The EU from a Critical Perspective: A selection of articles questioning further political integration

The EU from a
Critical Perspective
A selection of articles from EUWatch
The EU from a Critical Perspective
CONTENT
PREFACE iv
Chapter 1 - The Future of the European Union 1

From 'cooperation' to 'centralisation' - The advent of EU supranational
policing (Kevin Ellul-Bonici) 2
Europa Quo Vadis? (Peter Henseler) 7
Political integration-the ultimate goal (Anthony Coughlan) 10
Commenting on the results of the reflection period (Klaus Heeger) 12
A proposal for a new dynamic federalism in Europe (Bruno S. Frey) 19
A more self-reliant Europe – The response to global economic and
energy insecurity (Colin Hines) 26
The future of Europe: are there alternatives? (Karoly Lorant) 30
The EU after the Irish 'NO' (Interview with Michel Rocard) 44
The European Union between 'non-statehood' and 'supra-statehood'
(Peter Henseler) 50
The constitutional implications of the Treaty of Lisbon (Anthony Coughlan) 71
Chapter 2 - Democracy 83
The next 'constitutional' Treaty - What the people should decide
(Kevin Ellul-Bonici) 85
Referendum models in the process of Europe's constitutionalisation
(Peter Henseler ) 91
A way out - towards a more democratic European Union (Bruno Kaufmann) 99
Why national politicians are so europhile (Anthony Coughlan) 103
An unsettled referendum debate (Peter Henseler) 106
The importance of monitoring members' voting in the
European Parliament (Jan A. Johansson) 112
The results of the 2005 and 2006 referenda – What do the statistics reveal?
(Endre Barcs) 120
Freedom in the "United States of Europe"
– An exercise in the suppression of dissent? (Kevin Ellul-Bonici) 131
Is the European Union "Le meilleur des mondes possibles"?
(Gawain Towler) 136
Chapter 3 - Subsidiarity 139

Subsidiarity and proportionality – a legal-economic approach
(Peter Henseler ) 140
COSAC, subsidiarity and proportionality (Interview with Sarita Kaukaoja) 153
i
The subsidiarity principle and the EU institutions (Markus Nyman) 158
Subsidiarity at the service of technocratic centralism

(Christophe Beaudouin) 162
The primacy of the community law (David Sehnálek) 166
Is the Committee of the Regions promoting closeness and subsidiarity?

(Markus Nyman) 175
The white horse of bureaucracy (Martina Rozsívalová) 179
Chapter 4 - The Charter of Fundamental Rights 187

Limiting fundamental rights in the interests of the market (Frank Keoghan) 188
What will remain of the French 1789 human and citizens' rights?
(Anne-Marie Le Pourhiet) 192
Fundamental rights and freedoms: The dawn of an unprecedented legal
revolution (Christophe Beaudouin) 195
The impact of the charter of fundamental rights
(Interview with Peter M. Huber) 198
Chapter 5 - The Future of the Euro 201

The Euro and the OCA: Will the Monetary Union collapse? (Peter Henseler) 203
Political Union - the end game of the Euro
(Interview with Paul De Grauwe) 205
The birth and death of the euro (Anthony Coughlan) 208
Chapter 6 - The Financial Crisis 213

Prisoner´s Dilemmas, Locomotives and the EU -
Some Considerations in Connection with the World Crisis
(Kurt W. Rothschild) 214
The financial crisis: Strengthening or weakening the EU? (Peter Henseler) 219
The EU in the turmoil of the financial crisis: The particular vulnerability
of the central and east European countries (Janos Plenter) 226
The impact of the financial crisis on the European Union
(Mogens Ove Madsen) 235
Chapter 7 - Defence 239

Finland and the militarisation of the EU's non-aligned member states
(Esko Seppänen) 241
From common market to common defence – The Common Foreign,
Security and Defense Policy of the EU after Lisbon (Franz Leidenmuehler) 244
After the Lisbon Treaty, what is our defence strategy and what kind of
foreign policy does it serve? (Claude Gaucherand) 249
ii
France, NATO and European Defence (Thomas Valasek) 255

A call to vote NO against the militaristic Treaty of Lisbon
(Tobias Pflüger) 261
Chapter 8 - Immigration 265

Do we need solutions at EU level for the immigration problem?
(Interview with Nigel Farage and Johannes Blokland) 266
A European approach to the refugee problem is needed (Jan Harm Boiten) 270
Immigration policy: From loss of sovereignty to loss of identity?
(Christophe Beaudouin) 274
Immigration and integration problems the EU and its member states
are facing (Karoly Lorant) 283
Is there a European solution for immigration? (Klaus Heeger) 290
Chapter 9 - Energy 299

The New EU Energy Policy
(Interview with Andris Piebalgs) 300
Common energy policy: a house of cards built on shifting sands
(Nigel Farage) 305
Greenspirit - The causes of climate change
(Interview with Patrick Moore) 307
The Baltic Gas Pipeleine – Power Politics with Conflicting Interests
(Henrik Dahlsson) 309
Chapter 10 - Europe in numbers 313
LIST OF CONTRIBUTORS 335
iii
Preface
Our choice to publish a compendium of the 'best' articles from the first
thirteen issues of EUWatch (June 2006 to December 2008) was based
on our conviction that these articles are not only well-researched, but
are, in today's political context, as actual as ever.
To select the 'best' from among a plethora of excellent contributions

was an extremely difficult exercise, largely influenced both by the
general topicality and by the main political guidelines of the
Independence/Democracy Group in the European Parliament.
We also express our gratitude to Prof. Kurt W. Rothschild, whose article

"Prisoner's Dilemmas, Locomotives and the EU", reproduced in Chapter
6 "Financial Crisis", was a special contribution to this 'best of' edition.
The selected articles have hence been categorised under the following
topics:
- The future of the European Union

- Democracy
- Subsidiarity
- The Charter of Fundamental Rights
- The future of the euro
- The financial crisis
- Defence
- Immigration
- Energy
- Europe in numbers
Although the Independence/Democracy Group is known for its

eurosceptic, EU-critical and EU-realist positions, this publication has
remained independent and has also included many EU federalists'
views.
iv
Our aim, however, was to provide a much-lacking balance to the

Europhile Europeanist view within mainstream politics. This view
subscribes to the dogma that there is only one goal, namely that
Europe has to be ‘strong and powerful’, and that this can only be
achieved by the political structure envisaged in the rejected EU
constitution, today embodied in the Lisbon Treaty.
The doctrine that a ‘strong and powerful Europe’ could only be

beneficial to European citizens is questioned, as are the ‘democratic’
credentials of this new entity that creates new terms to describe old
political processes and entities.
This book seeks to unravel this doctrine and provide rationales as to

why we should be rethinking the future by learning from the past and
not repeating it.
Klaus Heeger and Karoly Lorant

Chief Editors
Note: The EUWatch issues quoted in some of the articles and interviews can be
found on and downloaded from the following website:
http://indemgroup.eu/48/
v
Chapter 1
The Future of the European Union
Paul Marie Coûteaux, février 2008 – Strasbourg :
"L'Europe n'a d'avenir – c'est l'évidence – que par ses peuples, car ses peuples
sont sa seule substance et sa seule force. Si ses peuples venaient à être
absorbés, dessaisis de leur responsabilité d'eux-mêmes, et divisés ou éclatés en
petites principautés sans dimension politique, alors, chers collègues, je
craindrais beaucoup pour notre avenir.
Vladimír Železný, June 2008 – Strasbourg:
Let me assure you that now that the Irish have killed this sick product that is
called the Lisbon Treaty, the Czechs will be happy to bury it and still remain a
Member State.
Georgios S. Georgiou, January 2009- Strasbourg:
The Nice Treaty provided the European Commission and the European
Parliament with the opportunity to overstep the mark. There was nothing left
that they did not do, acting within the framework of the Nice Treaty and
sometimes beyond the limits of what was permitted. This climaxed in the
enlargement of the European Union to such degree as to raise reasonable
doubts about the final aims of this undertaking. Even Thailand could well
have been integrated into the European core if this move had served the
strategic and other purposes of the European Union.
Witold Tomczak, November 2007 – Strasbourg:
Europe is faced with the temptation to undermine the rights of its own nations
in order to increase the role played by its cosmopolitan elites in the running of
the world. To give in to this temptation would be to wipe out the centuries old
heritage of European nations, which rests on respect for human rights and the
rights of human societies.
1
FROM ‘COOPERATION’ TO ‘CENTRALISATION’

THE ADVENT OF EU SUPRANATIONAL POLICING
By Kevin Ellul Bonici (June 2006)
When Commission President José Manuel Barroso launched the “Citizens’ Agenda for Europe”
(10 May) he made a stark warning: “Shall we have another terrorist attack before we have
effective common action?” he asked leaders of member states. “Are you able to give us the
means?”
The presupposition here is that Commission-inspired legislation would work better at

preventing terrorism in every member state than the legislative processes of each of those
member states.
In contention is the decision-making mechanism for what is known as “police and judicial
cooperation in criminal matters”. This concerns the question of who should legislate in cross-
border criminal justice affairs. Should it be the supranational level, as the Commission
demands, or individual member states according to their requirements? Or should harmonised
legislation in each member state suffice, without the need to grant any central authority the
power to federally legislate in cross-border criminal matters?
These are important questions, but there are others to explore.
Would supranational legislative power gradually extend from the cross-border to the national
level? Would this power eventually necessitate a supranational criminal justice system
complete with a federal police force? How ‘federal’ can such an inherently-centralised agency
be? And how effective, in reality, is the supranational level in criminal justice?
These questions are hardly being asked today and in this brief commentary my main aim is not
to answer them, but to ask them. The notion that the EU has a beneficial role in preserving law
and order has led to the general belief that EU legislative power is a prerequisite to our security.
This belief is held without envisaging the developments of this power and its consequences;
indeed, without asking the right questions.
FROM COOPERATION TO HARMONISATION
Let us take it step by step.
If we have an interstate market without borders, then to maintain the ‘four freedoms of
movement’ it is essential that the member states cooperate in police and judicial matters.
Cooperation may involve anything from shared intelligence and cross-border pursuit to
common criminal databases and coordinated joint operations – there is no limit to cooperation
within the intergovernmental framework, provided it is strictly within the scope of the
European Convention on Human Rights (ECHR).
Here the ECHR acts as a harmonisation catalyst but it is not the only one. Because in order to
cooperate in cross-border criminal matters, member states have required distinct levels of
harmonisation of their laws and procedures. The Maastricht Treaty had pushed forward this
harmonisation process by introducing the “Justice and Home Affairs” pillar and by establishing
areas of common interest in reaching the objectives of the Union1.
2
‘Harmonisation’ follows ‘cooperation’ in quick succession. Indeed, both processes act

symbiotically for the good of the interstate single market. In effect, what is presently described
as “cooperation” in criminal justice matters is in fact a hybrid process involving both
cooperation and harmonisation.
This dual process can be safely contained within a genuine intergovernmental framework,
where each democracy within the Union – each people – safeguards its right to a conclusive
‘No’.
It is when harmonisation turns into supranational legislation that the plot changes.
FROM HARMONISATION TO FEDERAL LEGISLATION
Legislative harmonisation does not necessarily require supranational or federal acts. In fact no
central authority is required for member states to harmonise their criminal laws and procedures
in the intergovernmental way. Yet at this point in time the Commission is asking not only for
the power to ensure harmonised legislation in criminal matters across the EU, but also for the
exclusive power to propose and initiate legislation (in the “Community way”).
The proposed EU Constitution had provided for this power, but its implementation in the
present form should be doubtful following its rejection in the French and Dutch referenda
since the constitutional treaty requires unanimity – and that means ratification by all the 25
democracies.
This notwithstanding, there is today a clear determination by the Commission and several
member states’ leaders to move “police and judicial cooperation in criminal matters” from the
third pillar to the community pillar (see table). This means that ‘police and judicial cooperation’
would cease to be a matter of “cooperation” (and harmonisation) and would become subject to
Community law.
In a more traditional discourse, criminal justice would fall under a supranational level that is
characterised as ‘federal’. Yet the EU ‘federal’ level includes an unelected central authority that
is exclusively empowered to propose EU legislation and oversee the whole legislative process.
The Commission is comprised of unelected legislators and executives, and if such bureaucrats
are given control over criminal justice it does not take much to recognise that the future of
freedom and democracy is in peril. The member-state democracies would then have to rely on
the co-decision procedure to avoid the adoption of unwanted federal legislation. But this
procedure is not as democratic as it looks on paper. Here, the Council, comprising the member
states’ governments, reacts to the Commission’s proposals by qualified majority voting – a
process which institutionalises the Council and favours EU totality whereby whole states and
regions become powerless minorities. This “co-decision” role is supposedly shared by the
European Parliament, which directly represents the member states’ citizens. But the European
Parliament has very little say.
According to MEP Jens-Peter Bonde, of 3124 sets of legislation passed by the EU last year, the
European Parliament had a say in only 57 of these. It is clear that within this triumvirate the
Commission, as the exclusive initiator of the legislative process, holds the leading role. In
whichever areas intergovernmentalism no longer exists, the Commission holds easy sway over
the future.
3
The intergovernmental way has been described as ‘tedious and cumbersome’. But there are
three points to consider here.
First, one needs to ask: ‘tedious and cumbersome’ for whom and for what? It is definitely
tedious and cumbersome for whoever wishes to eradicate the European democracies and
replace them with a pseudo-democratic, totalitarian authority that is ostensibly based on a
single European citizenry.
UNION LAW
Type Nature of legislation Decision-making
1. Primary Acts
Treaties
Intergovernmental;
General principles: unanimity required
a. Union law
b. Community law As derived from:
a. treaties
b. decision of the European
Court of Justice (ECJ)
2. Secondary Acts
Community pillar: Regulations, Directives, General co-decision procedure:
Decisions (binding) . Commission proposes, Council
Community Acts Recommendations, Opinions and European Parliament co-
(federal) (non-binding) approve;
Qualified majority voting in the
Council required
Second Pillar: Common Intergovernmental;
foreign and Security Principles and general unanimity required
Policy guidelines, common
positions and strategies
(non-binding)
Joint actions (binding)
Third Pillar: Police and Common position (non- Intergovernmental; unanimity

Judicial Cooperation in binding) Framework required - not including the
Criminal Affairs decisions, decisions and communitarised areas (from
Conventions (binding) Justice & Home affairs) of visas,
asylum, border control,
immigration and judical
cooperation in civil matters
3. ECJ case Law

(federal) Decisions of the European EU judiciary
Court of Justice and the EU
Court of First Instance
Source: www.europa.eu
4
Secondly, today’s EU has been fundamentally built on intergovernmentalism. The veto has not
stopped the encroachment of the Community pillar over more policy areas. Some would even
argue that the intergovernmental way has failed because it has well suited governments to
transfer the responsibility of law-making onto the EU central authority.
Thirdly, the intergovernmental way is the only way left to defend Europe’s democracies against
a singularity that is being empowered to self-empower.
If the EU is to acquire the power to legislate in criminal justice matters it is crucial to consider
what comes after federal legislation in the process of EU self-empowerment.
FROM FEDERAL LEGISLATION TO SUPRANATIONAL EXECUTION
Every organisation has an organic life of its own. As a political entity the EU is no exception. The
EU started as a cooperation framework for free democracies to open their borders for the
mutual benefit of their citizens. Yet instead of relying solely on intergovernmental treaties to
coordinate a new kind of confederation, this process was accompanied by the creation of a
separate central authority that has been consolidating its powers ever since.
We must keep in mind that what most people see as beneficial in the EU is the freedom of
movement of people, services, goods and capital. To a certain extent, this interstate market has
been achieved. But as I pointed out earlier, if the “four freedoms” require various levels of
cooperation and harmonisation, they do not necessarily require a central authority that itself
requires consolidation of power.
Consolidation of power translates into centralisation. This is the main EU process we see today.
With supranational jurisdiction over criminal justice affairs the road is paved for the
consolidation of a supranational criminal justice system – a centralised criminal justice system.
An EU criminal justice system would act, as any other organisation, to consolidate and obtain
more power – which the EU Commission would be able to grant, provoking even the necessity
of a ‘federal’ police force and its various branching agencies. But at a supranational level there
are no such things as a ‘federal police’ or a ‘federal criminal justice system’ for in truth these
would be centralised agencies acting under ‘federal control’, which is led by an unelected
bureaucracy within the Community pillar.
EU agencies executing EU laws might one day be seen as the obvious thing to have. This does
not mean it would be the wisest. An empowered Europol would initially act at a cross-border
level, leaving ‘street crimes’ to the jurisdiction of member states. Yet with cross-border crimes
deriving from national criminal sources there is a strong propensity for supranational acts to
shift from cross-border to national jurisdictions. The sky is the limit here, for nearly any
organised criminal activity can be associated with terrorism and given supranational priority.
SUPRANATIONAL POLICING
There is no evidence to support the contention that supranational anti-terrorist measures

would be more effective than the same coordinated measures taken in each member state. But
if the need for an EU criminal justice system is not felt, its development can be caused to be
necessitated. And once established there is hardly any way that European citizens could
influence its powers. The democratic power of each citizen would have proportionately
diminished.
5
The fear of terrorism is a major tool for the Commission to eventually promote the idea of EU
policing. In this context, EU member states have long been implementing legislation aimed at
citizen surveillance to track any potential terrorists in the preparation of their acts. Critical
criminologists and civil libertarians believe this action is only diminishing privacy rights and
increasing the powers of enforcement agencies to the detriment of our civil liberties. It should
be clear that with privacy rights and habeas corpus under attack in all the European
democracies, the advent of a supranational criminal justice system does not bode well. In a land
where everyone may be a suspect, supranational policing would tend to evolve into a huge
monolithic bureaucracy with tremendous powers of surveillance and investigations. The law-
abiding citizens would have to learn to fear it and live with its consequences, while the criminal
underworld would go further underground.
The United States of America should serve as a living example of how a “federal” criminal
justice system works. With crime rates higher than in Europe and with a per capita prison
population as much as ten times higher than in most European countries, it is evident that the
system is backfiring. Civil libertarians have come to describe the US as a ‘police state’ precisely
for its federally managed draconian legislation and highly militarised federal and state
agencies.
The United States is indeed another story altogether and different perspectives abound. It is
not clear, however, whether today’s Europeanists want to copy it or challenge it… or perhaps
do both.
NOTES:
1 These included police and judicial cooperation and harmonised policies and measures
against international crime and terrorism. Eventually the areas of illegal immigration, visas and
asylum were transferred to the Community Pillar by the Treaty of Amsterdam, and “police and
judicial cooperation in criminal matters” became the “third pillar” of the EU legal structure.
6
EUROPA QUO VADIS?
By Peter Henseler (June 2006)
European integration originally had started with the European Coal and Steel Community and
the Rome Treaty establishing customs union, common agricultural policy and foreign trade
policy. It then proceeded with the common and internal market concept towards more or less
coordinating elements of an economic, social and environmental union, and then realizing
European monetary union. It began aiming at some elements of political union beginning with
embodying intergovernmental procedures in the fields of foreign and security policy and
justice and home affairs matters into the treaty and then by establishing defence and military
structures in the Council General Secretariat.
Does this process imply tendencies towards more centralization? Shall it achieve the design of
a European federal state like Germany or the USA? Shall the final status of European integration
constitute a model as suggested by the former German foreign affairs minister Fischer in his
famous Humboldt speech of May 2000 or even United States of Europe as recently proposed by
the Belgian Prime-Minister Verhofstadt? The idea of this concept is not a new one. On the one
hand Verhofstadt adopted some ideas which had been already presented in the 1920s by the
Austrian writer Coudenhove-Kalergi, son of a diplomat of the old Austrian monarchy with
Flemish and many other European regional family roots. On the other hand Verhofstadt
proposed the well known and often propagated idea of core and pioneer groups. Apart from
this it could be useful to remember in this context the history of the United States of America
where some interesting parallels to the formation of the European Union could be observed,
when the Federal Constitution came into full functioning (1789) replacing the Articles of
Confederation (1781) and by this causing an irreversible and in later years increasing status of
the Union formation.
Without doubt the most intensive demise of the nation state and loss of national sovereignty in
Europe has been caused by establishing monetary union. This process will probably be
irreversible for practical reasons and for political reasons as well because it would raise
enormous technical problems if one or several countries would leave the club and it would be a
bankruptcy declaration of European integration if monetary union broke down completely.
Moreover this process will cause more pressure for centralization in flanking economic policy
areas to reduce the social costs of monetary unification (as the findings of the so-called
Optimum Currency Area Theory tell us). This would include adequate social and employment
policy measures and especially fiscal policy interventions providing sufficient funds to avoid
instability and to compensate for diverging economic standards between the monetary union
member states (not to forget the aspirants). This may conceal potential conflicts with the
Maastricht criteria and the Stability Pact and in the case where pressure is not relieved, the
centralization of monetary policy may cause conflicts that demonstrate the political limits of a
mainly economic integration without sufficient democratic legitimacy. Thus the simplistic
Maastricht vulgar economics approach of monetarist epigones being pushed by a “neo-liberal”
oriented, educated and/ or converted political class may be seriously challenged on the one
hand on the national level by increasing unemployment and overcharging the social security
systems and on the other hand on the European level by the purely monetarist policy of the
European Central Bank to which the deficits of political legitimacy would be addressed.
7
But this would aim at the wrong addressee for political and democratically legitimate
responsibility because sufficient support and legitimacy would be lost as a result of inadequate
responsibilities in the field of income policy and fiscal policy at the supra-national level.
Turning our view to the constitutional context of the present (and most probably also the
future) European polity we must note that the Treaty Establishing a Constitution for Europe
does not and could not open the way towards a legitimate democratic European federal state.
Instead of following the “classical” democratic model of division of powers the given mixture of
executive and legislative competences without clear institutional allocation will be continued.
The existing triangle of powers between Commission, Council and Parliament was confirmed
by Chirac and Schröder and presented to the Convention in a slightly modified version as the
future “institutional architecture” of the Union and thus will be put in place regardless of
timescale, no matter whether the constitution will be in force or not. Therefore the
inconsistencies in the fields of economic, monetary and social policies based on the prevailing
“neo-liberal” ideas will also be maintained.
Thus the result of this short intellectual effort is ambiguous and contradictory. On the one hand
we see a lot of centralizing tendencies prevail, on the other hand this does not fit into the
context of the present European polity because of deficiencies of democratic legitimacy. The
only thing we could be sure of is that the dynamics of European integration and the
institutional framework reveal a lot of inconsistencies being considerably influenced by
neoliberal ideology which on its part finds fertile soil in these inconsistent structures and
processes.
WHAT CONSEQUENCES CAN WE OBSERVE TO BE DRAWN BY THE EUROPEAN

INSTITUTIONS?
The main consequences we can see at the moment are that discussing the future of Europe has
become fashionable. On the Council’s side this had already begun with looking into the magic
lantern concerning future challenges of globalisation during the “feel-good” summit of
Hampton Court in October 2005 and taken up by the Austrian Presidency’s harmonization
exercise “Sound of Europe” in January 2006. Embedding the constitutional problem into a
broader context of some kind of futurism is the central idea. Hopefully the debate will not be
used as an alibi producing nice verbal air bubbles and leaving the real constitutional problem
untouched, but will take up the discussion of manifold scenarios being neglected during the
Convention. Only by doing it this way the “errors of constructivism” (Hayek) resulting from a
purely technocratic approach and being revealed by the negative referenda in France and the
Netherlands can be avoided.
As the Commission pointed out in its latest communication on the period of reflection and Plan
D citizens have a fairly low knowledge and interest on how the EU institutions work although
they may recognise that the issues faced both inside and outside Europe need to be tackled
Europe-wide. The Commission is right that citizens are concerned about employment and
security and want a European response to globalisation. Thus they also want to know concrete
proposals to solve real problems, i.e. “less abstract words and more concrete action”.
The first (inter-)parliamentary forum on the future of Europe does not encourage such a
resolution. Instead of this well known arguments had been reproduced concerning the EP’s
majority view on the Constitution. This view concerning globalisation which was considered as
a good thing for Europe, also concerned the so-called European Social Model on which views
8
diverged already on even agreeing on the number of such European social models. Last but not
least it concerned the question that the existing own-resources system should be replaced by a
more transparent scheme being (partly) tax-based.
In contrast to the parliamentary views the Commission approach seems to be a more

pragmatic one. Although it may be dominated by relatively conventional public relations
exercises it shows the Eurocrats’ typical kind of thinking of piecemeal engineering, namely
permanently boring into the famous thick boards by which Max Weber characterized the
persistency of political business. This kind of thinking may be favoured by the complex status of
centralized (i.e. Union) competences/ responsibilities and decentralized (i.e. member state)
competences/ responsibilities representing and creating a lot of compromises. Without doubt
this should be watched carefully to reveal a purely technocratic view to avoid this approach
usurping the democratic view.
9
POLITICAL INTEGRATION - THE ULTIMATE GOAL
By Anthony Coughlan (June 2006)
THE POLITICAL OBJECTIVE OF ESTABLISHING A SUPRANATIONAL EUROPEAN FEDERATION HAS

BEEN CENTRAL FROM THE START TO THE VARIOUS STAGES OF THE INTEGRATION PROJECT:
COAL AND STEEL COMMUNITY, ECONOMIC COMMUNITY, EUROPEAN COMMUNITY, EUROPEAN
UNION.
“Europe Day” commemorates the Schuman Declaration on 9 May 1950, which stated frankly
that the establishment of the supranational Coal and Steel Community was “a first step in the
federation of Europe” and that “this proposal will lead to the realization of the first concrete
foundation of a European federation.”
A federation is of course a form of a State, and yet for decades the champions of integration
have sworn they have no such thing in mind. They have said this as the EC/EU has steadily
acquired ever more features of a supranational Federation: its own laws, Parliament, Supreme
Court, currency, foreign policy, battle groups, code of fundamental rights, flag, anthem, motto
and now - they hope - its own Constitution and real citizenship and citizens’ obligations. If the
EU Constitution were to be ratified, it would leave the power to levy taxes as the only major
power of government still remaining at national level, and the advocates of integration clearly
aspire to get this in time.
The “ever-closer union among the peoples of Europe” which is referred to in the Preamble to
the 1957 Treaty of Rome set no limit to the integration process. What has been interesting is
how, as if to calm people’s fears and induce them to join unwittingly in the supranational State-
building project, they are persuaded to use familiar terms to describe it, whose legal meaning is
then altered retrospectively in a subsequent European Treaty. Calling the European Union by
the name “Europe” is the most obvious example, even though a dozen States that are
undoubtedly European are not members of the EU at all, and Europe’s boundaries are quite
different from the EU’s. The European “Assembly” of the Treaty of Rome was called the
European “Parliament” for years before the name was changed, in the 1987 Single European
Act, to make the term “Parliament” legally valid. For decades the three Communities - Coal and
Steel, Euratom and Economic were referred to as one European “Community”(EC) in Brussels
usage before that Community was established legally, which did not happen until the 1992
Maastricht Treaty on European Union.
The name European Union too embodies a deception. Note that the Maastricht Treaty, which
gave us the name “European Union” and the concept of EU citizenship for the first time, is a
Treaty “on” Union, not “of” Union. One can only be a citizen of a State and the present EU is not
a State and does not even have legal personality or distinct corporate existence, unlike the
European Community, which does.
What is called the European Union at present is a descriptive term for various forms of
cooperation between its Member States - the supranational Community “pillar” on the one
hand, where the Brussels Commission proposes the laws, and the “intergovernmental” pillars
of crime and justice and foreign policy on the other, where Member States relate to one
another as sovereign entities. Thus, strictly speaking, there is no such thing as European Union
law, only European Community, or “EC”, law.
10
The proposed EU Constitution, the Treaty Establishing a Constitution for Europe, would change
all that if it were to be ratified. It would equip the new EU that it would establish with real teeth.
It would repeal the existing EC/EU treaties, would abolish their three-pillar structure and merge
them into one unified system, all governed by the supranational law of what would,
constitutionally and legally, be a new and fundamentally different Union. This new treaty
would in effect be the “Treaty of European Union”, for it would establish the EU for the first time
as a distinct legal entity with the constitutional form of a European Federal State.
This new European Union would thus become our real legal sovereign and supreme ruler for
the first time, instead of our own national State or country. The Constitution would make us real
citizens of what in effect would be a United States of Europe, as France’s Valery Giscard
d’Estaing, Belgian’s Guy Verhofstadt, Germany’s Hans Martin Bury and other supporters of that
objective admit frankly.
Under the Constitution we would no longer be just honorary or notional citizens of an EU that
has no legal personality, which we are told we are at present. We would instead become real
citizens of a real EU Federation and would owe it and its institutions the first duty of citizenship,
which is to obey that State’s laws and give it our real loyalty and allegiance.
The Treaty Establishing a Constitution for Europe would thus be the fulfilment of the federalist
goal of the 1950 Schuman Declaration which we are asked to honour on Europe Day.
11
COMMENTING ON THE RESULTS OF THE REFLECTION PERIOD
By Klaus Heeger (July 2006)
WHAT ARE THE RESULTS OF THE FIRST PHASE OF THE REFLECTION PERIOD? WHAT SO-CALLED
EUROPEAN VISIONS AND VALUES IS THE FUTURE EUROPEAN UNION SUPPOSED TO BE BUILT
UPON? KLAUS HEEGER ANALYSES WITH IRONY AND SARCASM THE OUTCOME OF THE
REFLECTION PERIOD AND THE CONCLUSIONS OF THE JUNE SUMMIT.
"It is necessary to wait, but it is urgent to act”

Josep Borrell, President of the European Parliament on 15 June 2006.
"A quoi bon une telle réunion pour simplement constater qu’il est urgent de
ne rien faire?"
French diplomat quoted by Jean Quatremer, French journalist from “Libération” 1
THE COURSE OF EVENTS
Noting that citizens had “expressed concerns and worries” which had “to be taken into
account”, the June 2005 European Summit called for a period of reflection “to enable a broad
debate to take place in each of our countries, involving citizens, civil society, social partners,
national parliaments and political parties”. Both the Member States and the European
institutions were called upon “to make their contributions”. Of the European institutions, the
ball was explicitly put in the court of the European Commission as having “a special role in this
regard.”
Communicating to death
Taking the European Council by its word, being well-trained in communicating
communications2, and being in the middle of communicating new communications anyway3,
the Commission adopted its “Plan D” initiative4; its “Action Plan to (even further) improve
communicating Europe by the Commission”5 and republished the same content in a more
colourful and condensed way on 16/01/20066.
Then, in February 2006, a new communication (White Paper) on a European Communication

Policy was published7. Therein, the vision of a European Public Sphere and a strategy on how a
more lenient media could be “involved more effectively in communicating Europe” was
described.
While obviously aiming at communicating interested citizens to death and being skilled in
underpinning everything by a plethora of communications, strategies, guidelines, approaches
or action plans, the Commission’s “strategic principles” basically consisted of listening to the
citizens in order to be able to assess their “views on the future of the European project as well
as citizens’ support for and expectations of European policies and actions”.
Surveys on the future of Europe

Accordingly, two surveys on the future of Europe aimed at assessing citizens´ “views on the
future of the European project as well as their support for and expectations of European
policies and actions” were published at the beginning of May 20068.
Yet before any communication-harassed citizen could calmly assess them, two new
communications from the Commission9 had already analysed the surveys’ results and, in a
12
communication to the European Council, demanded a “Europe of results” (to become the
leading slogan for the coming years).
This was given to mean more competences and activities for the EU relating to economic
integration, to “delivering” the Single Market, to employment, social and health policies, to the
area of Freedom Security and Justice, and finally to the EU´s role in the world.
The European Parliament comes in

In the meantime, the attentive breathless citizen could observe how the European Parliament,
making itself busy (not reading the Commission’s communications but) blaming the European
Commission and the Member States for their lack of commitment, felt called upon to take the
lead too: It adopted the so-called “Duff- Voggenhuber” report10 (with almost no “Duff” and
hardly any “Voggenhuber”11).
Being less sensitive than the Commission which, although communication-obsessive, had
politely played the ball back to Member States by stating in its Plan D communication that the
primary responsibility in fact rested with them, the European Parliament was not willing to pass
the ball to anyone. It demanded so-called ‘Parliamentary Forums’ be jointly organized with
national parliaments to make “comprehensive recommendations to the European Council
about how the Union should proceed to find the way out of the crisis”.
Despite this idea (and its author) being given the cold shoulder by not just a few Member
States´ governments and parliaments, the European Parliament (more used to talk, than to
listen) adopted the “Leinen-report”12, as a follow-up to the discussions, in Brussels on 8 and 9
May 2006 it. Therein it concluded that it had actually come to no conclusion at all, and that
although “a deeper analysis will be needed so as to allow proposals to be developed in 2007”,
the constitutional process of the EU should nevertheless be continued.
In other words, as President Josep Borrell put it the next day, “it is necessary to wait, but it is
urgent to act” and although “our citizens have sent many messages, sometimes contradictory
ones”, “we must first continue the ratification process”. Here too, thoughtful European citizens,
who were supposed to be listened to, might have been surprised by the hastiness and clarity of
these conclusions.
The Summit
The European Council, meeting on 15 June 2006 for what quickly went down in the history
books as the most boring Summit of all times (except when a football player scored during a
World Cup game), finally came to a conclusion destined to shake the foundations of the entire
European construction project for the next decades: A “two-track approach”. First: best use of
the possibilities offered by the treaties (which means “continue working as usual”). Second: a
new report in the first half of 2007 (which means: “better leave it to Angie (Merkel)”). In
summary: no conclusions at all. The written report on information provided by Member States
about their national debates (doc. 9701/1/06 REV1), which served as a basis for the Council’s
assessment, was not even disclosed to the public.
However, the PR-trained leaders provided the press with the most interesting analyses: While
Austrian Chancellor Wolfgang Schüssel said that “we are moving away from the rhetoric” to the
“delivery of concrete results”, former and present Commission presidents Romano Prodi and
José Manuel Barroso, notorious for their underdeveloped sense of reality, stated respectively
that “This is the European Council of departure” and that it is “clearly a good consensus”13.
13
Although we might envy these Members of the European Council for their naïve and intrepid
EU- “joie de vivre”, their hazy and contradictory conclusions once more left a guessing
European public behind14.
Summing it up
So to sum up: Those genuinely called upon to launch a debate (the European Council, the
Member States and the Commission) are –despite a tendency towards obsessive
communication (the Commission)- obviously rather willing to pass the buck to each other (the
European Council, the Member States and the Commission); or have provided information on
their national debates of such nature (the Member States) that the report based on it could not
be disclosed to the public (doc. 9701/1/06 REV1). The one institution nobody really wanted to
launch a debate, let alone to take its lead (the European Parliament), has done exactly that.
Furthermore, in line with the above, all have come to the conclusion that they actually have
nothing to say. Yet despite lacking conclusions, all have nevertheless demanded a continuation
of the ratification process and a Europe of results (meaning more Europe).
Their procedures and respective tasks being far from absolutely clear, let us at least try to
conceive the visions that are shared by the leaders, which form the basis of the “good
compromise” of that Summit of “departure”, and which are likely to be moulded into some sort
of a new legal framework.
THE EU LEADERS´ VISIONS (TO BE MOULDED INTO A FUTURE TREATY OR

CONSTITUTION?)15
A first assessment reveals the imagination and vision of European leaders as to the future of the
EU to be more boundless, varied and colourful than expected, especially with respect to
proceeding further with the EU Constitution.
Saving the present draft?

Some propose that the Constitution should be saved as it was originally drafted, for example,
Belgian Prime Minister Guy Verhofstadt and former Convention president Valéry Giscard
D´Estaing. According to the time of day and her mood, German Chancellor Angela Merkel also
agrees, wishing a 2007 mandate to revive it “because we need Europe and therefore we need
the Constitution”. So does French President Jacques Chirac, “because Airbus shows that the EU
functions well”. Further, the European Parliament “demands in any case that every effort be
made to ensure that the Constitution enters into force
during 2009”.
Yet despite this enthusiasm, the weary no-votes in France and in the Netherlands would still
have to be overcome. Could this perhaps be through ratification by a majority of states, as
Declaration 30 (recently unburied by Belgian Prime Minister Guy Verhofstadt) suggests16? Or
maybe by resubmitting the same or slightly amended text to new referenda in France and in
the Netherlands? This latter alternative at least has been brushed off by the Dutch Government,
sometimes by the French government too, and also by European Parliament President Josep
Borrell - despite Borrell`s unconditional calls for the ratification process to continue.
Maybe countries that reject the Constitution should be expelled from the Union, as have
suggested former Commission President Romano Prodi (but that was long time ago), French
President Jacques Chirac (and that was very long time ago) and also as Luxembourg’s Prime
Minster Jean- Claude Juncker has suggested to the UK (strangely that was just some days ago)?
14
But the extremely inconvenient article IV- 447 of the draft Constitution demands ratification by
all Member States before it can enter into force.
Supplementing the present draft?

The draft Constitution could remain unchanged, but be supplemented by declarations or
protocols stressing certain issues of importance to its opponents. Yet here too France and the
Netherlands would veto such moves as disrespectful towards the “No” votes. Those dismissing
this plan include Dutch Prime Minister Jan Peter Balkenende, Dutch Minister for European
Affairs Atzo Nicolaď, sometimes French President Jacques Chirac and usually French Minister of
Interior Nicolas Sarkozy.
Cherry-picking?
A third option is to save only parts of the Constitution, like parts I and II (as sometimes
advocated by the French and the Germans governments and usually by Austrian Chancellor
Wolfgang Schüssel) or through “de facto” implementations? However, according to official
statements from the European Parliament, the European Council (at least according to
Taoiseach Bertie Ahern) and from Commission President José Manuel Barroso “there will be no
“cherry-picking” on the Constitution”.
What if the draft was changed just a little bit, as Portuguese Prime Minister Jose Socrates and
former Convention Vice-President Giuliano Amato have suggested? But the Dutch and
(sometimes) the French have announced their opposition to that proposal. So what if the draft
was changed a little bit more than just a little bit, in order not to disrespect the Dutch and the
French voters? Yet would it be just too problematic to determine who would decide what is “a
little bit more than just a little bit” and what would not be seen as (the commonly excluded)
“cherry-picking”?
A new treaty?
Maybe it should be a totally new Treaty, as favoured by Czech President Vaclav Klaus,
sometimes by Polish President Lech Kaczynski (pleading alternately for a new less centralist
kind of Charter or a brand new constitution) and usually by Italian Prime Minister Romano Prodi
(“Long live a new Treaty”). Yet the problem would be how to convey to countries which have
already ratified the previous one that their efforts have all been for nothing. As Spanish Prime
Minister José Luis Rodríguez Zapatero said, “How should I explain that to the Spanish people?”.
Renaming it constitutional treaty or simply treaty?

What if it was re-named “Constitutional Treaty” or simply “basic treaty”? Besides the fact that
the concerns noted above would also apply to this option, Austrian Chancellor Wolfgang
Schüssel has said that whether the outcome of the process should be named a “constitutional”
treaty or not would not be a high priority.
Leave the treaties?

So maybe the present treaties, as amended by the Treaty of Nice, should just remain as they
stand? Yet the European Parliament, the European Council and the Commission (basically
everyone, even French President Jacques Chirac who, back in December 2000, called the Nice
Summit a great success for the French Presidency) stress that “unless Member States approve a
new Treaty, the Union cannot enlarge beyond Bulgaria and Romania”. The European
Parliament “Duff- Voggenhuber” report even calls it impossible “to further enlarge the Union
after the accession of Bulgaria and Romania on the basis of the Treaty of Nice”.
15
Besides maybe being mere wishful thinking, "this is only true from a formal point of view
because Nice indeed takes into account explicitly only the accession case of these two
countries".
Indeed, the treaties´ institutional provisions can be amended by accession acts of future
enlargements. Therefore Danish Prime Minister Fogh Rasmussen also said, that “further
enlargement is not dependent on a new treaty, it is not a prerequisite for enlargement”. In an
abrupt change of mind, Austrian Chancellor Wolfgang Schüssel suddenly sympathised with the
present treaties too, saying shortly after the Summit that the “EU could live without any new
treaty” at that “the needed institutional reforms could be done within 5 minutes”. (Maybe he
was just tired of having had to be President and nice for so long.)
Yet with the evident blurred hope that the process of ratification “will be completed”, and that
“more” Europe is needed, this option of leaving the present Treaties as they stand does not
really seem to be a serious alternative, at least from the official point of view.
Could the summit agree on anything at all?

Yes, the summit did agree on something: On the date of the next, perhaps similarly clear,
assessment. This is to be the first half of 2007 (for the German report) and 2008 (for the entire
reflection period). Or was it 2009 (Danish Prime Minister Fogh Rasmussen), or 2010
(Luxembourg Prime Minister Jean-Claude Juncker)? Or was there any deadline at all (Polish
Prime Minister Kazimierz Marcinkiewicz and Swedish Prime Minister Göran Persson)?
Jacques Delors, former French Commissioner, sharply criticised the European leaders for their
lack of vision. “A single vision, a shared vision of Europe no longer exists.”
But how wrong could he be! The European Council did agree on 25 March 2007 to
commemorate 50 years of the treaties of Rome by adopting a “political declaration setting out
Europe’s values and ambitions and confirming their commitment to deliver them”… Austrian
Chancellor Wolfgang Schüssel even considered a joint Declaration on the common values of
the EU as “the glue that keeps the EU together” (although he said that at the beginning of the
Summit).
Meanwhile German chancellor Angela Merkel declared she wanted a Constitution with
reference to God. Polish President Lech Kaczynski said (although he said something else before,
but who remembers these little details?) that he actually wanted a constitution, but “on good
bases” adding, “not on a German basis”. That is what happens when the Pope becomes
German: Even with God, the Poles don’t want any constitution on a German basis.
We should be seriously looking forward to 25 March 2007.
THEY DON’T KNOW WHAT THEY WANT FROM EUROPE, BUT THEY KNOW THEY WANT
“MORE” EUROPE
Not being able to agree on anything, the Summit expressed the hope that the process of
ratification “will be completed”, while at the same time 7 member States have put their
ratification processes on hold.
So, while nobody knows why, the ratification process must continue…
And, while no one knows what one wants from Europe, one knows that one wants “more”
Europe…
16
Because there is one thing, at least, which is clear: Whatever form of Constitution, even an
amended or a newly drafted Treaty will do, it will shuffle further competences to the EU.
How can that be? In relation to the EU, the leaders of today have no common goals, no
common political and economical concepts, and, as Jacques Delors said, no common visions.
So why, and above all how, can this diversity be moulded into whatever legal foundation that
will further centralise competences?
History and politics teaches us: Nobody likes to be ruled, yet everybody likes ruling. The EU is
disdained when it imposes others´ concepts on us, yet loved when it helps us to impose ours.
How can we be sure that we will always be on the side of the imposers, and not on the side of
the imposed upon? Isn’t there, especially in light of the cacophonies and divergences discussed
above, an increasing risk that the future EU will no longer be based on common convictions
and values, but on mere impositions and obligations, more and more determined by those
sitting at the heart of that gigantic entity?
It is obviously futile to recall the now silent messages of the “Laeken Declaration”, such as the
statement that adjusting the division of competences “can also lead to restoring tasks to the
Member States” and such as the question of how it could be made more clear “that any powers
not assigned by the Treaties to the Union fall within the exclusive sphere of competence of the
Member States?”.
When we have a look at the recently published surveys, those interpreting these as a strong
message for more Europe obviously failed to notice another silent message: Citizens still
consider the EU as “a symbol of cooperation between the Member States”17.
NOTES:
1 http://bruxelles.blogs.liberation.fr/coulisses/2006/06/interlude.html#more
2 Between 2001 and 2004, the European Commission adopted three communications dealing
with information and communication: Communication on a new framework for cooperation
on activities concerning the information and communication policy of the European Union
(COM(2001)354); Communication on an information and communication strategy for the
European Union (COM(2002)350); Communication on implementing the information and
communication strategy for the European Union (COM(2004)196).
3 Information note from Vice-President Wallström of the Commission: Communicating the
Constitution: 10 concrete actions by the Commission, 2 March 2005
4 Communication from the Commission COM(2005) 494 final
5 SEC (2005) 985 final, 20.07.2005
6 See all documents on Margot Wallström´s website:
http://ec.europa.eu/commission_barroso/wallstrom/press/key_en.htm
7 White paper on a European Communication Policy - COM(2006) 35 final
8 Special Eurobarometer 251, May 2006; OPTEM: The European citizens and the future of
Europe – Qualitative study in the 25 Member States, May 2006
9 “A Citizens’ Agenda - Delivering Results For Europe”, Communication from the Commission to
the European Council, COM(2006) 211 – “The Period of Reflection and Plan D”,
Communication from the Commission to the European Council, COM(2006) 212 [pdf - 133kb]
10 European Parliament resolution on the period of reflection: the structure, subjects and
context for an assessment of the debate on the European Union (2005/2146(INI)), 19 January
2006 (named after its rapporteurs Andrew Duff and Johannes Voggenhuber)
11 The resolution which was finally adopted strongly differed from the initial proposals
17
12 European Parliament resolution on the next steps for the period of reflection and analysis on
the Future of Europe (B60327/2006), 14 June 2006 (named after its rapporteur Jo Leinen)
13 All quotes from Euobserver, “EU leaders gloss over big constitution questions”, 16.06.2006
14 As the Summit e.g. also stated, “citizens remained committed to the European project”. It
also expressed its hope that the process of ratification “will be completed”. Furthermore, it
concluded that, although “the Union’s capacity to absorb new Member States” must be
carefully debated, “the European perspectives” of Turkey, Croatia, and the Western Balkans
are “re-confirmed”.
15 The quotes are drawn from articles published in Euobserver, Spiegel online, Financial Times,
diepresse.com, AFP, Libération, Chronique sur le Débat en Europe du 22/06 (published by
the European Parliaments Directorate General “Information”
16 See also the articles published in the EUWatch issue 1 June 2006 “Reflecting by ratifying?”
and “Pushing the Dead Horse”
17 Special Eurobarometer 251, page 19 issue 2-11:Layout 1 12/12/2006 15:52 Page 33
18
A PROPOSAL FOR A NEW DYNAMIC FEDERALISM IN EUROPE1
By Bruno S. Frey (October 2008)
The coming together of Europe is a fascinating and wonderful development. It seeks to

overcome the perennial strife between the European nations whose worst manifestations were
the two world wars of the last century and the civil wars of long duration and bitterness in the
former Yugoslavia, Ireland, the Basque country and Corsica. But European history is not just a
catalogue of belligerent behaviour. Europe can be proud of its achievements in the arts,
sciences, and in its way of life. The basis of it all is diversity: a Scot is unlike a Sicilian, a Breton
unlike a Bavarian, and an Andalusian unlike an Aland islander, and so on.
The vision developed in this article is based on two basic ingredients: the future Europe has to
be peaceful, and maintain its diversity. The proposal of democratic decentralised jurisdictions
drastically differs from the European Union existing today. In particular, it emphasises the
citizen in the political process, and proposes to decentralise the political process to the
functionally most appropriate level. The proposal thus seeks to redress the two well-known and
often lamented shortcomings of the European Union: its ‘democratic deficit’ and its
‘decentralisation deficit’. The proposal in this chapter also differs markedly from other reform
plans, seeking to mitigate the two deficits, which are currently being discussed.
The favoured answer to the democratic deficit is said to lie in further strengthening the
European Parliament. But this measure does not necessarily engage the citizens of the
European Union (EU) more fully in the political process. Rather, it may even increase the
distance between the citizens and the decision-making body (Strasbourg or Brussels are even
more remote than the national capital). Moreover, the concentration of over 600 professional
politicians tends to invite the formation of yet another ‘classe politique’, now at the European
level, similar to the ‘Eurocrat’ counterpart of national bureaucrats.
The current plan to mitigate the ‘decentralisation deficit’ does not fare any better. It invokes the
principal of subsidiarity, something that is ineffective as long as the regions of Europe
financially depend on Brussels and the central governments of their nations. Political
decentralisation requires the power to tax at lower echelons of government.
The vision proposed here outlines a model for the European cooperation in which nation
states, retaining great part of their sovereignty, can efficiently cooperate on European level.
The proposal should not be understood to be a wholesale critique of the European Union.
Rather, European integration has been very successful in opening markets within its confines.
The four freedoms of liberal trade with respect to goods, services, capital and labour have been
achieved to a considerable degree. Though protectionist tendencies still exist and make
themselves felt almost daily, the European Union can be proud of having achieved a free
market covering almost the whole of Western Europe.
The European Union is, however, not just a success story, but also one of failure. A flawed
concept of Europe has increasingly taken over, and the unification process has taken a wrong
turn. While these tendencies have accumulated over time, they have become dominant
recently. This mistaken concept of Europe consists in identifying integration with
homogenisation and harmonisation. There are hundreds of laws and directives in the European
Union working in this direction. But the essence of Europe is its diversity. The strength of
Europe is its wide variety of ideas, cultures and policies. Diversity, and not unity, has been the
19
crucial element of Europe’s rise in history and continues to be so. A homogenised Europe loses
its raison d'être, and will lose its economic and political role.
For this reason a fifth freedom shall be added to the existing four: the freedom to establish
some kind of functional, overlapping and competing jurisdictions.
They will be tailed by their acronym FOCJ (any one jurisdiction is called FOCUS). FOCJ form a
federal system of governments that is not dictated from above, but emerges from below as a
response to citizens’ preferences. This fifth freedom requires a constitutional decision to give to
the most basic political units (communities) a certain degree of independence so that they can
engage in forming FOCJ. Citizens must be given the right to establish FOCJ by popular
referenda, and political entrepreneurs must be supported and controlled by the institution of
popular initiatives. The FOCJ themselves must have the right to levy taxes to finance the public
services they provide.
These federal units proposed here have four essential characteristics.

