No.23 April 2011 Community and intergovernmental method: an irrelevant debate?

Paolo Ponzano, obtained a political science degree in 1967. From 1969 to 1970, he worked as both a uni- versity assistant in International Law and as member of the International Affairs Institute. Then, from 1971 to 2009, Ponzano served as a civil servant for the European Commission. Most of his career took place in the Secretariat-General of the Commission, where he was Director of Relations with the Council of Ministers. From 1995 to 2001, he also represented the Commission in the Committee of Permanent Representatives (COREPER). After this, Ponzano served as the Director for Institutional Affairs and “Better Regulation”. In 2002 and 2003, Ponzano served as an alternate member of the European Convention. Currently, Ponzano is the Special Adviser of the Vice-President of the European Commission, Maros Sefcovic, and a Senior Fellow for the European University Institute in Florence. He has taught European Union Institutional Law and European Paolo Ponzano Union Governance in many universities and he has written several articles on European Union institutional questions and on the European Union decision process.

The two methods

The recent positions taken by the German Finance lor added: “Perhaps we could agree on the follow- Minister, Wolfgang Schäuble, in favour of applying ing description of this approach: a coordinated the intergovernmental method to economic gover- action in a spirit of solidarity, each one of us [Ed: nance as well as the federal government’s propos- EU institutions and member states] in the sphere als on the formation of an economic government in which comes under their responsibility but while the eurozone, have relaunched the debate on the focussing on the same aim. For me, that is the new use of the intergovernmental method rather than ‘EU method’ which we so need [...]” the community method in the application of the Treaty of Lisbon and, more generally, in pursuing At first sight, the Chancellor’s remarks - just like the European integration process. those by President Van Rompuy - seem full of good sense. Who could be against a coordinated action That follows what was called the “Speech on the by the EU that would allow it to set out a common method of EU decision-making”, i.e. the speech position on the most controversial issues in discus- given by Germany’s Chancellor Angela Merkel in sion with the EU institutions and member states? Bruges on 2 November 2010, in which she sug- But, when you dig deeper, you realize that the new gested moving beyond the old argument between EU method advocated by the Chancellor is a lot like the community method and the intergovernmen- - her speechwriter would not mind my saying so - tal method in favour of a new method, namely the the famous Hegelian night in which all the cows are “Union method”, which she defines as follows black. The Treaty of Lisbon envisages the applica- by first referring to a declaration by the European tion of the ordinary legislative procedure (namely Council President Herman Van Rompuy: “In most the aforementioned community method) for all

2011/no.23 cases, the choice is not between the community areas coming under EU competence whilst the inter- method and the intergovernmental method but governmental method is essentially reserved for the between a coordinated European position and no foreign, security and defence policy (although the position at all.” “In other words,” she goes on, “a initiative of member states goes hand in hand with coordinated European position is not necessar- that of the High Representative for the Common ily the result of the application of the community Foreign Security Policy). One might wonder there- method. This common position is sometimes an fore which areas the new EU method advocated by outcome of the intergovernmental method. The the Chancellor should apply to if not to the areas to main thing is to have a common position on impor- be found outside the EU’s competences (for exam- tant issues.” Pursuing her reasoning, the chancel- ple retirement). If, however, it was to apply to all www.notre-europe.eu / [email protected]

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resources. The European general interest would tations from heads of state and government would therefore demand not just a resulting increase in be very useful in encouraging the Commission to the EU’s budget but also the establishment of a new propose legislative measures and, if possible, draft own resource that would make it possible to give agreements with the third countries concerned. new flexibility to the EU’s budget at a time when national budgets will not be able to take on new However, it is important not to underestimate the expenditure because of the budgetary discipline danger that the political orientations of heads of that they will have to respect. state correspond to a minimum common denomi- nator between the different interests of the energy c) An EU energy policy resource producer and consumer countries. For example, the EU might need to put in place a real The Treaty of Lisbon stipulates in its Article 194 agency for energy supply tasked with executing (Treaty on the Functioning of the European Union) agreements reached in the meantime by the EU that the EU’s energy policy aims, inter alia, in a with producer countries, which would allow some spirit of solidarity between member states, to EU countries to gradually free themselves of their ensure security of energy supply in the EU. This energy dependence on these countries (in accor- objective should be achieved via measures adopted dance with the spirit of solidarity between member according to the community method (proposal from states set down in the Treaty). But will this objective the Commission, decision by the Council by quali- be achievable via the intergovernmental method? fied majority and codecision with the European Would it not be preferable to use the community Parliament, except for fiscal measures). But the method, which has, for example, allowed a common European Council is now talking about an energy fisheries policy (in spite of the difference in inter- strategy concerning both completing the energy ests between countries with fish stocks and the Single Market, security of supply and the EU’s action others) and the realization of the aforementioned towards its main partners. Of course, political orien- Galileo project?

