EU at 50

Only a week after the resounding Irish ‘No’, EU leaders faced the difficult task of formulating a response at a weekend summit that was slated to address the rather mundane issues of governing an almost unwieldy Union of 27.

Instead, EU heads of state and government faced yet another “crisis,” likened by some to the “abyss” created by the negative votes on the Lisbon Treaty’s predecessor, the ill-fated Constitutional Treaty. After the referenda in France and the Netherlands, the Union’s response was to enter a “period of reflection”. The cumbersome construction of governance, which the Nice Treaty dictates doesn’t exactly allow for quick reaction, nor was it prudent at the time. The rejection of the Constitutional Treaty underlined a legitimacy problem key to the entire European project: What is it all for? Citizens in two of the Union’s founding states had lost sight of the extent to which the EU benefitted their lives. Thus, leaders agreed to pare the Constitution down to its basics and focus largely on questions of governance, starting with the functioning of a 27+ - member, “ever closer Union”, not the creation of a federal super-state feared by many.

Institutional reform is a difficult platform to campaign on. My respect and admiration goes out to the Irish ‘Yes’ campaigners. Whether or not the Lisbon Reform Treaty was just not ’sexy’ enough to rally voter support, or whether it was too difficult to understand, the campaign was badly run or the ‘No’ side just had the winning arguments will be hard to determine, though analysts are already hard at work.

But what of the EU response on the weekend? Or should I say: What response? To quote the EU Council Conclusions:

“The European Council noted (emphasis added is my own) the outcome of the referendum in Ireland on the Lisbon Treaty and took stock (aha!) of the situation on the basis of an initial assessment provided by the Taoiseach Brian Cowen.

The European Council agreed that more time was needed to analyse the situation. It noted that the Irish government will actively consult, both internally and with the other Member States, in order to suggest a common way forward.”

Impressive. The Council takes note - now there’s a European Union I can throw my weight behind. The European Policy Centre is far more diplomatic, when it says “In sum, the language is very cautious and no specific commitment or recommendation is made.” (The EPC also has an excellent look into the political and institutional problems ahead)

True, there is no Plan B. The Union’s true response: Lisbon or bust. Germany’s Chancellor Angela Merkel, arguably the ‘mother’ of the Lisbon Reform Treaty negotiations and the incoming President of the European Union, French President Nicolas Sarkozy reiterated this point at the Summit. Contrary to the 2003 crisis, most Member States (save the Czech Republic, whose situation is a little more tricky) are forging ahead with ratification. The implicit - and so far only legal alternative - goal could be to push Ireland into a second vote, once exceptions (on neutrality, an Irish Commissioner, etc.) have been negotiated.

At this point no other Member State is leaning toward untying a package so precariously wrapped up during the German EU Presidency. Negotiating exceptions to certain rules to accomodate the Irish, however, might reopen Pandora’s box over time. The Czech government has its issues with the Treaty and is in the midst of an appeal to the country’s Constitutional Court with respect to its compatibility. The compromise achieved with Poland was tricky. At least Italy’s Berlusconi, the new-old Prime Minister is pushing ahead with ratification in his country, lest he throw a wrench in the process simply to make a political statement.

Ireland’s ‘No’ will not ’shut down’ the Union - it will continue to do business and legislate as usual. However, aside from a possible wave of ‘exceptionalism’ noted above, the obvious delay of the entire ratification process does have implications for enlargement (the Nice Treaty provisions weren’t conceptualized for a Union beyond 27 and Croatia would be the first to feel the effects), immigration policy (the Lisbon Treaty alters the legal basis of most legislation concerning justice and home affairs) and will likely alter the tone of the election campaign for the European Parliament in 2009.

In light of this ‘No’ the European Union as a whole cannot afford to be seen as simply ‘taking stock’ and ‘noting’ current developments. Of course solutions take time to formulate, but Europe’s citizens are already confused (not least the Irish - 22% of the naysayers felt they knew too little about the Treaty) about what it all means. For all the work the Commission has poured into its ‘Plan D’ to enhance the legitimacy of the Union, we now need a functional way forward. One can thus only hope that ratification continues and any exceptions are negotiated swiftly and stable, tenable results are achieved. Only if the Council is seen to be addressing the situation adequately is there truly hope for an “ever closer Union.”