They are as follows.
- Functional (F): the new political units extend over areas defined by the tasks to be
fulfilled;
- Overlapping (O): in line with the many different tasks (functions) there are
corresponding governmental units extending over different geographical areas;
- Competing (C): individuals and/or communities may choose the governmental unit
they wish to belong to, and they have the political right to express their preferences
directly via initiatives and referenda;
- Jurisdictions (J): the units established are governmental; they have powers of
enforcement and can, in particular, levy taxes.
FOCJ are based on theoretical propositions advanced in the economic theory of federalism.
They nevertheless form a governmental system completely different from the one suggested in
that literature. While the economic theory of federalism analyses the behaviour-of given
political units at the different levels of government, FOCJ emerge in response to the
‘geography of problems’.2 The four elements of FOCJ are now related to economic theory as
well as to existing federal institutions, pointing out both similarities and differences with
existing concepts.
Functions
A particular public service, which benefits a certain geographical area, should be financed by
the people living in that locality; there should be no spill-overs. Different governmental units
can cater to regional differences in the populations’ preferences or, more precisely, to its
demands. To minimize cost, these units have to exploit economics of scale in provision. As the
latter may strongly differ from sanctions (say, between schools, police, hospitals, power plants
and defense), there is an additional reason for uni-functional (or few-functional) governmental
units of different sizes. This is the central idea of ‘fiscal equivalence’ as proposed by Olson
(1969) and Oates (1972)3. This endogeneity of the size of governmental units constitutes an
essential part of FOCJ. However, fiscal equivalence theory has little concern with decision-
making within functional units. The supply process is either unspecified, or it is assumed that
the mobility of persons (and of firms, a fact rarely mentioned) automatically induces these units
to cater to individual preferences.
20
Overlaps
FOCJ may overlap in two respects: (i) FOCJ catering to different functions may overlap; (ii) two
or more FOCJ for the same function may geographically intersect (a multitude of school FOCJ
may exist in the same geographical area). An individual or a political community normally
belongs to various FOCJ at the same time. FOCJ need not be physically contiguous, nor have a
monopoly over a certain area. Thus, this concept completely differs from archaic nationalism
with its struggle over territory. It also breaks with the notion of federalist theory that states that
units at the same level should not overlap. On the other hand, in that respect it is closer to
Buchanan’s (1965) ‘clubs’ “which may intersect.4
Competition
The heads of FOCJ are induced to conform closely to their members’ preferences via two
mechanisms: the individuals’ and communities’ option to exit, mimicking market competition,
and their right to vote, establishing political competition (Mueller, 1989). It should be noted
that migration is only one means of exit; often, membership in a particular FOCUS can be
discontinued, without changing one’s location. Exit is not restricted to individuals or firms; as
indicated earlier, political communities as a whole, or parts of them may also exercise this
option. Moreover, exit may be total or only partial. In the latter case, an individual or
community only participates in a restricted set of FOCUS activities.
Secession rights ought to be an important ingredient for a future European constitution, as

advocated by Buchanan (1991) and the European Constitutional Group (1993). This is in marked
contrast to the prevailing system within nation states and federations where the right to
secede is usually absent and prevented by force. Current European treaties do not provide for
the secession of a nation from the European Union, and a fortiori for part of a nation.
For FOCJ to establish competition between governments, exit should be as unrestrained as

possible. In contrast, entry need not necessarily be free. As in Buchanan-type clubs, jurisdictions
and individuals may be asked to pay a price if they want to join a particular FOCUS and benefit
from its public goods. The existing members of the particular FOCUS have to democratically
decide on an adequate entry price for a new member.
Competition also needs to be fostered by political institutions, as the exit option does not
suffice to induce governments to act efficiently. Citizens should directly elect the persons
managing the FOCJ, and should be given the right to initiate popular referenda on specific
issues. These democratic institutions are known to raise efficiency in the sense of catering to
individual preferences; on elections, see Downs (1957) and Mueller (1999); on referenda B.S.
Frey (1994).
Jurisdictions
A FOCUS is a democratic governmental unit with authority over its citizens, including the
power to tax. Two forms of membership can be distinguished. First, all citizens automatically
become members of the FOCJ to which their community belongs. In that case, an individual
can only exit via mobility. Second, individuals may freely choose whether they want to belong
to a particular FOCUS, but while they are its citizens, they are subject to its authority. Such FOCJ
may be involuntary in the sense that one must belong to a FOCUS providing a certain function,
say schooling, and must pay the corresponding taxes. An analogy here is health insurance,
which in many countries is obligatory, but where individuals are allowed to choose an
insurance company. The citizens of such a school-FOCUS may then decide that everyone must
pay taxes in order to finance a particular school, irrespective of whether one has children. With
respect to FOCJ providing functions with significant redistributive effects, a minimal regulation
21
by the central government may be in order so that, for instance, citizens without children do
not join ‘school-FOCJ’ which in effect do not offer any schooling and have correspondingly low
(or zero) taxes. In this respect, Buchanan-type clubs differ from FOCJ, because they are always
voluntary, while membership in a FOCUS can be obligatory.
An evaluation of focj benefits

FOCJ compare favourably to traditional forms of federalism. Due to the concentration on one
functional area, the citizens of a particular FOCUS have better information on its activity, and
are in a better position to compare its performance with other governments. As many benefits
and costs extend over a relatively limited geographic area, FOCJ are often likely to be small. The
exit option, which arises from the existence of overlapping jurisdictions, can guarantee that
suppliers take individual preferences into account.
On the other hand, FOCJ are able to provide public services at low cost because they are
formed in order to minimise inter-jurisdictional spill-overs and to exploit economies of scale.
When the benefits of a specific activity indivisibly extend over large areas, and there are
decreasing costs, the corresponding optimal FOCUS may cover many communities, several
nations, or even Europe as a whole. An example may be defence against outward aggression
where the appropriate FOCUS may extend over the whole of Europe (and beyond the European
Union).
The threat of exit by dissatisfied citizens or communities, and the benefit of new citizens and
communities joining the FOCUS, gives an incentive to take individual preferences into account
and to provide the public services efficiently. Another advantage of FOCJ is that they open up
the politicians’ cartel (classe politique) to functionally competent outsiders. While all-purpose
jurisdictions attract persons with non-specialised knowledge into the political arena, in FOCJ,
persons with a well-grounded knowledge in a particular functional area (say education or
refuse collection) are successful.
A federal web composed of FOCJ certainly affects the role of nation states. They will certainly
lose functions they presently do not fulfil according to the populations preferences, or which
they produce at higher cost than FOCJ designed to exploit cost advantages. On the other hand,
the scheme does not purport to do away with nations but allows for multi-national as well as
small-scale alternatives where citizens desire them. Nation states continue in so far as they
provide functions efficiently according to voter preferences.
Alleged problems
Up to this point the advantages of FOCJ have been emphasised. However, there are also
possible problems that are now discussed.
Overburdened citzens
In a federal system of FOCJ, each individual is a citizen of various jurisdictions. As a
consequence, individuals may be overburdened by voting in elections and referenda taking
place in each FOCUS. However, citizens in a direct-democratic FOCUS find it much easier to
politically participate, as they have only to assess one or a few concrete issues at a time.
Overburdened consumers
An individual is confronted with a multitude of suppliers of public services, which could make
life difficult. This is the logical consequence of having more options to choose from, and is
similar to supply in the private sector. If citizens nevertheless find it to be a problem, a
22
governmental or a private advisory service can be established which offers information and
support to consumers.
‘Need’ to coordinate the activities of focj

While co-ordination is obviously often needed, co-ordination between governments is not
necessarily beneficial. It sometimes serves to build cartels among the members of the classe
politique who then evade or even exploit the population’s wishes (see CEPR, 1993; Vaubel,
1994; B.S. Frey, 1994).
As far as welfare in creasing coordination is concerned, its need is reduced because the FOCJ
emerge in order to minimise externalities. If major spill-overs between FOCJ exist, new FOCJ
will be founded taking care of these externalities.
Redistribution
It may be claimed that all forms of federalism - including FOCJ - undermine re distributive
goals. Moreover, the formation of FOCJ could be based on members’ income. This fear is
unwarranted, as long as redistribution is based on solidarity, or an insurance principles. A
problem emerges when redistribution is a pure public good, and requires enforcement to
prevent free riding. However, recent empirical research (Gold, 1991; Kirchgassner and
Pommerehne, 1996) suggests that substantial redistribution is feasible in federal systems.
Historical precursors
Decentralised, overlapping political units have been an important feature of European history.
The competition between governments in the Holy Roman Empire of German Nations,
especially in what is now Italy and Germany, has been intensive. Several of these governments
were small. Many scholars attribute the rise of Europe to this diversity and competition
between governmental units, which fostered technical, economic and artistic innovation. The
unification of Italy and Germany in the nineteenth century, which has often been praised as a
major advance, partially ended the stimulating competition between governments and led to
deadly struggles between nation states. Some smaller states escaped unification: Liechtenstein,
Luxembourg, Monaco, San Marino and Switzerland stayed politically independent, and at the
same time grew rich.
The above-mentioned governmental units were not FOCJ in the sense out - lined in this
contribution but they shared the characteristic of competing for labour and capital (including
artistic capital) among each other. However, history also reveals examples of jurisdictions even
closer to FOCJ. The highly successful Hanse prospered from the twelfth to the sixteenth
centuries; and comprised inter alia Lubeck, Bremen, Koln (today German), Stettin and Danzig
(today Polish), Kaliningrad (today Russian), Riga, Reval and Dorpat (today parts of the Baltic
republics) and Groningen and Deventer (today Dutch). Furthermore, London (England), Bruges
and Antwerp (to day Belgian) and Novgorod (today Russian) were Handelskontore or
associated members. It was clearly a functioning governmental unit providing trade rules and
facilities that were not geographically contiguous.
Partial existence today

In two countries functional, overlapping and competing jurisdictions exist to some degree.
They do not in all cases meet all the requirements of FOCJ specified above, but nevertheless
show that democratic functional jurisdictions are viable.
Us special districts
Single-purpose governments play a significant role in the American federalist sys tem. Their
number has increased more quickly than other types of jurisdictions (Zax, 1988). There are both
23
autonomous and democratically organised as well as dependent special districts (say for fire
prevention, recreation and parks).
Swiss communes
Many Swiss cantons have a structure of overlapping and competing functional jurisdictions
that share many features of FOCJ. For example, in Zurich (with a population of 1.2 million, an
area of 1,700 square kilometres; and tax revenue of CHF 2,800 million) there are 171 political
communes (with a tax revenue of CHF 3,900 million) which in themselves are composed of
three to six independently managed, democratically organised communes devoted to specific
functions and raising their own taxes. Examples for such types of functional communes can be
found in Zurich as well as in the cantons of Glarus and Thurgau.
Comparison to other proposals

FOCJ differ in many crucial respects from other proposals for a future European constitution.
One of the most prominent is Buchanan (1991) who stresses individual nation’s right to secede
but, somewhat surprisingly, does not build on Buchanan-type clubs. The European
Constitutional Group (1993) focuses on the example of the American constitution, and presents
constructivist proposals with respect to the houses of parliament and the apportioning of
weighted voting rights amongst countries. Overlapping jurisdictions and referenda are not
considered, and the exit option is strongly restricted.
The proposal by politicians at the European level (Herman report of the European Parliament,
1994) mainly deals with the organisation of the parliamentary system and national voting
rights, and to a substantial extent accepts the existing treaties as the founding blocks of the
European constitution. The crucial idea of competition between governments is neglected; the
report prefers to speak of the necessary- ‘co-operation’ between governments - which in fact
often serves to undermine the threat of competition.
FOCJ are also quite different from the regions envisaged in existing European treaties and
institutions. A major difference is that FOCJ emerge from below while the ‘European regions’
tend to be established from above. Moreover, their existence strongly depends on the
subsidies flow ing from the European Union and the nation states. In contrast, the concept of
FOCJ corresponds to Hayek’s (1960) non-constructivist process view. One cannot, a priori,
determine which FOCJ will be efficient in the future. This must be left to the competitive
democratic process at the level of individuals and communities.
‘Subsidiarity’ as proclaimed in the Maastricht Treaty is generally recognised to be more a vague

goal than a concept with content. Even if subsidiarity were taken seriously, it would not lead to
a real federal structure be cause many (actual or prospective) members of the European Union
are essentially unitary states without federal subunits of significant competence (examples are
the Netherlands, France or Sweden). The ‘regions’ existing in the European Union (examples are
Galicia and Catalonia in Spain, or South Tyrol and Sicily in Italy) are far from being units with
significant autonomous functional and fiscal competencies.
The Council of Ministers is a European decision-making institution based on federal principles

(but only nations are represented) and organised according to functional principles (or at least
according to the corresponding administrative units). However, this Council is only indirectly
democratic (the ministers are members of governments which are democratically legitimised
by the representative system) and the deliberations are not public. Exit from the European
Union is not formally regulated, and exceptions to specific aspects of agreements reached (as
in the Maastricht Treaty concerning the European Monetary Union, the Protocol on Social
Policy, or in the Schengen Treaty concerning the free movement of persons) are granted
24
reluctantly. Indeed, they are seen as damaging the ‘spirit of Europe’. Whether differential
degrees of European integration are framed as models of ‘variable geometry’, ‘multi-track’;
‘multispeed’, ‘two-tier’, ‘hard core’, ‘concentric circles’, or as ‘Europe a la carte’, it always elicits
fierce opposition. In a system of FOCJ, in contrast, functional units not covering everyone are
taken as a welcome expression of heterogeneous demands among European citizens.
Concluding remarks
In view of the major advantages of FOCJ the economist’s standard question arises: if this type of
federalism is so good, why is it not more in evidence?
The organisation of states today does not follow the model of FOCJ for two major reasons. An
obvious, but crucial one, is that individuals and communities are prohibited from establishing
such jurisdictions, and in many countries of the European Union, communities are not even
allowed to formally collaborate with each other without the consent of the central
government.
Second, a system of FOCJ cannot be observed because it violates the interests of politicians and
public officials at the higher levels of government. The emergence of FOCJ reduces the public
supplier’s power and increases citizens’ influence via newly introduced mechanisms of
competition by exit and entry, and by elements of direct democracy. Both are regularly
opposed by the classe politique. As politicians’ discretionary room and therefore the rents
appropriable are the larger, the higher the federal level, they favour a shift of competencies in
that direction, and oppose local decision-making, especially by FOCJ, wherever possible.
In the countries of the European Union (and elsewhere) a federal system of FOCJ will not arise if
these barriers are not overcome. A necessary condition are new constitutional rules allowing
the formation of FOCJ and giving citizens and governments the right to appeal to the
Constitutional Court in case they are blocked.
NOTES:
1 The ideas developed here are based on joint research with my co-worker Reiner
Eichenberger.
2 Similar ideas can be found in Montesquieu (1749). Burnheim (1985) mentions similar
elements. In the economics literature a related concept has been pioneered by Tullock
(1994), who calls it ‘sociological federalism’. Casella and Frey (1992) discuss the concept and
refer to relevant literature.
3 The principle of fiscal equivalence implies that each level of government should finance its
assigned functions with funds it raises itself.
4 Based on work by American economists Charles Tiebout (1924-1968) and James M. Buchanan
(1919- ), the theory of clubs studies the optimal size of groups of people with a shared
consumption (pools, clubs, museums), and the optimal provision of the goods or services. A
club good is excludable in that it is possible to prevent its consumption by entire groups of
people, but it is also a non-rival good in that its consumption by one individual does not curb
the consumption of another individual.
25
A MORE SELF-RELIANT EUROPE

The response to global economic and energy insecurity
By Collin Hines (October 2008)
With the Irish No vote, the slowing down of Europe’s economy, and energy and food security
rocketing up national agendas, the continent is at a crossroads. While its original ambition to
guarantee peace in Europe has been extraordinarily successful, it now faces these new
challenges and dilemmas. In particular, does it continue with its priority of evermore open
markets and hence dependence on the rest of the world for an increasing amount of its future
energy and food supplies, and for markets for its products? Or does it tackle the challenges of
energy security, job security and food security by taking a different direction, based on greater
decentralisation, sustainability, and self-reliance?
The EU has enormous potential to spread peace, freedom and security in and around Europe,
and to promote and protect democracy and human rights at home and throughout the world.
It has the potential to be a true pioneer in the transition to low carbon economies, and in living
more lightly on the planet. But to fully achieve this potential, it has to change direction, and to
put democracy and sustainability - rather than trade liberalisation and the single market - at the
heart of its objectives.
Recent European Summits where questions of the global economic slowdown, energy security
and climate change have been high on the agenda, have exposed the contradictions and
tensions that currently bedevil the EU. On the positive side, collective measures on climate
change were agreed, with binding targets to increase the EU’s investment in renewable energy.
Yet, on the negative side, EU leaders drew back from the hard decisions needed to bring about
drastic cuts in emissions required by 2020, for fear of jeopardising the competitiveness of
European industry.
Its time Europe’s leaders realised that it is impossible for the EU to genuinely promote greater
social justice, economic security and environmental sustainability whilst at the same time
continuing to prioritise international competitiveness and maximum economic growth. What is
required is a new direction for Europe to be based on a new goal of maximising self-reliance
through strengthening democratic structures at all levels, and through a process of economic
localisation. To achieve this the Treaty of Rome must be rewritten to further such an approach,
and with it institutional changes needed to ensure such a transition occurs with maximum
democratic involvement of people.
FUTURE CHALLENGES, AND THE COMMON POLICIES REQUIRED TO ADDRESS THEM
The world in 2008 faces challenges unimaginable half a century ago. If the EU is to become
relevant to people’s lives – and enjoy the democratic legitimacy it needs to function fairly,
efficiently and effectively – it must focus its efforts on tackling today’s problems.
It will be impossible for the EU to act with sufficient speed and on the scale required to tackle
the credit crunch, climate change and energy security so long as it continues to put
international competitiveness and ever greater free trade at the top of its agenda. Currently,
the Lisbon Agenda, with its mantra of greater liberalisation, deregulation and privatisation, is
allowed to trump efforts to achieve ambitious, binding emission reduction targets.
26
In order to both rebuild economic security and ensure that social and environmental justice are
at the heart of its domestic and international policies, the EU must set itself a new goal, away
from ever more deregulated trade, and towards the diversification of economies, supporting
greater self-reliance and promoting fair trade.
This could be achieved through “localisation” - a set of interrelated and self-reinforcing policies
that actively discriminate in favour of the more local. It ensures that all goods and services that
can reasonably be provided locally should be. Depending on the context, the “local” can be
part of the nation state, the nation state itself or, occasionally, a regional grouping of nation
states. This approach would provide a political and economic framework for people, their
communities and governments to reclaim control over their local and national economies, in
order to make them as diverse as possible, and to rebuild stability into community life. Over
time, we would gradually move from a situation in which all economies are trying to compete
with each other, to one in which goods and services are provided nationally or locally wherever
feasible and appropriate. This obviously does not mean putting an end to all international
trade. It simply means trying to meet more of our basic needs from closer to home, with long
distance trade reverting to its original purpose - the quest for what cannot be obtained
domestically.
This approach has the potential to increase community cohesion, reduce poverty and
inequality, improve livelihoods, social provision and environmental protection and provide an
all-important sense of security.
FROM THE TREATY OF ROME TO THE TREATY FOR LOCALISATION
Key parts of the EC Treaty that underpin the present damaging free market direction of the EU
need to be replaced with a Treaty for Localisation. (For the detailed changes see
www.carolinelucasmep.org.uk/ 2007/03/09/ an-alternative-berlindeclaration/ ) This would
enable the EU to provide a policy framework that would prioritise economic localisation and
ensure that the policies outlined above can be implemented. This emphasis on the rebuilding
of local, national and regional economies in a way that improves social conditions and
environmental protection could then act as a spur for other regional blocs to consider adopting
a similar radical alternative to globalisation.
In order to build a truly sustainable Europe, the EU needs to be based on a network of states
and agencies with maximum subsidiarity, within an overarching set of high social and
environmental responsibilities, and with freedom for member states to go beyond those
standards if they wish. This would allow the EU to build on its important successes in
environmental and social policy, and enable it to meet the real challenges that lie ahead. The
growing realisation that the era of cheap energy is over aligned with the fact that countries that
once exported food and energy are now keeping more for the use of their own populations
means that there is now no alternative but to shift the priority of the EU towards rebuilding its
own local economies.
Specifically, such an approach could tackle job insecurity by increasing the range of
employment through the re-localisation of manufacturing and services within the countries of
Europe. It could ensure energy security by emphasising decentralised local energy sources and
efficiency, and could stop EU agricultural surpluses and rebuild Europe’s rural economies. The
EU’s localisation emphasis in terms of its trade and economic relationships with developing
countries would become more supportively internationalist. Its purpose would be to promote
increased provision of needs locally and nationally rather than encouraging all developing
countries to try to out-compete each other to export in an open market system, where big
27
business and international capital are the major beneficiaries, and the growth of global
inequality and environmental degradation the twin adverse results.
Localisation is the very antithesis of globalisation, manifest in the EU’s emphasis on ever more
open markets, and which emphasises a beggar-your-neighbour reduction of controls on trade
and contorts all economies to make international competitiveness their major goal.
Localisation involves a better-your-neighbour supportive internationalism where the flow of
ideas, technologies, information, culture, money and goods has, as its goal, the protection and
rebuilding of national and local economies not just within Europe but worldwide. Its emphasis
is not on competition for the cheapest, but on cooperation for the best.
In practice, the policy mix will obviously vary to some degree from country to country. Some
countries are big enough to think in terms of increased self-reliance within their boundaries,
smaller countries would look to a grouping with their neighbours. It will also require a
reorientation of international trade and aid policies, so they contribute toward, rather than
work against, the building of sustainable economies worldwide.
It will be impossible for such a radical change to be introduced by one country alone. Individual
countries will need to co-operate in delivering this project on a regional basis. Regional blocs
like the EU will have a key role to play. Indeed, only Europe and North America are politically
and economically powerful enough to be a counterweight to overcome the forces that are the
major beneficiaries from globalisation - transnational companies and international capital.
Unfortunately, the immediate prospect for the US is that of a Bush programme that deliberately
rolls back key social and environmental protection in order to promote ever greater free trade.
The EU must, therefore, take on the mantle of the major engine for change, and its 50th
anniversary offers it a timely opportunity to do so.
The EU members should work together as a force for peace and for democratic reform of
international institutions, both in terms of resisting war calls at every opportunity and in terms
of staving off the economic problems most likely to lead to future injustices and violent
conflict. Perhaps the greatest of these is the threat posed by energy scarcity, driven both by
‘peak oil’ – the nonnegotiable reality that fossil fuel supplies are already in increasingly rapid
decline – and the increasingly fraught battles over control of remaining energy supplies, in Iraq,
Russia and Venezuela, for example.
By promoting real energy security through renewables, energy conservation and demand
reduction the EU could become a global beacon of how post-carbon industrial societies would
work, providing experience and expertise to help the world overcome the twin challenges of
climate change and the resource-led conflicts invariably exacerbated by energy scarcity.
For example, under a Europe that was emphasising “localisation”, energy would be sourced
first from the locality, then the country, then neighbouring countries, thus minimising
vulnerability to supply disruption, and increasing national security. We would have a crash
programme for as rapid a transfer as possible to maximum energy efficiency, plus a wide mix of
decentralised renewable sources of supply. Such an approach would involve the absolute
minimum use of fossil fuels and no role for new nuclear power stations. This could result in a
transition from existing centralised energy systems to one where as much energy supply as is
feasible is sited in the home, the place of work, and the neighbourhood.
Such a programme of “Real Energy Security” for Europe would not only dramatically reduce
dependence on foreign energy sources, but would also limit the financial and military
28
resources required to protect or obtain such sources - ranging from bribes through to military
intervention.
JOHN MAYNARD KEYNES

I sympathise, therefore, with those who would minimise, rather than those who would
maximise, economic entanglement between nations. Ideas, knowledge, art, hospitality, travel -
these are the things which should of their nature be international. But let goods be homespun
whenever it is reasonable and conveniently possible, and above all, let finance be primarily
national.
POLICY PROPOSALS FOR ACHIEVING “LOCALISATION”
A proposed route to localisation consists of seven interrelated and self-reinforcing policy areas.
The basic steps are:
– reintroduction of protective safeguards for domestic economies; a site-here-to-sell here

policy for manufacturing and services domestically or regionally;
– localising money such that the majority stays within its place of origin; local competition
policy to eliminate monopolies from the more protected economies;
– introduction of resource taxes to increase environmental improvements and help fund

the transition to the Localisation approach;
– increased democratic involvement both politically and economically to ensure the

effectiveness and equity of the movement to more diverse local economies;
– reorientation of the end goals of aid and trade rules so that they contribute to the
rebuilding of sustainable local, national and regional economies both North and South.
Crucially, this is not a “Fortress Europe” approach. Clearly in the short term, developing
countries depend on access to our markets, but much of this is to earn foreign exchange to pay
off debts, which themselves need to be renegotiated or cancelled. The medium and longer
term need is for a strategy that will include significant amounts of aid and development
cooperation - to build stronger national and regional economies in the South, rather than
skewing poorer countries’ economies to prioritise ever more exports to the North, in ever more
damaging competition with each other.
29
THE FUTURE OF EUROPE: Are there alternatives?
By Karoly Lorant (October 2008)
AFTER 50 YEARS OF SUCCESSFUL INTEGRATION AND DEVELOPMENT, THE EUROPEAN UNION,

IN ITS DIMENSION AND COMPLEXITY, HAS REACHED THE POLITICAL AND INSTITUTIONAL LEVEL
OF AN “EMPIRE”. NOW IT HAS TO FACE BOTH THE INTERNATIONAL CHALLENGES OF
GLOBALISATION AND THE INTERNAL PROBLEMS OF A DEMOCRATIC DEFICIT WITH INCREASING
DIFFERENCES AMONG MEMBER STATES. HOW CAN THE UNION RESPOND TO THESE
CHALLENGES? ARE THERE ALTERNATIVES, OR IS THERE ONLY ONE FEASIBLE SOLUTION? THIS
ARTICLE SUGGESTS THAT THERE ARE ALTERNATIVES AT ANY JUNCTURE. THE CHOICE AMONG
THEM WILL DEPEND ON OUR UNDERSTANDING OF THE AGE IN WHICH WE LIVE AND IN
IDENTIFYING THE FORCES AND INTERESTS BEHIND THE DIFFERENT IDEAS.
A BRIEF HISTORY OF EUROPEAN UNITY
Since the collapse of the Roman Empire, the idea of a united Europe has haunted the European
elite through the centuries. Charlemagne’s model for his Frankish empire was Ancient Rome –
indeed, he considered himself the re-newer of the Roman Empire. And although the Frankish
Empire did not last, it was soon followed by the Holy Roman Empire, established by Otto the
Great in 962, which had an almost thousand-year history and was dissolved only in 1806
following the Napoleonic Wars. For much of its history the Holy Roman Empire consisted of
hundreds of smaller kingdoms, principalities, duchies, counties, Free Imperial Cities, and other
domains.
In the late Middle Ages, the Hanseatic League was also established. This was not exactly an
empire but an association of north European trading guilds which existed from the 13th to the
17th century. Hanseatic societies acquired special trade privileges for their members.
With the Islamic expansion from the early Middle Ages, the concept of “Christendom“ led to a
vague concept of a unified Europe - rather as a military ideal without concrete political
intentions. But after the Fall of Constantinople to the Turks in 1453, the first proposals for
peaceful methods of unifying Europe against a common enemy emerged. George of
Podebrady, a Hussite king of Bohemia, proposed the creation of a union of Christian nations
against the Turks in 1464.1
Since then, attempts were made in almost every century to bring together the European States,
or to form overarching empires or alliances.
In 1569, the Polish-Lithuanian ‘personal’ union was transformed into the Polish-Lithuanian
Commonwealth, a federation of sorts which lasted until the partition of Poland in 1795.
Mainly to avoid further devastating wars, major European thinkers often raised the idea of
some kind of unification in Europe. In 1693, William Penn, a pacifist Quaker and founder of the
US state of Pennsylvania, advocated the unification of the English colonies in America and also
advanced a plan for a ‘United States of Europe’, proposing a ‘European diet’, or parliament, with
the aim of preventing further wars.
In 1728, Abbot Charles de Saint- Pierre, an influential and radical French writer, proposed the
creation of a European league of 18 sovereign states, with a common treasury, no borders and
an economic union.
30
After the American Revolution of 1776 the vision of a ‘United States of Europe’ similar to the
United States of America was shared by some prominent Europeans, notably the Marquis de
Lafayette and Tadeusz Kościuszko.
In 1814, the French socialists Saint- Simon and Augustin Theirry wrote the essay De la
réorganisation de la société européenne, which laid out some form of parliamentary European
federation. And at an International Peace Congress held in Paris in 1849, Victor Hugo proposed
a kind of ‘United States of Europe’ under the control of a supreme sovereign senate.
Following the catastrophe of the First World War, some thinkers and visionaries re-launched
the idea of a politically unified Europe and by 1923, the Austrian Count Richard Coudenhove-
Kalergi founded the Pan-Europa movement and hosted the First Pan-European Congress, held
in Vienna in 1926.
In 1929, the French prime-minister Aristide Briand gave a speech at the League of Nations’
Assembly in which he proposed the idea of a federation of European nations based on
solidarity and on the pursuit of economic prosperity and political and social co-operation. Many
eminent economists, among them John Maynard Keynes, supported this view, and in 1930, at
the League’s request, Briand presented a Memorandum on the organisation of a system of
European Federal Union. The Great Depression, the rise of fascism and subsequently World War
II prevented this inter-war, internationalist movement from gaining further support.
In 1940, following Germany’s initial military successes in World War II and its plans for the
creation of ‘a thousand-year’ Empire, a European confederation was proposed by German
economists and industrialists. They argued for a “European economic community”, with a
customs union and fixed internal exchange rates. In 1943, the German minister Joachim von
Ribbentrop and diplomat Cecil von Renthe-Fink eventually proposed the creation of a
European confederacy with a single currency, a central bank in Berlin, a regional principle, a
labour policy, and economic and trading agreements. The proposed countries to be included
were Germany, Italy, France, Denmark, Norway, Finland, Slovakia, Hungary, Bulgaria, Romania,
Croatia, Serbia, Greece and Spain. Such a German-led Europe was hoped to serve as a strong
alternative to the Communist Soviet Union and also as a counterweight to the British
dominance in world trade.
The European Union roots back to the times of the Second World War. One of its most
influential proponents was Altiero Spinelli, who at the time was interned on the island of
Ventotene. Spinelli, together with his fellow prisoner Ernesto Rossi, drafted in 1941 the
“Ventotene Manifesto” entitled “Towards a Free and United Europe”. The manifesto was
smuggled out of their internment camp and widely circulated in the resistance movements.
In 1943, Jean Monnet a member of the National Liberation Committee of the Free French
government in exile in Algiers, declared to the committee: “There will be no peace in Europe, if
the states are reconstituted on the basis of national sovereignty... The countries of Europe are
too small to guarantee their peoples the necessary prosperity and social development. The
European states must constitute themselves into a federation...” 2 But Monnet had to wait for
almost a decade for the realization of his views, for it was only in 1951 that the first step for a
federal Europe was taken with the establishment of the European Coal and Steel Community
(ECSC) comprising of Germany, France, Italy and the Benelux.
Encouraged by the success of this new form of cooperation, the six founding countries made a
step further and founded, with the Treaty of Rome in 1957, the European Economic Community
31
(EEC). The purpose of the EEC was to establish a customs union among the six members, based
on the “four freedoms of movement” - of goods, services, capital and people.
Since then, the development of the Community followed two parallel processes: the
enlargement of the communities with new countries and its deepening integration with more
and more competences given to the supranational ‘European level’.
Table 1
The growing dimension of the European Union3
1957 1973 1981 1986 1995 2004 2007

Total population (million) 168 256 272 323 372 459 495
EU area (km2) 1172 1530 1662 2259 3239 3977 4326
GDP/cap max/min (%) 200 186 188 171 181 323 413
Languages spoken 4 6 7 9 11 20 22
ENLARGEMENT AND DEEPENING
Although the first enlargement occurred almost two decades after the Community had been
founded, each of the following decades brought new countries into the community. In the
period 2004-2007, when 12 new countries joined, the community almost doubled in country
numbers and its population grew by 25%, namely by some 100 million people. The original
community with 6 countries and a population of 170 million had grown within three decades
into an empire of 27 countries and a population close to 500 million inhabitants; and the
enlargement process has not yet stopped.
With recent enlargements, the Union became more and more diverse in terms of per capita
income, economic structure, values, interests and so on. For instance, as regards GDP/capita (on
PPP basis) there was twice the difference between the original six countries which established
the common market (i.e. between Belgium and Italy). Later, there was a convergence in
GDP/capita among the member states, yet since the 1995 enlargement, and especially with the
accession of the Central and East European Countries, the differences (the ratio between the
highest and lowest GDP/capita) has grown to four times (e.g. between Bulgaria and Ireland).
With continuous modifications of the treaties, the Union framework had become so
complicated that the Laeken declaration (2001) called for a Convention with the aim of
simplifying the Treaties – if possible through a EU constitution. The declaration often referred
to the European citizens’ desire for a “clear, open, effective, democratically controlled
Community”.
After eighteen months of debate, in 2003 the 105-member Convention finalised the draft
Treaty establishing a Constitution for Europe.
However, from the onset, the convention members were presented with a skeletal draft, which
derailed the debate towards further integration instead of intergovernmental cooperation. The
initial draft presented by the convention president Valery Giscard d’Estaing even included the
word ‘federal’, which was eventually replaced by the more familiar euphemism ‘community’.
The Constitution for Europe was eventually signed on 29 October 2004 by the Heads of State or
32
Government of the 25 Member States and the 3 candidate countries. However, it still needed to
be ratified by all the 25 member states of the enlarged Union, leading to the famous 2005
rejections in the French and Dutch referendums.
Once again, as in the case of the Maastricht treaty in Denmark, it turned out that the European
leaders were conducting a policy which the European citizens did not accept. The rejections
came from the grassroots of both the Left and the Right of the political spectrum, while the
political leaders of both sides were campaigning for the Yes vote. The politicians and the press
were guessing the reasons, without actually asking the No-voters for their arguments. They
generally pointed to the dissatisfaction with governments, worries about the Constitution’s
neoliberal economic character, the concerns about the diminishing role of their nation states,
growing anti- Muslim sentiment, opposition to Turkish membership and fears over losing
control on immigration. Proponents for the No certainly had other reasons in mind, as some
cited the Constitution’s socialistic/collectivist ideals, while others said plainly that they were
against a supranational EU State with a controlling bureaucracy in Brussels. But whatever
mixture of reasons, the French and Dutch “No” meant that for the first time two founding
member states were against the proposed type of integration.
It would have been much easier to discover the real reasons behind the No vote with a deep
analysis of the people’s opinion. Given the lack of this kind of research we can only guess that
the principal reasons consisted of a clash between ongoing integration and the basic values of
the European society: the sovereignty of nation states, democracy and the European social
model.
Chart 1
Accumulated number of QMV articles

(introduced, or of unanimity articles moved to QMV)
250
Constitution/Lisbon
200
Nice
150
Amsterdam Treaty
100
Maastricht Treaty
Treaty of Rome Single European Act
50
0
1957
1986
1992
1997
2001
2004
Source: Klaus Heeger, Comparison of the 2007 Reform Treaty with the earlier EU Constitution,
EUWatch issue 8, October 2007
33
DIMINISHING SOVEREIGNTY
Since the Peace of Westphalia in 1648, the concept of nation-state sovereignty was based on
two principles: territoriality and the exclusion of external actors from domestic authority
structures. Yet with ongoing integration, these principles have been attacked by academics
and politicians alike, questioning the significance of the peace and the Westphalian System of
sovereign nation-states.
In 1998, a Symposium on the continuing political Relevance of the Peace of Westphalia, the
then NATO Secretary General Javier Solana said that “humanity and democracy [were] two
principles essentially irrelevant to the original Westphalian order” adding that “the Westphalian
system had its limits, since the principle of sovereignty it relied on also produced the basis for
rivalry, not community of states; exclusion, not integration.” In the end, it was a system that
could not guarantee peace. Nor did it prevent war, as the history of the last three centuries has
so tragically demonstrated.4
In 2000, the then German Foreign Minister Joschka Fischer referred to the Peace of Westphalia
in his Humboldt Speech, in which he argued that the system of European politics set up by
Westphalia was obsolete: “The core of the concept of Europe after 1945 was and still is a
rejection of the European balance-of-power principle and the hegemonic ambitions of
individual states that had emerged following the Peace of Westphalia in 1648, a rejection which
took the form of closer meshing of vital interests and the transfer of nation-state sovereign
rights to supranational European institutions.”5 In other words, the historical concept of the
Westphalian state sovereignty is contrary to the European Union concept of shared
sovereignty.
This view was somewhat supported by Commission President Manuel Barroso’s incidental
remark in July 2007 at the European Parliament in Strasbourg, when he hailed the European
Union as “an empire”.
European citizens generally have a bad impression of empires, be it the Holy Roman Empire,
the Hapsburg Dynasty, the Soviet Empire or the Third Reich. The fear of losing sovereignty
might be one of the main concerns of citizens, especially on the right side of the political
spectrum. Some politicians also expressed their doubt, as did Czech President Vaclav Klaus:
“This is crossing the Rubicon, after which there will be no more sovereign states in Europe with
fully-fledged governments and parliaments which represent legitimate interests of their
citizens, but only one State will remain. Basic things will be decided by a remote ‘federal
government’ in Brussels and, for example, Czech citizens will be only a tiny particle whose voice
and influence will be almost zero. … We are against a European superstate.” Czech President
Vaclav Klaus, Mlada Fronta Dnes, 29 September 2003.
“At every stage of this craze, from 1996 until 2005, a more reasonable choice could have been
made, a calmer rhythm could have been adopted, that would not have deepened the gap
between the elites and the population; that would have better consolidated the real Europe
and spared us the present crisis. But in saying this, I underestimate the religious fervour that
has seized the European project. For all those who believed in the various ideologies of the
second half of the 20th century, but survived their ruin, the rush into European integration
became a substitute ideology.
They planned urgently to end the nation state. Everything outside this objective was heresy
and had to be fought. This was in the spirit of Jean Monnet, the rejection of self and of history,
34
of all common sense. ‘European power’ was a variation, the code name for a counterweight to
America that excited France alone for years and towards which the ‘Constitution’ was supposed
to offer a magical shortcut. And let us not forget the periodic French incantations for a Franco-
German union.
As the train sped on, these two groups, instead of braking the convoy, kept stoking the
locomotive, some to enlarge and others to integrate, deaf to the complaints coming from the
carriages. Since we had to ask for confirmation from time to time, the recalcitrant peoples were
told they had no choice, that it was for their own good, that all rejection or delay would be a
sign of egotism, sovereignty, turning inward, hatred of others, xenophobia, even Le Penism or
fascism. But it didn’t work. The passengers unhooked the carriages.” Hubert Védrine, French
Foreign Minister 1999-2005, Irish Times, 8 August 2005
DEMOCRATIC DEFICIT
Since the Declaration of the Rights of Man during the French Revolution in 1789, citizens have
held the belief that the legitimacy of the state is created by the will or consent of its people,
who are the source of all political power.
The people’s control of policy could materialize in the framework of nation states, because the
people have the right and possibility to change the government if it does not deliver on its
promises. Yet in practice, especially in the age of “globalisation”, people have little chance to
change policy itself, even if they voted another government into power.
With the growing competence of the European Communities, people lost their ability to
control policy as it gradually got out of their reach. This democratic deficit was emphasized by
European leaders on a number of occasions. For instance the Laeken declaration states that
“Within the Union, the European institutions must be brought closer to its citizens. Citizens
undoubtedly support the Union’s broad aims, but they do not always see a connection
between those goals and the Union’s everyday action.” and that the “citizens are calling for a
clear, open, effective, democratically controlled Community approach”.
Europe’s democratic deficit is largely due to the EU’s institutional structure, which consists of a
special type of decision-making process between the Commission, the Parliament and the
Council of Ministers, but permits little input from the European public sphere. Propositions
often are results of informal negotiations among and within the key policy-making bodies of
the EU, leading to a less than transparent, and sometimes unpredictable, policy-making
process.6
While in member states citizens have the opportunity to influence national policy-making
through their elected officials (prime ministers, presidents), in the EU’s multi-tiered system they
can influence policy decision only in a very indirect way, through their elected representatives
in the European Parliament. However, in practice, this means that although the candidates
running for the EP can put forth various platforms, they have no real chance of realising their
plans once they are in office.
The members of the Council of Ministers have the necessary support of their national
parliament in EU policy making. However, the almost clandestine nature of its procedures,
often coupled with a lack of sufficient member state input, introduces a distinct perception of
democratic deficit into the workings of the Council.
35
The Commission is bestowed with the power to draft laws and regulations for approval by the
EP and Council, and is thus viewed as the driving force among the European institutions.
However, the European Commissioners are required to take an oath on representing the
“Union interest” not their country. The real drafting of laws and regulations usually takes place
behind closed doors by what have come to be known as ‘Eurocrats’, influenced only by a
number of advisory committees (some 3000) and lobbyists.
In national democracies, institutional linkages are more clearly defined and supported by
constitutions and other formal frameworks. Through a clearer role, the public has the
perception that it is involved in the process of decision-making, the outcome of which directly
affects them and their national interests. In contrast, people are represented in the EU’s multi-
tiered system by an assembly of elected officials (MEPs) who rarely consult or question the
public’s role.
ERODING THE WELFARE STATE
Modern welfare states developed through a gradual process beginning in the late 19th century
and continuing through the 20th. Among the milestones on the road to the welfare state the
following can be mentioned: the development of social insurance in Germany under Bismarck,
the unemployment and health care benefit scheme suggested by British prime minister Lloyd
George in 1911, the Swedish pay as you go pension system in 1935, the ‘Social Insurance and
Allied Services’ in England created by Sir William Beveridge, and Ludwig Erhardt’s ‘social market
economy’, in which a capitalist free market would be tempered by an active role for the state in
providing a market-friendly social welfare system. Secondary and tertiary mass education and
comprehensive health care systems for the entire population were set up at about the same
time. By the late 1960s and 1970s the “welfare state” or the “European Social Model” (albeit
with some differences in the individual countries) was established.
However, after the oil price explosion in the 1970s and the economic turmoil in its wake,
neoliberal ideas gained ground. Milton Friedman’s famous book “Free to Choose”, published in
1980, laid down the ethical basis for the demolition of the welfare state. Inspired by him,
thousands of other economists rushed to find arguments proving that the welfare state was
unsustainable. It is interesting that the arguments against the welfare state came up in a
country (the United States) where the welfare state was the least developed and the
redistribution of the income for the poor was the smallest. The idea was largely introduced into
Europe by Prime Minister Margaret Thatcher and from the United Kingdom it spread
throughout the EU. Yet, the idea that the welfare state cannot be sustained has more to do with
the changing power balance between labour and capital, than with the oil crisis (actually the
USA was hardly touched and eventually the prices decreased to almost the original level). With
technological progress, big companies employing sometimes up to several tens of thousands
of employees (especially in heavy industries) disappeared, and with them the organised
workers who were able to defend their interests.
The neoliberal ideas were moulded into the European Union framework with the Maastricht
Treaty and the Growth and Stability Pact. Many of the trade union organisations that supported
the European integration process were aware that the Maastricht criteria and the Growth and
Stability Pact would harm the European Social Model, but they were simply not strong enough
to prevent these developments.
To legitimise a predominantly neoliberal integration process, European policy makers

repeatedly referred to the European Social Model. The draft EU Constitution, rejected by French
and Dutch voters in the spring of 2005, included a paragraph on “social market economy” (I-
36
3.3), while giving monetary restraint and budgetary austerity a constitutional status. The
commitment to a socially-just Europe – even if it was hardly more than lip-service – convinced
even left-wing representatives in social democratic and green parties to vote for the
constitution.
However, the mainstream social democratic parties were unable to persuade their voters of the
advantageous character of the EU constitutional treaty and this was one of the reasons that in
France both the rightist and the leftist voters were against it.
Those against the welfare state have brought up many arguments, among them that society
was ageing and that Europe had to compete with China and India. However, welfare depends
only on the GDP/capita and the income distribution. If GDP/capita increases (as is the case in
the EU) there is no reason to assume that the system is unsustainable. The question is the
income distribution. As regards competitiveness, the question can be raised why continents
should compete with each other, i.e. why entities cannot produce the products they consume
and trade for those they cannot produce for natural reasons (e.g. climate, raw material
resources), or for technical reasons (e.g. the lack of modern technology). One of the alternatives
discussed later builds its proposals on this approach.
Meanwhile, others have pointed out that the so called ‘free market’ is not only distorted
through EU regulation, but also by the collusion between ‘big government’ and transnational
corporations, creating supranational monopolies and cartels.
THE ALTERNATIVES
The Lisbon Treaty was drafted to serve the same function of the Constitution while trying to
avoid the popular vote that had earlier wrecked it. However, the only place it could fall, it fell –
in Ireland, where a referendum was obligatory. Now the European political machine is trying to
persuade the Irish voters that they erred when they said “No”. But were they really wrong in
voting against the Lisbon Treaty? Is it true that without the power concentration as proposed
by the Constitution and, in its wake, the Lisbon Treaty, the European Union is unable to
function any further?
In the last decade, a number of different ideas on European cooperation surfaced, but these
were never seriously discussed, only dismissed by the mainstream ideologists. Below are
several ideas concerning possible alternative forms of cooperation among the European
countries.
Europe as an empire
The approval of the Lisbon Treaty would transform the European Union into an empire. When
Jose Manuel Barroso compared the EU to an empire last year, he correctly pointed to the “very
special construction” of the post Lisbon Europe. Barroso wanted to rebut the accusation that
with the Lisbon Treaty the European Union would became a “superstate” or a federation like
the United States. Hardly distinguishable from an empire, a superstate is a group of nations,
often linguistically and ethnically diverse, under a single political-administrative structure.
Yugoslavia could be an example for a superstate, although it was dominated by Serbs. The Holy
Roman Empire might be a better example of a superstate, although in some periods of its one-
thousand-year history it lacked a strong central power.
It is also true that the post-Lisbon Europe cannot be compared to a federal state, since federal
states (such as the United States or Germany) have clear democratic political structures, a
37
common language and thus a common communication space, strong feelings of solidarity
among their inhabitants and, not least, a relatively high budget.
An empire, by definition, is a centre of power that extends dominion over populations that are
distinct culturally and ethnically from the culture/ethnicity of the centre. Like other states, an
empire maintains its political structure, at least partly, by coercion.
This definition almost totally fits the European Union: the population is diverse ethnically,
culturally and linguistically; almost in every country a different language is spoken and the
inhabitants do not understand those of other states. For this reason there is neither a European
demos, nor a common communication/public space (media), both indispensable prerequisites
for a democratic political structure.
Barroso had also added that the European Union is a “non imperial empire” because it is based
on voluntary membership. In practice however the European Union, with its political and
economic strength, can yield enough influence to force nations into membership (see for
example the way the Irish are handled after their No to the Lisbon Treaty). With the Lisbon
Treaty, which lays down the basis for a globally interventionist European army, the EU would be
able to extend its powers militarily as the US does today – which has also come to be described
as an imperial power, notwithstanding its federal, noninterventionist beginnings.
In the EU, as it is often said even by its leaders, there is a “democratic deficit”. This deficit is
largely due to the EU’s institutional structure in which the central bureaucracy plays the
dominant role and the system permits little input from the European public sphere.
Furthermore, the EU has the tendency of continuous expansion, like other empires had in the
past, and it has its own currency, as well as its own security and defence policy. The Lisbon
Treaty, by further concentrating power to the EU’s central institutions, strengthens these
imperial characteristics.
Barroso was not the first to point out similarities between the European Union and empires. Jan
Zielonka, a political scientist, has already argued that the EU has transformed itself into an
empire by coercing its neighbours into adopting economic, legal and political patterns
corresponding to its own benefit.7
As EU Commissioner Margot Wallstrom correctly stated, the establishment of this European

political entity was the project of a small European political and business elite.8 Other
politicians also argued that the process which began with the Maastricht Treaty and ended
with the Constitution was running amok. (See also quotes above by Hubert Vedrine and Vaclav
Klaus)
The peoples of Europe have not had positive experiences with empires, especially not in the
20th century. Thus it is not a great surprise that they reject efforts to create a new one
whenever they have the possibility to do so.
European empire with green and social features

Green and leftist organisations generally supported both the Constitution and its rewritten
version, the Lisbon Treaty. Their main concern has mainly been the neoliberal character of the
Treaties and the lack of adequate environmental policy, although many in the GUE/NGL also
oppose the treaties’ militaristic characteristics.
The Greens/EFA group in the European Parliament welcomed the Treaty of Lisbon as a further
step in the European constitutional process. “It is a compromise, and in many ways an
38
unsatisfactory one, however it is indispensable and represents a step forward. The treaty
strengthens European democracy, establishes the Union as a community based on
fundamental rights, anchors its policies in a comprehensive system of common goals and
values, and reinforces the principle of sustainability.”9 At the same time they call for a “greener
Europe”.
The European Trade Union Confederation (ETUC) supported fully both the Constitution and the
Lisbon Treaty, claiming that they represented progress towards a stronger Social Europe. They
argued that the treaty reflected to a large extent the wishes of citizens, workers and trade
unions to develop a more efficient and socially sensitive Union. For this reason the ETUC urged
for the ratification of the Lisbon Treaty which would make the Charter of Fundamental Rights
legally binding. Other national trade unions, however, were not satisfied with these new
treaties. The Austrian federation of Trade Unions, for instance, called for the rejection of the
neoliberal policies in the Treaties. The British Medical Association (BMA) was against any
provisions that might undermine the British health care system. The Deutsche
Gewerkschaftsbund expressed its wish to enshrine the concept of the European Social Model
into the Treaties. 10
The ETUC became somewhat uneasy with the Lisbon Treaty when a judgement of the
European Court of Justice (Vaxholm case) made it clear that with the present EU Treaty
framework the right to strike was not guaranteed.11 Following this judgement it called for a
social progress clause to insert in the Lisbon Treaty. This was also the main argument of the
Irish trade union organization UNITE to campaign for a No vote on the referendum on the
Treaty of Lisbon.12
These arguments prove that the Constitution/Lisbon Treaty is acceptable for large factions
from the leftist and green movements as long as the Treaty takes into account their claims for
social protections. Since the rejection of the Constitution in France depended to a large extent
on the leftist movements that rejected the neoliberal policy, any change in this field might lead
to the acceptance of the Treaty.
It is yet another question as to whether – should the requested clauses be enshrined into the
Treaties – the political mechanisms would guarantee the enforcement of these rights.
Europe as a federal state, or ‘the united states of europe’

In his Humboldt University speech, Joschka Fischer argued for a European federal state,
referring to the inadequate functioning of the EU institutions, for a common foreign and
defence policy in a globalised world, and for more democratic political life. He suggested a
bicameral parliamentary system in which one chamber would be for elected members, who are
also members of their national parliaments, while the second chamber made of Member States
representatives would resemble the US Senate.
The European federation, or a ‘United States of Europe’, is supported by many political groups,
academics, business organisations and others, including the Union of European Federalists
(UEF) and the German philosopher and sociologist Jürgen Habermas, who worked out concrete
suggestions for the constitution of a federal state.
Federation of nation states

