June 3, 2010
Guy Verhofstadt, president of the European Parliament (EP) Liberal Democrats and former Belgian prime minister, briefed the European Policy Centre today on his vision for Europe.
In his view the main underlying issue at stake is whether the EU uses the ‘Community method’ or intergovernmentalism. The Union will only progress if it reduces its intergovernmental approach, whose failures include:
• The inordinate amount of time the Member States have taken to address effectively the crisis in Greece. It took them three months to agree a mechanism, two months the conditions and a month to agree the €750bn funding package. And there is still uncertainty to who manages and under what conditions. The financial markets are not testing the Greek capability to implement the necessary measures, but the EU capability to agree an economic governance policy. Under the Community method, the Commission and the European Central Bank could have promptly imposed measures and arrange loans carrying the normal interest.
• The failure of the Lisbon strategy, whose aim was to make the EU “the most competitive and dynamic knowledge-based economy in the world capable of sustainable economic growth with more and better jobs and greater social cohesion”, by 2010. This has now been replaced by “Europe 2020: A strategy for smart, sustainable and inclusive growth.” Decision-making, such as the ‘open method of coordination’ do not work.
A big mistake was made in the creation of the European Council in the seventies. Its original purpose was for the heads of state and government to meet round a fireplace from time to time, instead of having to telephone each other, to discuss international problems. An institution was never intended.
Verhofstadt said that installing an effective system of economic governance is essential: monetary union must have an economic pillar. But who will do it? The European Council, the Eurozone heads of government? It is not likely to happen with an intergovernmental approach.
The community method need not mean harmonization and centralization. Policy convergence is what is required, accepting differences but all moving in the same broad direction.
The ‘enhanced cooperation’ procedure should be used more often. The euro is really an example of it, and now it is to be applied to divorce law.
Unless drastic steps are taken, the EU will enter a ‘Japanese winter’, ie a long period of economic stagnation. We must also to clean up the banking sector, complete the internal market and embark upon a huge infrastructure programme. The crisis mechanism should be made permanent. There should be a European Monetary Fund.
So much for the Verhofstadt vision. He was asked who will lead the implementation of at least part of the vision. His reply was the European Parliament, which must take an aggressive approach to stem creeping intergovernmentalism. It has considerably more power under the Lisbon Treaty and reject proposals not based on the Community method. It has already taken a stand on financial supervision. The Ecofin Council destroyed the Commission proposal to establish supervision of transnational institutions. The budget will be a battleground over its nature, not just the figures. ‘Own resources’ must be drastically increased.
Verhofstadt forsees an ongoing fight between Parliament and the Council. The Commission must be strengthened and it should make better use of its right of initiative.
Verhofstadt is right that Parliament is the only potential leader. It is frequently criticized, but its past initiatives should not be overlooked (such as the Spinelli report). He is also right that Parliament must be tough and reject non-integrationist measures.Author : Stanley Crossick