12 Danielle Bossaert Luxembourg: Flexible and Pragmatic Adaptation
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2444Ch12 3/12/02 2:05 pm Page 298 12 Danielle Bossaert Luxembourg: flexible and pragmatic adaptation Participating in European integration to strengthen national autonomy1 With 406,000 inhabitants and a surface area of 2.586 km2, Luxembourg is by far the smallest Member State of the European Union. The highly positive attitude of the Luxembourg people towards the Union, expressed, for example, in the Eurobarometer surveys which are carried out on a regular basis, can be explained not merely by Luxembourg’s history, but also by the specific characteristics related to its small size. In this sense, the European Union as a community of peace contributed substantially to both strengthening Luxembourg’s oft-challenged national autonomy2 and to compensating for the disadvantages of the small national market. As one of the founding states, Luxembourg has gained many advantages from membership of the Union which have quite significantly contributed to a strengthening of its own sovereignty. In particular, those elements of the Union’s ‘architecture’ which are based on the principle of suprana- tionality, which guarantee rights of participation and co-decision for the smaller states, have contributed considerably to ensuring that Luxembourg has an influence disproportionate to its size. Normally, an isolated state such as Luxembourg – which has no political weight to speak of, has few natural resources and is more than 95 per cent depend- ent on imports and exports – would hardly be noticed as a sovereign state in European and international circles. In this context, the other Member States now recognise and respect the Grand Duchy as a partner, not least because of the active presence and willingness to participate of Luxembourg politicians, diplomats and public servants in the European Council, the Council of Ministers and its related expert groups. This also helps Luxembourg to better protect and look after its own vital interests. Since the beginning of the integration process, political parties and interest groups consider EU membership an unquestionable necessity for reasons related to security policy and economy. In this context it is also interesting to note that in recent years the employees’ organisations have Danielle Bossaert - 9781526137364 Downloaded from manchesterhive.com at 09/27/2021 03:43:02AM via free access 2444Ch12 3/12/02 2:05 pm Page 299 Luxembourg 299 become aware of the advantages of better mutual consultation. Thus, in 1996 the two largest trade unions, the socialist OGBL (Onofhëngege Gewerkschaftsbond Lëtzëbuerg) and the Christian LCGB (Lëtzëbuerger Chrëschtleche Gewerkschaftsbond), established a joint office in order to better safeguard Luxembourg’s interests within the ETUC. Both parties in the government (the Christian Social Party and the Democratic Party) as well as the main opposition parties (the Socialist Party and the green parties) openly follow a course in favour of integration. Accordingly, the deepening of the European integration process is carried by a broad consensus. For instance, Luxembourg was one of the first states to ratify the Maastricht Treaty by a large majority, and thus openly demonstrated its deep commitment to the introduction of a single European currency, a CFSP and progress in the JHA area. However, even the smallest Member State is sometimes susceptible to reservations about the idea of integration. In particular, the concept of citizenship of the European Union, which was introduced by the Maastricht Treaty, according to which EU citizens have the right to vote and to stand as candidates in municipal and European elections through- out the Union, caused alarm about foreign domination among the Luxembourg population. It was feared that this might jeopardise the peaceful co-existence of the Luxembourg and foreign population and that this right could change the current political balance of power.3 Later, however, this concern, which was connected with the fear of losing national identity, proved to be unfounded, especially since only a few EU citizens exercised this right. As the smallest Member State, Luxembourg is quite sensitive on matters that directly affect its extremely vulnerable economic structure and its most important sectors such as finance, the iron and steel indus- try, etc. Luxembourg therefore does not support harmonisation efforts at any price in the field of taxes or the introduction of capital gains tax. Two other key national interests concern the question of the seats of the European institutions and the observance of the principle of equal rights as regards representation in these institutions. Nevertheless, despite these sensitivities, the strongly pro-European attitude of the Luxembourg popu- lation is primarily based on the view that its national interests are best looked after in a supranational community of solidarity and common values. Indicative of this is the fact that the ratification of the last two EU treaties (Maastricht in 1992, Amsterdam in 1997) did not