?

Europe’s Commitment to Democracy in (the) Crisis

Christian Joerges (Bremen) & Florian Rödl (Frankfurt/M.)

We have already commented on what we perceive to be the most important among the five suggestions submitted by Johanna Croon and Miguel Poiares Maduro in their policy brief, namely, the proposal of an indirect-direct election of the President of the Commission (see our entry at: www.verfassungsblog.de of 4 July 2012). Given that the new brief has both reported and refuted some of the concerns with the proposal of such an indirect-direct election, but not ours, we take the liberty to repeat our major concerns.

The current architecture of European monetary union prescribes a growing systemic demand for European correction of national policies. On the one hand, the Euro demands economic convergence between Member States. On the other hand, thanks to its unitary exchange rate, its unitary bank rate, and soon – thanks to the “six pack” and to the “fiscal compact” – common budgetary policy, the Euro nonetheless, rather than fostering an “ever closer Union” forces Member State economies inexorably apart. Against this backdrop, Member States are expected to act as the servants of two categorically different masters, namely, their national constituencies, which urge them to respect the democratic institutions and will-formation, on the one hand, and the macro-economic imperatives as defined by a supranational regulatory machinery, on the other. Both masters make their contradictory views and expectation known ever more insistently. On the one hand, we are witnessing waves of protest particularly in the South, and exit moves in Ireland; on the other hand, we are observing ever stronger regulatory and guvernative responses at European level. As economic and social discrepancies are not simply felt in single Member States, but, instead, impact upon both the Eurozone and the EU in toto, the Union level seeks to facilitate the effectuation of macro-economic imperatives. However, at Union level, corrective measures are difficult to pursue through the Council, because its members find themselves in very unequal conditions. This is why the institutional balance of politics within the EU has tilted in favour of the Commission.

There are two democracy problems which have emerged with this state of monetary union in crises. Neither of the two is cured by an indirect-direct election of the Commission President. The first: the new “Euro governance”, operates through commissarial oversight of Member State democracies. The problem is only aggravated by the presence of further not democratically-legitimated actors, such as the IMF and the ECB in the elaboration of EU programmes and their implementation. Former integration through European law – enacted by the European Parliament and the Council, adopted according to the given order of competences and valid, in principle, throughout the Union – is being replaced by a fragmented (re-)ordering of the economic and social policies of individual Member States outside the Treaty order of competences under the leadership of the Commission with no say on the part of the European Parliament.

The second concern: these institutional developments are complemented and aggravated by a neo-liberal tilt in substantive policy priorities. The content of the macro-economic imperatives, transformed into executive prerogatives, is determined by the structure of monetary union, at least to a large extent. There is, under the given institutional framework, no viable political alternative to austerity and cuts in wages and social security. Substantial impulses for growth are virtually impossible both under the Fiscal Compact and given the absence of a relevant budget at EU level. Suffice it to recall here the bold, pertinent pronouncements during the French elections and to contrast them with the subsequent smooth acceptance of the fiscal compact.

The suggested indirect-direct election of the Commission President does not provide any credible response to these two challenges. The only difference that it would make may even be counter-productive. The indirect-directly elected President would, notwithstanding his or her new legitimation, neither be in a position to abrogate the authoritarian supervision of Member State democracies nor to derogate from their neo-liberal substance, i.e., austerity politics, such as cuts in wages and reductions of social security, would continue. Under such conditions, the hope for new legitimacy and for the acceptance of European rule will soon be disappointed. As long as so many European citizens are threatened by the massive reductions in wages and the slashing of social provisions in the name of the macro-economic imperatives of the governance of monetary union, the promise of a “new democratic legitimacy of the President of the Commission” will, at best, be perceived as what Kant has called as “leidige Tröster” (miserable comforters), or an exercise in what Jürgen Habermas and his co-authors have recently bemoaned as “sham democracy” (Fassadendemokratie; available at: www.social-europe.eu, 09/08/2012).

Apart from the indirect-direct election-issue, the brief by Croon and Maduro suggests that, in order to enhance democracy in the context of Euro governance, “dialogue” between European institutions and national parliaments should be intensified, in particular, through debates on “the State in the Union”, in which “the President of the Commission or a European Commissioner would be required to present a summary of the reports, recommendations and assessments that the Union will produce for each State”. We wonder, again, how likely it is that such an encounter might be understood as a strengthening of democracy, as long as it does not include an opening of alternatives to macro-economic imperatives which are preset by monetary union, and the taking of political decisions about them in Parliament.