At the time, former French prime minister Lionel Jospin had reacted sharply to Joschka
Fischer’s proposals. He said that the French people could never accept the status of a state like
the German Lander or the states of the USA. “There are nations, strong, vibrant nations, for
which identity is important, which constitute the wealth of our continent,” he said.13
39
He suggested that a move towards a federation requires clarifying the respective competences
of the Union and its states. According to him, this ought to be done in accordance with the
principle of subsidiarity. At the same time, Jospin wanted to keep under national control all the
policies that had already been conferred to the Community. This had meant keeping the status
quo of the Maastricht- Amsterdam treaties, taking into account the Nice Treaty’s provisions on
enlargement. This kind of European “federation of nation states” had already been suggested
earlier by the French Socialist and former European Commission chief, Jacques Delors14, and
later supported by Dr Johannes Rau, President of the Federal Republic of Germany, and the
French Prime Minister Dominique de Villepin. As the latter stated in a speech also at the
Humboldt University in Berlin:15
“We need to define a new relationship between Europe and the nations it is made up of. A
federation of Nation States is the most appropriate way to advance. Yes, I am a partisan of a real
European economic patriotism: it is not a question of hiding behind an outdated protectionism. It is
a question of combining our strengths and uniting our efforts to go in the same direction and
powerfully assert our interests in the world. European preference makes sense: it reminds us of our
duties to each one of our citizens.”
The French major trade union, the Confederation Generale du Travail (France) - CGT, also
supported the idea of cooperation based on nation states. As they wrote in their contribution
to the Convention: “The nation state, even if weakened by globalization, remains the only arena
for solidarity, the only guarantor of public services.”16
Europe of democracies
Based on the concept of cooperation among sovereign nation states, MEP Jens-Peter Bonde
and seven other colleagues, all members of the Convention which had drafted the EU
Constitution, proposed an alternative agreement to the Constitution.17 The main points of the
proposal were as follows:
– The European Union (EU) should not have a constitution. Instead, Europe should be
organised on an inter-parliamentary basis by means of a Treaty on European
Cooperation. This would create a Europe of Democracies (ED) in place of the existing
EU.
– The present 97,000 pages of the acquis communautaire covering the EU and EEA
must be radically simplified.
– Laws should be valid only if they have been passed by national parliaments. A
national parliament would have a veto on any issue it deems important.
– Laws should deal with the rules for the Common Market and certain common
minimum standards to protect employees, consumers, health, safety and the
environment. In other areas the ED would have the power to issue recommendations
for Member States, which are always free to adopt higher standards.
– The ED may unanimously approve flexible cooperation for those nations that want to
take part in closer cooperation.
– A simplified voting system would operate in the Council, with each Member State
possessing one vote in the ED Council. A decision by qualified majority would require
the support of countries with more than half the total ED population.
40
– Every national parliament should elect its own member of the Commission, and
national parliaments would have the power to dismiss their Commissioner. The
President of the Commission would be elected by the national parliaments.
– National parliaments would decide on the annual legislative programme and the
Commission would correspondingly act as a secretariat for the Council and the
national parliaments.
These ideas were supported by various movements across the EU, such as the European
Alliance of EU critical Movements (TEAM) and the Danish JuniBevagelsen Mod Union.
Flexible cooperation
There are several ideas for a more flexible system of cooperation. One was developed by the
Danish June Movement, proposing that EU decisions should be allowed more flexibility among
different members (“variable geometry” or “Olympic circles”). Another proposal, called “Europe
a la carte”, suggests a construction in which Member States may pick and choose the laws and
policies that suit them, thus ensuring diversity and a real choice for the people when it comes
to experiencing the ‘four freedoms of movement’.
A similar concept was developed by Bruno S. Frey and Reiner Eichenberger from the University
of Zurich. They proposed Flexible Overlapping Competing Jurisdictions (FOCJ) which would be
based on propositions in accordance with the economic theory of federalism. According to the
authors, it is a mistaken concept that Europe should be an integrated and homogenised entity.
The essence of Europe is its diversity, given that its strength lies in its wide va riety of ideas,
cultures and policies. Integration should serve to foster this diversity, whereby even
cooperation is flexible for optimal benefits The concept of FOCJ is described in detail in the
Sept/Oct 2008 issue of the EUWatch, see pages 3-8.
Considering the difficulties and the problems with the ratification of the Constitution, Charles
Grant, the director of the London based think tank Centre for European Reform, also suggested
some kind of “variable geometry”18, according to which not every country need take part in
every policy, but allows for some to cooperate more closely. He pointed to the fact that such
cooperation already exists in the frames of the euro and the Schengen zones. Those countries
which want more political union can use the provisions in the current treaties to foster
integration among them. Since future member states may thus also stay out of some policy
areas, variable geometry could thus make enlargement less threatening to the EU’s political
leaders and electorates.
Europe as a free trade area

There are movements, especially in the United Kingdom, which aim at transforming the Union
into a free trade area, or as a last resort, to withdraw their country from the Union. The United
Kingdom Independence Party’s (UKIP) principal aim, for instance, is the withdrawal of the UK
from the European Union.19
The Campaign for an Independent Britain (CIB)20, a cross-party Eurosceptic campaign group, is
in favour of free trade and cooperation between the nations of Europe, but is opposed to the
creation of a federal or unitary European state which they believe to be unnecessary and will
prove to be counter-productive. The model they recommend is based on the willing
cooperation of each nation and its people in areas of policy where cooperation will be fruitful
but not where it would be disadvantageous to their interest and development. They believe
41
that lasting unity can only be achieved by the people of Europe, and not their elites, and that a
failure to understand this can only lead to disaster.
However, not only Eurosceptics see the free trade agreement as a perspective. Even those in
favour of more EU integration identify problems in the discrepancy between the economic and
political conditions of integration. Professor Paul de Grauwe, an economic adviser to
Commission President J. M. Barroso, thinks that without political union the euro zone cannot be
sustained:
“A political union is the logical endpoint of a currency union. But if that political union fails to
materialise, then in the long term the euro area cannot continue to exist.
Now that nobody appears to want that political union, you can begin to wonder whether monetary
union was such a good idea. I hardly dare predict that, in the longer term, the monetary union will
collapse. Not next year, but on a time-frame of ten or twenty years. There is not a single monetary
union which survived without political union. They have all collapsed. You invariably get big shocks.
A monetary union becomes very fragile without a political framework. With the exception of a Don
Quixote like Guy Verhofstadt, I see nobody who is pushing the case for a political union ... A large
free trade zone remains the only feasible option for Europe. It’s an illusion that we can realise a
political union in Europe in the near future. Political unification has failed. But that is a big problem
for the currency union. That is in danger.”21
Multigrade europe
Multigrade Europe is the idea that the EU can be organised according to different grades of
integration. In such a structure, called among others “concentric circles”, the geographical core
countries integrate deeper than the outer regions. Another name for this construction is ‘two-
gear’ or ‘multi-grade integration’. The idea of the different grade of integration turned up first
after the Maastricht Treaty when the Danish rejection indicated the limits of integration that is
acceptable for citizens.
The German Christian Democrats initially launched the idea of a core group of EU members
consisting of the founding EU countries, Germany, France, Italy and the Benelux to promote
closer integration. This idea was brought forward repeatedly (as a German or French initiative)
whenever the ratification of treaties faced difficulties.22
The existing treaties already allow a group of member states to proceed with further
integration, e.g. through enhanced cooperation. In case of such multigrade integration it can
be taken for granted that France and Germany would be at its core. The more sceptic nations,
such as the UK, could take part in some policies and opt out of others.
Yet many, especially from the new member states, oppose such concepts as they fear being
downgraded to “second class” travellers.
‘Localisation’ approaches
The localisation approach is a revolutionary idea based on the urgent need for environmental
protection and the social security of the citizens.
The advocators of this alternative uphold that the EU should replace its overriding objective of
international competitiveness and free trade, with a new “Big Idea” for Europe based on
environmental sustainability and economic localisation. According to them, this could be
achieved through localisation – a set of interrelated and self-reinforcing policies that actively
discriminate in favour of the more local. This would ensure that all goods and services that can
42
reasonably be provided locally should be thus provided. Depending on the context, the “local”
can be part of the nation state, the nation state itself or, occasionally, a regional grouping of
nation states. This approach would provide a political and economic framework for people,
their communities and governments to reclaim control over their local and national economies,
in order to make them as diverse as possible, and to rebuild stability into community life.
It was Caroline Lucas MEP who, together with expert Colin Hines, developed this idea, which
comes close to the opinions of other environmental and social organisations.
NOTES:
1 Source: http://wapedia.mobi/en/Pre-1945_ideas_on_European_unity
2 Source: http://wapedia.mobi/en/Pre-1945_ideas_on_European_unity
3 Sources: CIA The World Factbook https://www.cia.gov/library/publications/theworld-
factbook/; Eurostat; World Bank Database
4 Source: http://www.nato.int/docu/speech/1998/s981112a.htm
5 http://www.jeanmonnetprogram.org/papers/00/joschka_fischer_en.rtf
6 Source: Jennifer Mitchell: The European Union’s “Democratic Deficit”: Bridging the Gap
between Citizens and EU Institutions.
http://www.eumap.org/journal/features/2005/demodef/mitchell
(Jennifer Mitchell is a PhD candidate at the Polish Academy of Science)
7 Jan Zielonka (2006), Europe as empire: the nature of the enlarged European Union, Oxford:
Oxford University Press, ISBN 0-19-929221-3, http://users.ox.ac.uk/~polf0040/IAReview.pdf
8 “This has been a project for a small elite, a political elite., that has worked - until now. Has it
ever been alive, European democracy? That is a very good question.” - EU Commissioner for
Communication Margot Wallstrom, Daily Telegraph, 14 October 2005
9 http://www.greens-efa.org/cms/topics/dok/210/210551.lisbon_treaty@en.htm
10 Source: The written contribution of these NGOs to the Convention Forum
11 http://www.lo.se/home/lo/home.nsf/unidView/9F47127F93A87C40C12574050046F3E3
12 http://www.swp.ie/news/latest/labourpartyattemptstodistortthefactsindebateonlisbon.html
13 http://www.futurum.gov.pl/futurum.nsf/0/4B143B7FA611BBB4C1256CAB0028A5EA
14 http://findarticles.com/p/articles/mi_qn4158/is_19960120/ai_n9638895
15 French Prime Minister Dominique de Villepin, speech at Humboldt University, Berlin, 18
January 2006
16 Initial proposals for the contribution to the discussion on the future of Europe CGT, April
2002
17 Alternative Report included in the Draft Constitution. See:
http://www.junibevaegelsen.dk/att/pdffiler/alternative_report.pdf
18 http://www.cer.org.uk/articles/grant_prospect_july05.html
19 http://www.ukip.org/ukip/index.php
20 http://www.eurofaq.freeuk.com/cib/index.html
21 Interview in De Morgen, Belgium, 18 March 2006
22 http://www.independent.co.uk/news/world/europe/france-and-germany-to-be-core-of-
acloser-eu-576625.html
43
THE EU AFTER THE IRISH ‘NO’

An interview with Michel Rocard (October 2008)
What is your opinion on the Irish ‘no’?
The Irish ‘no’ is not just Irish, and I tend to believe that the problem lies not only in the
referendum process, but in the use of the referendum in a totally media-driven world. It is
television in particular that has an aversion to providing explanations, background information,
analyses and reviews; all that is ‘zapped’ because it is considered boring.
By definition, European integration by means of successive treaties can only be modest and can
only be achieved step-by-step. The Lisbon Treaty is not yet able to address major problems,
such as the crisis in the Middle East, job creation and strong economic growth.
However, the arguments objecting to ongoing integration are symbolic ones relating to our
fears. In the case of Ireland, the questions raised were those of neutrality, higher taxes,
abortion. All these arguments are completely false, but the annoying thing is that we had
already, for the Treaty of Nice, asked the Irish to revote on the treaty, to which we had added
clauses concerning neutrality and other safeguards; although, of course, the laws on abortion
and other sensitive issues were purely national concerns. The Irish are free and sovereign, and
determine their national laws themselves.
However, as TV stands, no report or review would take account, for instance, of the huge
benefits Ireland has gained from the Union. But to say that, we would have to identify and
examine a whole range of aspects that are incompatible with the principles of the media and of
how TV, in particular, works. Under these conditions it is impossible to give serious, scientific
answers. Therefore, a battle based on step-by-step advances is a battle lost, in any case. This is
true for France, for the Netherlands, for Denmark and, of course, for Ireland. So I believe that,
given that the Danish constitution requires referenda on all treaties amending the current
Union framework, we are currently at a standstill.
I also think the Irish have shot themselves in the foot, because given the considerable
advantages they are currently enjoying, in particular that of fiscal dumping (the Council of
Ministers should no longer tolerate that), this vote has made their position weaker, but they did
not know that.
So do you think that the Irish made the wrong choice?
Let us look at the question in a different way. In our current political and media system we think
only in the short term and we tend to become very inward-looking. The problem is that we
have to face challenges on a global scale. How we can meet those challenges by maintaining
our national divisions, I simply don’t know.
There were a great many reactions to the Irish ‘no’. A large number of politicians said that
- the arguments put forward by the ‘no’ camp were misleading;
- the Treaty of Lisbon would actually resolve some of the criticisms that had been made;
- the Irish citizens had not voted on the Treaty itself, but had voted for national reasons;
- the citizens had not understood the Treaty or the issues it addressed.
44
In your opinion are these remarks legitimate in this highly media driven world that you just
mentioned?
I do not think that the information system in modern societies allows people to master
complex subjects. To make oneself understood one needs to simplify. However, the process of
European unification cannot be simplified. The arguments you have just mentioned are
therefore as true from a political or media point of view as they are crazy from a technical point
of view. But the system is not such as to be able to provide answers or rebuttals.
And were the arguments put forward by the ‘yes’ camp not also simplistic ones which also
sought to intimidate the Irish?
You are right. The defenders of the Lisbon Treaty – and the previous treaties – had to use
simplified arguments to explain a process which cannot be simplified; as a result they were on
the defensive and not aggressive. They probably described the advantages of the Treaty itself
too much, but these advantages were not good, because European integration is like a bicycle
which falls to the ground as soon as you stop cycling. The advantage of the Treaty lay not
merely in its specific provisions, but in the entire process. A process which – and this is a great
pity, but that’s the way it is – is extremely complex. In addition to that we are seeing a loss of
confidence in political leaders.
Should the ratification of the Treaty of Lisbon continue?
I am not in favour of repeating the ‘Nice trick’ with the Irish, that is to say, of adding codicils on
taxes or abortion to the Treaty of Lisbon. Returning to taxes, for example, I would like to stress
that Europe is currently being stifled by its financial perspective. The budget restricted to 1%
per year is creating a general paralysis and is hampering serious reform; it is preventing the
revision of EU policies and even the implementation of its reforms, such as the CAP reform. And
above all, Europe is being banned, by financial decision, from introducing any new policies
before 2013. Under these circumstances I cannot see why taxes would increase. The arguments
used by some Irish to frighten others were therefore most regrettably false.
However, the Irish should not be made to vote again, as the result would probably be even
worse. I believe we have to accept the situation as it is and allow the Lisbon Treaty to be passed
through enhanced cooperation, i.e. it will apply to those Member States which have ratified it
and Ireland will be in a kind of outer circle. For me, that is the only possible solution. Bearing in
mind that this could also settle the Turkey issue (which many do not really see as being in the
inner circle), there are a number of forces moving in that direction. And there will always be a
number of countries that wish to forge ahead, because the key issue is, whatever the case, to
frame a foreign policy and to help regulate the world; this is something that Europe is not
doing at the moment, as it is only looking at itself.
Can such a ‘two-circle’ Europe be established on the basis of the current Treaty (e.g. under
enhanced cooperation) or would it mean implementing the provisions of the Treaty of
Lisbon, or even applying the Treaty itself solely to those Member States that have ratified it?
It would be worth applying the Treaty of Lisbon in its entirety only to those countries which
have ratified it, as, amongst others things, it simplifies decision-making and gives the Union a
visible Presidency. Even if it frightens a great many sovereigntists, the Treaty makes its own
small contribution to ensuring that the Union can act more effectively in the world.
45
Given that Article 48 of the Treaty on European Union (TEU) and Article 7 of the Treaty of
Lisbon provide for ratification by all Member States, how can such a two-speed area be
established technically?
This is a matter for the European Council and the Council of Ministers to decide, and it could
well be that they will decide to apply the provisions of the Lisbon Treaty through enhanced
cooperation. If, to move from a 27- country Lisbon Treaty to a Lisbon Treaty with less than 27
countries, the countries which have ratified the Treaty have to accept an amendment to the
effect that the above-mentioned articles will not be enforced, then those countries will do it.
Much has been said about the principles of representative democracy. Are these principles
sufficient, given that the powers conferred upon the Union through successive treaties
irredeemably grant the Union considerable powers? Are the Member States still masters of
the Treaties?
As a French citizen I believe that there are certain aspects of France that are its identity card.
These aspects, such as its secularity and its education system, are imperative and immutable.
But at the same time we also have to deal with a number of new developments.
The first is the rising power of China and India, in the face of which everything is going to fall
apart at the seams. And in these circumstances we are allowing ourselves to talk about
maintaining the status quo! Will China and India set up a great world protectorate? That is the
real issue we will shortly have to face. I don’t know how we will be able to resist, with 60 million
inhabitants against one and a half billion. I can’t see anything intelligent in this essentially
British position.
The second is that capitalism is not in a healthy state, and this is not a purely European matter.
For a good number of years, between 1945 and 1975, we experienced a special kind of
capitalism which was well regulated, with a 5% growth rate, a total ongoing absence of
financial crises and full employment everywhere. At present, we can’t even attain a 2% growth
rate and Great Britain, which for years gave us sound lessons in economic management, is
going into recession once again. In addition to that, some 15% of all our workers are currently
in casual (precarious) employment. And the ‘no’ to the Treaty was nothing less than the result
of this precarious social situation. Everyone is scared of the future.
Moreover, our American friends – please note that I cannot stand simple-minded, foolish anti-
Americanism, which is counterproductive and never helpful – are totally intoxicated on their
strength, which they cannot restrain. Their treatment of terrorism (rather than taking an
individual approach to it with the cooperation of the entire world, and first and foremost the
Arab world, to secure its firm approval for a police-style approach to eradicating terrorism),
with their idea of war, wrongly involving peoples, territories and nations who have nothing to
do with it, has led us to an extremely dangerous and brutal confrontation between one billion
Muslims and one and a half billion Christians.
Europe’s major countries alone cannot resolve such problems. Only Europe could, but the
sovereigntists don’t want anything to do with it. In my view, this is an insult to intelligence,
which I do not understand.
But do you not think that with each new conferral of power on the Union through successive
treaties, the gap between democracy and this EU-wide efficiency is getting wider? The
46
Europe of results on the one hand and the Europe of democracy, or even of a grass-roots
approach, on the other – are these principles compatible?
I am an indefatigable and unconditional fighter for democracy, but I don’t like mixing issues up.
This approach calls for increasing understanding, bringing citizens closer to the major decisions
being taken. This approach – which is very warm and fuzzy and which we need to try to
encourage and achieve as best we can – is not compatible with the size of the Union. There is a
demand for democracy in Europe which suggests that we could create a grassroots democracy.
But Europe’s strength is that there are 500 million of us, and that is the very opposite of a grass-
roots democracy.
At the same time, some would have you believe that the national education system could
provide sufficient education on the economy, sociology, politics and law for citizens to be able
to understand everything. But that’s a lie! And so I agree with you that there is a gap or delay,
but if we do not accept this gap and delay and if we throw a spanner in the works because we
can’t accept the idea of taking decisions which might not be understood or approved, then we
stay the way we are. It’s the decline of the Holy Roman Empire, and the world, meanwhile, will
move on without us.
Is it not therefore hypocritical to claim that with a new Treaty – in this case the Treaty of
Lisbon – the Union will be at the same time more efficient, more democratic and closer to the
citizens?
Yes, a little. And it is true, for instance, that the process for appointing the Commission (which is
not a government) could be more democratic if the Commission were elected by a
parliamentary majority resulting from the elections to the European Parliament. But that would
not resolve the problem of people’s lack of support and interest in the details of the complexity
of European integration. It would, however, better resolve the issue of personal knowledge of a
leader, because people would have fought for him, they would have seen his photo
everywhere and they might be able to identify with him. And that’s certainly better than
nothing!
But can’t these comments also be applied to national politics?
Of course, it is also applicable to national situations, especially in the larger countries. But it is
the media, above all, that are responsible for this. Journalists could better explain these
complexities if they chose to do so. Let me quote, for example, Patrick Le Lay, the former head
of the TF1 TV channel, who once said ‘my job is to prepare viewers’ brains to receive messages
from Coca-Cola’. That means that advertisers don’t want their adverts to be run alongside
heavy things, things which concern viewers and remain in their minds. And so we have no war,
no unemployment and no massacres, and above all, not too many explanations.
This is all the more serious in our current crisis. It is not the politicians’ fault. Never forget that
politicians do not address the people - they can’t; it is up to the media to relay their views.
Normally, a political speech will not be reproduced in full, but only a sentence or two will be
taken. Politicians talk to people through sound bites. And the media system only chooses those
sentences which cause conflict, not those which are based on sound argument.
Are the slogans ‘efficiency, democracy and a grass-roots approach to the EU’ not also Coca-
Cola-style messages?
47
That’s just verbiage for naive voters and we can’t do anything about that. Europe is large, it’s
complicated, the economy cannot be controlled and we no longer even know very much about
how it works; meanwhile the economic world has fallen silent in the face of our current crisis.
But the refusal to address complex issues, the populist and popularity-seeking mentality and
the use of simple slogans are far more the responsibility of the media system than of politicians
themselves. One day, when I was Prime Minister, I had to deliver a keynote speech on the
reform of the social welfare system in France and I was keen to avoid sound bites so that I could
get the complexity of the message across. Result: none of the media took it up. Therefore, we
must not make Europe pay the price of an extreme simplification of public life as demanded by
the media.
Given the negative outcome of the referenda in France and the Netherlands and the
similarities of the Treaty of Lisbon and the Constitutional Treaty, does the current
ratification procedure for the Treaty of Lisbon not imply that not only is a decision being
taken without the opinion of the people (warranted in this case by the principles of
representative democracy) but also against the opinions of citizens, i.e. the opinions
expressed by the French and Dutch people?
This is a debate which I would call ‘woolly’, because in France three-quarters of the ‘no’ camp
said: ‘We are Europeans, but not like that!’ That is to say that they wanted to throw a spanner in
the works and create a different Europe, which nobody was willing to renegotiate with them. At
present, 60% of the population according to opinion polls want a stronger European foreign
policy. Let’s take the example of the Middle East, which affects us all: US diplomacy no longer
has the authority to make peace because it has acted with too much bias for too long. As a
result, the intervention of Europe, the no 1 world economy with its 500 million inhabitants,
could have an influence. But we are prohibited from intervening because there is no Europe.
Now, contrary to the implications of your question, this is what our public opinion wants.
Moreover, in France, the largest country to say ‘no’ by referendum, the ‘no’ camp has virtually
disappeared. Even within the Socialist Party nobody upholds the ‘no’ any more.
And yet it is always said that the ‘no’ vote would also have won in other countries if they had
put the Treaty of Lisbon to the vote in a referendum.
Indeed, it would have been totally unsuccessful. But I have just said that it is impossible to win
when the battle is between symbols which are said to be under threat (even when they are not)
and little, step-by-step achievements which can bring us neither the moon nor full
employment or peace.
Talking of a Europe of results, in your view what would be the most important results to be
achieved at European level? Do these results require the entry into force of the Lisbon Treaty,
given that Europe is functioning well on the basis of the current treaties?
It is not true that Europe is functioning well under the Treaty of Nice! It is a rotten and badly
negotiated treaty and, from the point of view of the future membership of Croatia and Turkey,
the voting procedures are no good. But it is also true that, even if the Lisbon Treaty is a (modest
and) useful simplification, nothing depends on it and we can carry on perfectly well without it.
Except that things will be more impractical, with more pointless conflicts. But essentially, it is
not very important except for the fact that the engine is no longer being fuelled.
48
So, what is the point of Europe? First, it is a marvellous tool for reconciliation. What we call
civilisation, in actual fact is merely progression in the art of killing, but not progression in
feelings. It is Europe which has brought us together. All the Irish will tell you that unless Ireland
had joined the EU the peace process in Northern Ireland would not have even begun. A friendly
community of Germans and Poles is now beginning to see the light. But the most remarkable
thing of all has been the reconciliation between Hungarians and Romanians after eight
centuries of bitter hatred. Their friendship pact – which was signed to please others – is now
being steadfastly implemented. That is Europe! And I could stop right there and simply tell you
that my great fear is that all those who were born after the war start to believe that peace is
inevitable, that it is a natural condition for humankind. That is the greatest idiocy ever heard.
What is natural to humankind is violence, domination and war. Nobody, nowhere ever thinks in
terms of half-centuries. That is not the normal way to look at things; however it is the right way.
So, to use one of the sovereigntists’ arguments ironically, without the Lisbon Treaty will we
find ourselves in the trenches?
There is indeed a small risk - that of fear. Most wars actually have their roots 15 years earlier. So
we can facetiously say that we’ll end up in the trenches without the Lisbon Treaty – though that
would be attaching too much importance to this second-rate diplomatic job – but to switch off
the engine of the integration process would be to set off in the opposite direction. And that
would fuel our hatreds and our interests, which still exist today.
To conclude: if Europe were to be re-drawn, what should be repeated and what should be
avoided?
This question needs to be put in context. The main tragedy that is killing Europe is not of
European origin. The thing that is killing Europe is job insecurity and the sinking of capitalism,
with a quarter of our population affected by job insecurity. Such a phase is creating anger,
dissatisfaction and disgust with politics. So in this Europe, which we need far more for foreign
policy reasons than for economic reasons, we are dealing only with economics because it is the
only thing we have been allowed to do. This Europe is in a fragile state which means that,
almost by accident, it is going through a crisis. Because those who voted no to the Treaty voted
no to insecurity. The misfortune is therefore that Europe was not built between the two wars;
because then Europe would always have been carried forward and consolidated by that
amazing period in which capitalism was regulated (from 1945 to 1975).
And excuse me for saying so, but saving the Arctic and the Antarctic as thermostatic regulators
of the planet is, in my view, more important than harmonising our tax systems. Having an
intelligent global approach to the fight against terrorism is infinitely more important than our
internal interests. But by giving priority to those internal interests we are not dealing with the
issues of climate change, terrorism and the global regulation of capitalism. But we haven’t
given ourselves the power to deal with these issues because of the sovereigntists. And I will not
allow anyone to say that they are more patriotic for France than I am.
Would the aim therefore be to give a more tangible form to integration?
No, it is no longer feasible. The political Europe is dead in the water. But what is feasible is that
Europe can change its focus. Instead of managing the misfortune of having failed to create a
great nation in terms of foreign or military policy (this will no longer be achieved), it should
manage what it does well, i.e. the economy. And in the current global crisis, only Europe has
enough influence to be able, possibly, to impose new regulations. If we manage to do that
people will regain confidence in Europe.
49
THE EUROPEAN UNION BETWEEN

‘NON-STATEHOOD’ AND ‘SUPRA-STATEHOOD’
Some paradoxes of European statehood, with an epilogue on the
consequences of the Irish referendum
By Peter Henseler (October 2008)
THIS ARTICLE IS BASED ON A REVISED VERSION OF THE SUMMARISED POSTULATES AND

CONCLUSIONS OF A LENGTHIER STUDY* WHICH WAS COMPLETED AND RELEASED FOR
PUBLICATION BEFORE THE IRISH REFERENDUM ON THE EU REFORM TREATY (THE TREATY OF
LISBON). IN AN EPILOGUE, THE AUTHOR TRIES TO IDENTIFY, FROM AN AUSTRIAN PERSPECTIVE,
CONSEQUENCES OF THE IRISH REFERENDUM. FINALLY THE AUSTRIAN SOCIAL-DEMOCRATIC
PARTY’S EU POLICY VOLTE-FACE WHICH HAPPENED RECENTLY IS BRIEFLY DISCUSSED IN AN
ADDED ‘EPILOGUE TO THE EPILOGUE’. THE PARTY’S ANNOUNCEMENT TO SUBMIT FUTURE
FUNDAMENTAL CHANGES OF THE EU TREATIES TO A REFERENDUM WAS (AMONG OTHERS)
ONE DECISIVE REASON FOR THE FAILURE OF THE GRAND COALITION AND FOR
PARLIAMENTARY ELECTIONS IN SEPTEMBER 2008.
1. The European Union as a state in the economic sense
1.1 From an economic perspective, the areas of intervention of the Union that are listed in the
catalogues of aims and responsibilities contained in the European Treaties are undoubtedly
public tasks, in other words governmental tasks. Functionally, then, the Union has the
attributes of a state as defined in economic constitutional doctrine. Considered over a period of
time, the EU can be seen to be undergoing a process of integration that has been progressing
at an uneven pace and in which the tasks of the Union have been increasing. The dynamics of
this process, in short, are potentially centralising. This effect comes to the fore when
subordinate areas of activity which have been left behind, as it were, by the integration
process, but without which the Community cannot achieve maximum efficiency in those fields
where it is already empowered to act, are ‘claimed’ as areas of Community competence. One
such example is the aspiration to competence in the field of social policy as a means of
cushioning the adverse after-effects of monetary union. These tendencies are further promoted
not least by the European Court of Justice’s jurisdiction, and they will be even strengthened by
the Charter of Fundamental Rights becoming legally binding.
1.2 In terms of the taxonomy of statehood and intervention policy, not all of the functions of a
state are equally developed in the European Union. For example, the Union is undoubtedly
based on the rule of law, yet it is not a fully fledged welfare state. It does, however, strongly
influence the constitutional framework of economic activity, particularly through its
competition policy and other forms of regulatory intervention. On the other hand, it subsidises
like a state, supporting the provision of public goods in the broadest sense of the term by
means of financial grants and thereby creating distribution, stabilisation, regional-development
and structural effects.
The economic justification for Community action lies not least in the external effects character
of cross-border contexts, where it is designed to overcome decision-making situations akin to
‘prisoners’ dilemmas’ which obstruct negotiated settlements between parties. Moreover, it is
only in these cases that the subsidium character of the higher-ranking intervening institution
under the principle of subsidiarity, and thus the justification for the centralised exercise of
power, becomes clear.1 To that extent, it is questionable whether the subsidiarity principle as
50
enshrined in the Treaty can legitimately be restricted to the areas in which the Union does not
possess sole competence but shares its powers with the Member States.
1.3 The social and economic policy of the EU is essentially limited to coordination. In the
absence of its own tax-raising powers, the Union is not a state in the fiscal sense. Its
coordination of economic policies is reinforced by its stability policy, whereby it monitors and
sanctions the Member States in the conduct of their budgetary policies. It is here that we see
the most potent form of intervention in the field of economic policy, which the stability
doctrine that forms the theoretical foundation of the Maastricht criteria justifies by invoking the
role of monetary union as the foremost centralised policy. On the other hand, this one-sided
focus on stability also entails inherent contradictions in cases where the criteria for an
‘optimum’ monetary area are not adequately fulfilled and compensatory measures cannot be
taken by the Union for want of sufficient resources but must be taken by the Member States;
this call on the national budgets could then jeopardise the achievement of the stability targets
imposed by the Union in the framework of its monitoring procedure. This is not primarily a
paradox of European statehood but a contradiction that arises from underlying economic
philosophies. Since political union has not – or not yet – taken shape, monetary union is
altogether risk-prone on account of the lack of direct political legitimation of the stability
focused monetary policy.2
1.4 To sum up, if we consider the Union’s catalogues of objectives and spheres of competence,
it is very difficult to argue that none of these are tasks of a state. The Union is therefore a state
in the economic sense. This is reflected most clearly in its allocation function, comprising
regulatory policy and practice and support for the production of public goods, but less clearly
in its distributive function, which the Union chiefly exercises in its governmental role of
subsidiser, or in its stabilising function, which revolves around the task of supervising
compliance with its stability policy criteria.
2. The question of the Staatsvolk as an attribute of statehood and of the existence of a

European demos
From the perspective of sociological constitutional doctrine, a Staatsvolk, meaning the people
as a constituent force, which legal constitutional doctrine posits as an essential condition of
statehood, is not unequivocally present, strictly speaking, at the level of the European Union. In
the conception of a ‘cosmopolitan Europe’ advanced by the German sociologist Ulrich Beck, the
constellation of the EU is actually characterised by the existence of both a European demos and
a national demos in each Member State. This ‘both…and…’ theory contrasts with the mutually
exclusive ‘either…or…’ approach to the question of whether a European demos exists.3
3. Sovereignty and state authority as a key issue of legal constitutional doctrine: the
Union as a non-sovereign state (Jellinek) and as a general state (Kelsen)
3.1 In legal constitutional doctrine, a sovereign state has two defining features: potential all-
encompassing competence and sovereign power. Sovereignty in the sense of self-
determination, of an authority bound by its own decisions and of an absolute unity of will is
not, however, total power but power conferred by the law; the crucial factor is not the actual
exercise of competence but the potential exercise of competence, in other words the self-
determination of an entity over its own competence – its ‘competence to be competent’, so to
speak. In the framework of this power conferred by the law, the imposition of the will of the
state is then guaranteed by virtue of its sovereignty (imperium).
51
A hundred years ago, Georg Jellinek, Austrian professor of constitutional law at German
universities, rejected the idea that sovereignty was an essential attribute of a state in his
Allgemeine Staatslehre (‘General Theory of the State’), which remains a reference work to this
day. Besides sovereign states, he said, there were also non-sovereign states. Although Jellinek
considered that a non-sovereign state also possessed power conferred by the law to determine
the bounds of its competence, this power was limited by the law of another body politic, which
could strip the non-sovereign state of the competence it had acquired. On the basis of the
established economic as well as legal theories of the state, it therefore seems apt to apply this
definition to the European Union.
3.2 If we adopt the principle of the indivisibility of sovereignty which was recognised by the
Austrian professor of public law Hans Kelsen, creator of the Austrian Federal Constitution, as
well as by Georg Jellinek, we must conclude that sovereignty remains indivisibly vested in the
Member States as authors and masters of the Treaties, which provide not only for the transfer
of powers to the Union but also, in theory, for the reversion of powers to the Member States. It
would certainly be inappropriate to speak of transfers of sovereignty. The more correct term
would be a shifting of powers and responsibilities – referred to in organisational theory as
centralisation – even though it is apparent that these shifts do entail the transfer of certain
sovereign rights.
3.3 Only if the statehood of the Union were completely developed, in other words if the general
order of the European Union, which would equate to the Republic of Austria, overarched the
two subordinate elements, namely central government, represented by the institutions of the
European Union and equating to the federal authority (Bund) in Austria, and the constituent
states, i.e. the Member States, analogous to the federal provinces (Länder) in Austria, with an
‘umbrella’ of sovereignty could one speak of a European federal state. Sovereignty would then
lie, according to Kelsen’s theory, indivisibly with the overarching order of the European Union
and would thus be vested in equal measure in the governing institutions of the EU, as the
central authority, and the Member States as the constituent states of the federation. Both the
central authority and the constituent states would be regarded as deriving their powers by
delegation from the overarching constitutional order.
3.4 The key to statehood and sovereignty is not that a new overarching tier, a common
umbrella forming the general order, is actually endowed with all the powers of a state, is
spanned, as it were, with a new watertight canopy, comprising all the sectoral spheres of
competence and public responsibilities. The vital thing is that this overarching tier should be
endowed with the legal potential to exercise all powers (potential omnicompetence), that is to
say it should be spannable with a watertight canopy. This is not, or not yet, the case with the
European Union, because the existing national umbrellas or partial umbrellas are still in place.
The Union cannot replace the existing national umbrellas without explicit authorisation, which
is always limited to specific areas of activity. Once it has received such authorisation, however,
the primacy of the overarching legal order established by the Union for the area in question is
absolute (see subsection 4.3 below).
3.5 To sum up this section, although Jellinek’s theory of sovereign and nonsovereign states is
not uncontested, Kelsen himself being among those who reject it, it is a pragmatic approach
that certainly lends itself to attempts to reconcile the doctrines of economic constitutional
theory with those of legal constitutional theory. According to these doctrines, the Union may
be regarded as a state in the economic sense but not as a sovereign state in the legal sense.
According to Jellinek’s theory, sovereignty rests indivisibly with the Member States as long as
the overarching order has not been developed into a federally constituted state. Some modern
constitutional theorists regard the development of supranationality as an authority derived
52
from states, corresponding to the associated restrictions of sovereignty or even erosions of

state sovereignty. Felix Ermacora, for example, a leading Austrian scholar of constitutional and
international law and human rights, refers to supranationality as the sovereignty of a nascent
regional confederation of states.
4. The paradox of European legal theory: is the Union a unique kind of entity (sui generis),
or is it a nonsovereign state that claims primacy for its legal order over those of its
sovereign Member States?
4.1 There is no universally accepted definition in European legal theory of the entity formed by
the European Union. The terminological uncertainty is reflected in the identification of
individual elements, some of which are indicative of supranationality, while others suggest a
Union without statehood, in an attempt to circumscribe a more or less inconclusively defined,
hybrid, one-off construct of a ‘community’ so as to reflect its value as an innovative form of
intergovernmental combination.
4.2 What seems paradoxical is that precisely this kind of construct which cannot be
systematically defined should be entrusted with key powers and responsibilities that influence
the life of society in the Member States, even if the transfer is not – or is not yet – what
traditional constitutional doctrine defines as a transfer of sovereignty. That is paradox No 1.
The transfer equates in principle to outsourcing the tasks of government to private legal
entities or, in the case of sovereign responsibilities involving administrative tasks, to companies
operating as authorised agents. In spite of its resonant name, the European Union is thus
presented as a kind of European security firm with political regulatory functions and a money
box from which it distributes subsidies. The Member States authorise it to perform specific
tasks on the basis of restricted mandates but still feel themselves to be ‘masters of the Treaties’,
regardless of the curtailment of their own rights. It should, of course, follow that the Member
States, as masters of the Treaties, can rescind the powers they have transferred in accordance
with the principle of specific conferred powers, just as Austrian administrative law permits the
withdrawal of a company’s status as an authorised agent. That, however, is pure theory. The
foregoing is not intended to imply that economic constitutional doctrine regards the transfer of
such responsibilities as unwarranted, particularly in cases where the solution of cross-border
problems would overstretch the capacity of individual states.
4.3 The Union certainly does not – at least not yet – possess the attribute of sovereignty that
consists in actual or potential omnicompetence; this is due to the principle of specific
conferment of powers by the Member States as masters of the Treaties. On the other hand, the
case law of the European Court, and particularly its judgment in Costa v. ENEL, confirms the
absolute and unrestricted, unconditional and final primacy of Community law, a primacy which,
though restricted to the fields in which competence has been transferred, transcends the limits
of the legal powers of the sovereign Member States in those fields in such a way that
Community law overrides national law. This no longer accords with the core element of the
classical concept of sovereignty, namely the exclusive right of self-determination. This may be
regarded as another paradox of European statehood (paradox No 2), precisely because the
non-sovereign state which is the Union is not limited by the legal powers of the existing
sovereign Member States but claims primacy for its legal order and actually enforces its claim,
thereby breaking those limits.
4.4 Whether and to what extent there are still barriers to the primacy principle in the form of
reserved national constitutional rights has had to be tested in Austria, the issue being whether
the Reform Treaty alters fundamental constitutional principles and therefore amounts to a total
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revision of the Federal Constitution, such a revision being subject to approval by referendum
(see subsection 7.2 below). If we accept Jellinek’s conception of the non-sovereign state, the
limited nature of conferred rights, that is to say the lack of actual or potential omnicompetence,
would thus be the final conclusive line of argument against the statehood or, to be more
precise, sovereignty of the entity known as the European Union. The case law on primacy
developed by the European Court of Justice counters that fine line of argument by
‘dogmatising’, to some extent, the primacy principle and does so with such rigour that it
creates at least the same effect – albeit in a limited number of specific fields – as would be the
case in a federally constituted state with Kelsen’s configuration of a complete and coherent
general order overarching the two subordinate orders of central government and the
constituent states.
5. The question of the ultimate aim of European integration: the ideal of a European
federal state versus the ideal of a constitutionalised European Union
The ideal and general conceptions as to the ultimate aim of the process of European
integration shifted around the mid-1960s from the post-war vision of a federal United States of
Europe towards the concept of a European Union. In the constitutional discussion too, which
began in the mid-1970s and has continued down to the present day, the qualitative leap to
statehood in the form of a federally constituted European state has not been on the agenda.
Accordingly, in the theory of European law, as represented e.g. by Thomas Oppermann,
sovereignty in the sense of competence to acquire the competence to take final decisions and
the power to exercise authority lies with the Member States as masters of the Treaties, even
though they have transferred considerable parts of their political authority to the jurisdiction of
the Community without reserving the right to revoke the transfer.
Another paradox (paradox No 3) is the fact that the logical ultimate purpose, namely the model
of a European federal state, disappeared from the agenda at the very time when the idea of a
constitution came to the fore.
6. The discussion of federal models prior to the Constitutional Convention and

alternative conceptions of the constitution from an anti-centralisation perspective and
from a pro-interventionist perspective born of perceived centralisation deficits
6.1 The attempts, chiefly from German sources, to revive the debate on the model of a federal
state as the ultimate aim of European integration in the run-up to the Constitutional
Convention were short-lived. France and Germany reached agreement before the start of the
Convention to cement the existing institutional triangle of Parliament, the Council and the
Commission with only minor modifications. This approach was adopted without amendment
by the Constitutional Convention. This consolidation is likely to block any development of the
European integration process in the direction of a federally constituted division of powers for
the foreseeable future and perhaps even beyond. The existing mix of executive and legislative
functions with no unequivocal exclusive assignment of the powers of each branch of
government to specific institutions in accordance with the classical separation of powers has
thus been preserved.
6.2 At the same time, however, this also amounts to a rejection of the conceptions influenced
by what is presumably an idealised image of the German federal model. Moreover, it creates
increasing scope for centralisation. This scope derives not least from the lack of a sharp dividing
line between Community and national spheres of competence, and it is being consciously
harnessed by the mothers and fathers of the Constitutional Treaty, and hence of the Reform
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Treaty too, to promote a ‘dynamic development’ of the Union. This is the criticism voiced by the
‘European Constitutional Group’ in its alternative constitutional proposals which are
anticentralist, seek to minimise the role of the state and favour a liberal, deregulated economy,
in contrast to the pro-centralisation and interventionist views of the ‘EuroMemorandum Group’
underlying the political and economic vision of those on the Left of the political spectrum, a
vision that tends to focus on the Union’s centralisation deficits.
7. Is there a ‘constitutional core’ that would necessitate a national or even European

referendum? The referendum requirement in Austrian constitutional law
7.1 In terms of the functioning of the European economy and institutions, there are clear signs
that the European Union is on the verge of possessing a ‘constitutional core’, a ‘constitutional
identity’ (statehood), although according to legal doctrine it will not, or at least not yet, have
the characteristics of a sovereign state. The following measures will contribute to that
constitutional core: making the presidential structure of the European Council more permanent
and streamlining the representation of the Union abroad, extending the powers of the
European Parliament, establishing an obligation to provide mutual military assistance,
although decisions on military matters will still be subject to the unanimity requirement, and,
not least, the incorporation of the Charter of Fundamental Rights into European law.
To put it briefly and starkly, the Reform Treaty will give the Union all the main characteristics of
a fully developed state except the right to raise taxes, to incur debts in order to fund the
performance of its tasks and to involve Member States in military operations against their will.
7.2 This immediately raises the question of whether and to what extent the increasing strength
of the European constitutional identity is being accompanied by a corresponding weakening of
national constitutional identity, a question which has given rise in Austria to a debate on the
conditions in which interventions into fundamental principles of the Federal Constitution are
classifiable as a total revision and must therefore be submitted to a referendum. This should be
distinguished for the purposes of the present analysis from the question of an EU-wide
referendum, to which I shall return in section 9 below.4 The question of the European
constitutional identity led to a judicial review by the Federal Constitutional Court in Germany,
which sought to establish whether the major step in the integration process that was taken
through the Maastricht Treaty had weakened Germany’s federal structure and its Parliament to
such an extent that it could be said to have diminished the constitutional identity (statehood)
of the Federal Republic of Germany.
7.3 Even though the German constitutional judges ultimately rejected this hypothesis,
choosing the ‘pragmatic’ option of prior scrutiny of each impending step in the integration
process, the key question of the point at which it becomes valid to speak of a loss of national
constitutional identity remained unanswered in Germany as well as in Austria, where the
doctrine of essential constitutional principles (‘Baugesetze’) is used to establish whether
constitutional amendments amount to a total revision and must therefore be put to a
referendum.
The sole exception was the decision that the amendments necessitated by Austria’s accession
to the EU were tantamount to a total revision, which led to the 1994 referendum. In both of the
other cases the new steps in the integration process, namely Austrian ratification of the Reform
Treaty and German ratification of the Maastricht Treaty, were given the green light. As far as
German ratification of the Reform Treaty is concerned legal proceedings are pending so that
the German act of consent to the Treaty is to be reviewed by the Federal Constitutional Court.
55
Until the Court’s announcement of judgement the German Federal President postponed
signature of the ratification law.5
7.4 There may be a good argument for this green light in terms of constitutional law, but it is
unsatisfactory in terms of constitutional policy. In Austria, reserved constitutional rights, in
other words the essential principles enshrined in the Federal Constitution, are still regarded as
limits to the absolute and unrestricted primacy of Community law demanded by the European
Court of Justice. Whereas this primacy principle was explicitly enshrined in the Constitutional
Treaty, it is now relegated to a declaration attached to the Reform Treaty. According to the
prevailing Austrian doctrine, the limits of constitutionality are no longer being overstepped, the
dominant view being that the relevant declaration more or less implicitly indicates respect for
these limits. That, however, is debatable.
7.5 Even if the prevailing Austrian doctrine of constitutional law per se, according to which the
requisite amendments do not equate to a total revision of the Constitution and need not
therefore be put to a referendum, is accepted as consistent with the principles of constitutional
law, there is a need to examine from the perspective of constitutional policy whether the
doctrine that encroachment on the essential principles of the Austrian Constitution is the
hallmark of a total revision has not become too blunt an instrument in the course of time –
contrary to the hypotheses that are occasionally advanced in Germany, for example, by
prominent constitutional experts – to be used effectively as a criterion of constitutionality for
transfers of competence to the EU and for steps towards closer European integration. This
instrument would ultimately come into its own if proposals for the establishment of a federally
constituted European state were on the table, but only then.
7.6 In those circumstances it would be appropriate to rethink constitutional policy, because

such a move would affect fundamental aspects of the ‘constitutional identity’ of the Republic,
by which I do not intend to imply that it would endanger the very existence of the state. This
applies particularly to the phenomenon of a creeping total revision, especially in view of the
effects of the more or less regular revisions of the European Treaties which have become
customary in recent years and which have led to progressively closer and firmer integration.
7.7 A qualitative leap, in this case towards a total revision of the Constitution, is normally the
culmination of a continuous sequence of increasingly numerous steps towards closer
integration, just as, in a domestic context, the abolition of the Republic or the abandonment of
democracy – a rather remote possibility, fortunately – could only be the culmination of a
creeping total revision of the Constitution. Constitutional doctrine should therefore provide
earlier clearly defined indicators that can be used to identify nascent processes leading towards
total revisions rather than resorting to mere acknowledgements of the vagueness of the legal
concept of a total revision. Instead of cultivating helplessness and philosophising on the
essence of constitutional principles, constitutional scholars should be able to provide visible
warning signs before an expected qualitative leap is made.
7.8 For democratic reasons it seems appropriate at least to remember the old-established in
dubio precept, which would mean that, in case of doubt as to whether proposed constitutional
amendments amount to a total revision, it would be right to assume encroachment on an
essential principle, in other words in dubio pro referendo, rather than proceeding from the
opposite premise. Political pressure is needed to assert this precept, particularly when major
transfers of powers to the Union or fundamental changes to the Union’s decision-making
structures are on the agenda, that is to say when the European institutions are to exchange
some of the characteristics of international organisations for those of governmental bodies, or
when instruments relating to fundamental rights await adoption. Such amendments create the
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‘constitutional core’ of a Treaty and highlight the integration threshold beyond which we enter
the realm of a total revision of the Federal Constitution.
Seen from this perspective, the debate on the question of whether the transformation of the
primacy principle into Austrian law amounted to a total revision of the Federal Constitution
was ultimately a matter of barking up the wrong tree, an exercise in hair-splitting, because the
issue was already res iudicata, having been decided by the Austrian people themselves in the
referendum on the EU Accession Treaty, which prescribed adoption of the established law and
practice of the Community – the acquis communautaire – and hence of the case law established
by the European Court of Justice, not least on the primacy principle.
8. Implications of the German Maastricht judgment
8.1 One possible reason why encroachments resulting from closer European integration are
more hotly debated in Germany is that German constitutional law makes no provision for
referendums, even in the event of encroachments on fundamental principles of the German
Basic Law. Because of this, on the other hand, constitutional judges in Germany seem in
practice to be more keenly aware of their role as guardians of the national Constitution and
more assertive in its defence than their Austrian counterparts, even though the approach to
judicial reviews of the constitutionality of integration measures, and possibly the outcome of
such reviews too, does not differ significantly between the two countries.
8.2 The Maastricht ruling, by emphasising the provisos that every proposed integration
measure must be subjected to scrutiny, that the subjection of an integration measure to
judicial review and the establishment of its constitutionality is without prejudice to subsequent
extensions of the relevant integration programme and that each proposed integration measure
must be subject to foreseeable conditions and be sufficiently definable, confines itself largely
to procedural considerations. This judgment did not set objective substantive limits any more
than the Austrian doctrine of essential principles defines the boundary between partial and
total revision. Roman Herzog, former President of the Federal Republic of Germany, who had
also served as President of the German Constitutional Court and later became chairman of the
first European Convention, which drafted the Charter of Fundamental Rights, presented a
number of institutional proposals designed to curb centralisation tendencies, i.e. transfers of
power to the Union. Like German and Austrian constitutional doctrine, however, these stop
short of defining the precise threshold of intolerability from the point of view of national
constitutional law.
8.3 This line can be drawn by means of a definition of the boundaries of integration based on
the concept of a ‘constitutional core’. The fact that such a core can be delineated on the basis of
customary constitutional standards but cannot be used as a basis for legal argument in the
context of present-day constitutional doctrine while on the other hand it would be a desirable
political means of identifying the point at which amendments to the national Constitution
become a total revision and need to be submitted to a referendum may be regarded as another
paradox (paradox No 4) in the debate on the statehood of the European Union.
8.4 This paradox assumes an additional dimension when we consider the effects that might
realistically be expected to emanate from the future enshrinement of the Charter of
Fundamental Rights, when the Charter becomes a general bill of rights that applies to the
entire umbrella of the European Union – to use Kelsen’s model of a tripartite state order –
rather than applying only, as Herzog originally intended, to the part of the order comprising the
European institutions, while the Union remains a unique construct to which the doctrine of
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European law does not – or not yet – attribute the character of a state (paradox No 5). The roots
of this paradox lie in the diffuse nature of the Charter of Fundamental Rights and of its scope.
On the one hand it seems logical to associate individual legal entitlements with the Charter by
analogy with the ‘classical’ bills of rights, while on the other hand the authors of the Charter, in
defining its scope, have firstly tried to focus the application of its provisions on the actions of
the Union, with the result that the fundamental rights, by dint of their wording, have indirectly
acquired the character of objectives of the Union. Secondly, they have tried to avoid extending
the competence of the Union. In view of this motley assortment of aspirations that underlie the
Charter, it is not impossible that, because the mandate to respect fundamental rights is
addressed to the institutions of the Union, the latter will consider themselves called upon, or
indeed encouraged, to take action to fulfil their mandate, including initiatives in areas in which
no powers have ever been explicitly assigned to them. The restriction of their action would thus
be interpreted as implying an invitation to act, as a result of which – possibly with the support
of the European Court of Justice – limitations would give rise to invitations. This would
undoubtedly nurture centralisation tendencies.
9. What form could a European referendum model take that would reflect the current
state of integration, the ‘statehood’ of the Union and the nature of the European demos?
9.1 In the debate about a referendum on the Reform Treaty, the need for a national referendum
must be distinguished from the question of direct democratic legitimation at the level of the
EU. The former has to be assessed on the basis of the national constitutional order in each
country and only has secondary relevance to the statehood of the Union and the nature of the
European demos. The latter, that is to say the question of EU-wide legitimation, would assume
immeasurably greater importance in terms of the politics of democracy and in the light of the
issue of the existence of a European demos and its role as a pouvoir constituant, or constituent
power, and this question should be – or rather should have been – discussed as a matter of
priority. In the prevailing political circumstances, however, that is Utopian or, more accurately, a
missed opportunity, although the political class no doubt squandered it intentionally in full
awareness of the consequences of their omission. As far as Austria is concerned, moreover,
unequivocal directions to this effect contained in resolutions of the National Council
(Nationalrat), the First Chamber of the Austrian Parliament, were not acted upon at all, let alone
implemented at the European level.
9.2 Neither a simple majority of the population of the EU nor a situation in which the majority
vote of the population in only one Member State can prevent the adoption of a proposed
Treaty is an adequate referendum model. In accordance with the sociological concept of a
‘cosmopolitan Europe’, given the present state of integration, appropriate weight should be
given to both the European demos and the decision taken by the population in the Member
States, reflecting the will of each national demos. The solution could be found in a double
majority, whereby a treaty would be deemed to have been adopted if the population of at least two
thirds of the Member States, i.e. 18 states at the present time, voted for its adoption by a simple
majority, provided that the total number of ‘yes’ votes corresponded to at least two thirds of the
enfranchised population of the Union.6 Thus different e.g. from Switzerland where for the double
majority requirement of both the population and the cantons a simple majority is sufficient in
each case of constitutional referendums, the threshold for the treaty’s passing by referendum
should set higher because of a simple reason: the statehood of a Confoederatio Europaea
equivalent to that exemplified by the Confoederatio Helvetica does not exist (yet).
9.3 Should it be the case that a move in this direction at the negotiations on the Constitutional
Treaty and/or the Reform Treaty was rejected for want of a consensus because the binding
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effect of an EU-wide referendum was regarded by the Member States as an unacceptable

