Introduction Stiftung Wissenschaft und Politik German Institute for International and Security Affairs Comments Blocked for Good by the Threat of Treaty Change? WP S Perspectives for Reform in the European Union Nicolai von Ondarza The European Union faces a fundamental dilemma. On the one hand, pressure to reform its structures is growing. The hard negotiations with Greece in summer 2015 have revived the debate on deepening the Eurozone, while at the same time London is pushing to roll back integration, at least for itself. On the other hand, national governments reject any moves that would require a treaty change (such as transfer of powers) as politically impossible. Legal options for evading the dilemma and developing the Union by “covert integration” do exist, but these require unanimous political agreement among all the national governments – and would in the medium term require treaty changes to restore transparency and democratic legitimacy. The traumatic process of negotiating and bought itself some time for reform, the vola- ratifying the EU Constitutional Treaty and tile negotiations with Greece in summer the Treaty of Lisbon has left deep marks. 2015 again spotlighted the persistence of Ever since, national governments have con- grave deficits in its economic and political sistently avoided initiating significant treaty structures. In response, France in summer amendments, including at the height of 2015 proposed strengthening the Eurozone the euro crisis. Even in projects such as the with a finance minister with a budget and banking union, they have instead turned a parliament of its own. Concurrently, in to treaties outside the EU framework. June 2015 the presidents of five European Despite this reservation – or perhaps institutions (Commission, Council, ECB, precisely because of it – pressure to tackle Eurogroup and European Parliament) pub- reform of primary law is growing. Momen- lished their conclusions on completing tum for a treaty amendment comes from the economic and monetary union. While three sides: Firstly, reform of the Eurozone recommending short-term reforms under remains on the agenda. Although indi- secondary law, in the longer term they also vidual crisis-hit countries like Ireland have suggest creating a European finance minis- made progress and the Eurozone has try. If this were to involve transferring new Dr. Nicolai von Ondarza is Deputy Head of SWP’s EU/Europe Division SWP Comments 50 November 2015 1 powers to the Eurozone within the frame- Comprehensive Treaty Amendment work of the EU – such as rights to control Remains Out of Reach or even intervene in national budgets, or In all three areas, however, national govern- new transfer mechanisms – regular treaty ments appear to recoil from seeking treaty amendments would be required, under the change. The reasons for this are complex principle of conferred powers that explicitly and stem from more than just fear of refer- guarantees that only member states may endums. Fundamentally, the rejection of transfer new powers to the Union. treaty amendments can be explained in Secondly, British Prime Minister David terms of the interaction of six factors: Cameron is pursuing – in parallel to but Firstly, the greatest obstacle is that under not independently of the above – a reform Article 48 of the Treaty on European Union serving British interests to convince his (TEU) any form of treaty amendment must electorate and above all his party base to be agreed unanimously. This provision vote to remain in the European Union in guarantees that the member states retain the referendum planned for 2016 or 2017. control over the EU treaties. And this is the The British demands also amount to reforms reason why disagreements over treaty nego- on a treaty-amending scale: exemption from tiations have frequently led to the adoption the objective of an “ever closer Union”, of special arrangements and opt-outs to ac- greater rights for national parliaments, commodate individual member states. Now and safeguards for non-euro states in the the differences between national govern- process of closer integration of the Euro- ments are larger than ever. Whereas the zone. Not least, Cameron is seeking to Eurozone is at least debating a further deep- reduce the incentives for intra-EU migra- ening, London would prefer to curtail or tion to the United Kingdom. While not even reverse integration. The gap, however, calling into question the principle of free- is especially wide when it comes to ideas dom of movement, this could require – about the future of the Eurozone. These depending on the specific interpretation of range from demands for greater sharing of European law – amendments to the treaty risks (European unemployment insurance provisions on free movement of persons or scheme, Eurozone budget) through further non-discrimination of EU citizens. Before transfers of sovereignty (enhanced budget the British referendum is held, the other controls, binding reform programmes) to member states will thus have to decide a