2011/no.24 Conclusions

The conclusions of the European Council of ing into conflict with the competences already December 2010 on economic governance envis- attributed by the Treaties to the EU’s institutions age amending Article 136 of the Treaty of Lisbon and leading to decisions based on the minimum by entrusting eurozone member states with the common denominator and even on the predomi- power to set up a stability mechanism that will be nant interests of some member states (see above). activated if it is essential to preserve the stability of However, what precedes confirms, it seems to us, the eurozone as a whole. Irrespective of the doubts the more balanced and more satisfactory nature of already expressed by several economists as to the community method for the EU and, within that, whether this instrument would be sufficient to safe- of the role played by the Commission in identifying guard the Single Currency, this provision innovates the general interest of the EU. by introducing an intergovernmental competence in a framework governed mainly by the community As Jean Monnet said in his memoirs, «Putting gov- method. We know full well that this solution aims to ernments together and making national adminis- avoid a fresh transfer of powers to the EU’s institu- trations cooperate starts with good intentions but tions, which could not be the subject of a simplified fails as soon as there are differences in interests Treaty revision procedure and would probably mean if there is no independent political body capable having a referendum in some countries. However, of taking the common view and coming to a com- the European Union might not be kept in the strait- mon decision.» This statement, drawn from a lot of jacket of its current competences if the necessity to experience of intergovernmental cooperation, still expand them were to appear in the clear light of day. seems relevant to us in the current phase of the process of European integration In addition, using the intergovernmental method in the aforementioned subjects runs the risk of com-