encroachment on their national sovereignty, this would be inconsistent too (paradox No 6), in
so far as the centralising tendencies inherent in the decision-making structures of the Union are
actually conducive to the transfer of sovereign powers, which the Member States accept, and
yet they reject direct democratic legitimation of such transfers. Whether the Austrian
Government ever actually made such a move in fulfilment of the unequivocal resolutions
adopted by the National Council and the eloquent declarations of intent made by leading
politicians cannot be verified but seems doubtful. Possibly the idea of a European referendum
could knock against the implications of the German constitutional court’s Maastricht
judgement. Following the court’s criteria reviewing constitutionality of competence transfers
to the European Union only the legitimate institutions of the Federal Republic of Germany are
authorized to decide on it and not any majority of European citizens. This was confirmed
recently by the German social-democratic MEP and former President of the European
Parliament Klaus Hansch.
10. Logical snares
10.1 A taxonomy of mutually exclusive conceptions of the ultimate purpose of European

integration produces several logical snares as well as contradictions and additional paradoxes
between intergovernmentalists and federalists, i.e. supporters of a Europe of nations and
proponents of a European federal state, between democrats and Eurocrats, between Euro-
sceptics and Euro-idealists and between supporters and opponents of referendums. Cross-
classification between these categories may reveal conceivable combinations, although some
pairs of categories will be mutually exclusive.
10.2 A first logical snare (paradox No 7), which is also tinged with irony, is that when Eurocrats
who are also Euro-idealists and federalists reject the idea of referendums, they are obstructing
the emergence of that very sense of European identity which characterises a European demos
and which would ultimately promote the European statehood to which the federalists actually
aspire.
10.3 On the other hand, intergovernmentalists who are Eurosceptics and democrats are liable
to be caught in a logical snare (paradox No 8) when they call for a referendum but overlook the
fact that they are supporting the very thing they actually reject, namely the emergence of a
sense of European identity in the minds of a European demos, especially since, even if such a
referendum were to produce a ‘no’ vote, the propagation of the case for a European
referendum alone would give powerful impetus to the idea of European statehood. Ironically,
then, both federalists and intergovernmentalists harm their own cause when they fail to
appreciate that the creation of a constitution is a profoundly democratic process in which the
people play a key role as the constituent power. Is that really the new Europe they want to
build?
10.4 In the slightly modified, strictly ‘either…or…’ scenario in which Eurosceptics oppose a
European referendum but favour a national referendum and in which their role as democrats is
reduced to support for democracy in their own country, possibly in a form that leans towards
right-wing populism, so that they are ultimately definable as nationalists, there is also an
inherent contradiction (paradox No 9), because it is scarcely conceivable that the validity of a
treaty could be restricted to the areas in which it enjoys public support, and the only option at
the end of the day is withdrawal, not least in view of the fact that renegotiation with parties
which have declared their desire to withdraw is scarcely realistic and seems unlikely to succeed.
The only way out of all of these dilemmas is offered by the democratic understanding of
integration based on the ‘both…and…’ configuration of a ‘cosmopolitan Europe’.
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11. General conclusions
11.1 In view of the Union’s catalogues of objectives and spheres of competence, it is no longer
plausible to argue that the objectives and activities listed there do not represent the tasks of a
state from the perspective of economic constitutional theory.
11.2 From the perspective of legal constitutional theory, it is possible to substantiate the view
that the Union, for want of omnicompetence and because of the system of conferred powers
whereby the Member States transfer specific powers in limited fields of activity, is a non-
sovereign state.
11.3 From these perspectives of economic and legal constitutional theory, the terminological
vagueness with regard to the unique hybrid sui generis construct of a European Union in the
doctrine of European law appears to be refutable and surmountable.
11.4 On the other hand, however, this non-sovereign state breaches the sovereignty of the
Member States by virtue of the fact that its judiciary claims absolute primacy for its legal system
in those areas of activity in which the Union possesses conferred powers. Therein lies the whole
paradox and contradiction of the European Union.
11.5 This relates not least to the question of the need for direct democratic legitimation of the
latest revision of the Treaties by the Treaty of Lisbon – the Reform Treaty – under the Austrian
Constitution. Regulation of the primacy principle has been a key criterion in the Austrian
debate.
11.6 Even though it is plausible to argue from the perspective of constitutional law – and, of
course, to dispute – that the Reform Treaty did not ultimately entail constitutional amendments
which amounted to a total revision and would have necessitated a referendum, this outcome is
nevertheless extremely inadequate in democratic terms and should prompt appropriate
reflections in the realm of constitutional policy.
11.7 In view of the clear crystallisation of a ‘constitutional core’ in the Treaties as revised by the
Reform Treaty, direct democratic legitimation is undoubtedly warranted from the perspective
of constitutional policy.
11.8 EU-wide legitimation in a European referendum should be given priority over points of
national constitutional law.
11.9 The form this legitimation could take depends on the existence of a European demos and
on how it can win recognition.
11.10 If such a referendum were held, not least among its effects would be a vital boost for the
development of a European demos. This lays sensitive logical snares into which both supporters
and opponents of a referendum are liable to stumble.
12. Epilogue, from an Austrian perspective, on the consequences of the Irish referendum
in the light of the results of the European Council’s deliberations on 19 and 20 June 2008
At its meeting on 19 and 20 June 2008, one week after the referendum in Ireland, the European
Council agreed that more time was needed to analyse the situation. It noted that the Irish
Government would ‘actively consult, both internally and with the other Member States, in order to
suggest a common way forward’. The European Council also noted that the parliaments in 19
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Member States had ratified the Treaty ‘and that the ratification process continues in other
countries’. There was no official call for continuation of the ratification process. It was noted,
however, that the Czech Republic could not complete its ratification process until the Czech
Constitutional Court had delivered a favourable opinion on the compatibility of the Lisbon
Treaty with the Czech constitutional order. The fact that a similar review was pending in the
United Kingdom and also lies ahead in Germany was evidently not considered to have any
profound implications. Lastly, the European Council ‘agreed to Ireland’s suggestion to come back
to this issue at its meeting of 15 October 2008 in order to consider the way forward.’ No other time
limits were specified, nor were there any references to further reflections.
12.1 What can be read between the lines?
12.1.1 It is surely essential to proceed from a realistic appreciation of the balance of power. In
the eyes of the dominant political class of the pro-ratification mainstream, Ireland, even in
combination with the Czech Republic, does not carry as much weight as France and the
Netherlands did in 2005.
12.1.2 The mainstream countries are unlikely to accept another breakdown of the Treaty
project.
12.1.3 Among the 19 Member States that have already completed their parliamentary
ratification, there is consensus that the ratification process must be continued as speedily as
possible in the remaining seven countries, so that 26 countries, i.e. all Member States except
Ireland, will have adopted the Treaty by about the end of the year. The Treaty could then enter
into force during the first half of 2009, provided that the Irish problem had been resolved by
then. A new legal foundation would thus be in force in time for the elections to the European
Parliament in June 2009.
12.1.4 With regard to Ireland, the intention is most probably to bring the Irish back on board –
or, to be more precise, back into line – by offering them more or less token concessions, namely
placebos in the form of unilateral declarations safeguarding Irish interests; such declarations
would do no one any harm and would not alter the substance of the Treaty. This would avoid
the need for a new ratification process. The guarantee that there will be an Irish Commissioner
has already been identified as one of the most significant concessions. Under the future
provisions of the Treaties as amended by the Treaty of Lisbon (Article 17.5), the European
Council could even take a unanimous decision to that effect, and in any case the decision
would not be implemented until the planned reduction in the size of the Commission takes
effect on 1 November 2014.
12.1.5 Ireland is then likely to be given the option of revising its vote, in other words of holding
another referendum. What happens if Ireland rejects that option, or if the fresh referendum
delivers another ‘no’ vote, is a question that has not yet been officially broached. It is
conceivable that Ireland would remain a member of the Union on the basis of the body of
Community law enshrined in the Treaty of Nice, preserving the number of votes assigned to it
by that Treaty, but would have to accept the new institutional framework established by the
Treaty of Lisbon. This is a delicate matter from a legal point of view. The legal advisers of the
Council will presumably come up with a solution that prevents Ireland from vetoing any
decisions in matters on which the Council is required to act by unanimity.
12.1.6 There is unlikely to be, or to have been, consensus among the 19 Member States that
have ratified the Treaty as to whether the pending enlargement processes should be put on ice
until the Treaty has entered into force, in other words until the ratification process has been
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completed. The main advocates of suspension were the big players France and Germany,
supported by Luxembourg, while Austria opposed it with unaccustomed vehemence – that, at
least, was how Austria’s Council representatives portrayed it to the press.
12.1.7 The speculation that has been in the public domain for decades and keeps surfacing
from time to time like the Loch Ness Monster about a ‘core EU’, a two-speed Europe in which a
club of countries that are willing and able to pursue closer integration would move towards a
European federal state, while the remainder would be a contractually bound free-trade
community focusing chiefly on the internal market (Georg Hoffmann-Ostenhof in the Austrian
news magazine profil, issue No 26 of 23 June 2008), reared its head once again in the public
debates surrounding the meeting of the European Council, although the matter was not
discussed officially by the European Council, needless to say. Germany’s Federal Chancellor,
Angela Merkel, had explicitly rejected that option prior to the summit. Jean-Claude Juncker,
who is surely Europe’s most experienced and longest-serving political leader at the present
time, saw it as a possible contingency plan, although he did explicitly declare that he himself
did not favour a two-speed Europe.
A core Europe (‘avant-garde group’) was most clearly advocated recently by former German
foreign minister Joschka Fischer, not least in reaction to the abrupt change of direction in
Austria’s EU policy (see the updating passage “epilogue to the epilogue” below), which was
introduced by Austrian federal chancellor Alfred Gusenbauer (SPO), together with Werner
Faymann, who had shortly before been named new interim chairman of the Austrian
socialdemocratic party (SPO) by Gusenbauer. In the online version of the German weekly DIE
ZEIT of 30 June 2008 (“Vive l’Avant-Garde”) Fischer said: ‘There is no other way but to retrace
our steps back to a European avant-garde, i.e. to form a group of states within the EU who want
to advance and are able to advance. Those who wish and are able to join are invited to come
along, those who won’t should not block the others any more.’
12.2 What are we to make of this situation?
12.2.1 The formal rejection of a core EU by Angela Merkel and Jean- Claude Juncker’s
expression of fear and regret that this might prove to be the only way forward may
undoubtedly be regarded as a veiled threat to bring into line not only the EU members that
have yet to ratify the Treaty but all 27 Member States, including Ireland. The ambiguous
message conveyed to the Irish people comprised on the one hand a hypocritical official pledge
to respect their wishes but on the other hand a declaration of resolve that the Treaty must
nevertheless enter into force in all 27 Member States. To this end, Ireland has more or less
explicitly been asked kindly to reverse the vote of its people, which is surely the most
undemocratic of solutions to a deadlock caused by Europe’s ruling political class.
12.2.2 It would even seem far more democratic to allow Ireland to remain bound by the Treaty
of Nice, especially since it approved that Treaty by referendum, albeit at the second attempt. In
this context, the reaction of Hans-Gert Pottering, President of the European Parliament, to the
result of the Irish referendum sounds almost cynical. He called it a great disappointment for all
those who want more democracy. If democracy was practised anywhere, it was surely practised
in Ireland, contrary to the view expressed by Mr Pottering. It was not practised in Europe (see
the next paragraph). The verbal tightrope act performed by Mr Pottering in his next sentence,
in which he said that ratification decisions in the other countries should be respected in the
same way as the Irish vote and that the ratification process must therefore be continued in the
countries in which it was still taking place, therefore sounds rather unconvincing, at least as far
as the first part of the sentence is concerned.
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12.2.3 The most democratic solution would undoubtedly have been an agreement to hold a
European referendum. I made a proposal to that effect in the above mentioned study on
European statehood and justified it by reference to the level of integration that the Reform
Treaty seeks to establish and to the associated development of a European demos.
The proposed solution lies in a double majority of the European population and of the Member
States, both elements of which must, however, be a qualified majority, because the statehood
of the European Union is not, or at least not yet, so fully developed as to be comparable with a
conventional federation such as Switzerland. In constitutional referendums there, where a
majority of the people and of the cantons have to approve constitutional amendments, a
simple majority suffices in each case, i.e. a simple majority of valid votes cast throughout the
country and a ‘yes’ vote by the population in a simple majority of the cantons.
13. The European political class has yet to see the light
The opportunity to take a giant step for democracy by means of a European referendum –
regardless of the outcome – and to nurture the sense of identity of a European demos was
missed – presumably not unintentionally. There would have been enough time to prepare a
referendum, even though there is no legal basis yet for referendums. Wolfgang Schussel, who
was Austria’s Federal Chancellor at the time, even mentioned explicitly during the debate on
the ratification of the Constitutional Treaty in the National Council, the First Chamber of the
Austrian Parliament, on 11 May 2005, that a total of 96 members of the Constitutional
Convention had signed a resolution7 during the sitting of the Convention on 31 March 2003
recommending to the Intergovernmental Conference that the Constitutional Treaty be
adopted not only by the national parliaments and the European Parliament but also by the
people of Europe in binding referendums. These referendums were to be conducted in
accordance with the constitutional requirements of the Member States and were to be held
simultaneously on the same day, possibly in conjunction with the 2004 elections to the
European Parliament.
Those Member States whose constitutions did not provide for the instrument of a referendum
were to conduct a consultative referendum. Schussel told the aforementioned sitting of the
National Council that he had even gone out on a limb by calling for a European referendum at
several meetings of the European Council, but his lone voice evidently fell on deaf ears.
The instrument of a referendum can scarcely be introduced by the very Treaty that is supposed
to be submitted to a referendum. It would certainly have been conceivable and realistic to
adopt a pragmatic approach and agree on the basis of a politically binding declaration,
possibly at the Lisbon summit in connection with the signing of the Treaty in December 2007,
to act on the recommendation made in 2003 by the 96 members of the Convention by holding
a simultaneous referendum in all Member States. In those countries that did not have
referendums or whose constitutions did not require a referendum for the ratification of the
Reform Treaty, the result of the referendum would have only indicative value, but for external
observers and the other Member States it would have a political and, ultimately, even a legal
character inasmuch as it would count towards an EU-wide result. This could still be tried.
In connection with the ratification of the Constitutional Treaty on 11 May 2005, the Austrian
National Council had adopted resolutions calling on the Federal Government to launch an
initiative at EU level for the introduction of European referendums on fundamental
amendments to the European Treaties in cases where such amendments impinged on essential
principles of national constitutions and for the enshrinement of these referendums in European
law. Although the wording of the draft resolution tabled by the two parties of the governing
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coalition of that time was tailored to future amendments of the Treaty, it explicitly referred to
amendments of a constitutional nature such as those introduced by the Treaty establishing a
Constitution for Europe.
In connection with the ratification of the Reform Treaty on 9 April 2008, a new resolution made
only a halfhearted reference to ‘continued support’ for the enshrinement of the instrument of a
European referendum. The issue had not featured in the parliamentary debate itself, in which
the populist parties of the Right had confined themselves to calling for a national referendum.
In view of the sequence of events that began to unfold in May 2005 (the ‘no’ votes in the
French and Dutch referendums and the Austrian general election in the autumn of 2006), no
one asked any more whether and to what extent the Austrian Federal Government of the time
had actually fulfilled its mandate from Parliament by launching an initiative for European
referendums and what response, if any, had come from the other Member States.
In the light of the result of the Irish referendum, more and more individual voices are now
mooting the idea of a European referendum.
On the basis of past experience, however, it is surely to be expected or, to be more precise,
feared that support will not grow beyond these individual voices, some of which may even be
paying mere lip service to the idea. For example, Wolfgang Schussel, the former Federal
Chancellor who now chairs the parliamentary group of the Austrian People’s Party (OVP) in the
National Council, called for a European referendum modelled on the Swiss instrument
immediately after the result of the Irish referendum was announced. The same message was
conveyed by the Greens’ prominent European parliamentarian Daniel Cohn- Bendit in an
interview with the Austrian news magazine profil (issue No 25 of 16 June 2008). According to an
article in the German weekly newspaper Die Zeit (issue No 26 of 19 June 2008), headed Vergesst
Irland! (‘Forget Ireland!’), the Green Group in the European Parliament is considering the
possibility of initiating an EU-wide referendum on a ‘Democracy Act’ to coincide with the
European elections of June 2009 ‘in order to salvage at least the Charter of Fundamental Rights
and wider powers for Parliament’. Johannes Voggenhuber, the Austrian Green who was once
an ardent campaigner for the Constitutional Treaty, continues to revel in the plaintiff’s role,
bemoaning the ‘return to the 19th century’ that is resulting from the hegemony of the large
Member States which set the tone and the pace in the EU, and to expound his pet theory that
‘the President of the Council actually holds the position with the least democratic legitimacy in
the entire Union’ (interview in profil, issue No 24, 9 June 2008). As a former democrat of the first
water, he conveniently ignores the fact that those who choose the President of the Council may
well possess more democratic legitimacy in their own country than a Member of the European
Parliament elected on a turnout of less than 50%.
Of the voices that spoke up in the days and weeks preceding and following the Irish
referendum, perhaps the most authoritative was that of the German Social Democrat Klaus
Hansch, a former President of the European Parliament, although he expressed scepticism
about plebiscitary democracy (interview with the German daily newspaper Süddeutsche
Zeitung, issue No 137 of 14 June 2008). He regarded national referendums on European treaties
as a ‘structural flaw’ in the relevant national constitutions. ‘EU treaties are international
agreements that have been negotiated by several parties. In a classical referendum, the people
are supposed to vote on their own fate and then bear the consequences alone. Every
referendum on an EU treaty, however, is also a vote on the future of other countries and other
peoples’. In his view, a referendum on whether a country wishes to become a member of the
European Union is an example of a justifiable referendum, because the decision relates only to
the fate of the voting nation, and the consequences of a ‘no’ vote would be borne exclusively
by the people of that country.
64
Translated into the language of economics, votes to reject European treaties would, in Mr
Hansch’s view, have unwanted external effects on the Member States that supported the
treaty. He was not asked explicitly about the relevance of a EU-wide referendum. If the Union
were a federally constituted state, the phenomenon of external effects which he rightly
identified would, in his opinion, no longer exist, and the defeated minority would have to
accept the democratically expressed will of the people. In this context, however, Hansch drew
attention to the specific constitutional situation in Germany. In his view, it was inevitable that
Germany – or, to be more precise, the Federal Constitutional Court – would always be the
stumbling block to the development of such a European solution. Alluding to the Court’s
Maastricht judgment, he said that, while the ruling allowed Germany to transfer very many
powers to the EU, ‘only the organs of the German constitution can decide on these matters,
never a majority of the European people’. This is undoubtedly a compelling argument (for
further treatment of this point, see section 8 above). However, if the basic conditions for a
European referendum were set in such a way that they fostered a sense of identity among the
European people, promoting the emergence of a demos, this author believes that even Klaus
Hansch could be persuaded by the case for such a referendum.
In conclusion, nothing could highlight the whole schizophrenia of the ruling European political
class more clearly than the remarks made by the prominent German parliamentarian Martin
Schulz, chairman of the Socialist Group in the European Parliament, in an interview in profil
(issue No 22 of 26 May 2008), the transcript of which was printed alongside a critical article,
headed Die Vier da (‘Those four there’) about figures already rumoured to be in the running for
the office of President of the European Council. The vague job description for the post came in
for particular criticism. Under Article 15.6 of the Treaty on European Union (TEU), the President
chairs the European Council and is to ‘drive forward its work’. He or she also ensures the
‘preparation and continuity’ of the work of the European Council and must ‘endeavour to
facilitate cohesion and consensus within the European Council’. Moreover, the future
permanent President of the European Council, elected for a period of two and a half years, will
share these vague responsibilities with others, not least with the regularly rotating President of
the Council, with a new appointee to the post of High Representative of the Union for Foreign
Affairs and Security Policy and with the President of the Commission, but there is no clear
definition of their respective tasks. This paves the way for a free interplay of forces and external
influences, the results of which will ultimately be determined in part by the assertiveness of the
personalities who operate in such organisational conditions. This author believes that the
structure may have been deliberately shaped so loosely with a view to leaving spheres of
influence open.
As regards the various appointment procedures:
– the permanent President of the European Council is to be elected by the European Council
(Article 15.5TEU),
– the President of the Commission is to be elected by the European Parliament, acting on a

proposal from the European Council (Article 17.7 TEU, first subparagraph),
– the High Representative and Vice- President of the Commission is to be appointed by the
Council by common accord with the President-elect of the Commission; the other members of
the Commission will also be appointed in this way (Article 17.7 TEU, second subparagraph),
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– but the whole college of Commissioners, and thus the High Representative and Vice-
President of the Commission too, is subject as a body to a vote of consent by the European
Parliament (Article 17.7 TEU, third subparagraph).
Finally, in view of these appointment procedures and of the lack of a job description for the
rotating President of the Council (‘Evil begets evil’) and hence the unclear future role of the
head of state or government of the Member State holding the presidency, Martin Schulz
engaged in speculation about the future balance of power among the figures appointed to
serve in these conditions and concluded that this new leadership structure of the EU has been
badly designed. And he is actually correct in this assessment. Any impartial critical observer
must wonder, however, why this staunch advocate of a new Treaty then went on to argue
vehemently for this particular Treaty instead of being secretly relieved that the badly designed
instrument for which he had once campaigned so passionately might ultimately be laid to rest
by the Irish vote. The answer, of course, is obvious: his main concern is not the badly designed
leadership structure but the provisions widening the competence, and hence increasing the
power, of the European Parliament, provisions that would have to be written off if the Treaty
were to come to grief once more. This is not a democratic Europe in which the voice of the
people counts but a Europe in which the legislative process resembles horse-trading in an
oriental bazaar. The catastrophic turnout figures in elections to the European Parliament – less
than 50% of the European electorate voted – shows that the peoples of Europe no longer feel
represented by such ‘representatives of the people’. This makes it appear doubtful whether
that body possesses sufficient legitimacy yet to lay claim to the role of a people’s representative
assembly.
14. Epilogue to the epilogue: Change of direction in the Austrian socialdemocrats’ EU

policy
On 26 June 2008, in a letter to the editor of Vienna’s high-circulation tabloid Kronen-Zeitung,

which in recent months had championed EUcritical reports, mainly demanding a referendum in
Austria on the Lisbon treaty, the Austrian federal chancellor Alfred Gusenbauer, together with
the newly designated interim chairman of the social-democratic party, Werner Faymann,
unexpectedly advocated ‘that future amendments to treaties affecting Austrian interests
should be decided upon by referendums in Austria.’ This should also apply to the Lisbon treaty,
but only provided it would be amended again in the wake of events in Ireland, necessitating
another ratification. In later statements the federal chancellor reformulated this proposition,
stating more precisely that referendums should only be held on such amendments to the
treaty “whose significance was comparable to that of the Maastricht or Lisbon treaties” (ORF
online of 2 July 2008). This point of view is shared by the author of the present text (The
European Union between ‘non-statehood’ and ‘suprastatehood’), namely, that any treaty
amendment of a constitutional nature should be subjected to a referendum; however, in
contrast to the new SPO proposal, subjected not just to a national referendum but – mainly – to
a Europe-wide one.
Quite recently, on 9 April 2008, the Lisbon treaty was ratified by the National Council (the First
Chamber of the Austrian Parliament) with the votes of both governing parties Social-
Democratic Party (SPO) and Austrian People’s Party (OVP) as well as those of the Greens
opposition party. On that occasion, as mentioned above, these three parties had also adopted a
resolution requesting the federal government ‘to continue advocating support of the
instrument of a European referendum’ by creation of a legal basis to organize such
referendums.
How to evaluate what the media have called the ‘SPO’s volte-face regarding referendums’?
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On the one hand, one might observe: The basic idea of direct democracy regarding
fundamental changes in EU treaties has finally landed in the SPO. This must be welcomed, since
the SPO (just like its grand coalition partner, OVP) did not really have a penchant for
referendums; after hitherto very limited practical experience with referendum democracy in
Austria, for example, the referendum on opening a nuclear power plant in November 1978, this
instrument was only resorted to for considerations of political opportunity.
A further positive aspect is that this clarification by the SPO might contribute to overcoming
the present difficulty with the Austrian constitution, which provides that a referendum is
mandatory only in the case of a total revision of the federal constitution. The legal wording
‘total revision’, however, is not precise, so that - ultimately – the decision on holding a
referendum will continue to depend on political majorities in the Austrian parliament.
On the other hand, much as the idea of referendums at national level may be desirable as a
means of strengthening democracy, the SPO has not yet become aware of the necessity of
Europe-wide legitimation. Moreover, the SPO, forming part of the governing coalition, has
done nothing to strengthen public awareness of this idea, as expressed in the Austrian
parliament’s resolution of 9 April 2008, for which the SPO had voted, too.
There may, perhaps, not have been enough time for that. However, the SPO might well have
oriented itself on the similar but infinitely clearer resolution of 11 May 2005, which the Austrian
parliament had passed at the time of ratification of the Constitutionial Treaty. Even earlier,
while still in opposition, the SPO could have asked the government what steps it had taken
towards implementation of that resolution. This would have helped to avoid giving rise to the
detrimental impression of a possible fundamental change in Austria’s foreign policy, indicated
by the recent abrupt ‘volte-face’.
The SPO’s change of direction can be explained by the party’s drastic decline in opinion poll
results, which induced the federal chancellor on 16 June 2008, ten days before publishing his
call for future national referendums, to withdraw as party chairman and pass on this function to
Werner Faymann on an interim basis, without formal decision by the respective party organs.
Faymann was minister of infrastructure at the time.
However, the explanation advanced for this change of position were recently published
negative image values in the regularly conducted Euro-barometer opinion polls. They had
revealed that in Austria only just about 28% of the persons interviewed had a positive
impression of the EU, and only 36% of them thought that EU membership ‘was a good thing’:
this represented the fourth-lowest value among all EU member states (EU average: 52%).
According to Gusenbauer and Faymann, counter-action was needed, i.e. ‘involving citizens
more in decisions of the EU’ and, not least, putting greater emphasis on the notion of a ‘social
Europe’. That, in fact, the EU has hardly any say in matters of social policy was not mentioned.
To link this aspect with the promise of national referendums on changes in EU treaties is not
very convincing, however, mainly because the volte-face would not have happened had there
not been the danger of negative election results. In principle, of course, even such a
fundamental change of direction may be viewed as legitimate; but if this step is tainted by the
accusation of having made a deal with a tabloid paper to buy its support, faithfulness to
political ideals and foreign policy credibility may eventually give way to populist vote rigging.
Quite apart from the above argument, the following must be said about those opinion poll
results: Although the above-mentioned 36% represented a value near the bottom of the list,
this is not at all critical considering the longer term; rather, this value ranges somewhere in the
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middle, between the lowest value of 30% reported so far (in spring 1997 and 2004) and the
highest value so far recorded for Austria, 46% (in autumn 2002 and 2004). One notes, not least,
that the observed values did change dramatically within a short time, for example, particularly
from spring to autumn 2004. If so, they should, however, be critical for the European and
national political class thus indicating their inability communicating appropriately the idea of
European integration and making it understood to people.
The way in which the two top SPO politicians communicated the change of direction, i.e. via a
letter by two private persons to the editor of a tabloid is, of course, to be criticised, or at least to
be considered poor style and a breach with established rules, since the opportunistic motive of
‘prostration’ to an influential tabloid and the motive of thereby stopping the rapid drop in poll
results cannot be discarded. Whether this strategy was successful will only be revealed by the
next election results. By writing a letter to the Kronen-Zeitung, which has made itself the
mouthpiece of the EU sceptics, the two signatories had intended – in their own words – to
‘directly approach the EU sceptics’. Nevertheless, a more appropriate form of communication
would have been conceivable.
It was thus to be expected that the ‘about-turn’ would provoke universal rejection and even
outright anger on the part of the coalition partner, OVP, but also among the ruling class of
Eurocrats in the EU institutions. Besides this the federal chancellor failed in his attempt to
secure his own political survival by splitting the functions of federal chancellor and party
chairman (‘twin head’) on 16 June 2008, and by announcing an about-turn regarding EU
referendums on 26 June 2008. Both decisions have also been contested in his own party. The
coalition government was dissolved by the OVP on 7 July 2008. The SPO accepted the
dissolution and immediately nominated Werner Faymann top party candidate, who thereby
became the possible future federal chancellor after the elections envisaged for autumn 2008
(28 September).
Most notable among the vitriolic reactions to the SPO’s about-turn was that by Joschka Fischer,
the formally politically retired, formerly stone throwing but also sufficiently power-conscious
‘grass-roots democrat’ (and, years later, a model Eurocrat and German foreign minister).
In the online edition of DIE ZEIT on 30 June 2008, he expressed what probably most members of
the ruling political class in Europe were thinking: ‘The most recent example of ruthless
opportunism with respect to Europe happened a few days ago in Vienna – after the debacle in
Ireland! The SPO and its federal chancellor, Gusenbauer, whose ship, according to the polls, is
about to sink, has prostrated itself to an EU-sceptic tabloid, contrary to previous firm
convictions, in order to secure one’s domestic political survival. According to the SPO, all
important future changes to the EU treaty are to be submitted to a referendum in Austria,
which practically ensures rejection! Poor Austria, poor Europe, being led by such opportunists.’
Joschka Fischer was not aware that his polemic will ultimately be water on the mills of populist
simplifiers. It was thus counter-productive.
It is regrettable that this angry polemic by a Green European do-gooder does not show even a
glimpse of understanding for the fact that creating a constitution is a fundamentally
democratic process that requires democratic legitimation. In comparison, even the former
federal chancellor and present OVP party whip in the Austrian parliament, Wolfgang Schussel,
could be called a model European grassroots democrat. For example, on 30 June 2008 (the
same day that Joschka Fischer posted his polemic online), in an interview on Austrian
Television ORF, Schussel recalled the three-party resolution passed on 9 April 2008 by the First
Chamber of the Austrian Parliament, on occasion of the ratification of the Lisbon treaty, calling
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for a European referendum. As already mentioned, Schussel proposed (following the Swiss
model) a dual majority of both the European population and the member states.
This should not be forgotten. However, as discussed in greater detail in the author’s study
mentioned above, it seems that the threshold of a (dual) simple majority is too low, considering
the current level of European integration. In the European Union, we have not yet reached the
kind of statehood exemplified by the Confoederatio Helvetica and the Lisbon treaty has not
resulted in a Confoederatio Europaea. The threshold level for adopting the respective treaty by a
European referendum should therefore be set higher, i.e. a two-thirds majority of both the
population and the member states should be mandatory. Consequently, if the quorum (for
adoption of the treaty) were not reached, amendments of a constitutional nature would not be
possible. This would apply, for example, to fundamental institutional changes like the
envisaged presidium structure of the European Council and the EU’s more stringent foreign-
policy representation or enlarged powers of the European Parliament, or – not least – the
Charter of Fundamental Rights, as well as – particularly relevant to Austria – the expansion of
military powers to a degree no longer compatible with Austria’s neutrality.
One hopes, in any case, that the SPO will keep its word, also in a new government and in spite
of the unpleasant circumstances and inappropriate form of communicating the change of
direction; one hopes that the SPO will continue to advocate a referendum in Austria on
amendments to the treaty of a constitutional nature and, above all, that it will also call for a
referendum at the European level. The Austrian social-democratic member of the European
Parliament, Hannes Swoboda, recently expressed concern (in an interview on 5 July 2008 with
the Vienna daily Die Presse) about the difficulty of bringing about an EUwide referendum, as
‘many countries won’t go along’. This may be true. On the other hand, he thought a national
referendum would be possible only “regarding participation of one’s own country in further
integration steps”.8 Swoboda thought that this might ultimately lead to a Europe of two
different speeds. However, in the author’s opinion, this is no reason to discard a Europe-wide
referendum as hopeless. Rather, on the contrary, the idea should be strongly propagated in
order to find a way out of the dead end in which we have recently landed again. Will anybody
grasp this, at last?
* The study appeared in German under the title Die Europäische Union zwischen
Nichtstaatlichkeit und Überstaatlichkeit – Vom Wesen und Wert juristischer und ökonomischer
Staatslehren bei der Erklärung vermeintlicher oder tatsächlicher Paradoxien europäischer
Staatlichkeit (‘The European Union between non-statehood and supra-statehood – on the
essence and value of legal and economic constitutional theories in the explanation of putative
or actual paradoxes of European statehood’) as part of a series of research papers on the public
sector published by the Centre for Public Finance and Infrastructure Policy of Vienna Technical
University.
NOTES:
1 For further discussion of this point, see my article ‘Subsidiarity and Proportionality – a
legaleconomic approach’, in EUWatch, Issue 5, February 2007, pp. 3 et seq.
2 For further discussion of this point, see the interview given by Professor Paul De Grauwe of
the University of Leuven to EUWatch, published in Issue 3, October/November 2006, pp. 8-9,
and my introduction to the reprint of an interview with Professor De Grauwe from the
Flemish daily newspaper De Morgen of 18 March 2006, which appeared on pages 5-6 of the
same edition of EUWatch.
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3 For further discussion of this point, see my article ‘Does a European demos, as a constituent
power (pouvoir constituant), exist, and how can it assert its validity? Referendum models in
the process of Europe’s constitutionalisation’, in EUWatch, Issue 6, April 2007, pp. 10 et seq.
4 For further discussion of this point, see my article entitled ‘An Unsettled Referendum Debate’
in EUWatch, Issue 10, February/ March 2008, pp. 27 et seq.
5 In Germany review of constitutionality of integration steps primarily is a judicial and not a
political question. It is exclusively decided by the German constitutional court. In Austria,
however, mainly and in the end it is a political decision, only in the surface involved in a
judicial review, because international treaties amending national constitution are withheld
from judicial review by the constitutional court. The [internal] review of constitutionality in
the run-up to parliamentary ratification concerns the question whether the constitution
would be affected by total revision or not. To submit in the latter case a mere partial revision
of the constitution to a referendum would be an unequivocal political decision.
6 For further discussion of this point, see my articles in Issues 6 and 10 of EUWatch.
7 Reproduced in B. Kaufmann, A. Lamassoure and J. Meyer (eds.), Transnational Democracy in
the Making, Initiative & Referendum Institute (IRI) Europe, Handbook 2004, p. 5.
8 The same would probably also apply to reviews of the constitutionality of such integration
steps by the respective national constitutional courts.
70
THE CONSTITUTIONAL IMPLICATIONS OF THE TREATY OF LISBON

Giving the EU the constitutional form of a Federation
By Anthony Coughlan (October 2008)
THE TREATY OF LISBON IS QUITE DIFFERENT FROM PREVIOUS EUROPEAN TREATIES, FOR IF
RATIFIED IT WOULD ESTABLISH OR CONSTITUTE A LEGALLY NEW EUROPEAN UNION IN THE
CONSTITUTIONAL FORM OF A SUPRANATIONAL FEDERATION. IT WOULD THEREBY
REVOLUTIONISE THE CONSTITUTIONAL AND POLITICAL ORDER OF THE EU ITSELF AND OF ITS
MEMBER STATES
“The pooling of coal and steel production should immediately provide for the setting up of
common foundations for economic development as a first step in the federation of Europe.” -
Schumann Declaration on the formation of the European Coal and Steel Community, 9 May
1950,
“The Constitution is the capstone of a European Federal State.” - Guy Verhofstadt, Belgian
Prime Minister, Financial Times, 21 June 2004
“From the inside it looks like an arrangement based on Treaties between States. From the
outside it looks like a State itself.” - Jens-Peter Bonde, From EU Constitution to Lisbon Treaty,
www.euinfo.ie and www.euabc.com
“The State may ratify the Treaty of Lisbon signed at Lisbon on the 13th day of December
2007, and may be a member of the European Union established by virtue of that Treaty. No
provision of this Constitution invalidates laws enacted, acts done or measures adopted by
the State that are necessitated by membership of the European Union, or prevents laws
enacted, acts done or measures adopted by the said European Union or by institutions
thereof, or by bodies competent under the treaties referred to in this section, from having the
force of law in the State.” (emphasis added) - Ireland’s 28th Amendment of the Constitution Bill,
2008; the first two sentences of the proposed constitutional amendment which Irish voters
rejected on 12 June 2008
1. The Treaty of Lisbon is quite different from previous European Treaties, for if ratified it
would establish or constitute a legally new European Union in the constitutional form of
a supranational Federation. It would thereby revolutionise the constitutional and
political order of the EU itself and of its Member States.
Implicit in the first sentence quoted above from the Irish Government’s 28th Amendment of
the Constitution Bill, which Irish voters rejected on 12 June last, is the fact that the Lisbon
Treaty would establish a constitutionally new European Union that would legally and politically
be very different from what we know as the “European Union” today. The proposed
constitutional amendment in Ireland would have permitted it to become a member of “the
European Union established by virtue of that Treaty“, namely the Treaty of Lisbon. This implicitly
indicated that the post- Lisbon Union would be a different EU from that which stems from the
1992 Maastricht Treaty on European Union, which is the EU that we are members of at present.
The “European Union established by virtue of that Treaty“, which Irish voters rejected in their
referendum, corresponds to the Union that was referred to in the first sentence of Article I-1 of
the Treaty Establishing a Constitution for Europe, which the voters of France and Holland rejected
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in their 2005 referendums. That sentence stated: “This Constitution establishes the European
Union.” That sentence in turn corresponded to the following sentences in Article 1 of the
amended Treaty on European Union which would be inserted by the Treaty of Lisbon if that
treaty should be ratified: “By this treaty the High Contracting Parties establish among themselves a
European Union, hereinafter called ‘the Union’ on which the Member States confer competences to
attain objectives they have in common ... The Union shall be founded on the present Treaty and on
the Treaty on the Functioning of the Union (hereinafter referred to as ‘the Treaties’). Those two
Treaties shall have the same legal value. The Union shall replace and succeed the European
Community.“
Both the 2004 EU Constitutional Treaty and the Treaty of Lisbon which succeeded it would give
the constitutional form of a supranational Federation to the new European Union which they
each sought to establish.
Ratification of the Lisbon Treaty therefore would usher in a constitutional and political
revolution in what we call the European Union today and in the national constitutional order of
the EU’s Member States. Most people are unaware of this proposed constitutional revolution.
Explaining the constitutional and political difference between the post-Lisbon Union and the
pre-Lisbon Union is not easy. The difficulty is compounded by the fact that the same name,
“The European Union”, is being used for two entities, the pre-Lisbon EU and the post-Lisbon EU,
which are constitutionally and politically very different from one another.
The Lisbon Treaty would bring about this constitutional revolution by amending fundamentally
the two existing European Treaties, the Treaty on European Union (TEU) and the Treaty
Establishing the European Community (TEC). The former would retain its name, while the latter
would be renamed the Treaty on the Functioning of the European Union (TFEU). These two
amended Treaties would then become the de facto Constitution of the post-Lisbon European
Union which they would constitute or establish, although they would not be called a
Constitution. The EU would thus be given a Constitution indirectly rather than directly, as had
been proposed in the original Treaty Establishing a Constitution for Europe. The 1993 Maastricht
Treaty was a Treaty on European Union, not “of“ Union, for it did not establish an entity with
legal personality that could be called the EU. The Consolidated Treaties as amended by Lisbon
would effectively become the Treaty of European Union, for they would do that.
The provision of the Lisbon Treaty that “The Union shall replace and succeed the European
Community“ (Art.1, amended TEU) makes clear that the post-Lisbon Union would be quite a
new entity, as the European Community of which the 27 countries are all currently members
would cease to exist.
Member States would still retain their national Constitutions post-Lisbon, but they would be
subordinate to the new Union Constitution, as the second of the two sentences quoted above
from the 28th Amendment of the Constitution Bill makes clear. As such the Irish and other
Member State Constitutions would no longer be constitutions of sovereign States, just as the
various local states of the USA retain their constitutions although they are subordinate to the
Federal USA Constitution.
The new European Union’s powers would be conferred on it by its 27 Member States, for they
would voluntarily have agreed to obey the EU’s superior authority in the policy areas
surrendered, which nowadays cover much the greater part of government. Where else after all
could the new Union obtain its powers? This so-called “principle of conferral” is normal in all
classical “bottom-up” Federations, such as the USA, 19th Century Germany, Switzerland,
Canada and Australia. These contrast with Federations which have been established by unitary
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States assuming federal form, e.g. post-World War 2 Germany, Russia, India, Nigeria etc., which
might be referred to as “top-down” Federations.
The provision permitting a Member State to leave the EU (Art.50, amended TEU) also occurs in
some Federal constitutions. There was such a provision in the early constitution of the USSR.
The remaining governmental powers, which have mainly to do with the traditional social
services and the taxation needed to finance them, would remain with the Member States. State
sovereignty in the new Union would be divided between the Federal and local state levels, as is
normal in Federations.
The metamorphosis of the pre-Lisbon EU into a post-Lisbon Union with the same name but of
fundamentally different constitutional and political character is underpinned by changes in the
formal structure of the amended Treaties which would become the new Union’s Constitution.
The two treaties, the TEU and TFEU, are stated to have the same legal value (Art.1, amended
TEU). Up to now, Article 47 TEU has determined that the Treaty on European Union is subsidiary
to the Treaty Establishing the European Community (TEC), which Lisbon would rename The Treaty
on the Functioning of the European Union (TFEU). Post-Lisbon, this Article 47 TEU would be
replaced by Article 40 amended TEU, which stipulates the subsidiarity of the Common Foreign
and Security Policy only (CFSP), as against the other competences set out in the treaties.
Moreover, the Lisbon Treaty would insert the new Title III on the institutions of the new Union
into the Treaty on European Union, the primary treaty, and not into the Treaty on the Functioning
of the Union, the present TEC, where they are currently set out.
2. The Treaty would empower the post-Lisbon European Union to act as a State vis-à-vis
other States
To understand the change that would be introduced by the Lisbon Treaty one needs to
appreciate that what we call the European Union today is not a State. It is not even a distinct
legal or corporate entity in its own right, for it does not have legal personality, although some
legal authorities contend that it has a form of embryonic personality. Certain it is that the name
“European Union” at present is the descriptive legal term for the totality of relations between its
27 Member States and their peoples. Article 1 of the current Treaty on European Union, deriving
from the 1992 Maastricht Treaty which established the EU that exists today, makes this quite
clear when it states that “the Union shall be founded on the European Communities, supplemented
by the policies and forms of cooperation established by this Treaty. Its task shall be to organise, in a
manner demonstrating consistency and solidarity, relations between the Member States and
between their peoples.”
These relations appertain both to the “European Community” area, where supranational
European law is operative, and the “intergovernmental” areas of foreign and security policy on
the one hand and justice and home affairs on the other, where Member States cooperate freely
with one another on the basis of keeping their sovereignty and where European laws do not
apply. These different areas, or “pillars” in EU terminology, together constitute what we call the
European Union today.
The Lisbon Treaty would change this situation fundamentally by creating a constitutionally and
politically new EU, while retaining the same name, the “European Union“. Unlike the present
European Union, this constitutionally new EU would be separate from and superior to its
Member States, just as the USA is separate from and superior to Massachusetts or Kansas, or as
Federal Germany is to Bavaria or Bremen.
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This post-Lisbon European Union would sign treaties with other States in all areas of its powers
and conduct itself as a State in the international community of States. It would speak at the
United Nations on agreed foreign policy positions, just as in the days of the Soviet Union the
USSR had a UN seat while some of its component states such as the Ukraine and Byelorussia
had UN seats also. Member States would be obliged to support the Union’s foreign and security
policy “actively and unreservedly in a spirit of loyalty and mutual solidarity“(Art.24.3, amended
TEU) (emphasis added). The word “loyalty” indicates the constitutional relation involved.
The Lisbon Treaty would also give the EU a political President, a Foreign Minister - to be called
the High Representative for Foreign and Security Policy - a diplomatic corps and a Public
Prosecutor. The new EU would accede to the European Convention on Human Rights (ECHR), as
most European States inside and outside the EU have already done.
The principle of the primacy and superiority of European law over the law of its Member States
has not been stated in a European Treaty before. Whereas Article I-6 of the 2004 Treaty
Establishing a Constitution for Europe did state this explicitly, the Lisbon Treaty does it by
referring in Declaration 17 concerning Primacy to the case-law of the European Court of Justice,
which over the years has asserted the principles of (a) the superiority of EU law, (b) its direct
effect in the territory of its Member States even if it has not been formally put through their
National Parliaments, and (c) the constitutional character of the legal order from which
European law emanates.
European law and national law would deal with different areas and matters, as is normal in
Federal States such as the USA, Germany, Switzerland, Canada and Australia. The Lisbon Treaty
would give the EU the power to make supranational laws that are binding on Member Stats
and their citizens in many new areas and would take that power away from national
Parliaments and from the citizens who elect these bodies. The new Union would make the
majority of laws for its Member States each year. Under Lisbon it would get further power to
make laws by qualified majority voting in relation to over 30 new policy areas. It would also be
given new powers to take decisions in relation to as many specific issues. Altogether there
would be some 68 areas or issues where individual Member States decide matters now and
where under Lisbon they would lose their veto or their right to decide.
3. The enormity of the constitutional change proposed by Lisbon may not be appreciated
because the same name - “The European Union” - would be used before and after the
Treaty would come into force, and the notion of EU “citizenship” has already been
introduced by the 1992 Maastricht Treaty, although the Lisbon Treaty would change
fundamentally the legal and constitutional nature of the Union itself, its Member States
and the character and implications of EU citizenship.
The change in the constitutional and political nature of the Union, its Member States and its
citizens would be made in four legal steps which are set out in the Treaty of Lisbon:
(a) Lisbon would establish a European Union with full legal personality and a fully
independent corporate existence in all Union areas for the first time, so that the post-
Lisbon Union would function as a State vis-à-vis other States and in relation to its own citizens
(Art. 47,amended TEU; cf. Art.281 TEC);
(b) This new European Union would replace the existing European Community and take
over all of its powers and institutions (Art.1 TEU).
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It would take over as well the “intergovernmental” powers over crime, justice and home affairs,
as well as foreign policy and security, which at present are outside the scope of European law,
leaving only aspects of the Common Foreign, Security and Defence Policy outside the scope of
its supranational power (Title 1 TFEU; Title V, amended TEU);
(c) It would thereby give a unified constitutional structure to the new Union which Lisbon
would constitute or establish. The European Community would disappear and all spheres of
public policy would come within the scope of supranational EU law-making either actually or
potentially, as in any constitutionally unified Federation (Art.4.1 and Art.5, amended TEU and
Arts.1-6 TFEU). One says “potentially” because further inter-State treaties would be required to
transfer the minority of law-making powers still remaining with the Member States to the new
Union in the future, or to shift powers back from the supranational level to the Member States,
something that has never happened up to now. Supranational legislative acts would not yet be
adopted in the sphere of Common Foreign and Security Policy and a new treaty would be
needed to change that. However the Commission, a key supranational body, would through
the High Representative proposed in the Lisbon Treaty gain the right of initiative in the foreign
policy field, so that even in the light of Art. 31.2 amended TEU a de facto “supranationality”
would be attained there.
(d) Lisbon would make us all real citizens of the new Federal Union which the Treaty
would establish (Arts. 9 amended TEU and 20 TFEU), with all the implications of that for
downgrading our present personal status as citizens of sovereign Nation States and
superseding it by citizenship of the component member states of a supranational European
Federation of which we would also be made citizens.
4. The Treaty would make us all real citizens of this new European Union for the first time,
instead of us continuing as notional, symbolical or honorary European “citizens” as at
present. In constitutional terms this would give the post-Lisbon Union a new source of
democratic legitimacy. Population size would become the prime criterion for EU law-
making, as in any unified State with a common citizenry.
One can only be a citizen of a State, and all States must have citizens. Citizenship of the
European Union at present is stated to “complement“ national citizenship (Art.17 TEC), the latter
being clearly primary, not least because the present EU is not a State or a corporate entity
which can have individuals as members. Our “complementary” citizenship of the present EU is
essentially notional, symbolical or honorific.
By transforming the legal character of the European Union, the Lisbon Treaty would
simultaneously transform the meaning of Union citizenship. This would not replace our
national citizenship, but would for the first time make us real citizens of a real European Union
on top of our national citizenship
By transforming the legal character of the European Union, the Lisbon Treaty would
simultaneously transform the meaning of Union citizenship. The Treaty would delete the word
“complement” in the sentence, “Citizenship of the Union shall complement national citizenship”, so
that the new sentence would read: “Citizenship of the Union shall be additional to national
citizenship” (Arts.9, amended TEU and 20 TFEU). This would not replace our national citizenship,
but would for the first time make us real citizens of a real European Union on top of our
national citizenship.
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This would be a real dual citizenship - not of two different States, but of two different levels of
one State - as is normal in Federations which are established from the bottom up by
constituent states surrendering their sovereignty to a superior entity, as has been the case
historically with the USA, 19th Century Germany, Switzerland, Canada and Australia. This
development would give the 500 million inhabitants of the present EU Member States a real
separate citizenship from citizenship of their national States for the first time. It would give a
treble citizenship to citizens of the individual Lander within Federal Germany. The rights and
duties attaching to this citizenship of the new Union would be superior to those attaching to
citizenship of one’s own national State in any case of conflict between the two, because of the
superiority of EU law over national law and Constitutions.
The Preamble to the Treaty on European Union refers to the aim of “establishing a citizenship
common to nationals of their countries”.
As most States recognise that one can only have a single citizenship internationally, it is
probable that over time one’s European Union citizenship would tend to be regarded by other
countries as one’s primary and internationally definitive citizenship rather than one’s national
citizenship, especially if a network of EU embassies and an EU diplomatic service were to be
established, as the Lisbon Treaty envisages.
An important federalist feature of the post-Lisbon EU is that its laws would be made primarily
on the basis of aggregate population size, as in any unified State with a common citizenry,
rather than on the basis of the weighted votes of Member States as at present. Currently
European laws are made by a majority of Member States so long as they can muster 255 votes
out of 345, with each State having so many votes. Under Lisbon EU laws would be made by 15
States or more out of 27, so long as they constitute 65% of the aggregate EU population. The
number of EU citizens supposedly for or against an EU law would thus become the primarily
determining factor in adopting it or not, although the votes would be cast by Government
Ministers on the Council rather than by the citizens themselves or their directly elected
representatives. Germany and France between them contain nearly one-third the EU’s
population, so that this citizen-population criterion would significantly increase the relative
weight of these and the other Big Member States in EU law-making, while it would significantly
diminish that of smaller States.
Lisbon would insert a new Article 10 into the amended Treaty on European Union: “The
functioning of the Union shall be founded on representative democracy. Citizens are directly
represented at Union level in the European Parliament. Member States are represented in the
European Council by their Heads of State or Government and in the Council by their governments”
This provision clearly sets up an alternative source of democratic legitimacy which challenges
the right of national governments to be the representatives of their electorates in the EU.
Contrast this Lisbon Treaty formulation with what is stated to be the foundation of the present
European Union (Art.6 TEU): “The Union is founded on the principles of liberty, democracy, respect
for human rights and fundamental freedoms, and the rule of law, principles which are common to
the Member States.”
It seems fair to say that Lisbon marks a qualitatively new stage in the gradual evolution of
institutional structure away from Europe’s Nation States, which slowly but surely emphasises
the idea of democratic legitimacy being developed independently of the Member States by EU-
level institutions.
The concept of a direct democratic citizens’ mandate for the new post- Lisbon European Union
is reinforced by the encouragement which the same Article gives to the development of
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European-level political parties that would be part funded by the EU Commission. These are
stated to “contribute to forming European political awareness and to expressing the will of citizens
of the Union.”(Art. 10.4 amended TEU). It is also emphasised by the obligation imposed on the
EU Commission to bypass national governments and “maintain an open, transparent and regular
dialogue with representative associations and civil society”(Art.11.2, amended TEU).
5. Lisbon would create a Union Parliament for the Union’s new citizens
The Lisbon Treaty would make Members of the European Parliament, who at present are
“representatives of the peoples of the States brought together in the Community“, into
“representatives of the Union’s citizens” (Art.14.2 amended TEU; cf. current Art.189 TEC). This
illustrates the constitutional shift which the Treaty would make from the present European
Union of national States and peoples to the new Federal Union of European citizens and their
national states - the latter being henceforth reduced constitutionally and politically to effective
provincial or regional status within the new Union.
The role of the European Parliament, which was first introduced as a modest check on the EU
Executive and was styled an “Assembly” rather than a Parliament under the Treaty of Rome, has
been elevated in successive EU Treaties. Its MEPs, direct representatives of EU citizens, now
have co-decision-making powers that put the EU Parliament on virtually equal terms with the
Member Nation States in ever more areas - including electing the President of the Commission
as presented to it by the European Council. The shift of EU authority as arising directly from EU
citizens rather than from the Member Nation States is reflected in the Lisbon Treaty when it
states unequivocally that: “The Commission, as a body, shall be responsible to the European
Parliament”(Art.17.8, amended TEU). The European Parliament approves the Commission
members en bloc and may force their collective resignation by a vote of censure.
By contrast, the Council of Ministers - consisting of representatives of the Member Nation