return to market-driven reforms and a whether and to what extent they are wil- strengthening of the no-bailout clause. Acri- ling to concede treaty-changing reforms. mony between European states over the refu- Thirdly, twenty-six of the twenty-eight gee crisis has further worsened the political member states have already agreed to seek climate within the Union. a treaty amendment by 2017, having com- Secondly, this also means that as soon as mitted themselves to incorporate the pro- treaty reform comes onto the table in any of visions of the Fiscal Compact into the EU the European Union’s many pressing issues, treaties within five years of its coming into the other questions almost automatically effect, in other words by January 2018 have to be debated and clarified too. For (Article 16 of the Treaty on Stability, Coordi- example, the United Kingdom would certain- nation and Governance in the Economic ly exploit any treaty reform initiated by the and Monetary Union). Given that this obli- euro states to force a deal on its own issues, gation is binding only on the signatories, using its veto to add weight to its demands. the corresponding treaty amendment is no The Union is thus unable to resolve any of foregone conclusion, because the two un- its problems in isolation by the route of re- involved states, the United Kingdom and form of primary law, but would be forced to Croatia, would also have to be persuaded tackle them as a whole. This naturally makes to give their consent. a solution considerably harder to find. SWP Comments 50 November 2015 2 Thirdly, the situation is complicated more than two years for ratification by the fact that in a Union of twenty-eight alone. member states there is almost always an Finally, every EU treaty amendment important national election looming in one must be ratified by all member states. Plebi- or another, which reduces the scope of the scites are not automatically necessary, but (larger) member states in negotiations. The for political reasons a referendum is planned debates about a political union in 2012 in the United Kingdom, and depending on were accompanied by warnings about that the extent of transfer of sovereignty may no treaty change was possible before the also be required in Ireland, and on matters German Bundestag elections in 2013, in affecting non-euro states also Denmark. In 2013 it was the 2014 European elections, the event of more significant treaty amend- and then the British elections in 2015. ments referendums could also be demanded And now, with German parliamentary and in France, the Netherlands and elsewhere, French presidential elections scheduled following the precedent of the EU Constitu- for 2017, there are again milestones before tional Treaty. Even parliamentary ratifica- which treaty reforms are excluded. As these tion is likely to be more difficult than for examples underline, national elections rep- the Treaty of Lisbon, because electoral suc- resent a structural rather than temporary cesses for EU-critical parties across Europe obstacle, because many national govern- have boosted their representation in ments believe that excessive willingness to national parliaments. compromise at the EU level reduces their prospects of re-election. Fourthly, the European Parliament must Option Covert Integration? also be involved in any significant treaty The EU member states are in a bind: The change. While it would not be expected to Eurozone must be adapted and developed fundamentally hinder any development of but the required major treaty amendments the Eurozone, there are certainly greater appear impossible. During the debt crisis concerns about the British demands. Under the European Union therefore incremental- Article 48 (3) of the TEU, simplified Treaty ly developed a way around this problem that revisions are possible without a convention, could be described as “covert integration”. but this shortcut requires the consent of The model is characterised by two mutu- the Parliament. Because a Convention grants ally complementary features. Firstly, nation- considerably greater influence to the Euro- al governments delegate substantive politi- pean Parliament (and national parliaments), cal decision-making powers that are not it is quite likely that the Parliament would explicitly defined in the EU treaties to the press for a Convention even for less signifi- EU level. This transfer of powers is then cant treaty amendments. concealed, either by creating structures Also for that reason, fifthly, the ordinary that can take decisions that might not be revision procedure suits neither the time- legally enforceable, but are politically bind- table of the British strategy nor that of the ing. Alternatively, the competences are Eurozone. The experience with the Treaty directly transferred to structures outside of of Lisbon shows that more than half a dec- the EU legal framework. The Fiscal Compact ade may pass between the first talks (early adopted in 2012, for example, did not rep- 2002) and entry into force (end of 2009).