With the support of the European Commission

© Notre Europe, April 2011 design : Notre Europe ISSN 2103-8635

2011/no.24 ber states (for example producer orconsumer coun- takes more account of the interests of somemem- in electronic commerce) or anoriginal solution that national legislation (for example Finnish legislation a given file could beto choose the most advanced positions orlaws because the European interest in the lowest common denominator between national a result, the Commission is not obliged to look for ular year tofish preserve stocks for the future). As could have aninterest inreducing them inapartic capture quotas individually while the EU as a whole could have aninterest inincreasing their fishing ber states (awell known example: memberstates equate to the sum of national interests of the mem- eral European interest, which does not necessarily all the interested parties before the identifying gen - task of analyzing national positions andconsulting munity method gives the European Commission the differences between the two methods? The com- eyond these general definitions, what are the main between the memberstates’ respective positions. to asearch for the lowest common denominator Parliament being involved, which generally leads decisions by unanimity and without the European be coherent ortransparent. Inaddition, states take and as sovereign powers without any obligation to mon position ondifferent files among themselves process inwhich memberstates negotiate acom- governmental method aims at a decision-making the Commission’s proposal. By contrast, the inter majority, with unanimity being neededto amend addition, the Council generally votes by qualified citizens -adopt European laws by codecision. In Parliament -aninstitution representing European ments of the memberstates -andthe European tion made up of representatives from the govern- ity to propose laws) while the Council -aninstitu- monopoly of legislative initiative (namely the abil- senting the general European interest -holds the in which the Commission -the institution repre- ‘pure’ community method corresponds to asystem to the European Convention in April 2002. The (Commissioners Barnier and Vitorino) submitted the representatives of the European Commission method. It is explained well inthe contribution that community method andthe intergovernmental Let us know look at the difference between the not, we would betalking about aHegelian night... areas, whether they are inthe EU’s competence or resulted inconclusions based on the lowest com- of the task force chaired by Mr Van Rompuy, which The intergovernmental method was behindthe work a) Economic governance issues Hot - - two methods to certain hot issues. potential consequences of the application of the European integration, let us briefly examine the of the two methods to facilitate the process of Before drawing conclusions on the relative value account of the European interest. the initiative and that they did not take sufficient too slanted to the interest of the countries that took recognized that national legislative proposals were That means that memberstates themselves have nized ingranted of to aquarter memberstates. pillar for the benefit of aright of initiative recog the right of initiative in the framework of the third Union according to which each memberstate had sion 67 of in Article the old Treaty on European forget that the Treaty of Lisbon deleted the provi- tion agreed to by member states. One should not in areduction of the level of ambition of the solu- in the intergovernmental method generally results for the European Parliament to exert real influence this objective). Finally, the fact that it is impossible Market (given its more general interest inachieving during talks in the Council to complete the Single often the country that was most isolated inthe 90s needed to reach unanimity. Thus, Germany was one by oneif they donot agree to the concessions their different voting weights) andcan beisolated cedure (with their different populations reflected in put on an equal footing in the majority decision pro- weight innegotiations whereas all the countries are ber states necessarily gives ‘big’ countries more addition, the needto gain unanimity among mem- of states that are taking partinthe negotiation. In that may bedifferent from the sum of the interests no research inadvance into the general interest states to reach unanimity more easily. So there is est common denominator that will allow member the national positions, seeks the to identify low- an administrative body which, as it is familiar with come from the memberstates individually orfrom The proposals for asolution to agiven problem The intergovernmental method is quite different. amend the Commission’s proposal. the European Parliament deciding by amajority to it is upto the Council deciding by unanimity and oly ontruth. It can get things wrong. Inthese cases, Of course, the Commission does not have amonop- tries inthe definitionof aEuropean energy market). on memberstates that would not comply with the non-automatic nature of sanctions to beimposed of the task force inproviding for the political and France andGermany would like to dilute the report mon denominator of national positions. However, - three member states, including two ‘big’ coun- proposal had sparked opposition from at least case of the Galileo project, whenthe Commission’s With regard to this, it is worthremembering the member states, even if they were two big countries. not bedismissed with awave of the hand by two the European Parliament andtherefore they could they would bethe subject of resolutions voted onby Council andeven European Council sessions, that these proposals would beput onthe agenda of the good thing about the community method is that come upagainst the same political difficulties but als coming from the European Commission would the EUbeing set inmotion.It is truethat propos- and French governments without areal debate in Tremonti) have sofar beenrejected by the German example the joint proposal by MrJuncker andMr made by somememberstates onthe issue (for or both instruments together. But the ‘proposals’ ing the EU’s institutions inthe to intervene markets in financial difficulty orcreating Eurobonds allow- mechanism that would work infavour of countries advocate either creating anautomatic solidarity put inplace. For this purpose, these economists counter international financial speculation were unless complementary mechanisms designed to mon economic policy would not survive for long mists argue that amonetary union without acom- the Single Currency. Several well regarded econo- economic policies as a necessary complement to posals designed to strengthen the coordination of A similar conclusion could beapplied to the pro- conformity with the community method. agreement with the European Parliament in June, in Commission proposals and are dueto reach afinal to ensure are Member met. states have debated ria andnot on‘political’ criteria which are difficult breach based on their not meeting objective crite- ing quasi-automatic penalties onmemberstates in go furtherby envisaging the possibility of impos - Commission’s proposals oneconomic governance threshold during the economic crisis. That is why the easer for several memberstates not to respect this compliance with this same rule, which has made it old was at the root of the flexibility introduced into the 3%of GDP(Gross Domestic Product) thresh - inability to punish somecountries for going over ity, especially if they are ‘big’ member states. The to put the country orcountries inbreach inaminor already shown that finance ministers are not ready cits’ procedure during the Prodi Commission has the rules. But the experience of the excessive defi- imposing sanctions for the countries inbreach of which would have to decide positively infavour of it could only sendrecommendations to the Council, of the Council deciding by qualifiedmajority), but the provisions of the newpact (barring adecision to impose sanctions oncountries that would breach words, the Commission would not have the power rules of the new Stability and Growth Pact. In other - the current situation of dwindling national public of 3%of GDP dedicated to research in2020 states have no chance of reaching the threshold If we look at the EU’s research policy, member currently does. should have aconsiderably higherbudget than it objectives -approved by the European Council -it Treaty of Lisbon and to achieve the 2020strategy’s competences granted to it by member states in the seems clear that, if the EUwanted to use the new ture andthe UK will want to keep its rebate. Yet it be against increasing cohesion-related expendi- want to keep farming expenditure, Germany will structure of the EU’s budget because France will political terms, it would lead to fixing the current translated the position of these memberstates in who are net contributors to the EU’s budget. If we ing position definedinadvance by somecountries are indanger of being undermined by anegotiat cial framework for the years from 2014to 2020- which should lead to its ‘proposal’ for anewfinan- for expenditure carried out by the Commission -and sultation of the parties concerned onthe priorities words, all the EU’s budget analysis work andcon- above the EU’s rate of inflation until 2020. In other indicating that the European budget must not go have sent an official letter to the EU institutions (Germany, France, the UK,Austria andFinland) of that happening now that somememberstates the general European interest. But there is adanger proposals from the Commission aiming to identify framework amongst themselves without having the annual budget andthe multiannual financial iftorted the memberstates had to negotiate both This procedure would run the risk of being dis- financial framework. basis for negotiations onthe newmultiannual Parliament of the document that will as serve the is upto it to seize the Council andthe European pose newcategories of own resources just as it able. The Commission also has the right to pro - every year within the limit of own resources avail - Commission to propose the expenditure to finance a proposal from the Commission. It is upto the tiannual financial framework andonthe basis of Parliament andCouncil) whilst respecting the mul- established by the budgetary authority (European The Treaty stipulates that the European budget is resources b) The European budget andnewown port ofport the European Parliament, got its way. after years of talks, the Commission, with the sup - (in particular onthe use of private finance). Finally, ervations formulated by countries against the plan and provided answers to the many questions/res- However, the Commission stuck with its proposal ties (Germany andthe UK)right from the outset. -

2011/no.24