States - has shifted over time from being the directing authority of a European cooperation in
which the Member States acted largely by unanimous agreement, to being a “second chamber”
of national representatives casting votes on a qualified majority basis on European legislation
proposed by the Commission. At the same time the Lisbon Treaty proposes to give the EU’s
Prime Ministers and Presidents much more political control over the post-Lisbon Union
6. Lisbon would create a political Government of the new Union
The Lisbon Treaty would turn the European Council of Prime Ministers and Presidents into an
“institution” of the new Union (Art.13, amended TEU), so that its acts or its “failing to act” would,
like all other Union institutions, be subject to legal review by the EU Court of Justice (Arts.263-
265, TFEU).
Legally speaking, these summit meetings of the European Council would thereafter no longer
be “intergovernmental” gatherings of Prime Ministers and Presidents outside supranational
European structures. As part of the new EU´s institutional framework, the Prime Ministers and
Presidents would instead be constitutionally required to “promote the Union’s values, advance its
objectives, serve its interests” and “ensure the consistency, effectiveness and continuity of its policies
and actions” (Art. 13.1, amended TEU). They would also “define the general political direction and
priorities thereof” (Art.15.1, amended TEU).
As an Institution of the new Union, the European Council of Prime Ministers and Presidents
would, for example, be open in principle to exhortation or possible direction from the
European Court of Justice to initiate steps to harmonise indirect taxes which constituted a
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“distortion of competition”, something that at present requires unanimity, if they were slow or
reluctant to do this (Art.113 TFEU), or if they failed to take steps to ensure that the new Union’s
“own resources” were adequate to meet its objectives(Art.311 TFEU).
The European Council would thus become in effect the Cabinet Government of the new
Federal EU, and its individual members would in constitutional terms be primarily obliged to
represent the Union to their Member States rather than their Member States to the Union.
7. The federalist character of the new Union political President
The federalist character of the European Council “summit” meetings in the proposed new
Union structure is further underlined by the provision which would give the European Council a
permanent political President for up to five years - two and a half years renewable once
(Art.15.5, amended TEU).
There is no gathering of Heads of State or Government in any other international context which
maintains the same chairman or president for several years, while individual national Prime
Ministers and Presidents come and go. The federalist character of the new Union President is
emphasised also by the Treaty provision which forbids that person from holding any national
office and which lays down that he/she shall “ensure the external representation of the
Union“(Art.15.6, amended TEU).
It is part of the federalist evolution of the Union that the President of the European Council, the
quarterly “summit” meetings of Member State Heads of State or Government, would be no
longer a rotating Head of Government, but a permanent EU official. If the President plays this
role effectively - including setting the agenda for legislation and representing the EU on the
international stage - he or she is bound to assume increasing status and importance. As a result
it would be surprising if in due course there were not suggestions that the President should be
directly elected by EU citizens, as France’s President Sarkozy has already urged.
8. The federalist character of the post-Lisbon Commission
As regards the EU’s executive arm, the Commission, the provision of the Lisbon Treaty which
would reduce the number of Commissioners to one third of the Member States (Art. 17,
amended TEU) is a symbolically important move away from “intergovernmentalism”, for that
required that every Member State had one of its own nationals at all times on the body which
proposed all European laws. An additional move towards a Federal institutional structure is the
provision of the Lisbon Treaty which would remove from Member States the right to “propose”
members of the Commission - which ensures that each State can insist on its proposals being
accepted as a condition for it accepting the proposals of the others - and its replacement by a
right to make “suggestions” only, for the new Commission President to decide (Art.17.7,
amended TEU; cf. current Article 214 TEC). Individual Commissioners shall be chosen on the
ground of their “European commitment” amongst other criteria (Art.17.3, amended TEU). The
Commission President would also have the power to shuffle the portfolios of individual
Commissioners and require them to resign at will (Art.17.6 amended TEU). These provisions
would effectively give the Commission President powers equivalent to a national Prime
Minister in the post- Lisbon EU.
9. Lisbon would endow the citizens of the new Union with a code of civil rights
All States have codes setting out the rights of their citizens. The EU Charter of Fundamental
Rights would be that. It would be made legally binding by the new Treaty and would “have the
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same legal value as the Treaties”(Art. 6.1, amended TEU) .This further embeds the concept that
EU citizens have rights and responsibilities defined by the EU itself which transcend those of
their national citizenship. Indeed it embodies the concept that the EU determines and is the
guarantor of those rights across national boundaries.
The Charter is stated to be binding on the Union’s own institutions and on Member States in
implementing Union law (Charter of Fundamental Rights, Art. 51). This limitation to EU law and
to the EU institutions is unrealistic however, because: (a) the principles of primacy and
uniformity of Union law mean that Member States would not only be bound by the
Fundamental Rights Charter when implementing EU law, but also through the “interpretation
and application of their national laws in conformity with Union laws“ (v. ECJ judgements in the
Factortame, Simmenthal and other law cases); and because (b) the Charter sets out the
fundamental rights of EU citizens in areas where the Union has currently no competence, e.g.
outlawing the death penalty, asserting citizens’ rights in criminal proceedings and various
other areas.
Post-Lisbon in any case, Union law would require that the rights set out in the Charter of
Fundamental Rights are guaranteed for all EU citizens. They would be part of their citizens’
entitlements. There would be little point to the Charter otherwise.
The EU has already got a human rights competence, in that the Court of Justice can adjudicate
on such rights as equality and non-discrimination under the existing Treaties. Therefore making
the Charter legally binding does not extend the powers or competence of the Union as such.
What Lisbon would do would be to give the ECJ a much wider range of human and civil rights
to interpret and decide on, for the Charter would cover all the fundamental rights of EU citizens
in the post-Lisbon Union. Making the Charter legally binding would effectively extend
considerably the human and civil rights jurisdiction of the EU Court of Justice and would make
that Court the final body to decide most of the rights of 500 million EU citizens in the vast area
now covered by European law, as against national Supreme Courts and the Court of Human
Rights in Strasbourg which are our final fundamental rights Courts today.
If Lisbon is ratified it is only realistic to expect that the EU Commission will in time come to
propose European laws to ensure the uniform implementation and guarantee of the EU
citizens’ rights provisions of the Charter throughout the Member States. The citizens of the new
Union will surely demand no less. American constitutional history provides ample evidence of
the radical federalising potential of the fundamental rights jurisdiction of the US Supreme
Court.
10. Lisbon would make National Parliaments subordinate to the new Union
The Treaty underlines the implicitly subordinate role of National Parliaments in the institutional
structure of the new Union by stating that “National Parliaments contribute actively to the good
functioning of the Union” by various means which are set out in Article12, amended TEU.
Under the pretext of enhancing the role of National Parliaments, the Lisbon Treaty actually
institutionalises their subservience by defining such a limited role for them in the new Union’s
structures. National Parliaments must be informed of and may scrutinise draft EU legislative
acts, but while the Commission is required to review the legislation if a third or more of
National Parliaments object, the Commission can then decide to continue with the legislation
unamended, with its decision confirmed by the normal QMV procedures.
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Ultimately it is the EU itself, through the Court of Justice, which has the final right to arbitrate
on claims of subsidiarity infringement (Protocol on Subsidiarity and Proportionality, Article 7).
This provision of the Treaty permitting National Parliaments in effect to complain to the
Commission is small compensation for the loss of democracy involved by the loss of some 68
vetoes by National Parliaments as a result of other changes proposed by the Lisbon Treaty.
National Parliaments have in any case already lost most of their law-making powers to the
EC/EU. The citizens who elect them have lost their powers to decide these laws also.
11. Lisbon would give the new Union self-empowerment powers
These are shown by:
(a) the enlarged scope of the Flexibility Clause (Art.352 TFEU), whereby if the Treaty does not
provide the necessary powers to enable the new Union attain its very wide objectives, the
Council may take appropriate measures by unanimity. The Lisbon Treaty would extend this
provision from the area of operation of the common market to all of the new Union’s policies
directed at attaining its much wider post-Lisbon objectives. The Flexibility Clause has been
widely used to extend EU law-making over the years;
(b) the proposed Simplified Treaty Revision Procedure (Art.48, amended TEU), which would
permit the Prime Ministers and Presidents on the European Council unanimously to shift Union
decision-taking from unanimity to qualified majority voting in the Treaty on the Functioning of
the Union, and
(c) the several “passerelles” or “ratchet-clauses”, which would allow the European Council to
switch from unanimity to majority voting in certain specified areas, such as judicial cooperation
in civil matters (Art.81.3 TFEU), in criminal matters (Art.83.1 TFEU), in relation to the EU Public
Prosecutor (Art.86.4 TFEU) and the Multiannual financial framework (Art.312.2 TFEU).
Conclusion
It is hard to think of any area of national law which would be unaffected by European law in the
post-Lisbon EU. It is hard to think of any major function of a sovereign State which the new EU
would not have if the Lisbon Treaty were to be ratified. The main one would seem to be the
power to make its Member States go to war against their will. The Treaty does however provide
that the EU may go to war while individual Member States may “constructively abstain”(Arts.42-
46, amended TEU).
The Treaty also contains a mutual defence clause (Art.42.7, amended TEU), which was so
characterised by Commission President J.M.Barroso in a speech on the Treaty on 4 December
2007. This commitment to an EU “mutual defence” is to be distinguished from an obligation to
participate in an EU “common defence”, viz. a common European army, which Art.42.2,
amended TEU lays down that the “progressive framing of a common Union defence policy will
lead to” (emphasis added).
The obligation on the Union to “provide itself with the means necessary to attain its objectives and
carry through its policies“(Art. 311 TFEU), which means raising its “own resources” to finance
them, may be regarded as conferring on it wide taxation and revenue-raising powers. This
Article empowers the new Union to “establish new categories of own resources” and in effect to
endow itself by means of any tax, so long as the Council of Ministers agrees that unanimously
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and it is approved by National Parliaments. Currently public expenditure and the taxation
measures needed to finance it remain overwhelmingly at National State level. This is because
such social services as health, education, social security and public housing, as well as policing
and public transport - the government functions that cost most money - are still mainly at this
level. That too is normal in Federations such as the USA, Germany etc.
Jean-Claude Piris, Director-General of the Legal Service of the Council of Ministers, refers to the
EU as a “Partially Federal Union” in his well-known book (The Constitution for Europe: A Legal
Analysis, Cambridge UP, 2006, p.192). One might say that it is better characterised as a
“Substantially Federal Union”. Piris contends that because it is only partially federal, it is not a
federal State. One could say rather that it is just like the classical Federations previously
mentioned which have evolved over time and which gradually acquired the characteristics of
statehood, and that the European Union post-Lisbon would have virtually all the features of a
fullydeveloped State. As former Danish MEP Jens-Peter Bonde, author of the The Lisbon Treaty-
the Readable Version has put it: “From the inside it looks like an arrangement based on Treaties
between States. From the outside it looks like a State itself.” (See www.euinfo.ie and
www.euabc.com)
The Lisbon Treaty would shift power away from voters in all EU countries and from small and
middle-sized countries to the largest ones. The post-Lisbon European Union would have its
own government, with a legislative, executive and judicial arm, its own political President, its
own citizens and citizenship, its own human and civil rights code, its own currency, economic
policy and revenue, its own international treaty-making powers, foreign policy, foreign
minister, diplomatic corps and United Nations voice, its own crime and justice code and Public
Prosecutor. It already possesses such normal State symbols as its own flag, anthem, motto and
annual official holiday, Europe Day, 9 May, when it commemorates the 1950 Schumann
Declaration proposing the European Coal and Steel Community as “the first step in the
federation of Europe”, although these symbols are without a legal basis in the Treaties.
As regards the State authority of the new Union, this would be embodied in the Union’s own
executive, legislative and judicial institutions: the European Council, Council of Ministers,
Commission, Parliament and Court of Justice. It would also be embodied in the Member States
and their authorities as they implement and apply EU law and interpret and apply national law
in conformity with Union law. Member States would be constitutionally required to do this
under the Lisbon Treaty. Thus EU “State authorities” as represented for example by EU soldiers
and policemen patrolling our streets in EU uniforms, would not be needed as such.
Allowing for the special features of each case, all the classical Federal States which have been
formed on the basis of power being surrendered by lower constituent states to a higher Federal
authority have developed in a gradual way, just as has happened in the case of the European
Union. The USA, 19th century Germany, Switzerland, Canada and Australia are the best known
examples. None of these came into the world as fully-fledged sovereign States. Indeed the EU
has accumulated its powers much more rapidly than some of these Federations - in the short
historical time-span of some fifty years. However, the key difference between these classical
Federations and the proposed new European Union is that the former, once their people had
settled, share a common language, history, culture and national solidarity which gave them a
democratic basis and made their State authority popularly legitimate and acceptable.
All stable and long-lasting States are founded on such communities, where people speak a
common language and mutually identify with one another as one people - a collective “We”.
Because of this mutual identification and solidarity, minorities are willing freely to obey
majority rule because they regard the majority as “their” majority. Likewise majorities are
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willing to respect minority rights because they attach to “their” minority. That gives these
States a democratic basis. In the European Union however there is no European people or
demos of this kind. The Treaty of Lisbon, like the EU Constitution before it, is an attempt to
construct a highly centralised European Federation artificially, from the top down, out of
Europe’s many nations, peoples and States, without their free consent and knowledge.
If there is to be a European Federation that is democratically acceptable and politically

legitimate, the minimum constitutional requirement for it would be that its laws would be
initiated and approved by the directly elected representatives of the people either in the
European Parliament or the National Parliaments. Unfortunately, the Lisbon Treaty does not
contain any such proposal.
Acknowledgement: This article was originally compiled by Anthony Coughlan, Senior Lecturer
Emeritus in Social Policy at Trinity College, Dublin, and Secretary of The National Platform EU
Research and Information Centre, Ireland (www.nationalplatform.org). The author was responsible
for initiating the 1986 Crotty case in the Republic of Ireland, in which that country’s Supreme Court
laid down that a surrender of sovereignty to the European level required a referendum of the people,
who are the repositories of sovereignty under the Irish Constitution. Ireland’s Lisbon Treaty
referendum stemmed from this. The author wishes to express his thanks to Klaus Heeger, joint editor
of EUWatch, for providing him with valuable insights into the topic of this article.
82
Chapter 2
Democracy
Georgios S. Georgiou, January 2009- Strasbourg:
Currently, peoples are neither asked for their opinions about, nor informed of,
what is to come. On the contrary, they are rendered puppets, all too often
bought off and deceived, but always controlled by selfish and, in many
respects, dangerous wills. Such wills, however, always lead the most advanced
and valuable for humanity continent to directions and initiatives that could
inflict irreparable damage to its core, history and future.
The fact that the powerful Europeans condemned the result of the Irish
referendum is compelling evidence that the New Executive Directory is first
and foremost interested in categorising the Europeans into two groups: those
who understand the strange propositions (Members of Parliaments and
governments) and those who do not and should not therefore participate
(people), so as to warrant the abolition of referendums.
Nigel Farage, June 2008 – Strasbourg:
Madam President, nobody else has said it, but I will: well done the Irish!
And yet, before the official result was out, there was Mr Barroso, holding a
press conference in Brussels, looking as shifty and as dishonest as anybody I
have ever seen, saying – despite what the rules of the club are – that the Treaty
is not dead and we continue. Frankly, it was a disgusting display; it was an
insult to democracy. It is perfectly clear that the ratifications should stop now
and the implementation of the Treaty should stop now.
Vladimír Železný, October 2007 – Strasbourg:
Mr President, after the failure of the Constitution it seemed that the principle of
democratic decision-making had once again gained the upper hand within
the EU, at least for a while. We were wrong to think that. Very quickly the same
Constitution has returned to the table under a different title. Its authors do not
even bother concealing the fact that it is the original Constitution in a slightly
83
modified form with the intention of ignoring the people’s democratic will in a
referendum.
A simple comparison shows that it is almost exactly identical to the

Constitution for a European federal state rejected by the French people and
buried by the Dutch. The impertinence with which it has been returned on the
table with the straight face of a poker player and now under a new Orwellian
title is astounding. A new type of utopian nationalism won in Lisbon: pan-
European and EU nationalism; nationalism without any real national, cultural
and historic foundations, rooted only in the long office corridors in Brussels.
Berlaymont patriotism has claimed victory.
Those of us who represent countries that lived for nearly half a century under
the communist totalitarian regime are not easily surprised by anything. We
have been accustomed to the insolence of power and contempt for the
people’s will. Not even in the CMEA, however, have we experienced such overt
deception as today’s deception by the EU of the people of the Member States.
At least in the CMEA similar attempts were hidden behind the party politburos;
but that is a thing of the past.
The citizens want to decide themselves whether they will hand over their
sovereign rights to a European super-state without a democratic or historical
framework. That is why I want to see a referendum.
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THE NEXT ‘CONSTITUTIONAL’ TREATY

What the people should decide
By Kevin Ellul Bonici (April 2007)
KEVIN ELLUL-BONICI EXPLORES THE POLITICAL ASPECTS SURROUNDING THE EU

CONSTITUTION AND ARGUES THAT NOT ONLY SHOULD THE PEOPLE DECIDE ON THE FUTURE
OF EUROPE, BUT THEY SHOULD BE EMPOWERED TO ACTIVELY PARTICIPATE IN CONSTRUCTING
THAT FUTURE. THIS CONSTITUTION, OR ITS DERIVATIVE IN THE NEXT TREATY, IS NOT A PROJECT
THAT COMES FROM THE PEOPLE, BUT A BLUEPRINT FOR AN ANTIQUATED VISION.
Italian Interior Minister Giuliano Amato did not mince his words over how to proceed with the
rejected EU Constitution. “The good thing about not calling it a Constitution is that no one can
ask for a referendum on it,” he told the congregation at the London School of Economics last
February.1
Clearly, Giuliano Amato, vice-president in the Convention that drafted the EU constitution in
20023, believes the people should not be asked on the construction of a ‘united Europe’.
Perhaps he believes it is a ‘noble cause’: not only should the people not be asked, they should
also be deceived.
MERKEL’S “ROAD MAP”
Amato’s cause is in line with that of German Chancellor Angela Merkel, holding the EU
presidency for the first half of 2007.
Change the name; keep the substance; ask the people at your own risk – that is the “road map”
which Ms Merkel hopes to launch in June 2007. It is only the second best option for Merkel,
who failed to garner enough support to push forward with nearly the same rejected text.
Reflecting this dissent from among EU leaders, the eventual Berlin Declaration on 25 March
could only reach as far as a modest attempt at directing the way forward:
“...today, 50 years after the signing of the Treaties of Rome, we are united in our aim of placing
the European Union on a renewed common basis before the European Parliament elections in
2009.”2
So a new text it will have to be, but Merkel’s “road map” aims to have it as close to the original
text as possible and agreed by the earliest possible date.
At a press conference after the Berlin Declaration she briefly explained that the “road map”
would aim for an Inter-governmental Conference (IGC) to be launched and concluded by the
Portuguese Presidency (July-Dec 2007). This would then flow into the Slovenian Presidency
(Jan-Jun 2008), giving “a solution right up to the French Presidency” (Jul-Dec 2008).3
When asked to elaborate, Ms Merkel had this to say: “We have already got a draft [constitution]
signed by 27 prime ministers and finance ministers, and the process has to go through the
procedures of national parliaments; there were two referendums with a negative result and we
have drawn our lessons; there is no use of having 27 signatures on a text that cannot be
implemented, but in June 2007 we will have a clearer picture.” 4
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So, as Ms Merkel admits, we have “a text that cannot be implemented”. This is due to the
democratic principle of unanimity. But it took two years for it to sink in. And there is little doubt
that Merkel attributes this to lack of support, most notably from the UK, the Netherlands,
France, Poland and the Czech Rep.
Others, like some in the European Parliament, including its president, are still pressing for the
same text to be adopted. But what about asking the people?
Asked about the possibility of EU-wide referenda, Ms Merkel replied: “Each country has its own
decision making process. In Germany we have no referendums. I, as President of the Council,
have no contribution to make to that at all.”5
To another question Ms Merkel replied, “I cannot promise that everything will happen in the
public domain.”
A PROCESS TO DECEIVE THE PEOPLE
Of the 18 countries that have ratified the Constitution, only Spain and Luxembourg held a
referendum.
Seven countries ratified the constitution even after its rejection in the French and Dutch
referendums. In normative terms, this means they refused to recognize the French and Dutch
democratic veto and the principle of unanimity. For most of these countries the so-called
‘Period of Reflection’ that followed the 2005 rejections was a good time to ratify.
Nine countries have not ratified. Six of these postponed or cancelled their planned referendum:
the Czech Republic, Denmark, Ireland, Poland, Portugal, and the UK.
Of the 17 countries that have had no intention of holding a referendum only Sweden did not
ratify.
This is the stage at which the process halted – precisely in June 2006, when the Finnish
parliament ratified the dead text of the EU Constitution in commemoration of 100 years of
Finnish democracy.
Polls indicate6 that if the referendum process continues there would be further rejections by
the people. So for Merkel’s “road map” to succeed, this halted process would somehow need to
flow seamlessly into an agreement over a changed text, mainly between the nine countries
that have not ratified the dead text (given that no major departure would be made from the
substance of the text that the others ratified).
The text for the next treaty could therefore require the following actions:
- a rewording of Part I, eliminating some of the symbols and rhetoric alluding to European
(supra) ‘nationalism’, such as the anthem and the flag;
- the inclusion of a clause adopting the Charter of Fundamental Human Rights (Part II); and
- the dissolution of Part III into some 60 amendments to the Treaty of Nice in the areas
where qualified majority voting will be introduced.
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In short, it would be the same rejected constitution transformed into a “mini treaty”, and the
only purpose for doing this is to deceive the people.
This deception works on two levels: eliminating calls for a referendum and alienating the voters
wherever a referendum is constitutionally or politically required.
Earlier this April, British Prime Minister Tony Blair took the lead in calling for “a conventional
amending treaty rather than a treaty with the characteristics of a constitution.” It may seem
that even the second-best option might be hard to obtain for Merkel. Yet it remains to be
known whether Blair’s call opposes Merkel’s road map, or whether it could in fact be
supporting the second-best option.
A ‘DEMOCRACY BY PROXY’
What causes the ‘Europeanists’ to brush aside democratic principles and deceive the people
into accepting their blueprint without asking them? No doubt, apart from the bandwagon-
effect, they believe they know best. Self-righteousness takes many forms in different eras but it
is always for a “noble cause”.
Today’s Europeanists are the flag-bearing descendents of a war generation that had
experienced the devastation of war and totalitarianism, but had failed to recognize the dangers
of creating a powerful pseudo-democratic political entity on a supranational scale. Like their
predecessors, they truly believe that Western Europe’s democratic values will prevail over the
actions of generations to come and that no abuse of European power could emerge from this
self-proclaimed ‘Beacon of Democracy’.
For them, the ‘United States of Europe’ would forever be a highly democratic federation and
could never develop into a totalitarian singularity.
It is here that the blueprint stops. What follows later is anyone’s guess, but ‘Europeanists’ are
certain this is what the European Union needs, hoping only that this centrally-planned project
will lead to a political, military and economic powerhouse.
The ‘Europeanists’ do not think about the possibility that they might be wrong in both scope
and vision, as earlier political were constructionists. For them, their opponents are petty
nationalists living in the past. Yet it is the ‘Europeanists’ who are living in the past, for
nationalism has nothing to do with this argument.
This frame of mind views today’s global scene, looks at the leading power and tries to emulate
it by imitating it. As such, they are attempting to create nothing new, but a copy of a unitary,
‘melting-pot’ federation that was re-founded at least once since 1776.
And since the federalization of the EU is fast-paced and has to deal with deeply-rooted cultures
of different nations speaking a multitude of languages, it requires a stronger gravitationalpull,
leading not to a true federation but a federalistic pyramid – a supranational unitary state.
For all this to materialize, the separation of powers at the European level would need to further
depart from what we are accustomed to in our parliamentary democracies. This path has been
leading us to a European ‘democracy by proxy’, where the representatives of the people’s
representatives depend on powerful EU civil servants, and the people are further relegated to
the political wilderness of ineffectual local politics, far removed from the European institutional
triangulation that governs them.
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LET THE PEOPLE DECIDE
Ultimately, the lives that are to be governed are those of the people, whose collective wisdom
might not be on a grand visionary scale as that of Monnet, but who are nonetheless aware of
their state of happiness and freedom.
And even if most of the time the people are being deceived, they are still able to understand
that moving more powers from their own parliamentary democracies to an empowered
European central authority does not necessarily benefit them or their children. Experience
shows that the more people get acquainted with the contents of the Constitution, the more
they reinforce the feeling that they would have little democratic control over this new
institutional set-up that would govern them.
In a true democracy the people and their media stand as watchdogs over their democratic
power. Western European democracy has never faced such a trial. A new European
government is in the process of being installed. The constitutions of Member States are being
subordinated. The people must be involved.
They must be empowered to decide fundamental issues such as who should hold decision-
making powers in the future EU. They need to be told the truth. They need to be allowed to
debate in order to decide in fair and balanced referendums, where governments take no sides
and where political parties allow free and open debates; in other words, an atmosphere where
political correctness does not dictate the debate.
HOW SHOULD THE PEOPLE BE COUNTED?
If the people are to decide over the next treaty, how should they be counted?
There are different ways of holding referendums. Some extremists would hope for a Europe-
wide referendum with a simple majority count of the whole EU population. This is neither
legitimate, nor democratic. It is not legitimate because no treaty provides for it. And it is not
democratic because a democratic vote requires one people so as not to create minorities out of
smaller nations.
Many federalists prefer a referendum in each of the 27 Member States, counting on the basis of
a majority of member states (which could be a qualified majority). Again, this is not legitimate:
it would require legal provisions that overcome the principle of unanimity. Others would prefer
a ‘double majority’, which would also require a majority of the EU population. But again this
falls squarely under the first category – a European nation does not exist.
Many opponents of the constitution want the principle of unanimity to be retained. This means
that whatever the number of referendums, the next treaty cannot be ratified if just one
Member State says No.
For the ‘Europeanists’ this is a political stalemate that takes their plans nowhere. It is for this
reason that people like Amato emphasize the need to avoid referendums.
So, should we do away with the principle of unanimity? It is, after all, a well-founded
international principle that emphasizes the supposition that members are united in a way that
they mutually guarantee each other that they either all move together in implementing a new
treaty, or they don’t move at all.
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Sometimes, not moving at all is the right thing to do. It would not be a standstill, much less a
“crisis”, for you would be allowing social movement to take its course and create more unifying
channels across the single market.
Aricle IV-447 of the Constitutional Treaty7 is in line with the principle of unanimity when it
stipulates that the Treaty enters into force on 1 November 2006 when all Member States should
have ratified it, or after the last Member State ratifies.
But in the annexed Declaration 30 (which is non-binding) the possibility of violating the
principle of unanimity is allowed. The “Declaration on the Ratification of the Treaty Establishing
a Constitution for Europe” states: “The Conference notes that if, two years after the signature of the
Treaty…, four fifths of the Member States have ratified it and one or more Member States have
encountered difficulties in proceeding with ratification, the matter will be referred to the European
Council.”
This one-paragraph declaration stops short of what happens later. It was just a safety clause
that did not work as the four-fifths threshold was not reached before the deadline. The two
years after the signing of the treaty in Rome elapsed on 29 October 2006. The future is again
open. Now is the time to start a genuine public debate on the future of Europe.
WHY THE PEOPLE CANNOT APPROVE THE NEXT TREATY
From a purely democratic viewpoint, the matter is not simply one of asking the people, even if
referendums were to be fair and balanced, and even if the debate is to be rid of all forms of
totalitarian political correctness.
Empowered with the responsibility to decide over the next treaty the people cannot approve it
if they played no part in its preparation.
Anything close to the EU constitution is democratically not approvable. Sketched by the

convention president, Valerie Giscard d’Estaing, the outline for this constitution required the
convention to simply fill in the blanks – it was more like a predetermined crossword puzzle,
than an open-ended game of scrabble. The convention gave a democratic stamp to an
undemocratic blueprint for an antiquated European vision.
This is the same vision that in the early fifties conceived the European Defence Community and
its sister, the European Political Community, both of which failed, paving the way for a
complete reversal of strategy and starting from the market instead.
If the people are to decide over their common European destiny, they must also be empowered
to participate in its construction. The EU must exist for the people, not the other way around.
FOR THE PEOPLE, BY THE PEOPLE
The people might want to give the Union a different direction. What many people appreciate
most in being “in the EU” is the fact that they are free of the borders that once chequered
Europe. Interaction and cooperation between Member States is often fulfilling.
If the people were to be allowed to unify the EU themselves, this would occur socially and
organically over a longer period of time. The four freedoms of movement, providing the
framework for the 490-million-strong EU market, require no politically-empowered central
authority. Not even standardized harmonization is altogether necessary.
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For true democracy to prevail in the EU, the four freedoms (the single market) must be
governed by the 27 parliamentary democracies according to the agreed cooperation
framework. There are hardly any limits to interstate cooperation, not only at an economic level,
but also at a political level, such as in defence, war, peace, security and scientific development.
No Hegelian authority is required. That is the challenge for ‘Western Democracy’ in Europe!
For citizens to make the most out of the EU, they must be able to choose between different
ways of doing things in different countries. With a large diversified market that choice
translates into unbounded opportunities. Left to their self-organizing collective wisdom the
people would prefer a more flexible EU, where central regulation does not suffocate the
diversity and creativity of European life.
A diverse and flexible EU is crucial for the development of democracy, allowing the peopleto
further devolve power by genuinely applying the ‘principle of subsidiarity’.
Today, ‘subsidiarity’ is entrenched in the European lexicon, yet in truth we witness its complete
reversal. This travesty can only evoke the tragedy caused by Hurricane Katrina in New Orleans
less than two years ago, and the incapacity of the state of Louisiana to effectively deal with the
devastation, while the US federal government did nothing, allowing the catastrophe to slowly
rot beneath the weeds of time. A city was allowed to die while the US federation moved on
without an eye blink.
That, of course, is not what the ‘Europeanists’ envisage for the EU. That is an empire ruled from
high above, where the ruling classes cannot be bothered. It is what happens to old federations
when the central powers further consolidate through self-empowerment.
What happens to a planned pseudo-democratic Union where representation is by proxy is

anyone’s guess.
NOTES:
1 Open Europe: http://www.openeurope.org.uk/mediacentre/summary.aspx?id=275 [21

February 2007]
2 Berlin Declaration: http://www.eu2007.de/de/News/download_docs/Maerz/0324-
RAA/English.pdf [25 March 2007]
3 German Presidency website live stream: http://www.eu2007.de/en/Media_Service/Live_
Streaming_Press_Conferences/index.html [25 March 2007]
4 Ibid.
5 Ibid.
6 Open Europe:
http://www.openeurope.org.uk/media-centre/pressrelease.aspx?pressreleaseid=31 [23.03.2007]
7 Treaty Establishing a Constitution for Europe:
http://europa.eu/constitution/en/lstoc1_en.htm
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REFERENDUM MODELS IN THE PROCESS OF EUROPE’S

CONSTITUTIONALISATION
DOES A EUROPEAN DEMOS, AS A CONSTITUENT POWER (POUVOIR CONSTITUANT) EXIST,

AND HOW CAN IT ASSERT ITS VALIDITY?
By Peter Henseler (April 2007)
IT IS SURELY UNDISPUTED IN CURRENT CONSTITUTIONAL DOCTRINE THAT, UNDER

DEMOCRATIC CONDITIONS, A CONSTITUENT POWER CANNOT BE IMPOSED ‘FROM ABOVE’ IN
ACCORDANCE WITH ECCLESIASTICAL OR INTELLECTUAL NOTIONS (AS IN TIMES PAST) OR – AS
TODAY – IN LINE WITH TECHNOCRATIC CONCEPTS OF THE POLITICAL ORDER (EVEN IF THESE
ARE SUPPOSEDLY INTENDED TO BE FOR ‘THE GOOD OF THE PEOPLE’). INSTEAD, IT MUST COME
‘FROM THE PEOPLE’ AND BE SUPPORTED BY THEM*. THE QUESTION, QUITE SIMPLY, IS
WHETHER – AT THE CURRENT STAGE REACHED IN THE INTEGRATION PROCESS – WE ALREADY
HAVE A EUROPEAN ‘DEMOS‘ WHICH CAN CLAIM THE ROLE OF A ‘POUVOIR CONSTITUANT’. THE
SECOND QUESTION WHICH ARISES FROM THIS IS HOW TO IDENTIFY A REFERENDUM MODEL
THAT IS APPROPRIATE FOR A EUROPEAN CONSTITUTION AT THE CURRENT STAGE OF
INTEGRATION.
The first unresolved question is this: does statehood represent the ultimate objective of
European integration and do we have to deal with a European demos, a national demos for
each country, or a post-national demos?
The answer to this first set of questions presupposes clarity about the ‘statehood’,
‘supranationality’ or indeed the non-statehood of the European Union, as well as the ‘ultimate
objective’ of European integration. This issue has been the subject of much reflection and
analysis – from the German doctrine of Europe’s legal status as a ‘special purpose association
(Zweckverband) of functional integration’ (Hans Peter Ipsen, 1972) to the doctrine of an
‘association of states’ (Staatenverbund) according to the German Federal Constitutional Court
in its decision on the constitutionality of the Maastricht Treaty (1993), and the much-debated
speech by the then German Foreign Minister Joschka Fischer at Berlin’s Humboldt University,
entitled ‘From Confederacy to Federation: Thoughts on the Objective of European Integration’
(12 May 2000). Moreover, it concerns the opportunities to make integration more flexible
through differentiated models (core Europe, enhanced cooperation, variable geometry, etc.),
which are expected – not least – to bring fresh dynamism to the integration process, or at least
point a way out of stagnation.
A conclusive answer – albeit one which is not easy for non-sociologists to understand – to all
these problems has recently been provided by German sociologist Ulrich Beck with his concept
of a Cosmopolitan Europe (co-authored with political scientist Edgar Grande, 2004). His core
thesis is that there is no ‘ultimate objective’ to Europe. (Indeed, the liberal economist and social
philosopher Friedrich A. Hayek would probably unmask this – in whichever form – as a
constructivist error or illusion). The current diffuse status of the EU as reflected in the present
doctrines is summarised by Beck/Grande as follows: ‘The EU can currently be defined as a
decentralised, territorially differentiated, transnational negotiating system that is dominated by
elites‘ (p. 85).
As a contrast, the authors present their concept of a ‘cosmopolitan Europe’, to be understood

as a ‘posthegemonic empire‘ which – unlike the empires of the past – is based not on national
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delimitation but on the removal of national borders, voluntary participation, consensus and
transnational interdependences. They argue that all this cannot be encapsulated by the
(conventional) notion and understanding of the state and the models derived from it (an
association of states, a federal state) (p. 86). For a better appreciation of the authors’ arguments,
it should be borne in mind that they often use the terms ‘Europeanisation’ or
‘cosmopolitisation’ instead of ‘integration’.
The ‘removal of borders’ does not mean releasing states from their national boundaries – i.e.
their ultimate dissolution – but denotes the authors’ sociological understanding of national
societies’ integration. This should be understood as a ‘both-and’ logic, which is advocated by
the authors (i.e. A and B), not as an ‘either-or’ logic (A or B) (for further discussion, see below).
The authors accept that their ‘both-and’ logic may often appear contradictory at first.
Rethinking Europe as a cosmopolitan Europe, say the authors, means thinking in terms of a
‘Europe of differences‘ and recognising national particularities.
The conventional understanding of integration as a ‘harmonisation policy’ geared towards the

dismantling of difference, however, ignores the fact that cosmopolitan integration views the
diversity of Europeanisation as the solution, not as the problem. This requires a shift of
paradigm in integration policy – towards an understanding of Europeanisation as linking two
‘apparently mutually exclusive demands’, i.e. ‘the recognition of difference on the one hand,
and integration of this diversity on the other’. (Beck, http://www.schaderstiftung.de/
schader_stiftung/830.php)
A defining feature of this alternative understanding of integration is the criticism of established

patterns of thinking (paradigms, stereotypes) in prevailing political and legal research on
Europe, which ‘interpret and shape the EU according to the patterns of the nation-state’. In line
with the conventional paradigm, according to Beck, ‘Europe is viewed as the plurality of
societies, in other words, in additive or – at best – comparative terms’. ‘European society is seen
as the sum of Europe’s national societies’, which Beck brands as ‘the methodological
nationalism of the social sciences’. But according to Beck, this also applies to the ‘post-national
constellation’ of German social philosopher Jürgen Habermas (1998), who – very much in line
with Joschka Fischer – thus aims to foster the emergence of a European federation, a ‘state of
nation-states’. Beck/Grande (especially pp. 51, 57, 81 and 82) sum up the conventional
paradigm in terms of a (mutually exclusive) ‘either-or’ perspective (which views Europe either
as a federal state or as an association of nation-states, by analogy with the native-foreigner
contrast).
The alternative model presented by the authors is the (mutually inclusive) ‘both-and‘
perspective (i.e. both Europeanisation and national societies; analogous to ‘both national and
international’). In other words, this is ‘European society as the horizontal integration of national
societies’ in a post-hegemonic/postnational cosmopolitan Europe.
Beck therefore critically challenges the conclusion, derived from the conventional paradigm
and the application of ‘the nation-state as the conceptual yardstick’, which suggests that ‘the
realities of Europeanisation are defective’ (lack of statehood, democratic deficits, lack of a
European public). Instead, ‘the nation-state-fixated understanding should give way to
cosmopolitism’ in order to ‘be able to focus on the real dynamics’, whereby ‘European’ in this
context means ‘co-national forms of identity, lifestyle, production and interaction’, which ‘as, it
were, break through the walls of the states’ (see above-mentioned website). For Beck, this
applies equally to the question of the existence of a European demos, which according to the
conventional, nation-state-dominated way of thinking, is also stereotypically labelled as
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defective, albeit with the regretful acknowledgement that no European demos exists. This, say
the authors, leaves the question as to which demos is meant in each case (national, regional or
even mutually interconnected?) unanswered.
Nonetheless, Beck/Grande identify the need for a constitution firstly in terms of ‘establishing
the normative [i.e. norm-justifying] element for the constitution of a European civil society‘ and
secondly, ‘institutionalising the cosmopolitan regime in European politics’ (p. 342), especially as
cosmopolitism is based on ‘the principle of recognising difference’ but also on ‘a common
minimum corpus of substantive and procedural norms’. In institutional terms, this conforms
with a ‘postnational model of democracy’ which cannot be measured using the categories of
the representative models established in the Member States (MS).
Not least, say the authors, this shows that, based on experience to date, the establishment of a
representative model of democracy at European level has been unable to overcome the
existing democratic deficit. This can only occur through a participatory model. Since the
opportunity to link the constitutionalisation of Europe ‘with the activation and mobilisation of a
European civil society has been recklessly gambled away’, this ‘failed birth of a European
constitution’ could, in the two authors’ view, ‘be remedied at least in part by a Europe-wide
referendum … in which Europe’s citizens must give their express endorsement of their
constitution’ (p. 344).
In particular, in a Europe whose constitution is geared towards cosmopolitanism, ‘the principle

of differentiated integration must be radicalised and expanded’ (p. 365). But how can the
complexity associated with a participatory democratic model be appropriately overcome? The
authors address this issue mainly in abstract terms. The same applies to their referendum
model, which they propose as suiting a cosmopolitan/post-national model of democracy.
According to a recent newspaper article (ZEIT, 1.3.2007), Beck envisages a dual majority (in the
individual state and Europe-wide).
CONSTITUTIONAL REFERENDUM MODELS FOR THE EUROPEAN AND/OR THE NATIONAL

DEMOS?
The following sections will focus primarily on answering the second question raised above,
namely the choice of a specific referendum model. In this context, an attempt will be made to
present various possible voting variants and outline the criteria for their adoption (approval or
voting quorums) in a spectrum ranging between the following two poles:
(A) a model for an EU-wide referendum based on the criterion of a simple majority of votes cast,
and
(B) referenda in the various Member States according to the criterion that the draft constitution
will only be adopted if, in each MS, a simple (or qualified) majority is achieved for the draft. This
means that the draft is deemed not to be adopted if a majority is not achieved in just one MS.
As the table shows, various voting models can be presented between these two poles, based
on various criteria (majority of total votes cast, majority of votes cast in the individual MS to be
understood and counted either as a majority of states or as a majority of population of those
states which voted in favour) and quora in various possible combinations, which can be
ordered according to the increasing intensity (restriction, stringency) of the adoption criteria. It
is clear that the voting model assigned to (A), as one of the extreme ends of the spectrum,
conforms with the conceptual model of a fully-fledged federal state, while the model at the
other end of the spectrum (B) favours the maximum possible preservation of national
93
sovereignty. It also seems entirely plausible that as the stringency of the adoption criteria
applicable to the various voting variants progressively increases, the European demos
character progressively decreases.
With the fading of the character of the European demos – in other words, the idea of the
European people as the sovereign – the natural trend is for each national demos (sovereign) to
retain or potentially strengthen its importance. European constitutionalisation is thus reduced
to the (legal) question of constitutional amendment at national level, which must be judged
and decided by the MS according to their constitutional systems. If there is no European demos
to which the role of a pouvoir constituant can or will be ascribed, it then remains a matter for
the national demos to decide autonomously whether a European constitutional text conforms
with its national constitutional order, or whether it is prepared to (tacitly) accept a situation in
which its national constitutional bodies increasingly forfeit control and policy-making
opportunities through the transfer of sovereign rights to the European level.
Quora sm qm
Criteria:
1. Majority of total votes cast EU-wide
2. Majority of votes cast in the individual MS
3. Population figures of MS voting in favour
4. Dual majority (2xm) re. 1 and 2
5. 2xm re. 1 and 3
6. 2xm re. 2 and 3
7. Triple majority (3xm)
As the holding of a referendum Europe-wide falls within national constitutional competence, it

must be assumed that all the MS will at least commit themselves to holding a referendum,
which should take place in all MS, preferably at the same time. In those MS whose constitutions
do not provide for the option of a referendum (e.g. Germany) or whose constitutional rules do
not regard the holding of a referendum as necessary in the specific case of the European
constitution (unless this were specifically decided by the national parliament, e.g. Austria), the
outcome of this procedure would not be legally binding at national level (but would merely be
regarded as an informal consultation process). Nonetheless, in a Europe-wide context, it would
have legal effect insofar as the outcome of this procedure would count at European level.
Above, we present various voting variants as conceptual models in the form of a matrix table
which is structured as follows:
The vertical columns show the quora, i.e. simple majority (sm=1/2+) and qualified majorities
(qm; these could be assumed to be a 3/5, 2/3 or 3/4 majority, for example).
The horizontal rows show the voting models, e.g. based on seven sample criteria selected
below:
The table should be read as follows:

Criterion 1: The constitution is adopted if a simple majority or one of the proposed qualified
majorities is achieved EU-wide, without regard to the results of the votes in the individual MS.
Criterion 2: The constitution is adopted if a simple majority or one of the qualified majorities
proposed is attained in each individual MS. This means that even if the population in just one
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MS rejects the draft by sm (or in the case of the qm quora stated, its complement, i.e. the
blocking minority threshold, is exceeded), the constitution is deemed not to be adopted.
Criterion 3: The constitution is adopted if the population figures of the MS voting in favour
make up at least half, or 3/5, 2/3 or 3/4, of the total EU population.
Criterion 4 (2xm re. 1+2): The constitution is adopted if a majority of total votes cast is achieved
EU-wide in line with the envisaged quora and, at the same time, the majority requirements are
fulfilled in the individual MS in line with one of the proposed quora.
Criterion 5 (2xm re. 1+3): The constitution is adopted if a majority of total votes cast EU-wide is
achieved in line with one of the proposed quora and the population figures of the MS voting in
favour make up at least half, or 3/5, 2/3 or 3/4 of the total EU population. (This model is similar
in form to the voting model for the Council defined in Article 24 of the Convention’s draft
Constitution, whose provisions were made more complicated and restrictive in Article I-25 of
the Constitution).
Criterion 6 (2xm re. 2+3): The constitution is adopted if in each MS, a simple majority or one of
the proposed qualified majorities is achieved and the population figures of the MS voting in
favour make up at least half, or 3/5, 2/3, 3/4 of the total EU population.
Criterion 7 (3xm): The constitution is adopted if a simple or qualified majority of the total votes
cast is achieved in line with one of the proposed quota not only EU-wide but also in each MS,
and, furthermore, the population figures of the MS voting in favour make up at least half, or 3/5,
2/3 or 3/4 of the total EU population.
The table can of course be developed at will (but also made more complicated) through the
inclusion of further criteria. For example, between 1 and 2 (or between 2 and 3), the criterion of
a majority of states could be included – either unweighted or weighted according to
population size. This is different from 2 and 3 in that a simple or qualified majority would not
need to be achieved in each MS (as with 2), or the proportion of the population of MS voting in
favour would not be the crucial factor (as with 3), but there would need to be a majority of
states whose populations had voted in favour.
It is easy to see that as depicted in the above matrix, the adoption criteria potentially increase
vertically and horizontally (from left to right, and from top to bottom) while, conversely, the
European demos character increasingly fades away. Coming back to the extreme positions
discussed at the start, A is located in the first row in criterion 1 under sm, whereas B lies outside
the table. As mentioned, B denotes a (simple or qualified) majority of votes in all MS. However,
the additional criteria which could be inserted, as stated above, would not fully conform with
this trend, firstly because the adoption criteria are fairly weak, and secondly because of the
dominance of a majority of states over a majority of the population, which makes the demos
character relatively weak. The adoption criteria could be restricted solely through the highest
possible qm quorum – in an extreme case, 1/1, i.e. case B.
As indicated above, in order to gain an overview of all the possible models, the criteria
(horizontal) would have to be combined with the quora (vertical) in the dual majority (2xm: 4, 5
and 6) and triple majority (3xm: 7) models. This would require the practicability, practical
relevance, conformity with reality, and plausibility (especially as regard to the actual
institutional power relations which can realistically be assumed) to be verified in each case in
order, not least, to exclude combinations which may be logically incompatible.
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In the simple example set out above, it is clear that for criteria 1, 2 and 3, two voting
variants/models can be derived. For criteria 4, 5 and 6, four variants can be identified using
combinatorics, taking the example of criteria 4 (2xm re. 1 and 2):
Re. 1: sm qm sm qm
Re. 2: qm sm sm qm
This can also be applied to criteria 5 and 6.
For criterion 7 (3xm), eight variants arise, i.e.:
Re. 1: sm qm qm qm sm sm sm qm
Re. 2: qm sm qm sm qm sm sm qm
Re. 3: qm qm sm sm sm qm sm qm
This means that in total, there is a choice of 26 voting models. Using algorithms based on
combinatorics, this figure very soon multiplies greatly if the calculation model is based on
several qualified majority quora, such as the three mentioned above. In that case, it is not just a
matter of multiplying the number of qm quora considered; it must also be borne in mind that
the combination possibilities increase dramatically.
There is a possible additional condition (akin to adding a third dimension to the matrix,
although this cannot be illustrated in a two-dimensional figure), which is as follows: instead of
proceeding on the basis of votes in favour as a proportion of votes cast, the calculation could
be based on turnout, i.e. the total electorate. For example if there is a turnout of 50% (which,
based on previous experience, can be expected in Europe-related elections) and a majority of
60% of votes cast are in favour, this means that in reality, only 30% of the electorate has actually
voted in favour. The basis of the outcome’s legitimacy is therefore extremely questionable, and
it should be considered whether, in this case, the outcome should actually count. One option is
therefore to take account of a result only if turnout is at least 66% (or 60%, or certainly no lower
than 50%).
So which possible variants/combinations should be adopted? This, of course, is a highly

sensitive political issue in light of the theoretical difficulties in aggregating individual
preference systems into a logically consistent collective system. What is undoubtedly required
is political agreement on these rules, and achieving this is likely to be just as fraught with
difficulties as the constitutional project itself.
If a decision is taken to present the above-mentioned variants and possible combinations in the
form of a questionnaire, the prospective respondents (ideally a representative sample of MEPs
from all groups, or a broad cross-section of representatives of the Europe-relevant political
class) should be asked to tick their preferences in the table above, or to place the individual
variants in order of preference.
Naturally, each of the very numerous (theoretically) conceivable combination options,

horizontal and vertical, can be justified with greater or lesser success in terms of democratic
policy. In any event, in a questionnaire as described above, respondents should be requested to
justify their preferences in democratic terms.
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CONCLUSION
As an alternative to the current doctrines of European ‘statehood’, namely Beck’s concept of a

‘cosmopolitan Europe’, European integration is no longer explained in terms of the
conventional understanding of the state and the concepts derived from it. It would thus be
inappropriate to argue in terms of mutually exclusive categories (e.g. either an association of
states/ intergovernmentalism, or a confederation of states/ federalism) or even refer to the
‘ultimate objective’ of Europe. Instead, the alternative model of ‘cosmopolitan’ integration
requires us to think in terms of mutually inclusive categories. This means thinking, in
sociological terms, of Europeanisation in parallel to the existence of the national societies, i.e.
seeing European society as a horizontal integration of the national societies.
Extending this to the question of the existence of a European demos as the constituent power
(pouvoir constituant), this means that we must proceed on the basis of a European as well as a
national (and ultimately a regional) demos. In terms of the decision as to which referendum
model accords with this understanding of integration, there is no clear prima facie result. What
can be justified, however, is a model based on a double or even a triple majority, which would
give the result of a referendum at national level appropriate weight compared with an overall
EU-wide result. This weighting will depend on the extent of the actual status of integration,
above all however on the question, whether and how far a European demos has emerged and
what relevance can be attributed to national demos in relationship to a European one. If
considerable importance is attached to the national demos, the national decision taken by a
referendum or a parliamentary ratification will be given decisive relevance. Then the decision of
the European constitutionalisation will not be taken by a European pouvoir constituant, but the
national ratification decision will consist in reviewing the conformity of European rules – no
matter whether they should have constitutional character or not – with the national
constitutional systems. If little importance is attached to national demos, the question of the
existence of a European pouvoir constituant becomes more and more relevant.
If no clear-cut result is achieved in one of these cases (a highly likely outcome given the current
divergence between the pro-European political class and the Eurosceptic public) or if, as in the
afore-mentioned model B, the constitution is rejected, albeit by only one MS, the constitutional
project could of course continue to find itself deadlocked, as is currently the case. This dilemma
could only be overcome if the way towards flexible and differentiated integration models were
opened up at the outset. This could only be enabled by institutional solutions/ reforms which
would allow for the participation in the ongoing European integration process on the one
hand, but which would provide for opt-outs from certain areas subject to further integration on
the other.
If justified purely in terms of institutional history, the above-mentioned model B could possibly
provide the appropriate model, as it reflects the intergovernmental origin of European
integration derived from an international organisation. However, as already mentioned above,
this model lies outside the options set forth in the table. As we are undoubtedly dealing purely
with Community law here, it is not possible to draw on examples of constitutional decisions or
amendments by other international organisations, either as analogies or precedents. The 2/3
majority of states (plus certain privileged states) required by major international organisations
(UN, ILO) for a constitutional amendment to come into effect would, in terms of the above
table, constitute a relatively mild adoption criterion, and, moreover, would not be appropriate
to the specific quality of the European integration process.
In all these models, it is important to bear in mind that the institutionalisation of referenda
especially in the specific case of the European constitution, would not only serve to broaden
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the democratic legitimacy of the entire project, which is undoubtedly desirable.