 Commentators are speculating about the end of the Barroso Commission as we know it. It seems as if he resignation of EU health Commissioner Markos Kyprianou to take up the post as Cyprus’ Foreign Minister two weeks ago was only the beginning. Effective March 14 one of the arguably most successful Commissioners, internal policy head Franco Frattini will take a leave of absence to campaign for Silvio Berlusconi, as he puts in his bid for another term as Italy’s prime minister. Frattini’s return looks as unlikely as the likely Berlusconi victory, meaning he will have a plush cabinet post waiting for him. EU transport Commissioner, Jacques Barrot, will take over for Frattini during his announced one-month absence, but should speculations prove true, a permanent solution will have to be found.

This news comes only days after the Austrian press published articles insinuating that Members of the European Parliament would be unlikely to support a second term for current Commission President José Manuel Barroso. That might be the least of Barroso’s current worries, however, as his term runs until 2009. He might be fretting more over fishery Commissioner Joe Borg’s interest in returning to his home country of Malta, following recent elections there. Or, he might be concerned about how long it might take the European Parliament to approve the candidates set to follow in these Commissioner’s footsteps, recalling the Rocco Buttiglione crisis, which necessitated a reshuffle at the last minute.

Alternatively, he could be seeing this as a warm-up for the changes to come. Once the Lisbon Reform Treaty is ratified by all Member States, the EU Foreign Minister will be introduced. Only candidate for the post: the current EU chief diplomat (official title: High Representative for the Common Foreign and Security Policy - what a mouthful), Spaniard Javier Solana. His post will necessitate an institutional change, as Solana will move from the Council to the Commission. This in turn might cost two current Commissioners their job: fellow Spaniard and monetary affairs Commissioner Joaquin Almunia and Austrian external relations head, Benita Ferrero-Waldner, who has already taken a back seat to Solana in terms of driving that policy area.

Commentators are seeing the recent developments as a sign of instability, while Commission spokespeople are quick to paint the story in a different light, speaking instead of the distinctive leadership capacity these men and women have that they are called back to ‘national duty’. Naturally, these changes are cannot be compared to the Santer fiasco. Yes, these shifts don’t make the Commission seem like the most stable administration, but they are a part of the European political process. Yes, the approval hearings might be drawn out, as the European Parliament flexes its muscle as and holds new candidates to account. Is that likely? No. The Member States have a vested interest in putting forth candidates that will win the support of the parliament and the latter has no interest in stalling the legislative process. The hearings will be another opportunity for the parliament to prove its legitimate role in a ‘normal’ EU political process, however, and if it retains its critical capacity to discriminate and weed out the good from the bad, it will bolster its significance and highlight the normalcy of change in a functional supranational, democratic entity.

Cutting red tape is just one of the avowed goals of the Barroso Commission. A high-level expert group including the former Bavarian state governor, Edmund Stoiber, and international management consulting guru Roland Berger has been given the mandate to examine how to most effectively reduce bureaucratic hurdles and enhance the functioning of the internal market. The group reports directly to EU Commission Vice-President, Günter Verheugen. The overall goal is to slash the administrative burden placed on businesses by 25% by 2012 – a move the Commission claims could give a €150 billion boost to the European economy.

The group has already taken up its work, criticizing the hurdles small businesses face in applying for licences and permits, which often have to be approved by 27 different authorities in their respective languages. Though plans were likely already in the works before Stoiber and his fellow analysts set out, their comments seem to have been heard.

Ahead of the EU Spring Summit, which traditionally examines the Union’s economic progress along the goals mapped out in the 2000 Lisbon Agenda, the Commission and Parliament have now approved a plan to lift the burden of static regulations for some of its most active growth promotors: it’s small and medium sized enterprises. The new program will ease key linguistic and statistical burdens, facilitating licencing across the board.

The Commission and the expert group estimate that EUR 500 million in savings could be the immediate result. EU Heads of State are likely to give the plans their nod of approval at the Council Summit on March 13th and 14th.