encounter any insurmountable constitutional problems. Since 1956, the transfer of sovereign rights to a supranational community has been regulated by Article 49a of the Luxembourg Constitution, which stipulates that compe- tences reserved for legislative, executive and judiciary powers can be temporarily transferred by treaty to institutions under international law. The right of EU citizens to vote and stand for election at municipal and Danielle Bossaert - 9781526137364 Downloaded from manchesterhive.com at 09/27/2021 03:43:02AM via free access 2444Ch12 3/12/02 2:05 pm Page 300 300 Member States and the European Union European levels, as introduced by the Maastricht Treaty, was the only change requiring Articles 52 and 107 of the Constitution to be amended. Luxembourg’s policy priorities in the Union: active deepening and discrete mediating Luxembourg’s policy regarding the Union shows an exceptionally high degree of continuity. Apart from some minor shifts of emphasis, which are mainly caused by the different personalities of the leading politicians, there has hardly been any difference between the principal European poli- cies of the Christian Social governments under Pierre Werner (1959–74; 1979–84), Jacques Santer (1984–95) and Jean-Claude Juncker (since 1995), and those of Gaston Thorn’s Democratic government (1974–79). With their clearly pro-European attitudes, these governments have contributed considerably to strengthening and promoting further integra- tion. For example, in the early 1990s, it was the proposal developed under the Luxembourg Presidency, which was strongly oriented towards politi- cal compromise between the United Kingdom and the other Member States, which prevailed over the far more idealistic Dutch plan and served as a basis for the formulation of the Maastricht Treaty. Prominent Luxembourg politicians such as Joseph Bech, in the early years, made great contributions to the further development of the European integration process as active co-developers or discrete media- tors. In this respect it is worth mentioning the three-stage plan to build EMU, developed in the 1970s under the leadership of Pierre Werner, as this played an important role in the field of financial policy. In the late 1990s, the negotiating skills of the Prime Minister Jean-Claude Juncker brought about German–French agreement at a time when the stability pact on budget deficits was being developed, and thus helped to further EMU. Luxembourg’s European policy focuses primarily on a deepening of the integration process while safeguarding vital national interests. During the 1996–97 IGC, the government supported first and foremost the consolidation of the Internal Market through the introduction of EMU and the reinforcement of the second and third pillars. However, it vigor- ously opposed both a Europe à la carte and any weakening of the European Commission. Jean-Claude Juncker has particularly favoured monetary union, to which he committed himself with great perseverance and which is considered in the Grand Duchy as an indispensable prelimi- nary stage for a CFSP. Of course, with respect to this close co-operation on monetary policy, we should not overlook the fact that the establish- ment of the ECB has given Luxembourg a considerably greater say in matters than it has ever had before, especially when considering that since its accession to the Belgian–Luxembourg Economic Union4 in 1921 it had given up part of its monetary sovereignty.5 In the Luxembourg govern- ment’s declaration on ratification of the Maastricht Treaty, former Prime Danielle Bossaert - 9781526137364 Downloaded from manchesterhive.com at 09/27/2021 03:43:02AM via free access 2444Ch12 3/12/02 2:05 pm Page 301 Luxembourg 301 Minister Jacques Santer stated that monetary union was significant for Luxembourg since it would now become a partner with equal rights in a Union managing a common currency and defining a common monetary policy.6 In contrast to larger countries such as Germany or France, which are characterised by extremely complex structures of domestic interests, the vital interests of a small state such as Luxembourg which, moreover, is spared from internal disputes as far as Luxembourg’s European policy is concerned, are less extensive. This of course has the advantage that in certain areas it may be more ready to compromise and can often act as mediator between conflicting interests. Looking to the future, a question that arises in particular for Luxembourg is that of its position within a European Union which will one day comprise twenty or more Member States, mostly from Central and Eastern Europe. In this context the Grand Duchy will of course be required to defend its position as an active founding member with the same rights and obligations as the large states. Consequently, during the 1996–97 IGC the government vehemently argued that – both now and in the future – all the Member States should be represented in all institutions (Council of Ministers, Commission, EP, ECJ, Court of Auditors, Presidency, etc.), so that they can actively participate in the decision- making process.