Constitutionalisation – regardless of one’s position on the ‘ultimate objectives’ of Europe –
would undoubted give major impetus to Europe’s development into a state, as it is itself a key
element of this process. This point should be borne in mind by all the advocates of a
referendum – including, or especially, those Eurosceptics who reject Europe’s development
into a state, given that this could prove to be something of a pitfall for them in intellectual
terms.
* See Walter Leisner, Demokratie – Betrachtungen zur Entwicklung einer gefährdeten

Staatsform [Democracy – Observations on the Development of an Endangered Form of
Government], Berlin, 1998, p. 697
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A WAY OUT - TOWARDS A MORE

DEMOCRATIC EUROPEAN UNION
By Bruno Kaufmann (April 2007)
GETTING THE PEOPLE ONBOARD WITH THE STRUGGLING EUROPEAN INTEGRATION PROCESS
REQUIRES GENUINE TRANSNATIONAL LEADERSHIP SKILLS, WHICH CURRENT EU GOVERNMENTS
DO NOT SEEM TO HAVE. HOWEVER, THERE IS A WAY OUT OF THE CONSTITUTIONAL
STALEMATE. WE NEED BOTH BIGGER OPTIONS FOR MEMBER STATES AND GREATER
OPPORTUNITIES OF PARTICIPATION FOR CITIZENS, SUGGESTS BRUNO KAUFMANN.
With a rhetorical trick, the heads of state and government tried to bypass a key issue at the
recent 50th anniversary summit of the European Union in Berlin: “We, the citizens of the
European Union, have united for the better”, the Berlin Declaration reads and concludes by
promising “a renewed common basis” by the next EU Parliament elections in June 2009. But in
reality, the intention is to instrumentalise the mood of celebration in order to bring back the
‘good old days’ of European integration, when the peoples of Europe were happy to live
without the prospect of war and concentrate on increasing their personal wealth with no
ambition to disturb their leaders’ hard work of taking the common institutions forward.
Today we are living in a quasi-federal and quasi-constitutional polity with 27 member states
which produces up to 80% of the member states’ laws and which increasingly plays a major
global role in issues such as climate protection, security and health. As there are no historical
precedents or established ways of both democratically and efficiently governing such a
transnational body, the EU must develop its own political system. Learning by doing is the
method – or sometimes even by burning, as when the French and Dutch voters shot down the
first constitutional drafts in their 2005 referendums.
ALMOST 50 REFERENDUMS IN 25 COUNTRIES
Popular votes on European issues are no new factor in European integration politics: since 1972
almost 50 nationwide referendums in 25 countries have taken place. The subject matter
included mainly membership treaties (30 votes) and constitutional amendments (16 votes). In
most cases the citizens, who normally turn out in high numbers (66% on average), approved
the proposed steps. However, on certain votes the opposition prevailed. As - under the
principles of international law - EU treaties can only be amended when all member states ratify
them, ‘No’majorities in a single country had consequences for the whole of Europe. While the
Danish 1992 ‘No’ to Maastricht and the Irish 2001 ‘No’ to Nice could be overcome by bilateral
amendments with these countries, the French and Dutch ‘Noes’ to the constitutional treaty
have produced the need for a “renewed common basis”.
The requirements for such a new foundation were already outlined in the 2001 Laeken
Declaration, in which the EU leaders agreed to let a constitutional convention develop a
framework programme for a “more democratic, more transparent and more efficient” European
Union. The results of the 14-month long deliberations were not bad, but not good enough to
take the citizen test – a referendum was finally announced in only 11 out of 25 member states
at that time. While some leaders simply do not like the idea of letting the people decide on
major issues, others – like the former President of the EU Parliament – argue that EU-related
referendums “give an answer to everything else but the question on the ballot paper”. In other
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words: many leaders simply do not approve of referendums as a useful means of ratifying EU
treaties and try to do everything possible to avoid them in the future.
“DIRECT DEMOCRACY IS THE BETTER METHOD”
This is a bad strategy as the argument is not soundly based. In fact, extensive recent research
projects – conducted for example at the European University Institute in Florence – furnish
evidence that referendum votes on Europe in Europe predominantly deal with the subject
matter in hand: “Direct democracy has fostered a high degree of politicisation of integration”, is
Alexander Trechsel’s summary of a large empirical research project on “first and second order
referendums” (www.dd-la.ch/download/Glencross_Trechsel.pdf). Glencross and Trechsel
conclude that “direct democracy is, in comparison with EP elections, a better method for
allowing citizens both to participate in the political construction of Europe and hold their elites
accountable for the integration process”.
While the basic need for the establishment of direct-democratic instruments within the political
systems of the EU was endorsed by the constitutional treaty – in its proposal for an EU citizens’
initiative right for one million citizens from several member states (Art. I.47.4) – the actual use of
national referendum votes as part of the ratification process is far from well-balanced.
One basic imbalance is the fact that not all EU citizens in all member states have the right to
vote and there is no transnational coordination or framework for the voting process. An
analysis of EU integration history suggests two major phases (Treaty and Constitution) with
three forms of referendum in each, plus a transformation phase -the constitutional treaty
phase.
FROM TREATY TO CONSTITUTION
Established as a purely intergovernmental cooperation, the European integration process did

not offer any referendum votes at all during its “treaty light” phase. This changed in the 1970s,
when a “treaty standard” procedure was introduced by membership entries like those of
Ireland and Denmark. New memberships increasingly became a standard issue for a
referendum vote. In addition, the growing public debates triggered consultative votes on
related issues such as enlargement (France), or constitution-making proposals (Italy). In the mid
1990s a “treaty plus” method was established, which put the most important issues of EU
integration to a referendum vote in at least one of the member states – which therefore got a
de facto right of veto for the whole EU.
The lesson from the Irish “no” to the Nice Treaty was that the growing call for more democracy
and transparency on the transnational level had to be embedded within a new institutional
framework, later called the “constitutional treaty”. This mixture of old and new introduced (in
2005) a transformational form of referendum -the constitutional treaty votes. Basically
uncoordinated and underestimated – the Dutch government, for example, deliberately
omitted to campaign for its proposal – it was no surprise that citizens in several countries did
not agree with the proposed draft.
But there is no doubt that a huge majority of EU citizens want to have a say on the subject. In
spring 2007, opinions polls commissioned by the British think-tank Open Europe revealed that
77% of Europeans would like a referendum on a new treaty.
It is more than obvious that both the framework method as well as the referendum form must
be developed further in order to ensure basic requirements for democracy, transparency and
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efficiency. And it would be a major mistake to just concentrate on the efficiency issues, as is so
often proposed by leaders within the EU institutions and member states. Otherwise most
people will see no other option than to fight the EU as such – or to fall into deep apathy. As
both of these negative reactions are unattractive to anyone who appreciates the EU’s peaceful
and democratic record, German philosopher Jürgen Habermas - a long-time promoter of
deliberative democracy -has proposed (in a interview published by the Deutsche Presse
Agentur) a first Europe-wide referendum on selected issues such as “an independent financial
basis and a common foreign minister”. Habermas has stressed that “for Europe [this] will be the
only chance to consolidate the Union”. Such a vote, to include all EU citizens, would however
mark a “constitution light” referendum, whose main new feature would be its Europe-wide
character, while the legal basis for the votes would remain with the member states. With such a
procedure a bridge from the “constitutional treaty” framework to a “constitution light”
framework could be made, offering both a more democratic foundation for the Union and
additional options for opt-ins and -outs for the member states.
Tab. The European Referendum Framework in the past, today and in the future
Timeline Status Legal Basis Majority Rule Remarks

1950s-1960s Treaty Light N.N N.N "Monet method"
1970s-1980s Treaty Standard Member States Unanimity Irish and Danish
innovations
1990s-2004 Treaty Plus Member States Unanimity De facto
mandatory votes
on membership
and treaty
changes
2005 Constitutional member States Unanimity "First order
Treaty referendums"
2006-2009 Constitution Member States Unanimity (with Europe-wide
Light (first elements possibility for referendum
of EU approval linked to the EP
referendum majorities to go elections
legislation?) ahead)
2010s?- Constitution European Union Double majority Votes also
Standard (combined with (MS & triggered by
MS legislation) citizens)with citizen initiative
comprehensive procedures (?)
opt out
possibilities for
MS
? Constitution Plus European Union Double majority Fully established
(in cooperation with limited opt modern
with MS) out possibilities transnational
for MS democracy
Towards a better informed debate

As a next natural step in the genesis of transnational voting procedures on substantive issues a
“constitution standard” referendum method could be considered, which would combine
Europe-wide referendum votes with binding outcomes on those countries in which a new
constitution had been accepted by a majority of the citizens. This would, however, be the last
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phase within which the current veto rights of each member state would prevail. A further
development of the European Union’s basic laws would include double or qualified majority
requirements for common decisions including a “constitution plus” referendum procedure.
Learning by doing – and sometimes by burning. This process will no doubt continue in Europe.
There is no way back to a time when European treaties were made in secret, negotiated by
governments and ratified by parliaments only. While the need for direct-democratic elements
within the EU´s representative democracy is widely accepted, the methods and ways of
designing, improving, expanding and implementing these elements are still in need of much
greater development. This includes a step-by-step approach to the use of referendums on
Europe in Europe and the establishment of strong transnational citizens’ initiatives procedures
as proposed in the constitutional treaty. And last but not least – we need a much better-
informed debate and practical work around one of the most challenging developments in
democratic history, including know-how on direct-democratic delivery and the need for a
proper direct-democratic infrastructure beyond the nation-state. We have to dare more
democracy in order to bring Europe forward!
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WHY NATIONAL POLITICIANS ARE SO EUROPHILE
By Anthony Coughlan (July 2007)
AGAINST THE BACKGROUND THAT SOME 80% OF THE LAWS ARE AGREED IN BRUSSELS,
ANTHONY COUGHLAN ASKS WHY NATIONAL PARLIAMENTS HAVE BEEN SO WILLING TO DIVEST
THEMSELVES OF THEIR POWER TO MAKE LAWS AND WHY NATIONAL GOVERNMENTS HAVE
GONE ALONG SO READILY FOR DECADES WITH SUCH A SHIFT OF POWER FROM THE NATIONAL
TO THE SUPRANATIONAL EU LEVEL?
Between 1998 and 2004, according to the German Ministry of Justice, 23,167 legal acts were
adopted in Germany, of which 18,917, some 80% of the total, were of EU origin; so that only
one-fifth originated domestically.
Referring to this, former German President Roman Herzog wrote in Welt am Sonntag on 14
January last: “By far the largest parts of the current laws in Germany are agreed by the Council
of Ministers and not the German parliament. . . Therefore the question has to be asked whether
Germany can still unreservedly call itself a parliamentary democracy.”
The same supranational laws must be adopted by all 27 Member States of the EU. While the
proportion of supranational to domestic laws will differ from country to country, it is safe to say
that in every EU Member State well over half its laws each year come nowadays from Brussels.
Dr Herzog’s question may therefore also be asked of them: Can they unreservedly any longer
call themselves parliamentary democracies?
This prompts further questions: Why is it that national Parliaments have been so willing to
divest themselves so radically of their power to make laws? Why have governments and
government ministers, and aspiring ministers on opposition benches, gone along so readily for
decades with such a shift of power from the national to the supranational EU level, when it has
left their national parliaments but shells of their former selves?
The only plausible explanation seems to be something on these lines: At national level when a
minister wants to get something done, he or she must have the backing of the Prime Minister,
must have the agreement of the Minister for Finance if it means spending money, and above all
must have majority support in the national Parliament, and implicitly among voters in the
country.
Shift the policy area in question to the supranational level of Brussels however, where laws are
made primarily by the 27-Member Council of Ministers, and the minister in question becomes a
member of an oligarchy, a committee of lawmakers, the most powerful in history, making laws
for 500 million Europeans and irremovable as a group irrespective of what they decide to do.
National parliaments and citizens lose power thereby, for they no longer have the final say in
the policy areas concerned. Individual ministers on the other hand obtain an intoxicating
increase in personal power for themselves, as they are transformed from members of the
executive arm of government at the national level into EU-wide legislators at the supranational.
For national ministers operating at the EU level, keeping in with their fellow-members of the
exclusive Council of Ministers “club” of EU lawmakers becomes gradually more personally
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important for them than being awkward in defence of their own people’s interests. Dissent
from the predominant consensus on the Council risks one being branded as a trouble-maker.
Ministers’ minds tend to identify ever more with the great EU project. They see themselves as
political architects of a coming world power. They come to regard the EU rather than the
national stage as providing the most exalted platform for their future careers, the place for
historic photo-opportunities. Increasingly they see one of their key functions vis-a-vis their
fellow EU Council members as delivering their national electorates in support of further
European integration.
This is a particularly attractive prospect for government ministers from smaller countries. At
Council of Ministers level the leaders of small countries mix on first-name terms with the elite of
the European world. There the likes of Bertie Ahern can be pals with Tony, Angela, Jacques,
Guy, Jose-Manuel, Romano and the rest. It is nicer to be running “Yurrup”, as former British
Prime Minister Edward Heath used to call it, than running Luxembourg or Ireland.
France’s President Chirac as leader of a big country did not apologise to his EU confreres when
his countrymen voted No to the Treaty Establishing a Constitution for Europe in May 2005. Yet
Irish people recall with embarrassment the attitude of Taoiseach Bertie Ahern when he
attended the EU summit in Gothenburg a few days after Irish voters rejected the Treaty of Nice
in June 2001. Press reporters present said that Mr Ahern went around virtually beating his
breast in apology for his people’s delinquency as he told his fellow Heads of State and
Government to take no notice of the Irish vote but to go ahead with ratifying the Nice Treaty
regardless and that he and his government would rerun the referendum and ensure a different
result, which in due time he did.
Simultaneously with turning national ministers into supranational legislators, the shift of policy
areas from the national to the EU level frees the national civil servants dealing with them from
scrutiny of their actions by elected national parliaments. It increases their bureaucratic power
as they interact with their opposite numbers in Brussels in drafting and often deciding on EU
legislation and policy. For the great bulk of EC/EU laws are never debated at Council of
Ministers level, but are formally rubber-stamped there if agreement has been reached further
down among the civil servants at the preparatory stage of COREPER, the Committee of
Permanent Representatives, and in the 300 or so Council committees and the 3,000 or so
Commission committees where national civil servants interact with one another and with the
Commission bureaucracy.
Thus EU integration gives senior bureaucrats as well as government ministers more personal
power at supranational level than they have at home. In the article in which former German
President Herzog asks whether Germany can be regarded as parliamentary democracy any
longer, he refers to the scope the EU offers for the “natural tendency” of civil servants
everywhere “to pursue power and influence”.
EU integration therefore has become not just a process of depriving Europe’s nation states and
peoples of their national democracy and independence. Within each member state it
represents a gradual coup by government executives against legislatures, and by politicians
against the citizens who elect them. It hollows out the Nation State, sucking the reality of
power from its traditional government institutions, while leaving these formally still in
existence. They still keep their old names - Parliament, Government, Supreme Court - so as not
to upset ordinary citizens, but their classical functions have been transformed. Their prime
purpose now is to be transmitters of EU laws, executive edicts and legal judgements as the
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attempt to subsume the Nation States of Europe into a supranational EU Federation proceeds
relentlessly on its way.
EU integration has thus turned the Nation State itself into an enemy of its own people, while
clamping a form of financial feudalism on much of Europe. It represents the most profound
crisis of democracy in Europe since the days of fascism. It challenges citizens everywhere to join
in the growing international movement to restore national democracy and national
independence across our continent.
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AN UNSETTLED REFERENDUM DEBATE
By Peter Henseler (March 2008)
THIS ARTICLE AIMS AT DIFFERENTIATING THE REFERENDUM DEBATE BETWEEN THE NECESSITY
OF A NATIONAL REFERENDUM AND THE LEGITIMISATION OF THE LISBON TREATY BY DIRECT
DEMOCRACY AT PAN-EUROPEAN LEVEL. THE FIRST ASPECT HAS TO BE ASSESSED ACCORDING
TO THE RESPECTIVE NATIONAL CONSTITUTIONAL ORDERS. FOR THE FOLLOWING FRAMEWORK
OF ARGUMENTS THIS IS, HOWEVER, ONLY OF SECONDARY IMPORTANCE. YET THE LATTER IS
CONSIDERABLY MORE IMPORTANT FROM THE DEMOCRATIC POINT OF VIEW AND THE
QUESTION OF WHETHER A EUROPEAN ‘DEMOS’ EXISTS AND ITS ROLE AS A CONSTITUENT
POWER (‘POUVOIR CONSTITUANT’). THIS SHOULD HAVE BEEN DISCUSSED WITH HIGHER
PRIORITY THAN THE QUESTION OF NATIONAL REFERENDUMS. IT IS NOT SURPRISING THAT
UNDER PRESENT POLITICAL CONDITIONS THIS MAY NOW SEEM UTOPIAN. IN MORE REAL
TERMS, HOWEVER, IT APPEARS AS A WASTED OPPORTUNITY WHICH THE POLITICAL CLASS
DELIBERATELY LET HAPPEN. IN SUBSTANCE (EXCEPT FOR THE EXPLANATORY FOOTNOTES) THIS
ARTICLE IS BASED ON A LETTER (17.12.2007) FROM THE AUTHOR TO THE AUSTRIAN FEDERAL
PRESIDENT HEINZ FISCHER WHICH WAS ANSWERED BY THE PRESIDENT’S LEGAL ADVISER ON
11.1.2008. AS INDICATED IN THE FOLLOWING TEXT THE PRESIDENT TOOK A VERY POSITIVE
POSITION TO SOME ESSENTIAL ARGUMENTS.
During the course of an interview with the Austrian Television ORF on 15.12.2007 on the issue
of a referendum on the EU Lisbon Treaty the Austrian Federal President Heinz Fischer came out
against the idea of a referendum at national level that would be binding throughout Europe.
However, in the editorial context of the interview he was quoted as being of the opinion that
the necessary preconditions for a Europe-wide referendum could be created.
In a letter of reply the President’s legal adviser1 confirmed that the President has constantly
stood up in favour of a European referendum without neglecting the complexity being
connected with the setting-up of the prerequisites of such a Europe-wide referendum. ‘This
would be linked with the principal question of how far Member State sovereignty would be
transferred to the Union.’ However, according to the President, the idea of European unification
- not only economically, but also politically – would be questioned if only a single Member
State could impede achieving an important change of primary community law.
According to the above mentioned letter of his legal adviser the President agrees with my
opinion, that there is a need to make a clear distinction between the question of the need for a
referendum under the national constitution and the question of legitimisation of the Treaty
through direct consultation with the citizens at a pan-European level.
As far as the first question is concerned, according to the Austrian constitution there has to be a
differentiation between a mandatory and an optional referendum. A referendum is mandatory
if the Federal Constitution is to be affected by a ‘total revision’.2
It is however a purely political question whether a referendum should be held in the case of
(only) a ‘partial revision’ of the constitution.3 With respect to the Lisbon Treaty this question
does not arise for the present Grand Coalition government in office.4 The Austrian
constitutional main stream doctrine rejects the necessity of a (mandatory) referendum for the
Lisbon Treaty (nearly) unanimously because in its view the Treaty would not imply a total
constitutional revision. So there is a (virtual) consensus amongst Austrian constitutional experts
that the first question can be answered in the negative.
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Of course the two parties of the present Grand Coalition share this position.5 To my mind, this
view is not entirely clear-cut, inasmuch as I would say that the so-called Baugesetz-doctrine –
unlike the rulings of the German Federal Constitutional Court6 – has now become a very blunt
instrument to serve as an effective yardstick for measuring the constitutionality of transfers of
sovereignty to the EU.
Even in this view of lacking consistency I would regard this question as basically of secondary
importance. The second question, however, strikes me as being of primary relevance.
It cannot be denied that the current stage of European integration calls for a new constitutional
order. This was originally to be created by the Constitutional Treaty and is now supposed to be
achieved by the Lisbon Treaty, which is virtually identical in terms of substance. It is also
indisputable that the EU is increasingly taking on the character of a ‘state’ (by achieving more
and more ‘statehood’). To put it briefly (following Anthony Coughlan7) and with only slight
overstatement: the Lisbon Treaty will, in principle, furnish the EU with all the main
characteristics of a fully-fledged state – with the exception of the power to raise taxes, to
borrow in order to fund its activities and to force Member States against their will to participate
in acts of war.
Logically enough, the Lisbon Treaty therefore includes all those elements of the failed
constitution that display constitutional traits according to the usual national constitutional
standards because they either contain fundamental changes in EU institutions or entail (de
facto) irreversible transfers of sovereignty from the Member States to the Union.
Firstly, these elements consist of the confirmation of the presidential structure of the European
Council by having the President elected for a longer period (like the president of a nation-state)
and the streamlining of the EU’s foreign policy representation by creating a ‘High
Representative of the Union for Foreign Affairs and Security Policy’ who will also be Vice-
President of the Commission and Chair of the General Affairs and External Relations Council –
thus overcoming the current split between the Council and the Commission in terms of foreign
representation.
Secondly, they involve extending the powers of the European Parliament and putting it on an
equal footing with the Council in legislative procedures on virtually all matters.
Thirdly, they involve the provision of mutual military assistance in the case of a military attack
on a Member State, even though the principle of unanimity (still) applies to common foreign
and security policy (albeit combined with the possibility of shifting to qualified majority
decisions, except in the case of issues related to military or defence policy). The special nature
of national security and defence policies (i.e. permanent neutrality of individual Member States)
is to remain unaffected – whatever this means and however this contradiction is supposed to
be resolved.
And last but certainly not least comes the enshrinement of the Charter of Fundamental Rights
in law. Even if this does not form the basis for justifying any new competences for the European
Union, the incorporation of social rights in particular has raised expectations not only of
significant social progress but also of a new momentum that will face the Union with new
challenges and tasks and will also bring additional financial requirements, not least in order to
cushion and mitigate the negative social consequences of a one-sided stability-oriented
currency policy. Here, too, only the future will tell how this contradiction will be resolved,
particularly as in the case of fundamental rights that go beyond the classic protection offered
by a liberal state governed by the rule of law (for example protection against arbitrary acts by
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the state) and establish rights to specific services, the EU does not (yet) have any responsibility
in many of the areas involved.
The Austrian Federal President did not misjudge the existence of significant tendencies of the
EU’s future development towards more ‘statehood’. On the other hand, in his opinion one
should take note that there exists no consensus between Member States to create a state out of
the ‘special structure’ named ‘European Union’. On the contrary: quite a few Member States,
including Austria, strictly opposed this idea. ‘The transformation of the EU into a federal state
would be a total revision of the Austrian Federal Constitution which would have to be
subjected to a mandatory referendum.’ In the President’s view the Lisbon Treaty, however,
definitely can not be understood in the sense that such a transformation is intended.
It cannot be denied that the matters regulated by the Treaty have become so complex and the
Treaty itself so complicated – in some cases contradictory and even (virtually) unreadable – that
it would seem unreasonable to force the public to shoulder the final responsibility for putting it
into effect by holding a referendum.
A case can be made – as the President said in the above-mentioned ORF interview – that it
would be ‘justifiable’ to realise this responsibility by means of the particular form of political
and democratic legitimisation that is customary in each Member State – i.e. parliamentary
ratification. In other words – slightly overstated – by realising one’s political/moral obligation
towards the citizens concerned according to the triedand-tested 18th century Austrian
tradition (established by the Empress Maria Theresia and the Emperor Joseph II) that the
political class knows best (or rather, should know best) what is good for the people.
On the other hand, this does not, in my opinion, change the fact that – as I have already said – it
cannot be ignored that the European Union has now reached a stage of ‘statehood’ that would
seem to call for direct democratic legitimisation of the result – in other words for it to be put to
a referendum. However, this would not only call for a massive programme to inform the public
– which, to my mind, has not yet taken place or only to an inadequate extent – but would also
require the various peoples within the Union to have matured into a European ‘demos’ that
would justify being given a central role as ‘pouvoir constituant’ in Europe’s process of
becoming a state and developing a constitution. Mere parliamentary ratification of the Treaty,
as happened in almost all Member States with earlier revisions (including the rejected
Constitutional Treaty), would not meet this democratic requirement. I would therefore regard
the slogan ‘Parliament is the People’ (Johannes Voggenbuber), quoted in this context by
proponents of a constitution and former (supposedly) unimpeachable grass-roots democrats,
as inadequate in itself (if not a downright insult to the people).
Apart from anything else, they fail to explain the contradiction that, on the one hand they
regard the Treaty as bad and therefore apparently believe the people to be too stupid to
understand it – which is why they would prefer to ratify it themselves – but at the same time
they defame all those who are in favour of direct democratic legitimisation because this
supposedly only serves the interests of those who wish to make the Treaty fail or are even in
favour of leaving the EU.
Now of course one first has to acknowledge that at the present time there is (as yet) no legal
provision for holding a Europe-wide referendum. As I have already said, the political class can
be criticised for the fact that – apart from apparent Austrian attempts8 that appear, however,
not to have received any support or have remained unknown – this instrument has not been
promoted with the necessary political pressure. It is probably now too late to do so. And it
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would be difficult and from a logical point of view even bizarre to insert the provisions for a
referendum into a Lisbon Treaty that is itself to be subject to a referendum.
It would, however, in my opinion have been possible and realistic to take a ‘pragmatic’
approach and agree, on the basis of a politically binding declaration at the Lisbon Summit, to
carry out a referendum simultaneously in all Member States, the result of which would only
have indicative character in those states in which the instrument is unknown or not regarded as
necessary for the Lisbon Treaty, but which externally and vis-à-vis all the other states would
acquire legal status inasmuch as it would be included in the overall European result, which
itself would be legally binding. The result of this referendum should, therefore – provided a
certain quorum is reached (at least half of those entitled to vote, see below) – be binding,
irrespective of whether in individual Member States such a referendum is required by the
constitution, is only carried out on an optional basis or for historical reasons is not provided for
at all, and also irrespective of the fact that the instrument of a Europe-wide referendum should
legally first be separately provided for in a treaty between the Member States.
As far as the requirements for acceptance are concerned, it cannot be the case that a negative
result in an individual state condemns the entire project to failure. This would be inappropriate
and also unfair vis-à-vis those who were willing to ratify the Treaty. That was also the
President’s – justifiable – concern in the above-mentioned interview.
On the other hand, one could assume that the European Union has now reached a certain
degree of ‘statehood’ but cannot (yet) be compared with a traditional state, especially as all the
ideas discussed (e.g. on the periphery of the constitutional discussion in the then Constitutional
Convention, or by Germany and France on the objectives of Europe (Finalität Europas) along
the lines of democratic, constitutional and federal statehood of the EU) had been concluded in
advance by more or less setting in stone the existing triangle of power between the Council,
Commission and Parliament. The time would therefore appear not to be ripe for regarding a
Treaty as having been legally approved in a referendum if, as in the case of referenda in
individual states, a simple majority of the European population voted in favour, independently
of the particular results in individual states. I would therefore regard it as appropriate, at the
current stage of integration, to provide for national referendum results to carry a significant
weight when it comes to the overall result.
The voting model used should, therefore, represent a compromise between these two
extremes and achieve a balance between the plebiscitary interests of individual states and
those of Europe as a whole, in line with the degree of ‘statehood’ currently achieved by the EU
and at the same time giving considerable weight to the expression of will at national level – in
other words: a balance or compromise between both the will of the people as a European
demos and their will as a national electorate.9 One guiding principle could be the new qualified
majority voting system that the Lisbon Treaty proposes for the Council from 2014 onwards. This
introduces a ‘double majority’ system, with a threshold of 55% of members of the Council
representing 65% of the EU population.
If this were applied to a Europe-wide referendum it would set both a majority threshold for
Member States (i.e. a majority of states whose populations would have to vote in favour) and
also a threshold consisting of a majority of the EU population. However, in order to match the
plebiscitary nature of the vote, it would seem to me to be appropriate to set the required state
majority higher than in the case of majority decisions in the Council – in other words to set
stricter requirements for approval and to call for a two-thirds majority of Member States. The
threshold set for the population could also be two-thirds (in other words, roughly the same as
in the Council), but – unlike the qualified majority decisions in the Council – it should be
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enough for this majority of the population to be calculated on a Europe-wide basis, in other
words it would not just be the proportion of votes in those states voting in favour that would
be taken into account in calculating the overall result.
To sum up: the Treaty would be passed if the national electorate of 18 Member States voted in
favour (by simple majority in each of these 18 states) and two thirds of the EU population also
gave its approval.
To my mind, this would represent significant progress for democracy. If, however, as happens
in the European elections, less than half the electorate were to vote, then one would have to
seriously consider whether a result on such a weak basis could be regarded as sufficiently
democratically legitimised and therefore binding. In this case, the logical democratic
conclusion would be that politicians taking on their political responsibility within the various
Member States would have to face up to their national sovereign, represented by the national
parliament, in the context of the parliamentary ratification process that would then come into
play for the Treaty.
I am aware that this may all appear rather utopian. However, one should never give up hope,
even when the Zeitgeist – which no-one, as we know, has ever actually seen – suggests to the
contrary. I am happy to see that my opinion is shared by a much more thorough thinker – who,
I imagine, had also played a guiding role in President Fischer’s process of political/academic
socialisation – namely Jürgen Habermas, who recently (in Die Zeit on 29.11.2007) said that
European integration policy had ‘always seen itself as an elitist project, above the heads of the
population’ and especially at present, as the Lisbon Treaty comes into existence, ‘has never
been pursued in such a blatantly elitist and bureaucratic fashion’. ‘The pained silence being
maintained by governments on the question of the future of Europe’, therefore calls, in the
opinion of Habermas, for governments to ‘force themselves to give their own citizens an
opportunity to decide in a referendum on the future of Europe.’
I have little to add to that, apart from, perhaps, the sad conclusion that the political class
(especially in Austria) appears to be doing the very opposite.
NOTES:
1 Ludwig Adamovich, former president of the Austrian Federal Constitutional Court and former
General Director of the Federal Chancellory’s Legal Service (Verfassungsdienst).
2 Total revision means substantial alteration of (even only) one single principle of the so-called
‘fundamental’ or ‘structural’ principles (‘Baugesetze’) of the Federal Constitution, i.e.,
according to the Austrian doctrine, the democratic, the republican, the federal, the
separation of powers, the liberal, and the rule of law principles.
3 Partial revision means that by any constitutional amendment none of the above mentioned
fundamental principles is affected.
4 According to the Austrian constitution, principally a (simple) majority of the first
parliamentary chamber (‘Nationalrat’) could decide to submit any law to a national
referendum. This includes also those constitutional laws affecting a partial revision of the
constitution (but not a total one) and thus it could fit also to the Lisbon Treaty. Apart from
this, in the case of a partial revision at least one third of the members of either the first
parliamentary chamber (Nationalrat) or the second chamber (‘Bundesrat’) may bring a
motion to initiate an optional referendum. Under the given political conditions this is really
unlikely because the present coalition government in office is based on a 73.2% majority of
deputies in the first chamber.
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5 The two right-wing opposition parties, however, postulate a national referendum – as far as
the greater party (Freiheitliche Partei – FPÖ – ‘Freedom Party’) is concerned inasmuch with a
Europe-wide legally binding effect as a negative result should impede the Treaty’s entry into
force, otherwise Austria should even call on the option to leave the Union. This is claimed
partly in the context of campaigns accompanied by right-wing populist polemics. The green
opposition party finds itself in agreement with the government in rejecting to hold a national
referendum. However, more or less significantly it pleads for a pan-European referendum.
Only isolated voices in favour of such a European referendum could be heard from some
officials of the two coalition parties. There is no doubt that a European referendum had been
repeatedly the subject of internal talks of the Federal President and had been also discussed
in the Austrian parliament.
6 One of the most important questions that had to be judged by the German constitutional
court was whether Germany will lose her constitutional identity (‘statehood’ – Staatlichkeit)
by the Maastricht Treaty, in particular by significant tendencies of Entparlamentarisierung
(removal of power from the German parliament) and Entföderalisierung of the German
federal institutions. Although the action was rejected the judgement (BVerfG 89, 12.10.1993)
stated a reservation reviewing the ratification law of the Treaty according to German
constitutional standards saying explicitly that future changes of the Treaty’s ‘integration
program’ would not be covered by its present ratification law. Former German Federal
President (and former president of the German Federal Constitutional Court and president of
the then first Convention drafting the Charter of Fundamental Rights as well) Roman Herzog
argued in the same direction saying (in Welt am Sonntag on 13.01.2007) that ‘the question
has to be raised of whether Germany can still unreservedly be called a parliamentary
democracy’ under the ongoing constitutional efforts of the EU in not solving its democratic
deficits.
7 EUWatch October/November 2007, Issue 8, p. 7.
8 So the Austrian Minister for Foreign Affairs (the ministry meanwhile was relabelled into
‘Federal Ministry for European and International Affairs’) Ursula Plassnik mentioned in an
interview with an Austrian newspaper (ÖSTERREICH on 18.11.2007) that Austria did support
the idea of a Europe-wide referendum.
9 This ‘both-and-principle’ goes back to Ulrich Beck’s vision of a Cosmopolitan Europe, to which
I referred in my EUWatch article on the existence of a European demos (Issue 6, April 2007).
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THE IMPORTANCE OF MONITORING MEMBERS’

VOTING IN THE EUROPEAN PARLIAMENT
By Jan Å Johansson (September 2008)
THE EUROPEAN PARLIAMENT IS FAR AWAY FROM THE ELECTORATE. MEDIA COVERAGE ON
WHAT HAPPENS IN THE PARLIAMENT IS INSUFFICIENT, THE DECISION PROCESSES ARE
COMPLICATED AND MANY REPORTS THAT ARE ACCEPTED ARE ONLY STATEMENTS OUTSIDE
THE LEGISLATIVE PROCEDURE. THE MEMBERS OF THE EUROPEAN PARLIAMENT (MEPS) ARE
OVERSHADOWED IN THE MEDIA OF THEIR HOME COUNTRIES EVEN BY THEIR PARTIES’
SPOKESPERSONS IN THE NATIONAL PARLIAMENTS OR BY CABINET MINISTERS.
The European Parliament is governed by a broad majority of the Christian

Democratic/Conservative Group (EPPED) and the Socialist Group (PES). A lot of the daily work in
the Committees is based on the compromises between these two groups, sometimes with the
Liberal Group (ALDE).
In Swedish election campaigns to the European Parliament the Social Democratic and the
Conservative parties concentrate on debating Right-Left perspectives, but in the European
Parliament both groups agree on transferring policy area after policy area to the EU level. The
Service Directive, for example, was heavily debated during the European elections campaign of
2004 in Sweden. But both before and after that campaign the majorities in these two groups
agreed on large compromises on the Directive text.
Party cohesion in the European Parliament
To hold the party groups together has become more and more pressing when the Parliament
has gained increased influence in the Union with every new Treaty. But does a Group whip find
it harder to vote in a certain way than a whip from the party back home?
First, it is not the Group leadership in the European Parliament or in the European party that
compile the candidate lists for the next European elections. Nominations and selections of
candidates are carried out within the national parties in the Member States. If an incumbent
member fails to pay attention to his or her party organisation in the constituency but follows
the Group whip, he or she would be in hot water when it comes to securing a new nomination.
This is of course the decisive reason for following the national party whip. Spending a lot of
time in Brussels or Strasbourg, far away from home, does not facilitate the Member’s
involvement in the daily work of the national party.
Second, if the party of an MEP is in government and an order is given to follow a certain
political line which has been upheld in the Council, it would be difficult for the MEP to oppose
it.
What the MEPs think is not given much importance in domestic politics. The MEPs are generally
rather marginal in domestic issues. The decisions of the party leadership are more important.
We can take as an example when Tony Blair in British domestic politics stated that any
decriminalisation of cannabis use was out of the question. At the same time the British Labour
MEPs supported a resolution on a more liberal approach to drugs (the Catania Report A6-
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0067/2004 about recommendations to the Council on the European strategy on fighting drugs
[2005-2012], voted 15 December 2004). Yet I do not think that the British Labour party would
dare include aspects from this resolution in their election manifesto for 2009.
Party group discipline vs. national interests - some examples
The Lehne Report – The Directive on takeover bids of 4 July 2001
The following is an example of how the Groups‘ discipline can totally fall apart:
On 4 July 2001 in Strasbourg, voting began slightly behind schedule at 12:09. Three matters
were first considered using the Simplified Procedure. One of these was a codecision matter in
its second reading, which concerned action against antipersonnel mines. The three reports
were pushed through without debate. This took approximately four and a half minutes. A point
of order was then considered where an MEP complained that there was insufficient hotel
accommodation in Strasbourg, which meant that visiting groups had to be billeted far from the
city.
It then became very interesting. A report under the co-decision procedure in its third reading
concerning a Directive in the field of company law relating to takeover bids was to be voted on.
The matter concerned the institutional rules applying to big business in Europe regarding the
acquisition and takeover of large companies.
The Directive would have led to common rules for takeover bids within the EU. It was
considered to be an important reform in order to facilitate the cross-border restructuring of
companies. Work on the Directive had been going on for twelve years. In early June, a
settlement was reached on the matter between the Council of the European Union and the
European Parliament’s conciliation committee for the matter. However, in the Council,
Germany was against the proposal. In the middle of May 2001, the German Federal Chancellor
Schroder had dined with the chairman of Volkswagen. After the meal, Germany changed its
position. They claimed that it would be far too easy for foreign companies to submit hostile
bids on German companies. Among the demands put forward by Germany was that a
company’s board of directors should be able to implement countermeasures to prevent
unwelcome acquisitions, without first allowing the shareholders to decide on a particular bid at
a general meeting. In the proposed Directive, the ultimate decision-making right concerning an
acquisition would rest with the general shareholders’ meeting. A company’s board of directors
would have very little opportunity to prevent a hostile acquisition itself. The proposed Directive
would also give employees the right to full information prior to a company acquisition,
including that relating to planned closures and cutbacks.
It also became clear that voting in the European Parliament sets national traditions against
each other. On the one side, there was the established Anglo-Saxon tradition as typified by free
market principles, whilst on the other there was the corporative and protectionist continental
tradition. The first tradition was advocated in the European Parliament’s debate by the English
MEPs in particular. They were in favour of the Directive as submitted. The other tradition was
represented by the German MEPs and, in particular, by the German MEP Lehne from the
German CDU. He was the European Parliament’s rapporteur for the matter and was unhappy
about the conciliation with the Council. During the European Parliament’s second reading in
December 2000, 15 amendments were adopted. After the conciliation result, a minority of six
members out of 14 believed that it was too far removed from the amendments that the
European Parliament had presented.
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The two major groups, the Christian Democrats/Conservatives (EPP-ED) and the Social
Democrats (PES) were split almost equally for and against the conciliation result.
Before the vote was due to take place, the rapporteur Lehne (CDU/EPP-ED) explained that
those who agreed with the opinion of the rapporteur should vote ‘no’ to the report.
At 12:15 according to the European Parliament’s clock, the voting on the Lehne Report was
concluded. The result of the vote was 273 for and 273 against the report, with 22 MEPs
abstaining. A total of 568 MEPs took part in this vote. The speaker initially announced that the
report had been adopted, but then read out an extract from the Rules of Procedure. According
to Rule 83, a simple majority for a proposal is required in order to be adopted, while Rule 128(3)
states that the proposal must be deemed as having been rejected if the number of votes for
and against is equal. The report was therefore rejected.
The British Conservative MEP McMillan-Scott asked the president, Mrs Fontaine (UDF-EPP-ED),
how she had voted on the matter. She replied that she had not voted at all, and that she
believed that it was a matter of principle that the president only voted when the issue was very
special (‘very special’ must mean something like the occasion on 16.05.2001 when she voted to
retain Friday sessions in Strasbourg in 2002). McMillan-Scott said that the conciliation
committee which negotiated the proposed Directive believed that the president should have
voted, and then the Directive would have been adopted. We do not know if this is the case –
Fontaine’s party, UDF, was split on the issue.
Table 1: The distribution of votes in the European Parliament on the basis of the national
delegations´ votes on the Lehne Report on 4 July 2001
Country Yes No Abstained Absent Total

Sweeden 19 0 3 0 22
Austria 4 14 1 2 21
Belgium 5 16 0 4 25
Germany 1 95 0 3 99
Denmark 13 0 1 2 16
Spain 26 31 1 6 64
France 45 26 10 6 87
Finland 11 2 1 2 16
Greece 2 21 0 2 25
Italy 32 36 3 16 87
Ireland 10 2 0 3 15
Luxembourg 5 1 0 0 6
Netherlands 9 22 0 0 31
Portugal 19 1 2 3 25
United Kingdom 72 6 0 9 87
EU 15 273 273 22 58 626
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However, the president’s vote did not prove decisive. Many other random factors decided the
vote. Four members had it recorded in the minutes after the vote that they had intended to
vote ‘yes’ but for some reason had failed to vote.
After having debated on how the voting on the Lehne Report had gone for more than ten
minutes, a vote was taken on the next report. It became apparent in the next Roll Call vote at
12:28 that more MEPs had arrived. A total of 585 MEPs took part. For various reasons, 17 MEPs
had quite simply not managed to get to the chamber in time to vote at 12:15. For example, the
Danish MEP Anne Jensen from the liberal left was delayed by an interview and did not manage
to vote. She would have voted for the Directive. It is extremely likely that at least one MEP
voted wrongly but failed to correct it in the minutes. A correction in the minutes still does not
alter the result. On this occasion, nobody complained that their voting machine was not
working, which happens occasionally.
A total of 597 MEPs signed in on this day, plus an additional three MEPs who voted at 12:28
who never signed themselves in on the session’s attendance list. Excluding the president, not
all MEPs managed to press the voting buttons in a single vote, another factor that can be
decisive when the number of votes is equal in a co-decision matter.
After the voting, there was also some confusion at a time when the provisional record for the
vote showed the result at 273 for and 272 against. An error had occurred because of a new
Italian MEP who had joined the European Parliament as a replacement member two days
previously. He had not been properly signed-in in the electronic register.
Many random factors can therefore decide a vote in the event of a close result. Introducing a
system of pairing members as used for example in the House of Commons in the UK or in the
Swedish Parliament would also have been impossible in this situation, as a number of party
groups were split. The British and Scandinavians generally voted ‘yes’ to the proposed
Directive, while the Germans almost all voted ‘no’. Should those present be offset against
absent MEPs on the basis of national affiliation? This would undoubtedly be unacceptable –
after all, “national interests” definitely do not exist in this “home of the true Europeans”.
The then EU Commissioner Fritz Bolkestein, who was responsible for competition issues, said
later that this was a serious blow to the EU’s ambitions of becoming the world’s strongest
economy.
Sweden’s Minister for Trade at the time, Leif Pagrotsky, said in the Swedish newspaper, DN, on
the day after the vote that there had been a belief that we were home and dry and that the
basis for a modernised industry in Europe was about to improve. Pagrotsky also said that the
goal was for the EU to catch up with the USA in ten years’ time. The ‘no’ from the European
Parliament therefore had serious consequences for the EU itself. All this was decided by a vote
in the European Parliament that was significantly affected by random factors.
This was the second time in history that the European Parliament rejected a proposed Directive
on which agreement had been reached in a conciliation committee. The first time this
happened was in March 1995, when the proposed Directive on the right to patent human
genes was rejected. This matter later returned in a revised form to the European Parliament for
consideration in July 1997 and again in May 1998.
The day before the vote, the Swedish Prime Minister at the time, Goran Persson, encouraged
MEPs to approve the result of the negotiations and warned that a ‘no’ could have crucial
consequences for the work of the European Parliament.
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The Spanish, French and Italian delegations had a relatively even distribution between ‘yes’ and
‘no’ voters. In other countries, MEPs voted very much according to their national affiliation.
The three Scandinavian countries, Denmark, Finland and Sweden, as well as the United
Kingdom, Ireland, Luxembourg and Portugal primarily took an opposing position to Germany,
Austria, Greece and Belgium. Each Member State’s national government and the MEPs’ national
parent parties undoubtedly pressed MEPs to vote in a particular way on this occasion. We know
for example that the British and Swedish governments put considerable pressure on their
respective national delegations to vote as they did.
Not only did the parliamentary groups split along national lines: MEPs also voted differently
within the various national party delegations. For example, both the Greek PASOK and New
Democracy delegations (PES and EPP-ED respectively) had an MEP who deviated from the party
line and voted ‘yes’ while the rest voted ‘no’. The Dutch PvdA delegation (PSE) also had one
MEP who voted ‘yes’ while the other five voted ‘no’. From Germany, all MEPs voted ‘no’, except
for one from the CDU who voted ‘yes’. There were therefore a number of deviations from the
national party lines and it is difficult to know whether it was deliberate in every case or whether
it was the result of a fast vote when people were still entering the chamber, making it difficult
for individual MEPs to know what the party line actually was – the European Parliament groups’
or the national party delegations’. Without interviewing each and every one of those 626 MEPs
about their position on this issue at the time, we would never be able to assess the random
factor of how many MEPs deliberately deviated from the party line and how many made a
simple mistake because they could not follow the issue at the party group meetings.
Other examples of deviations from the Group whip
Other more recent examples of remarkable deviation from the party whips include the
Gebhardt report (A6-0409/2005) on the Service Directive, which was up for the first reading on
16 February 2006. In this case, the new member states’ delegations in the EPP-ED deviated from
the group whip.
Another example is the Cercas report (A6-0105/2005) concerning certain aspects of the
organisation of working time that was up for vote in the first reading in the co-decision
procedure on 11 May 2005. It can be noted that the Greek and Maltese parties within the PES
deviated from the Group whip and voted no or abstained. The British Labour members voted in
favour of the report but their Government in the UK played a strong hand in the Council to put
the issue on hold.
The budget work in the EP - negotiations behind closed doors
The European Parliament has had for a long time a direct influence on the budget of the Union,
above all on non-compulsory expenses. But it is interesting to note that the budget procedure
in the Parliament is conducted by a small group in the Budget Committee comprising two
members from EPP-ED, two from PES and one from ALDE. Ordinary backbenchers receive the
documents and the voting lists for the session before the budget vote at a very late stage, even
if the computerisation of documents in the Parliament has made it easier. But in budgetary
issue there is a group elite that takes the real decisions behind closed doors and only a handful
of members have a real say in the matter.
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How to put pressure on the MEPs - the Swedish example
In the Swedish media, ever since Sweden joined the European Union in 1995, the results of
different roll call votes (RCV) have been mainly reported through debate articles from EU-
critical parties. It was the small political minority in Sweden that has kept interest alive by
putting questions to the members from the different parties about their voting behaviour in
the Parliament.
My EU-critical party, the June List, has published three books in Sweden named “With Split
Tongues” that compares the promises made by the parties in the European Parliament election
campaign of 2004 with the concrete voting behaviour in the European Parliament. For example
the slogan of the small Centre Party (with one MEP) in the election campaign was “a narrower
but sharper EU”, which demanded, among other things, that cultural issues should not be an
issue for the European Union. But when elected to the Parliament, their representative voted in
favour of taking many cultural issues on the political agenda of the Union.
More or less all political parties in Sweden want, in principal, to abolish or radically reform the
Common Agricultural Policy. At least, this is what has been upheld during the 2004 campaign.
But in the European Parliament most of the Swedish members have been quiet and allow the
extremely subsidy-focused Committee on Agriculture in Parliament to work freely.
After our publication of the third issue of “With Split Tongues” in February 2008 we have noted
that the Swedish parties are revising their voting behaviour, maybe in view of the 2009
election, and have now started to regularly vote against the different reports from the
Agriculture Committee. We can now see a genuine “Swedish” position on these issues thanks
to the information activities of the June List.
At the session in Brussels on 5 June 2008 the Veraldi report (A6- 0182/2008) on the future of
young farmers under the ongoing reform of the CAP was up for a vote. It was a report outside
the legislative procedures and was only a political statement from the Parliament. But this is
not without importance considering the fact that the European Parliament has a strong lobby
influence on the other European institutions and on the Member States.
The Swedish June List requested eight RCV (through the IND/DEM Group) on proposals in the
report that are controversial in countries with strong EU-critical opinions. The Swedish Social
Democratic, Conservative/ Christian Democratic and Liberal MEPs were hunted down to break
with their Group whips and to vote against many of the proposals made by the Agriculture
Committee. Also, the June List succeeded in getting one point in the report deleted when the
Groups had a closer look on the proposals and found that one of the points went beyond what
was required.
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Table 2: The distribution of votes in the European Parliament on the basis of the political
groups in the vote on the Lehne Report 4 July 2001
Political Absent/Did
Yes No Abstains
group not vote
EPP-ED 98 119 4 11
PES 80 84 0 17
ELDR 45 0 0 7
Verts/ALE 8 31 2 5
GUE/NGL 1 30 7 4
UEN 16 0 0 5
TDI 7 4 5 3
EDD 9 5 3 1
NI 9 0 1 5
Total 273 273 22 58
Some examples from the votes
Point 35 in the report stated that the EP “reaffirms its opinion that rural development measures
should be aimed directly at farmers.” This was accepted by the Parliament with 537 votes to 77
with nine abstentions. It is interesting to see that three Swedes in the Liberal group and one
Swede in the Green group voted in favour, while 13 Swedes voted no. One Swedish
conservative was present but did not vote and another Swede was absent from the session.
Point 67 called “for a European monitoring centre to be established on the setting-up and
transfer of farms and rural areas;”. This proposal was surprisingly rejected by 394 votes to 212,
with 16 abstentions. Of the 18 Swedish members present, one voted in favour (Maria
Carlshamre, Feminist initiative in the ALDE Group), whereas 17 voted against. For the Swedish
Social Democrats this might have been an ordeal. They were -together with two Danes- the
only ones in the PES Group who voted no. The whip from the PES was to vote yes.
Point 70 proposed “the designation of a European year of urban-rural dialogue;“. It was

accepted by 515 against 105 votes, with 16 members abstaining. Of the 18 Swedish members
present, 16 voted no, one liberal (Centre Party) abstained and one liberal (People’s Party) did
not vote. The resolution as a whole was accepted by 571 against 31 votes, with 39 abstentions.
Of the 18 Swedish members present, one voted yes (Feminist initiative in the ALDE Group), 15
voted no while one liberal (Centre Party) and one Green member abstained. It must be noted
that the 31 no votes comprised of 15 Swedes, seven Brits, four Danes, three Czechs, one Finn
and one Dutch member.
With better media coverage, or through reportage in the blogosphere, on the voting in the
European Parliament it should be possible to raise the number of EU-critical voting MEPs in
these member countries.
When it comes to the heavily criticized fishery agreements with African countries, in principal
no Swedish party defends them, except for the Swedish Social Democrats. But several political
parties said one thing during the election campaign, yet failed to pursue it in Brussels and
Strasbourg. At the beginning of this legislature, the Swedish conservatives (moderates) voted
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in favour of the fishery agreements. However, after the publication of our second book in the
“With Split Tongues” series, they made a u-turn and voted against. And yet, the present
Conservative/Christian Democrat/Liberal coalition government supports these fishery
agreements despite their opposite manifesto declarations in the 2006 national elections
campaign. We in the June List will be taking further actions against the present government on
this issue.
It must therefore be underlined that it is essential to have a political opposition in the European
Parliament that can call for roll call votes on sensitive issues and ensure that the elected
members are held accountable for their voting behaviour. How can we guarantee that the
public opinion in all Member States monitors the MEPs´ work?
Does the European Parliament have problems to cope with increased openness?
With increased openness and attention from the public to issues being voted on in the
European Parliament, the MEPs would be more sensitive to the opinions in their home
countries. Yet this would probably undermine group cohesion and make the results of the
votes less predictable. Can the leadership of the large groups be interested in increased
openness if this causes such problems?
What sanctions could the group leaders impose on members who disobey the whip? As
pointed out, political groups in the EP cannot determine the nomination processes within their
member parties, yet they must attract as many members as possible in order to secure as much
influence as possible; influence in negotiations between the groups and in getting as big a slice
as possible of the grants awarded to the political groups in the Parliament. Sometimes it gets
very obvious that adding more members to the group is much more important than having
political cohesion inside the group.
For example, the ALDE accepted members from the Conservative Party of Romania after this
party was denied membership in the EPP-ED Group.
Another example is when the PES Group did not expel or suspend members of the Slovakian
Social Democratic party (SMER), although the SMER was suspended from the Party of European
Socialists. To expel a national party from the group is not tempting at all - first, there is a lot of
money involved in grants from the Parliament to the Groups, and secondly, to build up
relations with a political party in a Member state is not an easy task. In today’s situation, when
the ideological differences between the EPP-ED, the PES and the ALDE Groups are continuously
decreasing, it is not advantageous to give away members to a competing group.
All this points to the fact that the larger groups - EPP-ED, PES and ALDE - will continue to be
strongly dependent on the broad compromises reached in the EP´s committees. This is due to
the fact that it is hard to make the whip system function as it does in the national parliaments.
Because there is no pairing system for absent members (for example it is hard to imagine the
transnational pairing of a German Social Democrat with the PES and an Italian right winger with
the EPP-ED) the disconvergence in the voting results must be eliminated by broad agreements
and compromises. The political groups in the European Parliament have no other option.
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THE RESULTS OF THE 2005 AND 2007 REFERENDA:

What do the statistics reveal?
By Endre Barcs (December 2008)
WITH THE LAEKEN DECLARATION IN DECEMBER 2001, THE LEADERS OF THE EUROPEAN UNION
DECIDED TO ESTABLISH A CONVENTION TO PRODUCE A DRAFT FOR A EUROPEAN
CONSTITUTION. THE DRAFT WAS PUBLISHED IN JULY 2003. AFTER PROTRACTED
NEGOTIATIONS IN THE INTERGOVERNMENTAL CONFERENCE, THE FINAL TEXT WAS AGREED BY
JUNE 2004 AND SIGNED IN ROME ON 29 OCTOBER 2004 BY 53 SENIOR POLITICAL FIGURES
FROM THE 25 EU MEMBER STATES. HOWEVER, THE TREATY COULD ENTER INTO FORCE ONLY
AFTER RATIFICATION, WHICH WAS ACCOMPLISHED IN SEVENTEEN MEMBER STATES, BUT IN
TWO COUNTRIES, FRANCE AND THE NETHERLANDS, IT WAS REJECTED BY REFERENDUM. IN
TWO OTHER COUNTRIES WHERE A REFERENDUM WAS HELD, SPAIN AND LUXEMBURG, THE
POPULAR VOTE APPROVED THE CONSTITUTION. TO CIRCUMVENT THE OBSTACLES THE
REFERENDUMS CAUSED IN THE RATIFICATION PROCESS, A NEW TREATY, THE LISBON TREATY,
WAS DRAFTED WHICH CONTAINED ALL THE FUNDAMENTAL PROVISIONS OF THE REJECTED
CONSTITUTION. PRESENTED AS A MERE PROPOSED MODIFICATION OF THE CURRENT TREATIES,
THE LISBON TREATY WAS NOT SUBMITTED TO POPULAR APPROVAL (REFERENDUM), EXCEPT IN
IRELAND WHERE IT WAS REJECTED ON 12 JUNE 2008. ALTOGETHER, EUROPEAN CITIZENS HAD
THE POSSIBILITY TO EXPRESS THEIR OPINION ON AN EVER CLOSER EUROPE ONLY IN FIVE
COUNTRIES. THIS ARTICLE AIMS TO DISPLAY THE REASONS WHY THE POLITICAL CLASS
INITIALLY OPTED FOR REFERENDA EVEN WHEN THEIR CONSTITUTIONS DID NOT REQUIRE IT;
WHICH WERE THE MAIN ARGUMENTS IN THE POLITICAL DEBATES; WHAT THE STATISTICS OF
THE REFERENDA REVEAL AND, FINALLY, WHAT WERE THE MOTIVATIONS FOR THE RESPECTIVE
“YES” OR “NO” VOTES.
THE PROPOSED EU CONSTITUTION
The first country to hold a referendum was Spain, on 20 February 2005, hardly three month
after the treaty was signed in Rome. The reasons for holding a referendum were twofold. The
first reason was of a civil-democratic nature. In a country in which neither the entry into the
Union in 1986, nor the successive Treaties (Maastricht, Amsterdam and Nice) were submitted to
a popular vote, it appeared appropriate to open a debate on Europe. A second reason was
related to the fact that the Zapatero government had used the slogan ‘back to Europe’ as one
of the central point of its electoral campaign which brought it to power in 2004. A quick and
overwhelming ratification of the Constitution was seen as a political asset for the Government
both at home and abroad.
It can be stated, however, that a true debate about the EU, its options and alternatives, its costs
and benefits, did not take place in Spain. Most political parties, in one way or another, avoided
a debate even within their own organisations. Of all political parties, only the small Iniciativa per
Cataluyna and Convergencia Democratica de Cataluna launched an internal debate within the
framework of their party conferences, in which they presented two alternative proposals, one
in favour of a “Yes” and another in favour of a “No”, which were then submitted to a vote (finally
the party sympathisers overwhelmingly voted “Yes”).
In France, the approval of the Constitutional Treaty was in the hands of President Jacques
Chirac, who likewise decided to submit the issue to the people‘s vote. When Chirac made his
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decision, he never contemplated the possibility of a rejection as public opinion polls suggested
a two-thirds majority in favour of the constitution. Chirac sought to boost his popularity
following painful defeats for the government camp in previous European and regional
elections.
The media assumed that the discussions would focus merely on certain issues not related to
the Treaty, such as the opposition to Turkey’s EU membership. However, it became clear very
soon that the real debate lay elsewhere. Democratic and social concerns fuelled the growing
opposition to the European constitution.
Whereas right-wing parties like Philippe de Villiers’ Mouvement Pour la France, Charles Pasqua’s
Rassemblement pour la France, Jean- Marie Le Pen’s extreme-right Front National, and even
some 90% of Chirac’s governing UMP itself, opposed the constitution from a souverainiste
standpoint, the left wing of the French political landscape expressed fears for the social impact
of the “social dumping” policies associated with the constitution, as well as its impact on
democratic rights.
The leftist opposition constituted a broad group, ranging from the minority wing of the
Socialist Party to the MRC led by Jean Pierre Chevčnement, from the opponents of globalization
in Attac to the Communist Party and the Ligue Communiste Revolutionnaire (LCR). They argued
among others that the basic principles laid down in the constitution are “an internal market
where competition is free and undistorted” and “a highly competitive social market economy.”
According to them, this expressed the domination of the interests of big business over all
aspects of social life; in other words, the treaty enshrined free market capitalism as a
constitutional principle.
Turkey’s possible membership in the EU also played an important role in the campaign. The
hostility to Turkish membership was shared by extremeright Jean-Marie Le Pen, the
souverainiste Philippe de Villiers, former Socialist prime minister and leading campaigner for the
“No” vote Laurent Fabius, and Nicolas Sarkozy. Even President Chirac stated that “the values,
the way of life, the functioning of Turkey” was “incompatible with our values.”
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CHART 1
Voted "NO" by age groups
80
70
60
percentage
50 18-24
25-39
40
40-54
30 55 +
20
10
0
Spain France Netherlands Luxembourg Ireland
CHART 2
Percentage of those who voted "YES" by education

(years in education)
90
80
70
60
percentage
15 -
50
16-20
40
21 +
30
20
10
0
To this was added the project of a common military force to be developed beside NATO within
the framework of the EU. This had an important role in the campaign against the Constitution.
The most prominent spokesman for the “No” camp inside the Socialist Party, Laurent Fabius,
warned of an “impotent Europe” and a “weakened France” should the constitution come into
effect. He argued that in addition to Europe being currently tied down by the defence policies
122
of a US dominated NATO, veto rights would be awarded to all EU member countries with
regard to foreign policy and defence decisions, and that Germany would have a greater voting
weight in the new EU than France.
However, while opposing the proposed constitution, Fabius declared his explicit support for
the European Union, for a Europe “capable of acting,” and for a strengthening of the Franco-
German axis. “The Franco-German partnership is absolutely crucial,” he said in an interview
with France Inter a major French public radio network. “For my part,” he added, “I favour
moving towards a common Franco- German defence, and that we unite our forces in the IMF
and the World Bank and jointly help the developing countries.“
In France the “Yes” camp was headed by the leaders of the political establishment: President
Jacques Chirac and his supporters in the Union for a Popular Movement (UMP), the liberal Union
for the French Democracy (UDF), which also belonged to the government coalition, and the
(leadership of the) Socialist Party under François Hollande. The Green Party was also prominent
in the official “Yes” campaign. The head of the Greens in the European Parliament, Daniel Cohn-
Bendit, was intensively campaigning on Chirac’s behalf.
The then French Foreign Minister Michel Barnier declared that the referendum was a means by
which the French people would decide whether they wanted a “European Europe” or a “Europe
under American influence”. Should the constitution be rejected, he argued, France would suffer
a decline in its international influence.
UDF head François Bayrou expressed himself even more clearly. When asked in an interview to
give reasons for voting “Yes”, he answered: “We need a united and strong Europe against the
US, China and developing powers. Look at the enormous pressure from China. Look at
American supremacy. Without Europe, without a constitution, we find ourselves in a position of
submission.”
Supporters of the Constitution from the left emphasised that the treaty incorporated a Charter
of Fundamental Rights and thus helped to secure the future of the European social model. In an
article in the magazine Politique Internationale, Pierre Moscovici, European minister in the
Socialist Party government of Lionel Jospin, wrote that an expanded Europe “will amplify the
influence of France”.
The then German Chancellor Schröder and Spain’s Prime Minster Zapatero repeatedly
appeared in the French media to argue in favour of the constitution. German Social Democrats
and members of the Green Party travelled across France on behalf of the “Yes” side. Well-
known artistic figures and intellectuals such as the writer Günter Grass and the philosopher
Jürgen Habermas also called for support of the constitution.
In the Netherlands, the referendum on the European Constitution was the first national
referendum for over two hundred years. Although not binding on the government (meaning
that despite the electorate‘s rejection of the Constitution it could theoretically still have been
ratified by the parliament), the Dutch government had previously declared that it would be
bound by a decisive result, provided that the turnout would exceed 30%.
All governing and major opposition parties, making up 80 percent of the country’s members of
parliament, stood behind the “Yes” campaign. The Constitution was also backed by the major
Dutch newspapers. The parties of the coalition — Christian Democratic Appeal, People’s Party
for Freedom and Democracy, and Democrats 66 — campaigned for a “Yes“ vote, as did the
opposition Labour Party and Green Left.
123
The “Yes” campaigners called on the electorate to avoid damaging the Netherlands’ reputation
in Europe, as the French result was perceived as having weakened the position of France.
Television broadcasts by the “Yes“ campaign raised controversy for projecting a spectre of
chaos and a new possible war in Europe should the Constitution be rejected.
TABLE 1
Absenteeism by age groups
Age groups
Country 18-24 25-39 40-54 55 +
Spain 73 69 58 41
France 34 40 22 23
Netherlands 54 48 30 25
Luxembourg Voting is compulsory
Ireland 64 57 41 31
The Socialist Party, the List Pim Fortuyn, the Group Geert Wilders, the Reformed Political Party
and the Christian Union were backing the “No” campaign.
The gist of the campaign of the Dutch Socialist Party was: “If you want a social Europe and a
Europe for the people, not for business and money, then say “No” to the constitution.”
The main theme of the right-wing “No” campaigners during the campaign was, as in France,
opposition to immigration and Turkish membership of the EU. The debate over the accession of
Turkey to the European Union, as well as countries of Eastern Europe, led to fears of an
increased immigration and of an outsourcing of jobs to new member states.
At the time of the referendum, the Netherlands’ centre-right coalition government, led by Jan
Peter Balkenende, was suffering a period of unpopularity as it tried to push through cuts in
public spending, and there was widespread disillusion over the country’s political elite. There
was also dissatisfaction with the European Union. A common complaint on the “No” side was
that “Brussels does not listen”. The common argument brought forward was: “It’s because of
the whole way things are managed and manipulated, not just by our government, but by the
authorities in Brussels.”
In Luxembourg, the “Yes“ campaign had the support of all parliamentary parties. The “No”
campaign attracted a varied group of supporters, from leftwing anti-globalisationists to far-
right sympathisers. The far-left “di Lenk” party (the Leftists), said the text was too market-
orientated and did not do enough for workers
THE LISBON TREATY
After the Constitution had failed and had been redrafted through the Lisbon Treaty, it was
planned to avoid referenda in 26 out of the 27 EU member states, with Ireland as the only
exception.
The government took it for granted that the Treaty would be approved and started its
campaign for a “Yes” relatively late. The “Yes” side was strong enough, all major parliamentary
parties (Fianna Fail, Fine Gael, Labour Party and the Green Party), regardless of whether in
power or in opposition, campaigned for the “Yes”, and their members in the parliament
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amounted to more than 90 percent. Only Sinn Fein, with 4 out of 166 representatives, and
several other small parties were against the Lisbon Treaty.
The “Yes” side argued that the EU provided an area of peace, stability and prosperity. It helped
reconcile and rebuild the countries of Western Europe after WW2 and it consolidated the
transition to democracy in the southern Mediterranean in the 1970s and in Eastern Europe in
the 1990s.
According to them, Europe had also been crucial in the modernisation and transformation of
Irish society over the thirty years of membership. The major slogan was: “The Lisbon Reform
Treaty provides the improvements that are needed to ensure that a Europe of 27 countries
works more effectively, with greater democracy and with a stronger social engagement. The
new Treaty means a Europe that is better able to meet the challenges of a globalising world.“
The “No” side was very mixed. On the left side, Sinn Fein provided ten reasons why the Lisbon
Treaty would be harmful to Ireland, among them that the Treaty would involve a massive
transfer of power to the EU, significantly accelerate its militarisation and contain proposals
which would be prejudicial to the Irish economy, to public services and to workers‘ rights.
PANA, the Peace & Neutrality Alliance, advocated an independent Irish foreign policy
maintaining Irish neutrality.
On the right side of the political scale the main campaigner for the “No” was Libertas, a new
European movement advocating more democracy, accountability and transparency in the
institutions of the EU. The organisation was set up by Declan Ganley, an Irish entrepreneur, and
their major argument against the Treaty was that it would stipulate the superiority of EU law
over Irish law, diminish Ireland‘s voting weight in the Council and give exclusive competence to
Brussels in matters of international trade and foreign direct investment. A radical anti-abortion
campaign group known as Coir opposed the treaty on the grounds that European law could
undermine the Irish ban on, among other things, abortion.
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TABLE 2
When voters made their decision
At the time, In the final

Fairly early
the weeks or on
during the Do not
Country referendum the Total
referencum know/NA
was referendum
campaign
announced day
1 Spain 35 23 41 1 100
- YES 39 24 36 1 100
- NO 24 23 49 4 100
2 France 29 29 41 1 100
- YES 32 29 39 0 100
- NO 29 31 41 0 101
3 Netherlands 26 21 45 8 100
- YES 24 20 55 1 100
- NO 28 22 49 1 100
4 Luxembourg 29 22 46 3 100
- YES 33 20 46 1 100
- NO 25 24 51 0 100
5 Ireland 10 19 71 100
- YES 10 22 67 1 100
- NO 11 17 72 0 100
CHART 3
Positive answers for the question "Is your country's

membership in the EU a good thing?"
100
80
percentage
60
40
20
0
YES voters NO voters
126
The Yes side also had the support of the major groups in the European Parliament, most
prominently EPP, PES and ALDE, while on the No side the GUE group backed Sinn Fein and the
Ind/Dem group backed Kathy Sinnott’s campaign.
CONCLUSIONS ON THE MAIN ARGUMENTS BROUGHT FORWARD IN THE DEBATES
From the above it can be deduced that in all the countries where referenda were held the
mainstream parties, constituting a great majority of the members of the national parliaments,
and in most cases trade unions, churches, professional organisations as well (the
“establishment”), were campaigning for the approval of the Lisbon Treaty. The “No” side had
the support of rather small parties, popular movements or academics, endowed with very
limited resources. In three of the five above-mentioned cases however, the latter obviously led
a more convincing campaign.
THE RESULTS OF THE REFERENDUMS
In the 20 February 2005 referendum in Spain, 76.72% voted “Yes” of a 42.32% voter turnout. Yet
almost six out of ten Spaniards abstained from voting. This electoral absenteeism, present in
practically every socio-demographic segment identified, reached extremely worrying levels
among the youngest section of the electorate, in the 18-24 age group. In this group only one in
every four persons turned out to vote (73% abstained while 27% turned out to vote, Table 1).
In France’s 29 May 2005 referendum, however, the turnout rate of 69.3% was extremely high,
which can be seen as a proof of the interest aroused by the campaign. In that vote, the “No”
obtained 54.7% of the votes cast, thereby breaking the trend of previous referenda on
European construction.
The highest levels of abstention during this referendum were recorded among French voters
aged under 40: 34% of the 18-24 age group and 40% of the 25- 39 age group. It is noteworthy
that only 4% of voters close to the Communist party abstained, which highlights the
mobilisation strength of this party.
In the Dutch referendum of 1 June 2005, a high turnout of 62.8 % was observed as well and a
large majority of voters rejected the Constitution too: the “No” obtained 61.6% of the votes as
against only 38.4% for the “Yes”.
As it was the case in France and Spain, younger voters seemed to have been less mobilised to
vote than the older population. Some half of the Dutch citizens under 40 indicated that they
did not vote, while this ratio was only 25-30% among the over 40-year-olds.
In Luxembourg, where the referendum was held on 10 July 2005, the electoral turnout
indicator has no major significance, given that under Luxembourg law voting is compulsory. Of
the votes cast, nearly 57% of voters backed the European Constitution, against 43% who
opposed it.
The Irish referendum of 12 June 2008 revealed an official turnout figure of 53.1% and showed
the same characteristics as in the other countries: the younger voters were those who
abstained most from voting. The official result: 46.6% “Yes” vs. 53.4% “No”
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TRENDS: YOUNG PEOPLE TENDED TO REJECT, EDUCATED PEOPLE TO

APPROVE THE TREATY
If we look at the socio-demographic breakdown of the election results, one striking feature is
that the youngest section of the electorate is not only the least likely to go to vote, but is also
the segment where opposition to the Treaty was the strongest. The difference between the old
and young generation was especially striking in Spain and Luxembourg where the Treaty was
approved by a large margin. In countries where the Treaty was rejected, it happened first of all
because more important parts of the older generation also rejected it (see Chart 1).
TABLE 3
"YES" by age group in the Netherlands

(Relative frequency of the answers)
Essential in Strengthen the Strengthen the role

order to pursue feeling of a of the Netherlands
Age
the European European within the Union in
construction identity the World
18-24 16 22 27
25-39 26 12 9
40-54 20 12 17
55+ 26 13 10
Total 24 13 13
As it appears the more educated people tended to be more in favour of the Lisbon Treaty, at
least in four of the five countries. In Spain however, the percentage of the more educated who
voted “YES” was lower than the percentage of yes-voters among the less educated population
(see Chart 2).
WHEN DID VOTERS MAKE UP THEIR MINDS ON HOW TO VOTE?
In all the countries where referenda were held Eurobarometer’s surveys prove that
campaigning had an effect on the voters. As a general rule, it can be said that only some 30% of
the voters had made up their minds on how to vote at the very beginning when the
referendum was announced. A further 20-25% made their decision during the early stage of the
referendum campaigns, and some 45-50 percent in the final weeks or even on the voting day
itself. The exception is Ireland where at the time when the referendum was announced only
some 10% had already made up their mind, and 70% decided during the final weeks or on the
voting day. It also means that the impact of the campaigns in Ireland was much stronger than
in the other countries. In most cases, the “No” side was more successful in the final weeks than
the “Yes” side, except in the Netherlands where more voters decided to support the Treaty in
the final weeks (Table 2).
MAINSTREAM PARTY FOLLOWERS TENDED TO VOTE IN FAVOUR OF THE TREATY
Analysing the vote in terms of party affiliation it turns out that the Constitution was approved
when mainstream party supporters largely voted in favour. Overall “No” results were achieved
when mainstream party followers turned against their own party’s policy regarding the
Constitution/Lisbon Treaty.
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In Spain the almost unanimous majority of PSOE supporters (Spanish Socialist Workers’ Party)
voted “Yes” for the proposed Constitution (93%). Similarly, almost three out of every four (72%)
PP followers (People’s Party – Partido Popular) voted in favour. Only the supporters of the
“extreme” leftist and rightist parties (Republican Left of Catalonia, United Left, Basque
Nationalist Party and Galician Nationalist Bloc) overwhelmingly rejected it.
In France, however, only the supporters of the middle-right parties (UMP, UDF) voted for the
Constitution; in all other cases mainstream party sympathisers voted “No”.
In the Netherlands, almost all supporters of the “No” political parties followed the voting
recommendations of their camp (Labour Party, People’s Party for Freedom and Democracy). On
the side, almost half of the (“pro-Treaty”) Government Christian Democrat Party’s sympathisers
voted “No”.
The “Yes” voters in Luxembourg mainly consisted of supporters of two parties: 79% among
voters of the Christian Social Party CSV-PCS and 55% among those backing the Democratic
Party. Those supporting the Luxembourg Socialist Workers’ Party and the Greens were clearly
divided on the issue (49% vs. 49%). “No” votes were only leading among supporters of the
Alternative Democratic Reform Party (77%) and the Dei Lenk (86%).
The Irish Sinn Fein supporters largely followed the party line by voting “No” with a 95% majority,
whereas all of the parties supporting the “Lisbon” ratification lost a significant numbers of their
party supporters in the referendum: Green Party supporters, 57% “No” vote; Labour Party, 55%
“No” vote; Fine Gael, 49%; Fianna Fail, 40%.
MOTIVATION FOR THE “YES” AND “NO” VOTERS
In all analysed countries, “Yes” voters particularly welcomed the pursuit of the European
construction and the strengthening of a European identity. Possible national benefits were only
mentioned at third place (except in Ireland where the country’s interests were the most
frequently cited reasons for approving the Treaty (see below); eventually because the “Yes”
campaign concentrated on this message).
In France, 55% of the citizens who voted in favour of the Constitution declared that they did so
because they wanted to strengthen the European construction. Strengthening the role of
France within the European Union (12%) and increasing the importance of the European Union
vis-á-vis the United States (11%) also played a significant role.
In the Netherlands the primary motivation of the “Yes” voters was also their commitment to
the ongoing European construction and to a European identity (altogether 37%). The role of
the Netherlands within the Union was the third major argument (13%). A significant difference
between elder and younger voters was noted: While younger people emphasized the
Netherlands’ role in the Union, older voters tended to emphasize the importance of the
ongoing European construction (Table 3)
In Luxembourg the “YES” was also motivated by the ambition to strengthen the European
construction (altogether 54%) and was followed by the desire to guarantee peace in Europe
and to strengthen Luxembourg‘s role in the Union.
In Ireland, the majority of respondents who voted “Yes” stated that they felt that this was in
Ireland’s best interest (32%) and mentioned the benefits Ireland had received from the Union
(19%).
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The reasons why people voted “No” were more numerous, yet mainly based on national and/or
social aspects which prevailed over European considerations. “No” voters argued for instance
that the Constitution/Lisbon Treaty would have negative effects on employment (France,
Luxembourg). In both the Netherlands and Ireland, “No” votes were largely motivated by the
lack of information, but also by the fear of loss of national sovereignty or identity. National
social interests, opposition to national governments and to Turkey’s EU membership also
played a significant role.
“NO” VOTERS IN FAVOUR OF EU MEMBERSHIP
Although the “No” vote clearly won the referenda in three countries (France, the Netherlands
and Ireland), “No” voters did not question their countries’ membership in the European Union.
On the contrary, in France 83% of the “No” voters stated that French EU membership was a
good thing. The same was indicated by 78% of the Dutch and 80% of the Irish voters (see Chart
3).
Sources of information:
This study used the following information sources:

http://www.realinstitutoelcano.org/analisis/701.asp
http://www.wsws.org/articles/2005/apr2005/fran-a19.shtml
http://www.wsws.org/articles/2005/may2005/fran-m26.shtml
https://secure.wsws.org/articles/2005/may2005/euro-m25.shtml
http://en.wikipedia.org/wiki/Dutch_referendum_on_the_European_Constitution
http://news.bbc.co.uk/2/hi/europe/3954327.stm
http://www.labour.ie/lisbonreformtreaty/whyyes
http://www.erc2.org/160.0.html
The statistical data are based on the following Eurobarometer surveys:

1) The European Constitution: post-referendum survey in Spain Flash Eurobarometer 168
2) The European Constitution: post-referendum survey in France Flash Eurobarometer 171
3) The European Constitution: post-referendum survey in the Netherlands Flash
Eurobarometer 172
4) The European Constitution: post-referendum survey in Luxembourg Flash
Eurobarometer 173
5) The European Constitution: post-referendum survey in Ireland Flash Eurobarometer 245
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FREEDOM IN THE ‘UNITED STATES OF EUROPE’

An exercise in the suppression of dissent?
By Kevin Ellul-Bonici (March 2008)
“TRUTH IS TREASON IN THE EMPIRE OF LIES,” WRITES RON PAUL IN THE PREFACE TO HIS
FORTHCOMING BOOK, THE REVOLUTION: A MANIFESTO. THE MESSAGE IS PRIMARILY FOR
AMERICANS, YET IT IS NOT JUST AMERICANS THAT CAN BENEFIT FROM IT. IF EUROPEANS WANT
A GLIMPSE OF THE FUTURE OF THE EUROPEAN UNION, THEY HAD BETTER RECOGNIZE WHAT IS
OCCURRING IN THE UNITED STATES – THE CURRENT LEADERS OF THE WESTERN WORLD.
EUROPEANS SHOULD ALSO LOOK INTO THE PAST AND IDENTIFY EUROPE’S POLITICAL
TRADITIONS – THE VARIOUS ‘EMPIRES OF LIES’ WHERE TRUTH BECAME TREASON.
“FREEDOM IS POPULAR”
But first, who is Ron Paul? Ron Paul is a ten-term Congressman seeking the Republican
nomination for the US presidential election in November 2008. His campaign has come to be
known as the ‘Ron Paul Revolution’ and his message of ‘freedom, peace and prosperity’ has
caught on across the United States, especially among the younger generations and particularly
on the Internet where he overtakes all other candidates, especially in online fundraising.
Ostracized by his own pro-war party, marginalised by the mainstream media and perennially
plagued by single-digit land-phone polls, Ron Paul supporters have been relentlessly active.
This grassroots movement has been so passionate in promoting its cause it has often been
described as ‘a phenomenon’ in US elections. Ron Paul himself has maintained that ‘something
big is going on’ because people are ‘sick and tired of bureaucrats in Washington running their
lives’ – ‘Freedom is popular,’ he says.
Ron Paul’s results in ongoing primary elections do not confirm that freedom is popular,
especially as mass voters flock to the media-spun frontrunners, not wanting to ‘waste their
vote’. Yet 2007 has marked a crucial political victory for the freedom movement: Ron Paul’s
message has resonated with and woken up millions of people. The seeds have been sown, the
movement is growing exponentially and the message keeps seeping through – even in Europe.
The central theme of Ron Paul’s freedom message concerns the consequences of centralized
power. It relates to the role of the federal government and the need to reestablish the US
Constitution. This message asserts that federal power in Washington DC has created a
monolithic centralized government that has empowered the military industrial complex and
other large industries (banking, oil, pharmaceutical) to join an inflated federal executive to
regulate society and the economy, and steer foreign policy towards military interventionism.
Meanwhile, multimillion funded lobbying in Washington continues to ensure that big
government empowers big corporations to the detriment of the people; it continues to
determine where most of the taxpayers’ money goes, while the Federal Reserve steals the
people’s money through inflation by printing more dollars to help sustain a world empire and a
trillion-dollar war, precipitating the collapse of the dollar.
The masses have so far consented to this federal takeover of their lives and money. It is a form
of consent, as Noam Chomsky famously argued, that is “manufactured” by the major media
networks, which promulgate the lies and half-truths emanating from Washington, while
blacking out, ridiculing or attacking dissent.
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In the light of this modern-day tyranny, this budding American revolution demands a return to
the long-abandoned US constitution. It also demands:
i) the revocation of the tyrannical laws enacted after the 2001 attacks, which have eroded civil
liberties to worrying extents;
ii) a change in foreign policy and the withdrawal of troops from across the globe, iii) the
decentralization of power by returning to the states the constitutional powers they lost to the
federal bureaucracy in Washington.
AN END TO A BEGINNING
This last point resonates soundly with critical voices in the European Union – voices that call for
power to be restored to the people in their respective parliaments. Centralized power in
Brussels is not a phrase spun by “eurosceptics” but a reality we all need to face.
In essence, the process of decentralization demanded by the Ron Paul Revolution is an idea
whose time has come, even if it would ultimately entail the collapse of the dollar to truly bring
it into motion. This process is the complete reversal of the process of federalization that is
today establishing the new European Union – which for clarity’s sake we may call the “United
States of Europe”, as Belgian prime minister Guy Verhofstadt called it – or even an “empire”, as
Commission president Barroso famously described it last July (Watch video clip at
http://www.youtube.com/ watch?v=c2Ralocq9uE).
So whereas in the USA we are witnessing only the beginning of the end of centralized federal
power, in Europe we’re just seeing the end of the beginning of the construction of the “United
States of Europe”. Since this is a process that centralizes more power from the European
democracies to the Brussels bureaucracy, it is also a process of de-subsidiarization and de-
democratization.
In the fight to regain freedom, the US constitution provides Americans with guidance. For the
US constitution was designed to restrain the federal government; it was meant to disallow the
federal government from seizing powers from the states and to prevent the establishment of a
centralized bureaucratic government. The EU Constitution, however, provides the mechanisms
that empower the Union to effectively seize (and create) more powers.
The US constitutional mechanisms to safeguard the states’ rights have long failed (which is why
it entails another “revolution” to regain them).
They failed because at a federal level the Senate and Congress betrayed their electorates,
preferring to play the Left vs. Right partisan games while consenting in their vast majorities to
the incremental federal seizure of power over time. If this is what happened in the US there is
no reason why it should not happen in the EU. The US constitution does not provide for
Washington to govern and regulate the states the way it does today, but the EU Constitution
will. The budding American “revolution” may be described as a constitutional act, in Europe it
will be “unconstitutional”, or, as the EU Court of Justice would decree, not ‘in the spirit of the
Union’. Moreover, the EU centre requires more gravitational force than in the US since it needs
to deal with at least 22 languages, various cultures and 27 mainstream-media configurations.
This force is being sought through centralized regulatory measures, rather than by allowing the
“four freedoms of movement” to organically harmonize life across the 27-member-state Single
Market – an organic transformation that would come from the people through each of their
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national parliaments, whose sovereignty is subject to no supra-power, but only to treaties and
human rights conventions.
The road to centralized power is paved. With the EU Constitution, rejected in two referendums
and eventually re-invented as the “Treaty of Lisbon”, the people are being deceived into
relinquishing their constitutional powers to a new political entity.
And the Charter of Fundamental Rights, you might ask? I would say this Charter has to do with
everything except human rights. For other than there being nothing unmanageable with the
European Convention on Human Rights, which it replaces, what the Charter essentially does is
place our rights squarely within the realm of the EU Court of Justice – a jurisdiction where the
‘spirit of the Union’ reigns supreme.
And within this realm, it seems, one should rather not protest against centralized power.
WHEN DISSENT IS DENOUNCED
Protest, if not revolution, is evident across the European Union – not only in the minds and in
the streets, but even in the European Parliament. In a democracy the right to non-violent
protest is a sine qua non. But the spirit of the times does not look kindly on protest.
December 12, 2007 marked a sad day for democracy in Europe. Not because some 80 Members
of the European Parliament (MEPs) protested inside the Strasbourg hemicycle. It was a sad day
because that protest was considered treacherous by the conventional wisdom of the day. That
day the protesting MEPs were calling for a referendum on the Lisbon Treaty.
Their call is justified since the Lisbon Treaty performs the same functions as the Constitutional
Treaty, a fact emphatically demonstrated, among others, by the ‘Father of the Constitution’
himself, Valéry Giscard d’Estaing. The reinvention of the rejected Constitution into the Lisbon
treaty was performed with the sole purpose of deceiving the people into believing that the
Lisbon Treaty is just a minor amending treaty that requires no referendum. In effect, on the
basis of this lie the French and Dutch No votes were ignored and five promised referendums
were cancelled. The responsibility of deciding the future of Europe now lies squarely with the
Irish for only Ireland is holding a referendum.
So today we witness the rest of the member states’ governments ratifying in the national
parliaments the disguised Constitutional Treaty with hardly a brave voice uttering an objection.
But if brave voices in most national parliaments are sparse, those in the European Parliament
stand united behind their call for freedom.
Their watershed manifestation in the Strasbourg Hemicycle brought on them the ire of the
majority in the House, not least the president of the European Parliament himself, who
eventually called for a handpicked 13 MEPs (of around 80 MEPs taking part) for disciplinary
proceedings (Watch YouTube video, at 05:15 - Nigel Farage: http://www.youtube.com/
watch?v=qkHK_EFfTCM). There is hardly the need to emphasize that this “headmaster’s
reprimand” of elected officials goes against the grain of democracy.
More was to come. When the dissenting MEPs, applying rules of procedure, asked for roll call
votes, explanations of vote and points of order, the president sought discretionary powers to
arbitrarily stop whatever action he considers obstructive to the House, even if such action is
according to procedure and therefore legitimate.
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“A DARK DAY FOR DEMOCRACY”
There was never any doubt that the president’s request for arbitrary powers. And there should
be less doubt as to the implications of this new power.
“Today is a dark day for democracy”, said Nigel Farage MEP (IND/DEM) after the decision
(24.01.2008). “From now on the President of the Parliament has the power to interpret the rules
as he sees fit. He can rule out of order any action that opposes the status quo in any area of
policy. In practical terms this means that if there were another massive fraud case in the
Commission debate could be quashed on the word of the President”.
It was in this storm of authoritarian self-righteousness that Daniel Hannan MEP (EPP-ED) tested
the waters by half-comparing this empowerment to the majority rule that approved the 1933
Enabling Act in Germany. It is no surprise that the call to banish Daniel Hannan from the
European People’s Party/European Democrats (EPP-ED) commenced in earnest. This is how he
puts it in his Telegraph blog (31.01.2008):
“I repeated the point I made in this blog last week: that the 1933 Enabling Act had had a
technical majority in the Reichstag, but that it opened the door to unconstitutional rule.
Whatever else MEPs are, they are not Nazis: many of them have proud records of fighting
totalitarianism throughout the world. That is why it was so disappointing to see them resorting
to this appalling measure in order to silence dissent.
“As I sat down, the EPP leader, Joseph Daul, sprang to his feet and announced that he wanted
me thrown out of the group. He had lost patience with my filibustering, he said. Enough was
enough.
“I spoke to him afterwards. I hoped, I said, that he wasn’t taking any of this personally. But I
understood why he wanted to exclude me. There was, I suggested, an ideological difference
between us. “Not a difference, an incompatibility”, he snapped, adding: “I don’t care if you call
for a referendum in the United Kingdom. But I won’t have you doing it from the floor of the
European Parliament as a member of my Group.”1
And yet, after all that’s said and done, it was okay for Martin Schulz, head of the Socialist group,
to compare the manifestation in parliament to the “shouting strategy” of “Adolf Hitler” in the
“Weimar Republic”; and it was okay for Liberal Group leader Graham Watson to compare the
protest to the actions of “communists in the Russian Diet” and the “National Socialists in the
German Reichstag”; and it was also okay for Daniel Cohn-Bendit to call the dissenting MEPs
“idiots”, “mentally weak” and “mad” (Watch YouTube video from 01:55 – Schulz, Watson and
Cohn-Bendit: http://www.youtube.com/watch?v= qkHK_EFfTCM).
WHEN TRUTH IS TREASON
This is the state of the Union at the end of the beginning of the ‘United States of Europe’. Not
exactly the ‘beacon of democracy’ one would have hoped for. But then, it is no surprise. The
democratic tradition is only one of Europe’s various political traditions. On dissecting Europe’s
past traditions one is confronted by the same pattern of intolerant institutional thought. There
is this recurring occurrence, this Inquisitionist persistence against dissent. It transgresses all
eras. We had the old pontifical powers that burned heretics, the collectivized Hegelian nation
state that perfected the art of war and established the Fatherland, the Soviet Motherland that
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suppressed expression and locked dissenters in gulags; one can go on and on. These are all
European traditions and they all suppressed freedom.
The American tradition is an offspring of the European tradition (even if many Americans think
the US is a planet in its own right). The American tradition is indeed an extension and a direct
development of the European Enlightenment. If we, as Europeans, are trying to emulate the US
federal system, we should at least critically observe what goes on in the US and recognize the
direction it is heading. For if the “Violent Radicalization and Homegrown Terrorism Prevention
Act of 2007” and the notorious FEMA camps in the US are the precursors of another round of
the gulag experience, then freedom in the West is in a bad shape indeed.
The ‘Ron Paul Revolution’ is the effect of a deteriorating republic whose surging empire it can ill
afford. It is the effect of a centralized “federal” state where the people have long been directed
by the mainstream media within an illusion of partisan political games. The Ron Paul
Revolution is made up of a minority that is dissenting against Washington, where
representatives bow in consent to political correctness.
One cannot fail to recognize how important freedom of expression is in the European
Parliament, especially at a time when the people are being continuously deceived by their own
governments. Within the triumvirate of institutions that rules the Union, the European
Parliament is the only one that is directly elected by the people. There can be no restrictions on
expression here, let alone tactics which cannot be described without transgressing the ‘code of
political correctness’.
Political correctness and denunciation of dissent are symptoms. They appear whenever
freedom is obscured. Totalitarianism is the malady, where intolerance to opposing ideas is the
germ. Thedemocratic process can itself be used to denounce freedom. If allowed to happen, a
majority can decide to suppress freedom forever. That is why constitutional safeguards exist to
protect the minority. That is why the voice of the minority must be heard above that of the
majority.
For it is the minority that signals peril ahead, not the bandwagon majority. The minority’s
weapon is its voice, for its vote hardly counts at all.
So here are some questions. How will the Charter of Fundamental Rights, annexed to the
Lisbon Treaty, safeguard the rights of the political minority at the European level? Does the
ideology of the new European Union only allow dissent inasmuch as the Left-(Centre)-Right
partisan game is concerned?
Beyond Left and Right, is there not Up and Down, where Up is toward freedom and Down is
toward totalitarianism?
NOTE:
1. http://blogs.telegraph.co.uk/politics/danielhannan/jan08/eepthrowingmeout.htm
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IS THE EUROPEAN UNION

“LE MEILLEUR DES MONDES POSSIBLES”?
By Gawain Towler (June 2008)
THIS ARTICLE SUGGEST A VERY DIFFERENT FUTURE FOR THE EUROPEAN CONTINENT THAN THE
ONE THAT IS CURRENTLY PLANNED. ITS AUTHOR DOES NOT PRETEND THAT THE PRESCRIPTION
HE OFFERS IS GOING TO BE EASY, BUT HE CONTENDS THAT IT IS POSSIBLE. HE MAKES THE CASE
THAT THE ONGOING INTEGRATION PROCESS IS INTERNALLY FLAWED AND BASED UPON THE
MISCONCEPTION THAT PRETTY THEORIES MAKE BAD REALITIES.
Leibniz’s famous phrase about this being the best of all possible worlds was coined to find a
justification for the evidence all around us that this isn’t the case. Indeed Voltaire shredded the
concept through the character of “Dr Pangloss” in Candide. It appears to me that the whole
construction of the European Union to date, and its major advocates are living in a
“Panglossian” world of hopeless and irredeemable optimism.
So if the current state of affairs is not the best of all possible what might be? What could be a
better world?
It is astonishing that the continent that gave the world the rule of law and representative
democracy has turned itself through lack of self-confidence and self hate.
We must start with the building blocks of a cohesive society; we must start with how we believe
a society can organise itself to best serve those who live in it. After hundreds of years’
experimentation we have designed a system of representative democracy. But what we hadn’t
bargained for – having ripped off the straight jacket of elite rule, by aristocrats or clergy, then
ideological governance – is that those in power always, but always wish to draw the ladder of
power up. Today we have no representative government, but the government of a
technocratic bureaucratic elite. This elite is individually more like its counterparts from across
the EU 27 than the man or woman on the street. It is estimated by Giles Merrit of the Friends of
Europe that there are only “200,000 people that count” in Europe. Worse still this pan national
elite is now co-opting national governments and even local government into its class, shall we
call it the ‘new ruling class’. They have been to similar schools, have exercised the same career
progression. Inducted at University, student politics, academia/think tank/political staffer then
on to a position in an NGO or lobby firm, maybe political journalism, then into the bureaucracy
or towards elected politics. No conception of the real world outside the rooms where the levers
of power are kept, shiny with use. Proponents of this new ruling class are talking now about the
inevitability of the ‘post democratic age’. This is they say a world too complicated for mere
citizens to understand; therefore governance should be left to us experts.
A better world would be one where those in positions would be accountable to the citizenry.
Where no government could bind a future government. Where civil servants understood the
word ‘servant’.
Local democracy, not subsidiarity would be the keystone of this better world. Where autonomy
was not a word discussed in reverential terms in seminars but was a real aspect of everyday
lives. Decisions as to a man or woman’s actions would be made to all intents and purposes by
themselves.
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People would combine as much or as little as they wished. Risk and failure would not merely be
allowed, but celebrated as part of experience. For without failure where can we learn?
What is the point of being granted, by God or nature free will, when regulation uncontrolled
and unwanted cannot be gainsaid? When civil servants become as they are now, not the cadre
whose job it is to apply the wishes of democratically elected, and thus accountable politicians,
but an end in themselves.
In this imperfect world in which we now live the ruling class is right. We could do away with
elections and the people would hardly notice the difference. Oh there would be a lack of
legitimacy, but with the shameful reintroduction of the European Constitution this year we can
see that legitimacy is no longer a key requirement of the elite. Power, out of the hands of the
populous is.
So what would this better world look like? Firstly it would consist of far smaller units. Units
which would be happy to accept governance by others as they would regard all within them as
‘we’ or ‘us’ rather than them. This is no outrageous idea, we have had these units before. They
are called nations. These nations could then decide how best to govern themselves within the
constraints of their own cultures. If one would like to ban the wearing of the colour green
between the hours of darkness, then so be it. It is their choice. If another would like to have
draconian laws then so be it. It is called freedom and responsibility. If some would like to
operate protectionist policies, then that is their choice. If another wishes to have unilateral free
trade and zero rated income tax, yup that is their choice.
There would be no need to level the playing field between nations, because the policies of
those nations would be decided by the people of those countries.
So what of challenges that cross borders? Global warming, international terrorism, and assorted
stories designed to scare the newly infantilised population. Do they really cross so many
borders? Is Global Warming really more than an excuse to ramp up taxes and to penalise the
third world in order to protect our subsidized life? Is international terrorism such a threat that
our liberties are so much chaff to the wind? Somehow I doubt it.
It is wealthy countries, free countries that best find solutions to pollution. It is independent
countries that are best able to spot and to combat terrorism. The deliberate destruction of
borders in the EU has facilitated cross border trade, of course, trade in trafficked women, or
slaves to use a blunter word. Trade across borders of terrorism and its supporters. Were the
peoples of Europe ever asked if they agreed with completely open border policies? Did they
ever vote for them? Never. It was done by the elite, those wise experts who know so much
better than the ignorant masses what is good for them and their communities. And now we
reap the whirlwind.
Personally I come from a tradition of liberalism and tolerance, and that is how I would envisage
my nation. But I would not have the temerity to impose my world views on others countries
whose traditions and systems are different to mine. If there is any global leadership needed, let
it be by example, not by imposition.
But that would be too slow one might contend, People need to be improved faster as suffering
happens now not at some time in the future. But people cannot be improved they cannot be
legislated better against their will, and the same goes for countries.
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If we wish to set out a plan for a better future we must keep an eye on the past. All previous
attempts to dragoon populations into situations that are not of their making and against much
of what they hold dear end in tears. The European Union today resembles nothing more than it
does a secular religion. It has its prelates, it has its clergy and its laity, it has its sacred texts. Its
commissioners meet in what they call conclaves. It proselytises.
But what it lacks is a flock, a population of believers. For it to achieve its aims it has to rely on
apathy and trickery. But a people tricked by its ruling class will, in the end overthrow the
governors, no matter how powerful and unassailable they may seem.
The better Europe that I sketch is not necessarily a nicer world, or one that is more comfortable.
It is no doubt ruder in habits and coarser in language than the vision proclaimed by the
European elite. But it is achievable, more honest and runs with the flow of our cultures and
histories.
The current dreams of the elite are dreams fuelled by a touch of Huxley’s soma. They are visions
like those of “Dr Pangloss”, utterly at odds with reality.
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Chapter 3
Subsidiarity
Philippe de Villiers, juillet 2008 – Strasbourg:
Monsieur le Président de la République, les peuples européens ont à supporter,

hélas, dans leur vie quotidienne les effets désastreux des politiques menées par
les autorités européennes de Bruxelles et de Francfort. Les peuples européens
constatent chaque jour davantage que tous leurs pouvoirs leur échappent,
que leurs libertés sont confisquées: pouvoir d'achat, euro cher, OGM, fiscalité,
pêche, absence de protection commerciale, immigration, et jusqu'au football,
que vous avez vous-même évoqué il y a quelques instants. Tout leur échappe
et je dirais, Monsieur le Président de la République, Monsieur le Président de
l'Union européenne, tout vous échappe. Vous le dites vous-même, vous le
soulignez, et pour le déplorer. Alors, il est grand temps d'agir et de mettre en
conformité le langage et les actes.
Christophe Beaudouin, EUWatch, February 2007:
The principle of subsidiarity is usually considered to be the antidote to

centralism, but it reflects the irresistible march towards European
centralisation.
Klaus Heeger, EUWatch, January 2008:
The breadth of support for subsidiarity could be perceived as a source of

political strength or indicate political and legal meaninglessness.
Community objectives lead per se to a denial that their achievement can be

sufficiently achieved by the Member States and point to their being better
fulfilled by the Community. They open little evident scope to the possibility of
their having the reverse effect of reshuffling competences to the Member
States.
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SUBSIDIARITY AND PROPORTIONALITY