What we find encouraging, however, is the move towards a stronger involvement of national parliaments in European issues. It is worth noting that the German Constitutional Court has been operating along such lines for some time. This aspect is present even in the much criticised judgment on the Treaty of Lisbon of 30 June 2009 (available at: http://www.bundesverfassungsgericht.de). To be sure, the Court examined there the democratic credentials of the integration projects against the yardsticks enshrined in Germany’s Basic Law. But what the Court noted was a tension within the commitment to democracy, on the one hand, and the dedication to the European project, on the other. Although both commitments are of constitutional dignity, they are not identical. One need not subscribe to each and every pronouncement in the judgment, but one should both realise and appreciate that the Court addressed a very real, existing problem. It was the defence of the actual principle of democracy as equal participation in the generation of binding and coercive law which led the Court to reject that a parliament without the right of legislative initiative and composed according to the principle of digressive proportionality, whose groups are not accrued from integrated European parties and which is not embedded in a European, or, at least, a transnational, public sphere, could confer democratic legitimacy equivalent to the given instantiation of the democracy principle at national level.

The Court’s defence of democracy, however, has a dark side. This dimension came to the fore with the Court’s judgment on the ESM and the Fiscal Compact of 12 September. The Court insists that the principle of democracy includes the national parliament’s authority over the budget, a claim whose general viability should be beyond doubt. If, however, this claim for budgetary authority has to be effectuated under conditions of monetary union, the logical result is a regime of fiscal discipline: The principle of national budget authority trumps any mechanism of transnational solidarity beyond ad hoc support measures, enacted by parliament on a case-by-case basis. This implies that fiscal discipline – and all politics which are intimately linked with it, such as wage reduction and social cuts – is no discretionary political choice by a Member State constituency, but it is represented by the Court as a principled democracy requirement, namely, that of donor Member States, first and foremost Germany.

It is a puzzling paradox: national democracy is saved, according to the Court, by a dramatic restriction of political autonomy, namely, by way of subjecting national politics to the exigencies perceived by neo-liberal macro-economic economics. This paradox has already been the core assumption of the Court’s Maastricht judgment of 1993. At that time, however, it went widely unnoticed. Instead, now it has now become self-evident with the ESM-judgment, in which the Court articulates its consequences rather clearly: “By virtue of its approval of stability aids, the Bundestag exercises the influence demanded by the Constitution and is a participant in decisions on the amount, conditionality and length of stability aids. It therefore determines the most important conditions for future successful demands for capital disbursements under Article 9, Para. 2 ESMS” (para. 274). As German citizens, we can feel relief; our democratic rights are taken care of. But what about democracy for the recipient states, for the rest of the Union? With the Court’s argument, Germany’s democratic rule degenerates to a mere leverage for pan-European hegemony. We are all the more irritated, as the Court has ceased to refer to out-dated understandings of sovereignty. Germany was understood as a Member State of the Union, hence, as one partner among equals, who has to recognise and respect the democratic rights of its fellow Member States.

To sum up our argument in a wider context: what we see emerging is a new mode of economic governance, a de-legalised economic constitution, which is dedicated to balanced budgets and which seeks to ensure compliance with this objective through a regulatory machinery with comprehensive supervisory powers and the means to ensure compliance with its evaluation. The crux of the matter for the jurist is the simultaneity of the suspension of democratic commitments and the erosion of the rule of law. The threat to the integrity of the European project is such that we should not content ourselves with the assurance and hope that this state of exception will be transitional, and, in the end, generate a strengthened and more democratic Union. But our preoccupation and critique would remain empty if it could not be complemented by some alternative perspective to the dilemmas generated by the crisis and its management. We are immodest enough to assert that we are, indeed, disposing of such a perspective. We claim that the legacy of Europe’s “integration through law” could, and, indeed, should, be replaced by a new paradigm which we have coined “conflicts-law constitutionalism”; this paradigm is a plea for “unity in diversity”. It respects the diversity of Member States and envisages a co-operative architecture governed by common standards. There is no room here to elaborate upon the technicalities of this vision, but we can substantiate our core normative premises and their implications: if it turns out that the socio-economic, political and cultural diversity of the enlarged Union and even of the Eurozone can be unified only at the price of austerity and the petrification of neo-liberal policy options, then we must plead for diversity and de-centralisation. If the Union’s most precious credentials cannot be safeguarded under the rule of the Euro, we prioritise democracy and the rule of law.

This piece was initially published on the Network Global Governance Programme website, a blog from the European University Institute, and is reproduced here with permission and thanks

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