– A LEGAL-ECONOMIC APPROACH
By Peter Henseler (February 2007)
BEGINNING WITH THE HISTORIC ROOTS OF THE SUBSIDIARITY DOCTRINE AND THE RELEVANT
TREATY PROVISIONS, THE AUTHOR EXAMINES THE SCOPE OF APPLICATION OF THE PRINCIPLE
BY HIGHLIGHTING SOME IMPORTANT IMPLICATIONS, DEFICIENCIES AND PITFALLS, IN
PARTICULAR THE KEY CRITERIA OF ARTICLE 5 TEC, “NOT SUFFICIENT” AND “BETTER”, THE
SPECIAL CASE OF TRANSNATIONAL ASPECTS AND THE NEW PROCEDURAL RULES PROPOSED IN
THE EU CONSTITUTION. TO OVERCOME THE PROBLEMS OUTLINED, THE AUTHOR ANALYSES
ECONOMIC CONCEPTS DEALING WITH TRANSNATIONAL POLICY ISSUES, EXTERNALITIES AND
POSSIBLE CONTRIBUTIONS FROM ECONOMIC EVALUATION METHODOLOGY. AS A PRINCIPAL
CONCLUSION HE SUGGESTS THAT THE SUBIDIARITY DOCTRINE SHOULD BE REPLACED BY A
GENERAL RULE OF ECONOMIC EVALUATION (COST-BENEFIT, COST-EFFECTIVENESS) OF EACH
LEGISLATIVE PROPOSAL. THIS SHOULD ALSO APPLY TO PRACTICAL DECENTRALIZATION
STRATEGIES FOR COMMUNITY ACTIVITIES UNDER THE EXISTING LEGAL SITUATION. AS FAR AS
INSTITUTIONAL AND PROCEDURAL RULES ARE CONCERNED, THE PROPOSALS OF THE
“EUROPEAN CONSTITUTIONAL GROUP” SHOULD BE CONSIDERED. HE SUGGESTS THAT IF THESE
WERE SLIGHTLY MODIFIED THEY COULD, IN COMBINATION WITH THE PROCEDURAL RULES OF
THE PROTOCOL ANNEXED TO THE CONSTITUTION, LEAD TO A MORE EFFECTIVE APPLICATION
OF THE SUBSIDIARITY DOCTRINE.
HISTORICAL ORIGINS OF THE SUBSIDIARITY DOCTRINE
It is usually said that the doctrine of subsidiarity goes back to Catholic social philosophy, laid
down in 1891 in the well known Papal Encyclical Rerum novarum, which was confirmed and
extended in 1931 by the Encyclical Quadragesimo anno, which referred to the “priority of
smaller entities”. Thus, wherever possible, social and economic action should be carried out at
the “lowest level” of society. The use of higher levels should only occur as a subsidium for which
special justification should be necessary. In modern terminology, following Rothschild, there is
a greater need of legitimation in the case of transfer of action to “higher” levels.
In this context it should be recalled that the doctrine had already been formulated more than
300 years earlier, namely by Calvinist political theory in the latter half of the 16th century
(Johannes Althusius). That listed a limited range of centralized competences based on the
mutual consent of all the interested parties involved. These centralized competences were
properly limited to a subsidium for establishing, in particular, common living standards and for
dealing with cross-frontier issues of the “lower” entities (see the interpretation in modern
terminology by Hüglin and Luyckx). Thus in political philosophy a theory of decentralization
versus centralization had been long established which attributed priority to the decentralized
entities and units. In principle the same idea was promoted by the “state-sceptic” liberal
theorists of the market economy, beginning with Adam Smith and continuing to our own
times. This gives moral and theoretical superiority to economic actors on the “free” market and
favours the greatest practical restriction on State intervention.
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The relevant provisions of Article 5 of the Treaty Establishing the European Community (TEC)
(1) Article 5 TEC, first paragraph:
Principle of conferral of power (limits of competences): A ban on exceeding explicitly assigned

competence:
“The Community shall act within the limits of powers conferred upon it by this Treaty and of the
objectives assigned to it therein.”
(2) Article 5 TEC, second paragraph: Principle of subsidiarity, dealing with the question whether
(following Döring, p. 79) and to what extent the Community shall take action in areas outside
its exclusive competence:
“In areas which do not fall within its exclusive competence, the Community shall take action, in
accordance with the principle of subsidiarity, only if and in so far as the objectives of the
proposed action cannot be sufficiently achieved by the Member States and can therefore, by
reason of the scale or effects of the proposed action, be better achieved by the Community.”
In terms of organization theory, this incorporates a definition of the range of the Community’s
centralization competence. As the paragraph refers to the objectives of the proposed action,
the burden of proof justifying Community action falls on the Community.
(3) Article 5 TEC, third paragraph: Principle of proportionality (prohibition of excess of

competence) dealing with the question, how (following Döring, p. 79) the Community shall
take action in areas in which it is, whether exclusively or non-exclusively, competent:
“Any action by the Community shall not go beyond what is necessary to achieve the objectives
of this Treaty.”
The Treaty establishing a Constitution for Europe does not propose any substantial changes to
these three paragraphs (Art. I-11, paragraphs 2, 3 and 4). As an introductory note paragraph 1
of Article I-11, however, explicitly clarifies that “the limits of Union competences are governed
by the principle of conferral”, whereas, regarding the exertion of competence, “the use of
Union competences is governed by the principles of subsidiarity and proportionality.”
The three paragraphs suggest a gradual mode of checking on Community competence and its
exertion in practice, particularly regarding the steps from paragraph (2) to paragraph (3)
(Beutler et al., p. 106): After establishing the legitimacy of Community competence in principle,
its limits and the conditions for exercising it need to be examined in accordance with the
principles of subsidiarity and proportionality. In areas of exclusive competence or where, in
areas of non-exclusive competence, measures cannot be sufficiently achieved by the Member
States and can be better realized by the Community, the intended measures have to be kept
within the range of what is necessary (3) (Oppermann, p. 198). Therefore, even if the check of
the subsidiarity principle should confirm the appropriateness of Community competence, the
doctrine may require further examination of whether the exercise of competence is excessive,
i.e. whether it is in breach of the proportionality principle (3). Thus the Community’s
competence to act, fore example, on the basis of such general Articles as numbers 94, 95, 308
TEC, has had stronger conditions imposed on it (Oppermann, p. 198).
According to the present Protocol attached to the Amsterdam Treaty on the Application of the
Principles of Subsidiarity and Proportionality “compliance with the principle of subsidiarity shall
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be reviewed in accordance with the rules laid down by the Treaty” (paragraph 13). The ECJ
jurisdiction has up to now rather avoided any “substantial” review of subsidiarity, mostly by
using rather empty phrases when referring to it (Ritzer/ Ruttloff, p. 121). This may however be
partly due to insufficient or unclear demands of the various litigant parties, to which the court
is bound to give prime attention in legal proceedings. Regarding the powers conferred on the
Community by the Treaty, in particular stressing the ECJ’s role, paragraphs 2 and 3 of the
Protocol state that
“(2) the application of the principles of subsidiarity and proportionality shall respect the general
provisions and the objectives of the Treaty, particularly as regards the maintaining in full of the
acquis communitaire and the institutional balance; it shall not affect the principles developed
by the Court of Justice regarding the relationship between national and Community law, …”
“(3) the principle of subsidiarity does not call into question the powers conferred on the
European Community by the Treaty, as interpreted by the Court of Justice. …”.
This confirms the status quo of existing Treaty provisions, “institutional balance” and the ECJ’s
interpretation of the Community competences. Moreover it favours “conservative”, Community
oriented interpretation by the ECJ. Thus the Court’s contribution to making the subsidiarity
principle more effective may be seriously called into question. Regarding such further
implications as “how” powers are to be exercised - which seems to be more a proportionality
issue than a subsidiarity issue -, how they should be applied and how they might even be
reshuffled, repatriated and restored to the Member States, paragraph 3 of the Amsterdam
Protocol also states that
“…the principle of subsidiarity provides a guide as to how those powers are to be exercised at
the Community level. Subsidiarity is a dynamic concept and should be applied in the light of
the objectives set out in the Treaty. It allows Community action within the limits of its powers
to be expanded where circumstances so require, and conversely, to be restricted or
discontinued where it is no longer justified.”
See below for some improvement in the procedural rules implementing subsidiarity and
proportionality in the Protocol annexed to the European Constitution. Concerning
transnational aspects however, this Protocol could be regarded as entailing more a step
backward than an advance compared with the present legal situation.
SIGNIFICANT IMPLICATIONS, DEFICIENCIES AND PITFALLS OF THE TREATY

FORMULATIONS
DEFINITION OF EXCLUSIVE COMPETENCE
First of all, the subsidiarity and proportionality principles as described in Article 5 (2) and (3) TEC
lack a definition and catalogue of exclusive competence (Article 3 TEC refers only generally to a
catalogue of “activities” of the Community). Articles I-13 and I-14 of the Constitution do refer to
a catalogue of exclusive and shared competences respectively. But this does not involve a
clearcut and definitive list of what are the respective powers of the Union and its Member
States.
This had been explicitly ruled out by the Convention drafters of the Constitution because it
would prevent a “dynamic integration process”, as Herzog/ Gerken pointed out recently in a
critical article dealing with the democratic deficiencies of the Union, which will not been solved
satisfactorily by the Constitution. According to this article, shared, mixed competence
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combined with the reference to the specific policies of Part III of the Constitution, will open the
door for even more centralization.
Several articles and legal textbooks (e.g. Oppermann, p. 199) doubt the existence of a “real
exclusive” Community competence. They state that, even in the area of common commercial
policy – an area which is considered as belonging to the Community’s exclusive competence –
Member States still maintain a parallel competence. This was basically also confirmed by the
ECJopinion 1/94 (WTO/ GATS/ TRIPS). According to this, exclusive Community competence
could only be assumed if the Community has occupied a certain area by secondary legislation
to such an extent that national competence would be completely crowded out. This however
rarely occurs. Yet the optimistic view of some authors that, under the impression that this is the
opinion of the ECJ, the subsidiarity principle could apply on a larger scale, for example in areas
of exclusive Community competence as well, may be valid only in a theoretical sense.
The principle of conferral of power does not mean that Member State competence prevails
over the Community’s
First, Article 5, paragraph (1), per se allows the conferral of competence on the Community
even in areas where Member States are able to act successfully. In addition paragraph (1) gives
no justification for any lower level of Community competence vis-avis Member State
competence. In other words Community competence within areas of national responsibility is
not excluded.
COMMUNITY OBJECTIVES AS A REFERENCE POINT
Regarding paragraph (2) it is worth remembering that the abovementioned “founding fathers”
of the subsidiarity doctrine envisaged the principle as referring to social and economic actions,
whereas Article 5 TEC refers to the objectives which are intended for concrete activities,
irrespective of whether these are embodied in legal acts or not. This “point of reference”
enables one easily to find reasons for the appropriateness of any Community measure. Thus
any objective-oriented action of the Community causes a “suction of competence” in its favour
(Döring, p. 95). This may be favoured by the specific character of “programme-oriented”
Community law. According to Luhmann Community law can largely be characterized as
“objective-oriented” programmes (Zweckprogramme, Finalprogramme) that are oriented
towards certain “effects” being achieved, e.g. the creation of a single market, the process of
integration as such or the achievement of an ever-closer Union, whereas “traditional/
conventional” law envisages programmes as “conditional” (Konditionalprogramme) in
accordance with the scheme: “if …, then …”.
Open-ended consequence: Under what conditions should Community competence be

restored to Member States?
Apart from the problems regarding the indefinite terms used in the treaty, “not sufficiently” and
“better”, which can be given substance by an economic interpretation (see below), it seems to
be an open question what should be done if the Community exercises competence in areas
where measures can be executed sufficiently by Member States, or even by the private sector,
and where objectives cannot be better achieved by the Community. In this case – as both
conditions of Article 5 (2) TEC must be fulfilled to permit Community action - competence
should be restored to the Member Sates by adaptation of the Treaty. This might be regarded as
analogous to privatization of activities at the national level. Although the possibility of
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restoring competences to the Member States may be regarded as implicit in paragraph 3 of the
Amsterdam Subsidiarity Protocol, there has to date been no example of this happening.
The terms “insufficient” (with respect to Member States) and “better” (with respect to the
Community): Criteria of “insufficiency” and “efficiency”
Undoubtedly both criteria have to be fulfilled cumulatively (see the formula “and therefore”).
Thus the subsidiarity formulation (2) does not require that those entities which are able to
prove that they could “better” achieve any objective, should automatically be given the
competence to do it. In the case of sufficient achievement of Community objectives by
Member State actions (i.e. where the insufficiency condition would not be fulfilled) the
Community would not be entitled to competence, even in cases where it could prove to
“better” achieve the objective of the measure (Döring, p. 99, following Pieper, p. 254-255). Thus
the criterion of “better” seems to be prejudiced by the statement of insufficiency.
THE “INSUFFICIENCY” CRITERION
From an economic viewpoint “insufficiency” would mean that the effectiveness of the
proposed action could be considered as unsatisfactory or even, in a theoretically worst case, as
non-existent. This would mean that Member States would be quite unable to take action, so
making Community intervention undoubtedly necessary. Thus the legal criterion
“insufficiency” can be viewed in economic terms as one of “effectiveness”, including in the
extreme case, complete ineffectiveness.
In that case the question of Article 5 (2) TEC above could be raised as to whether and to what
extent the Community should take action. This implies an answer first of all to the preliminary
question whether Community action seems necessary at all. In legal and economic texts this
aspect is sometimes referred to as the “necessity criterion”, although in some texts it is used in a
confusing way to refer to “insufficiency” in general, referring to the criteria of “whether” and “to
what extent”. Although differentiating in this way may seem too refined, the distinction has
important legal implications (see Döring, p. 97). Relying on the nondifferentiated necessity
doctrine (e.g. Mager, p. 474) would mean that Community action leading to further
centralization could only be justified if the “lower” entity, viz. the Member State level, is quite
unable to undertake the action on its own. Relying on the effectiveness doctrine however
would allow centralized action as soon as the effectiveness of decentralized action would
merely come to be regarded as unsatisfactory. This means that the latter criterion would be less
restrictive of centralizing tendencies.
It should be remembered that this applies only to the first key criterion, that of insufficiency,
the fulfilment of which does not yet justify centralizing Community action. In logical terms its
fulfilment alone is indeed “insufficient”, which involves a “play of words”: the criterion
“insufficient” may be viewed as a necessary but not sufficient condition for centralization,
which means that the second key criterion of being “better” has to be fulfilled too.
THE “BETTER” CRITERION
In economic terms the criterion of “better” could also mean “more” effective, thus simply
aiming at greater effectiveness, but at the same time “more” efficient. In this sense texts on
legal and economic subsidiarity usually refer to it as the “efficiency principle”. Efficiency would
per se have the same implications for the scrutiny of centralized action as the effectiveness
criterion, i.e. it would tend more to authorize than restrict centralized action (Döring, p. 97). See
below for the efficiency principle as the theoretical basis of evaluation methodology.
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The special case of transnational aspects and new procedural rules of the Constitution
In September 2005 the ECJ delivered a judgement in a case (C-176/03) dealing with the
Community’s competence in criminal law (for a criticism of which see the articles in EUWatch,
Number 1, June 2006). The Court’s central argument had been to ensure that the Community’s
environmental protection rules could become fully effective even with the present division of
competences, under which undoubtedly no competence in matters of criminal law had been
explicitly transferred to the Community. From the subsidiarity and proportionality point of
view, this raises the issue of what conditions set out in Article 5 TEC could justify such a transfer.
The subsidiarity issue of insufficiency (lack of effectiveness) could have been focussed, had the
Court wished, on criminal law as a mean to ensure effective environmental protection.
Furthermore, according to the abovementioned gradual check for a Community competence,
stepping from paragraph (2) to paragraph (3) of Article 5 TEC, the proportionality question
dealing with what might be necessary to achieve the Treaty’s objectives would be considered.
Both steps however would involve as a precondition that a Community competence in criminal
law matters can be asserted by reference to “implied powers” and “effet utile”. If that is denied,
the subsidiarity question could not even be raised.
The reasoning of the Court was not on these lines however. Yet even in the perspective of a
communitarian point of reference for criminal law, according to the insufficiency criterion it
would have been necessary to examine the effectiveness of national criminal laws on
environmental pollution in general, and how effective these might be in dealing with
transnational pollution in particular. This should have been done before the issue of the
effectiveness of the Community’s environmental rules, and also before the subsidiarity criterion
of a “better” (i.e. more effective and efficient) achievement by means of criminal sanctions
under Community competence, would have been raised. The Court’s argumentation however
concentrated only on the effectiveness of Communitarian environmental law. Thus how to deal
with the issue of Community legislative competence for criminal law matters in the light of the
subsidiarity principle was avoided.
One plausible result of a “subsidiarity check” with respect to criminal law could have been that
in the case of a transnational element of environmental pollution the effectiveness of national
criminal law is insufficient, so that better results could be achieved at the Community level. This
was a case in which the Protocol attached to the Amsterdam Treaty on the Application of the
Principles of Subsidiarity and Proportionality could have been applicable. Besides laying down
procedural rules the Protocol establishes guidelines which should be able to indicate whether a
proposed action cannot be sufficiently achieved by Member States within the framework of
their own constitutional systems. According to paragraph 5 of the Protocol it is required that
(a) “the issue in question has transnational aspects which cannot be satisfactorily regulated by
Member States;”
(b) “actions by Member States alone or lack of Community action would conflict with the
requirements of the Treaty (…) or otherwise significantly damage Member States’ interests;”
(c) “action at Community level would produce clear benefits by reason of its scale or effects
compared with action at the level of the Member States.”
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These requirements are no longer included in the identically titled Protocol annexed to the
European Constitution. In substance the Protocol annexed to the Constitution is weaker than
the Amsterdam Protocol.
The Constitution Protocol restricts itself to procedural rules. As far as procedures are concerned
the only progress made in the Constitution text compared to the present legal situation
consists in the involvement of national parliaments which “shall ensure compliance with the
principle of subsidiarity in accordance with the procedure set out in the protocol” (Article I-11,
paragraph 3, of the Treaty Establishing a Constitution for Europe). According to Article 6 of this
Protocol national parliaments are allowed to give a “reasoned opinion” on European legislative
proposals “stating why they consider that the proposal in question does not comply with the
principle of subsidiarity.” The European Parliament, the Council, the Commission or other
proposers of a legislative initiative “shall take account of the reasoned opinions” (Article 7). If
negative reasoned opinions on a legislative proposal are given “by at least one third of all the
votes allocated to the Member States’ parliaments” (in the case of an initiative with respect to
the area of freedom, security and justice the quorum must be one quarter), the legislative
proposal has to be reviewed (each national unicameral parliament has two votes and each
chamber of a bicameral system has one vote for purposes of aggregating the reasoned
opinions). But the proposers of the legislative initiative are not bound to comply with the
reasoned opinions.
According to Article 8 of the Protocol, the ECJ shall have jurisdiction to hear actions of Member
States directly or on behalf of their national parliaments and actions of the Committee of
Regions on grounds of infringement of the subsidiarity principle by a legislative act. The
present Amsterdam Protocol contents itself with the simple phrase (paragraph 13) that
compliance with the subsidiarity principle shall be “reviewed” according to the Treaty
provisions.
Thus the new procedure set out in the Protocol attached to the Constitution implies some
progress compared with the present legal situation, but in principle the reasoned opinions
remain without any real effect if they do not lead to the legislative proposal being amended or
withdrawn by the institutions which had originally initiated it.
Economic concepts dealing with transnational aspects, externalities and individual versus
collective rationality
For purposes of the following let us consider the individual Member States as individual actors,
and the Community as a whole as a collective actor. External effects (externalities, spillovers)
mean that any individual rational activity which affects others for the better (in the case of
external economies or positive external effects) or for the worse (in the case of external
diseconomies or negative external effects), cannot be taken into account by these others
paying for external economies or being compensated in the case of diseconomies. If these
effects cannot be “internalized”, e.g. by direct negotiations on compensation payments
between those causing and those being affected by these externalities, a “higher authority”,
usually the State, will have to intervene. This is especially so in cases where the external effect
cannot be attributed to a particular group of individuals or where market prices do not exist as
a measure for compensation payments. The analogous model applies to the relation between
the EU Member States as individual actors and the Community as a higher authority and
collective entity that is capable of internalizing external effects between Member States (e.g.
transnational environmental pollution). It can apply even in the case of transnational issues
originating from outside the Community and whose effects are unequally distributed between
its Member States, e.g. the refugee problem.
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Intervention by this “higher authority” can be envisaged in accordance with several “grades of
intensity” of the problem in question. The scale of possibilities ranges from a moderate role that
would give impetus to informal talks between the parties, to further formal negotiations
between them, to formal coordination and organized continuous cooperation between them,
and finally to the ”higher authority” taking over direct responsibility for concrete solutions and
policies. The latter case would mean centralization in institutional terms. In economic terms it
would mean that the intervention in question was justified as a “public good” (see below).
As a rule competing competence between Community and Member States in the case of
external effects can be expected, because the boundaries of a politically and legally defined
territory and the spatial dispersion of external economies or diseconomies cannot be expected
to coincide. Therefore it is no longer clear what politico-legal entity has to deal with the
external effects (Döring, p. 93-94). In this context it will not be difficult to prove that Community
intervention will promise better results because common objectives may not be sufficiently
achieved by Member States’ individual actions.
Economic reasoning goes even further: The famous game theory model of the “Prisoners’
Dilemma” demonstrates that, in the case of information barriers between individual actors
which hinder cooperative action, individual rational behaviour will have an impact on the
community as a whole that does not lead to a collective optimum and can in fact do social
harm. To avoid this, economic reasoning would also consider an intervention by a “higher
authority” to be necessary. The collective, social optimum would only be achieved if individual
actors abstain from following strategies based on an assessment according to their individual
rationality.
All these models can be seen as examples for the subsidium character of higher level (State,
Community) interventions and thus as justification of centralization. In practice all kinds of
cross-border effects of “individual” activities can be a field of application for these theoretical
models. Finally, even the abstract objective of guaranteeing common, equal living conditions in
the Community could be imagined as a case in which the theory could apply, although the
consequences may in reality be twofold and ambiguous: Concrete harmonization assignments,
for example directed at the establishment and functioning of the internal market (Article 95
TEC) or the improvement of living and working conditions (Article 136 TEC) or the enforcement
of fundamental social rights according to Part II of the Constitution, will lead to extensive
interpretation of Community powers and further centralization. Among other things this would
further involve a correction of market processes by redistribution of individual income, e.g. by
social policy interventions on the part of the State. The notion of subsidiarity requires that all
those areas where positive or negative externalities do not exist have no need of any “higher
level” intervention and remain exclusively the responsibility of the sovereign decentralized
entities.
If however any positive externality becomes a public, social good in the economic sense, i.e. it is
provided to all people of a certain spatial area, if the benefits of the good are indivisible and
people cannot be excluded from using it, the good will not be supplied under market
conditions, but largely or wholly by State intervention. The same applies in principle to the
opposite case of a social “bad”, because to counter it and take market failure into account, State
intervention may be regarded as having a “public good” character, e.g. in such cases as
environmental and health protection. The latter instances do not in principle exclude market
solutions, but for social reasons State interventions are usually thought to be necessary, except
perhaps for those holding a predominantly market-radical or “neo-liberal” ideology. With
respect to so-called “pure” public goods such as foreign and security policy, the mere
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subsidium character may disappear, because any priority of smaller and lower entities can
hardly be justified. It is worth recalling in this context the political and constitutional system of
the old Austro-Hungarian monarchy. In that political entity the two areas of foreign affairs and
military matters, including their joint financing, had been institutionalized by constitutional law
in 1867 as common policy matters of the two States which kept their sovereignty in all other
areas – except the customs union which had been established before 1867, the common
currency and common central bank which was based on special arrangements after 1867.
AN ECONOMIC EVALUATION METHODOLOGY
As established economic principles teach us, efficiency means either maximizing output with a
given input or minimizing input to achieve a given output. In concrete terms this involves a
proportion between costs as an input, and results (“profits” in money terms or “effects” in
various quantitative if not necessarily money terms) as an output. In the private enterprise
sector, this is the basis for investment calculation, usually for the purpose of evaluating several
investment projects in order to choose the most efficient or most “profitable” one. In the public
sector such calculations serve as justification for public investments and indeed for public
expenditure decisions in general. Formally the calculation method is the same as in the private
sector, although there are enormous problems with attempting to express all relevant figures
in monetary categories.
The standard method is cost-benefit analysis, if both costs and benefits (“profits”) are expressed
in monetary items. The method is termed cost-utility or costeffectiveness analysis if at least the
costs, although not the benefits or “profits”, can be expressed in money terms. The
effectiveness-side should reflect as far as possible the achievement of a certain outputobjective
in quantitative terms. Whatever calculation or evaluation methodology may be used, the result
always reveals a proportion between input and output.
In economic terminology “proportionality” is thus used in a more comprehensive sense than in

legal terminology. It implicitly covers the subsidiarity question with respect to effectiveness
and efficiency.
When using this evaluation methodology in the case of a proposed measure of centralization,
one should compare the status quo with the proposed Community action in question.
Likewise, the status quo of a centralized issue could be evaluated with reference to a
decentralization strategy, irrespective of the legal situation, to find arguments for restoring
Community competence to Member States. This would lead to choosing the strategy which
yields the best cost-effectiveness or costbenefit ratio - in the latter case, the highest net-benefit.
As already stated, the Treaty’s subsidiarity formulation (2) does not require that competence be
conferred on the Community automatically, even when it is proven that it can do a “better” job
than its Member States. This is especially the case when Member State action on their own can
sufficiently achieve Community objectives. Thus the results of any cost-benefit calculation
according to the efficiency principle may only be used to justify centralization if the
insufficiency condition with respect to Member States is unfulfilled. On the other hand the
Treaty’s subsidiarity formulation does not lay down grounds for any decentralization (as
subsidiarity “does not call into question the powers conferred on the European Community by
the Treaty, as interpreted by the Court of Justice” – paragraph 3 of the Subsidiarity Protocol).
Only in the case of excess Community action would be restricted by the Treaty’s proportionality
principle (3).
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Referring to the specific characteristic of Community law as an objective - oriented

“Finalprogramm”, this type of legal programme has similarities to costeffectiveness and cost-
benefit categories. As Luhmann (p. 130) has pointed out, the Finalprogramm
(Zweckprogramm) refers to the effects to be achieved and from this basis it tries to find out the
most efficient measures to realize these effects.
As national higher audit institutions together with the European Court of Auditors could play
an important role in making subsidiarity more effective (see the conclusions below), it is worth
recalling in this connection the auditing criteria of the European Court of Auditors and other
national and Community auditing institutions. In 1977 the International Organization of
Supreme Audit Institutions (INTOSAI) adopted in its “Declaration of Lima” guidelines on public
auditing, the so-called “E-E-Eprinciple”: effectiveness-efficiencyeconomy. Effectiveness has to
be understood in the sense of conformity with objectives (in German: Zweckmäßigkeit). It seeks
to establish whether a certain action is in principle suited to achieve a certain objective and, if it
is, to assess to what extent the achievement may be expected. Therefore effectiveness can be
interpreted as a preliminary issue to efficiency. Economy can be seen as one of the two parts of
the efficiency principle mentioned above, namely minimization of costs. It is rather strange that
of these three criteria only efficiency is explicitly mentioned in the Treaty (cf. Article 248,
paragraph 2, TEC: where there is reference to “sound” financial management; in the German
Treaty version: Wirtschaftlichkeit, which is the German translation of efficiency. This is in
substance not changed by the Constitution: Article III-384, paragraph 2).
The INTOSAI-declaration of auditing standards shows that as soon as these principles become a
constituent part of national constitutional law, financial management is automatically obliged
to follow them. As this applies to the Community as well, it seems doubtful that effectiveness
can be viewed as a measure of the Community’s financial management. Apart from the
conventional criteria of legality and regularity, this is only guaranteed with regard to efficiency.
This scarcely provides enough incentive for the Community authorities to think in categories of
effectiveness in general, especially so far as subsidiarity is concerned.
CONCLUSIONS
In our context the original, historical concept of subsidiarity, which is concerned with the
tension between the range of individual action and collective needs, has been examined by
reference to the categories of legality in Community law and economic efficiency. There are
undoubtedly difficulties in making legal and economic terminology mutually compatible.
Nevertheless, economic concepts may be helpful in throwing more light on legal terminology
so as to make interpretation easier. Facing the issue of “centralization” versus “decentralization”
it would be easy to recommend the strategy that yields highest net-benefit, compared to the
alternative of sticking with the status quo. That however would exclusively reflect the
economic approach. Legally it would not be permissible in the European context because:
- centralization is to be rejected if Community objectives by individual (decentralized) Member

States action can be sufficiently achieved, even if the Community can achieve the same results
better;
- the principle of subsidiarity, and thus the above-mentioned potential efficiency approach,
does not apply in the case of exclusive Community competence (although various legal
textbook authors and even the ECJopinion 1/94 call into question the existence of such “real
exclusive” competence);
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- the principle of subsidiarity does not apply to decentralization strategies.
The “absolute” limit of Community competence is provided by the proportionality principle -

the prohibition on exceeding what is necessary to achieve the objectives of the Treaty. This
becomes especially important in view of the “suction of competence” which favours greater
Community centralization (a) because of the objective related concept of the Treaty’s
subsidiarity formulation, and (b) because of the characteristics of Community law as an
objective oriented “Finalprogramm” in general.
Thus the proportionality principle may be viewed as the most important and most effective
instrument for preventing excessive Community competence. On the other hand however,
“below” this limit the play of centralization and decentralization interests unfolds. Thus only
relying on the effectiveness of the proportionality principle as a “last hope” to prevent
centralization, would not suffice. One may even question whether the proportionality principle
would actually be necessary at all, since in principle any excess of competence may be brought
to the ECJ for annulment because of noncompetence, regardless of the explicit mention of the
proportionality principle in the Treaty. As its own wording clearly indicates, it involves primarily
a “principle”, i.e. a guideline for evaluation, and not a substantive rule.
From an economic point of view it does not seem plausible to restrict the application of
economic evaluation methodology to areas outside exclusive Community competence. As a
consequence, the subsidiarity principle as stated in Article 5 TEC, in particular in paragraph 2,
should ideally be replaced by a general rule which foresees cost-benefit or costeffectiveness
evaluations of every legislative proposal. In addition such analyses should be done regularly
under the existing legal situation so far as cost-intensive expenditure programmes are
concerned. However in the case of these analyses having negative results, this should not only
lead to restriction or discontinuance of the programmes (as stated by paragraph 3 of the
Amsterdam Subsidiarity Protocol), but also to repatriating of Community competence to the
Member States. Such analyses could be undertaken along with the half-term reviews of
programmes under existing law and by introducing “sunset legislation” in general. In other
words, the existing legal situation should be continued only in the case of an “insufficiency”
criterion with respect to Member States and a “better-achievement” criterion with regard to the
Community.
Undoubtedly the methodology of these instruments involves problems concerning

quantitative indicators and monetary evaluation, in particular with respect to benefitcategories.
Because of the absence of sufficient market price indicators for public expenditure projects
with public goods features the methodology may be influenced by specific interests and thus it
will presumably reflect more “political” prices rather than economically justifiable ones, the
objectivity of which can be questioned. Therefore it will not be possible to avoid different or
even contradictory results, depending on the political and other interests of those who present
such analyses or appeal to them. In particular the point of view of national authorities may
differ from those of the Community. These differences would become evident when the
procedure foreseen by the Protocol attached to the Constitution would have to deal with
diverging views on centralization versus decentralization.
In June 2003 the “European Constitutional Group” (ECG) published an alternative draft for “A
Basic ‘Constitutional’ Treaty for the European Union – with Comments” and presented in this
context an interesting proposal calling in question the giving of final power of interpretation of
the subsidiarity principle to the ECJ because, as it stated, “the ECJ has no incentive to respect
subsidiarity.” For this reason the draft proposed to assign jurisdiction concerning the
distribution of competences between the Union and the Member States to a separate
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“European Court of Review” composed of judges who would be designated by the highest
Member State courts. At parliamentary level a second EP chamber composed of representatives
of national parliaments would ensure that the rules of the legislative process have been
observed, among them the rule that Union laws should only apply to “cross-border
transactions” such as immigration and pollution. The Second Chamber should have “the power
to block legislation”. Thus compliance with the subsidiarity principle should be reviewed by a
special court and by a parliamentary institution as well. Both ideas were also presented recently
by Herzog (former President of the German Federal Republic) and Gerken who outline several
proposals institutionalizing a “guardian of subsidiarity”.
Although new institutions would be created and additional procedural rules would become
necessary, the ECG proposal could be realized with moderate additional costs because the new
institutions would be composed of members of already existing national institutions. But it
should/ could be modified in the following way:
A European bicameral parliamentary system might cause more complications and therefore it
would need special procedural rules to avoid mutual blocking of the legislation process
between the two chambers – regardless of the possible composition of the second chamber,
whether by reference to representatives from the national parliaments, by delegation of extra
representatives according to the results of national elections (corresponding to the Austrian
Bundesrat with respect to the Länder), by direct elections (like the US Senate) or by
composition of the heads of the national governments (corresponding to the German
Bundesrat with respect to the Länder). Thus a second EP chamber would not be without
problems. Apart from this, establishing a second parliamentary chamber may not be really
necessary if interests concerned with decentralization, including the interests of regional and
local bodies, are sufficiently represented by the Council of Ministers and the Committee of the
Regions. Of course ideally this should be the case, but unfortunately that is problematic. If
however, according to Herzog/ Gerken, the second chamber could explicitly be restricted to a
guardianof-subsidiarity role preventing excessive centralization, this would undoubtedly make
the subsidiarity principle more effective. On the other hand the “degradation” of the Council of
Ministers to a second parliamentary chamber - as already proposed by the former German
Chancellor Schröder and his foreign affairs minister Fischer in 2000 and 2001 - would add to the
power of the Commission and Parliament, institutions which are aiming primarily at more
supranational centralization, thus creating a new quality of “institutional imbalance”.
With respect to the importance of economic evaluations it would be advantageous if also

members of the national supreme audit institutions to be members of the Court of Review and
be consulted as experts by the second EP chamber, if this chamber should be considered
necessary. The Court of Review should be appealed if a legislative proposal is not amended or
withdrawn even after its non-compliance with the competence principles had been stated by a
quorum of national parliaments in accordance with the Constitution Protocol. As proposed by
Herzog/ Gerken, ECJ judgements dealing with matters of competence should also be
submitted to the Court of (Competence) Review. To enable also “impartial” and “independent”
(so far as possible) Community views, the Court of Review, composed of members of the
Member State supreme courts and the supreme national audit institutions, should demand an
opinion of the ECJ and the European Court of Auditors on the legislative proposal in question.
The Court of Review should take account of these opinions. The ECJ should be obliged to
undertake a subsidiarity check automatically in connection with every preliminary ruling
concerning the interpretation of the Treaty and every action on the ground of competence,
even in cases where such a check is not explicitly demanded by the litigant parties or the
national courts. Restoring competences to Member States should be explicitly institutionalized,
which was also proposed recently by Herzog/ Gerken.
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It is worth considering these recommendations if the subsidiarity concept is to be made more

effective.
NOTES:
Beutler, B./ Bieber, R./ Pipkorn, J./ Streil, J., Die Europäische Union – Rechtsordnung und Politik,
5th edition, Baden-Baden 2001.
European Constitutional Group, A Basic “Constitutional” Treaty for the European Union – with
Comments, 8.6.2003; published by P. Bernholz/ F. Schneider/ R. Vaubel/ F. Vibert, An
Alternative Constitutional Treaty for the European Union, in: Public Choice 118/ 2004, p.
451-468.
European Court of Justice, Opinion 1/94 (WTO/ GATS/ TRIPS), 15.11.1994 – Slg. 1994, p. I-5267.
European Court of Justice, Case C-176/03, 13.09.2005.
Döring, T., Subsidiarität und Umweltpolitik in der Europäischen Union, Marburg 1997.
Herzog, R./ Gerken, L., Europäische Union gefährdet die parlamentarische Demokratie in
Deutschland, Gastkommentar in: Welt am Sonntag, 13.01.2007.
Hüglin, T.O., Althusius – Vordenker des Subsidiaritätsprinzips, in: A. Riklin/ G. Batliner (eds.),
Subsidiarität, Baden-Baden 1994.
Luhmann, N., Legitimation durch Verfahren, 2nd ed., Darmstadt 1975.
Luyckx, M., Histoire philosophique du concept de subsidiarité, Commission des Communautés
européennes, 1992.
Mager, U., Die Prozeduralisierung des Subsidiaritätsprinzips im Verfassungsentwurf des
Europäischen Konvents – Verbesserter Schutz vor Kompetenzverlagerung auf die
Gemeinschaftsebene?, in: Zeitschrift für europarechtliche Studien 4/ 2003, p. 471- 484.
Oppermann, T., Europarecht, 2nd ed., München 1999.
Pieper, S.U., Subsidiarität – Ein Beitrag zur Begrenzung der Gemeinschaftskompetenzen, Köln
1994.
Ritzer, C./ Ruttloff, M., Die Kontrolle des Subsidiaritätsprinzips: Geltende Rechtslage und
Reformperspektiven, in: Europarecht 1/ 2006, p. 116-137.
Rothschild, K.W., Subsidiarität aus ökonomischer Sicht, in: A. Riklin/ G. Batliner (eds.),
Subsidiarität, Baden-Baden 1994.
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COSAC, SUBSIDIARITY AND PROPORTIONALITY
An interview with Sarita Kaukaoja, Permanent Member of the COSAC Secretariat

(February 2007)
COSAC (which is an acronym for "Conference of Community and European Affairs Committees
of Parliaments of the European Union") is a platform for co-operation between committees of
the national parliaments dealing with European affairs, as well as representatives from the
European Parliament. At the biannual meetings of COSAC, each parliament is represented by
six members. In addition, national parliaments from candidate and acceding countries are
invited to participate with three observers each.
COSAC was created in May 1989 at a meeting in Madrid, where the speakers of the Parliaments
of the EU Member States agreed to strengthen the role of the national parliaments in relation
to the community process by bringing together their European Affairs Committees. The first
meeting of COSAC took place in Paris in November 1989. COSAC was formally recognised in a
protocol to the Amsterdam Treaty that was concluded by the Heads of State and Government
in June 1997. The protocol came into force, together with the Treaty of Amsterdam, on 1 May
1999.
The role of the Brussels-based secretariat among other things is to assist the Troika and the
Presidency in the preparation, convocation and organisation of every meeting held in the
framework of the COSAC, and ensure publicity of such meetings, initiate and write factual
reports on developments in EU procedures and practices relevant to parliamentary scrutiny in
order to provide the basis for debate in COSAC, keep the archives of official COSAC documents
and be in charge of the COSAC website (www.cosac.eu) .
What was the motivation for the creation of COSAC? Was it linked to the “subsidiarity” issue
from the beginning?
Not really - the scope of the COSAC is larger than that. The development in the role of COSAC
has to a large extent mirrored the development of European integration and the role and
functions of the national parliaments within the European Union.
However, several schools of thought exist when it comes to the question what role COSAC
should assume. One main objective of COSAC is to reinforce the involvement of national
parliaments in European matters and thereby to increase the accountability and democratic
legitimacy of the European Union. A key question in this context has always been whether
COSAC should become a player in the decision-making process at European level or whether
COSAC should rather serve to enhance European Union scrutiny within member states by
facilitating an exchange of information and best practices between the parliaments at
European level.
Over the years some national parliaments promoted the idea of creating a “European Senate”
consisting of national palriamentarians to reduce the democratic deficit, but today such
notions have been definitively abandoned by the parliaments: the debate in the European
Convention showed that there was only very limited support for such ideas. At this point,
COSAC is in the process of establishing itself as a platform for exchange of information and best
practice for scrutiny of European Union issues in national parliaments. This also includes the
question of subsidiarity checks, of course:
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The Amsterdam Treaty protocol stipulates that “COSAC may address to the European
Parliament, the Council and the Commission any contribution which it deems appropriate on
the legislative activities of the Union, notably in relation to the application of the principle of
subsidiarity, the area of freedom, security and justice, as well as questions regarding
fundamental rights.”
It is difficult to predict how the role of COSAC will evolve in the coming years. The increased
involvement of sectoral committees in the scrutiny of European matters in some national
parliaments is challenging the traditional monopoly of European affairs committees – and the
current role of COSAC. In addition, a broader range of inter-parliamentary activities, aimed at
involving sectoral committees in European matters, is emerging in the European Union: some
such activities are orchestrated by national parliaments, and some by the European Parliament.
The challenge for COSAC will be to adapt to a situation with more players in the scrutiny of
European Union matters - a European inter-parliamentary cooperation in which sectoral
committees play a more prominent role.
What are subsidiarity checks? What methods and procedures are used? What is their legal
base?
The draft Constitutional Treaty establishes that national Parliaments shall ensure that EU-
legislation complies with the principle of subsidiarity. A new so-called “early warning system” is
proposed to allow a national Parliament or a chamber of a Parliament to contest a legislative
proposal with regard to its compliance with the subsidiarity principle.
However, the XXXIV COSAC in London in October 2005 agreed that even without the
Constitutional Treaty, the National Parliaments have a role in scrutinising the principles of
subsidiarity and proportionality as recognised in the Protocol on the Role of National
Parliaments attached to the Treaty of Amsterdam. That is also the legal base for conducting
these checks. The main aim of these checks is to test the systems of national parliaments for
reaching decisions on subsidiarity and proportionality, enabling an assessment of the
justifications presented by the Commission and stressing national parliaments’ role in relation
to subsidiarity and proportionality.
The method and procedure were announced at the same meeting in October 2005 and COSAC
decided to encourage national parliaments to conduct subsidiarity and proportionality checks
on forthcoming EU legislative proposals. The proposals selected for the year 2006 were:
(1) The proposal for a Regulation on the applicable law and jurisdiction in divorce matters, and
(2) The proposal for the full accomplishment of the Internal Market for Postal Services.
It was also agreed that participating national parliaments should seek to complete their
scrutiny within a sixweek period, which should begin as soon as the proposal has been
published in all official languages. The Protocol on the role of national parliaments in the EU
attached to the Amsterdam Treaty provides that six weeks shall elapse between a proposal
being made available in all languages to the European Parliament and the Council by the
Commission, and the date when it is placed on a Council agenda for decision (either for the
adoption of an act or for adoption of a common position). The aim was also that participating
parliaments should send any comments on subsidiarity or proportionality directly to the
Commission, the European Parliament and the Council within the six-week period. Only by
acting fast can the national parliaments have some influence at the early stage of decision-
making.
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In 2006 the Commission announced a new subsidiarity check procedure. What does this
entail? Was it a mere political “good-will” declaration or was it more than that?
The new initiative from the Commission does not relate to the subsidiarity check as such, but
entails a proactive approach towards the national parliaments in general. The Commission
announced in its Communication to the European Council, “A Citizens’ Agenda - Delivering
Results for Europe”, of 10 May 20061 its intention to “...transmit directly all new proposals and
consultation papers to national parliaments, inviting them to react so as to improve the process
of policy formulation.” Following this announcement, the European Council in its Conclusions
of June 2006 asked the Commission “to duly consider comments by national parliaments - in
particular with regard to the subsidiarity and proportionality principles.”
The aim of the Commission’s initiative is to inform national parliaments of the Commission’s
legislative initiatives, which could help to involve national parliaments in the decision-making
process at an early stage. The direct transmission of documents by the Commission to national
parliaments started in September 2006.
The overwhelming majority of parliaments welcome the Commission’s initiative to forward

legislative proposals and other documents directly to them. Its impact will depend on whether
national parliaments make sufficient use of the new procedure and on the extent to which the
Commission will consider their statements. In order to keep up the momentum of the initiative,
a follow-up will be conducted within COSAC.
What are the experiences so far?
National parliaments seem to welcome continuing and even intensifying cooperation within
COSAC on the subsidiarity and proportionality checks. On the other hand only 11 parliamentary
chambers from 9 Member States (i.e. about one-third) managed to give their responses within
six weeks. Much of the impact of the responses from national parliaments will depend on
whether they manage to conclude their scrutiny procedures before Council meetings,
especially in the light of the increasing number of so-called first reading agreements.
27 parliamentary chambers from 20 Member States conducted a subsidiarity and

proportionality check on the Commission proposal on applicable law and jurisdiction on
matrimonial matters. A clear majority of parliaments did not find any breach of the subsidiarity
or proportionality principles; however, several chambers remarked that the European
Commission had provided insufficient justification for its proposal. National parliaments are
currently considering the proposal for completion of the internal market in postal services and
it looks like the results of these checks will be quite similar.
Can concrete results be achieved by these checks?
The aim of these two checks has been to strengthen the scrutiny role of national parliaments,
as recognised in the Protocol on the Role of National Parliaments attached to the Treaty of
Amsterdam, to allow them to test and to improve their procedures for reaching decisions on
subsidiarity and proportionality, to enable an assessment of the justifications presented by the
Commission, and to demonstrate to the Commission the role of national parliaments in relation
to subsidiarity and proportionality. So the tests are used mainly in the context of COSAC’s core
duties - namely the exchange of information and best practices for scrutiny of European Union
issues in national parliaments.
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Two checks cannot give a comprehensive picture, but a few conclusions can be drawn
however: Even if the great majority of parliaments did not find the Commission proposals in
breach of the principles of subsidiarity and proportionality, some parliaments found that the
Commission did not sufficiently justify the need for the proposed legislation with regard to the
proposed legal basis. Some of the concerns raised when checking the subsidiarity and
proportionality of the proposals seem rather to refer to the question of legal basis than to the
principles of subsidiarity and proportionality. The results of these checks suggest that the scope
for subsidiarity complaints can be rather limited even where national parliaments may have
genuine concerns with regard to proposed legislation.
For more information on the results of the subsdiarity checks, please consult the COSAC
website: http://www.cosac.eu/en/info/
Do you see any methods by which the two criteria of Article 5.2 TEC (objectives which cannot
be sufficiently achieved by the Member States and can therefore be better achieved by the
Community) could be concretely assessed and thus become justiciable?
Although the principle of subsidiarity is meant to be justiciable, and has indeed been applied
by the European Court of Justice in several instances; its wording in Article 5.2 TEC leaves of
course a wide margin for political decisions.
However, the protocol on the principle of subsidarity and proportionality, which was part of the
Amsterdam Treaty and is still in force, gives quite a number of concrete hints as to the
understanding of the principle.
Are the national parliaments willing and able to conduct subsidiarity checks?
Most of the national parliaments are quite keen on conducting these checks within the
framework of COSAC, but also from their own initiative. Their ability to do this depends on an
individual parliament and the efficiency of its scrutiny system. Also the sheer number of the
Commission proposals makes it virtually impossible for a national parliament to check each and
every proposal.
“Subsidiarity” has been one of the leading slogans in the past years. What concrete meaning
does it have in COSAC´s understanding?
As mentioned before, one of the main tasks of COSAC is to provide a forum for an exchange of
views and best practices - including the application of the subsidiarity principle. Its task is not to
develop its own understanding of a principle which is a part of the Treaty establishing the
European Community. However, through the exchanges made possible through COSAC,
national parliaments might eventually develop a common understanding of subsidiarity.
What is the relationship between the principle of “subsidiarity” and the principle of
“proportionality”?
Both principles are an integral part of the TEC. They must be respected horizontally in all
actions the EC wishes to take. Both principles are closely related, because both protect the
competences of the EU Member States.
However, their content is quite distinct from one another: The principle of subsidiarity
determines whether, in the case of competences shared between Member States and the
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Community, the Community may take action at all. Under the subsidiarity principle the EC
legislator has to show that the proposal’s objective can be better achieved on a Community
level than by national or sub-national means.
The principle of proportionality refers to the intensity that EC measures may take and is meant
to prevent overregulation. However the discussions have recently concentrated on the
subsidiarity. The debate has also been very general in nature. It also unfortunate that the
Constitutional Treaty does not offer remedies against breaches of proportionality as it does for
the breaches of subsidiarity.
Would it be correct to say that proportionality can be seen as the principle with more
“potential”?
Yes, because it can be understood in a wider sense. However, the protocol on the principles of
subsidiarity and proportionality gives a rather narrow interpretation of the remit of the
proportionality principle. The proportionality principle can be perceived as more “political”,
since the most common complaint against EU legislation is that it is unnecessarily intrusive or
inappropriate in a particular local context. Legally this has not to do with subsidiarity, but with
proportionality. It may be that question of proportionality - that is the degree of intrusiveness
of EU legislation - is closer to the concrete concern of citizens than the somewhat legalistic
concept of subsidiarity.
What results should ideally be expected from subsidiarity checks?
If this is how you can get national parliaments to increase parliamentary scrutiny of draft EC
legislation - under all aspects - the main goal has been already achieved. EU-related decisions
need to be integrated with the general decision-making system and the division of powers in
each Member State. In all Member States national parliaments have means to influence their
governments and to ensure their own role - if they so wish. The subsidarity check is one of the
means to provoke greater interest and involvement of national parliaments in EU legislation.
Is “subsidiarity” an objective in itself? Why are decentralisation and nearness, generally

speaking, so important?
Who could be against the principle that the decisions should be taken on the most appropriate
level? Sometimes it feels like there is a lot of discussion about subsidiarity without real
understanding of the concept.
NOTE:
1(COM(2006) 211 final)
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THE SUBSIDIARITY PRINCIPLE AND THE EU INSTITUTIONS
By Markus Nyman (February 2007)
The subsidiarity principle is intended to ensure that decisions are taken as close as possible to
the citizens and that constant checks are made as to whether action at Community level is
justified in the light of the possibilities available at national, regional or local level. It is the
principle whereby the EU does not take action, except in the areas, which fall within its
exclusive competence, unless it is more effective than action taken at national, regional or local
level.
The subsidiarity principle is often praised by the EU institutions and seems therefore to be of
high importance. It is even underlined and strengthened in the EU Constitution. But what
about the reality? Do the EU institutions follow the subsidiarity principle? Let me put forward a
number of short examples that would question the validity and application of this principle.
QUALITY OF BATHING WATER
Let's start with the directive concerning the management of bathing (76/160/EEC). This
directive set standards on the quality of bathing water in the EU. According to the
argumentation of the EU Commission the free movement of people within the EU, with
increasing cross-border tourism, justifies the need of an EU directive with common high
standards in this field. However, the detailed directive has caused irritation among county
administration boards and local municipalities in the member states. The argument is largely
that the directive is not adapted to particular local circumstances.
Local authorities in northern Sweden have complained that it does not make much sense to
control the quality of water in remote lakes on a frequent basis, particularly since the lakes in
this part of the country are covered by ice during much of the year. There are obviously major
differences between beaches in the Mediterranean, with hundreds of thousands of tourists
every year, and small lakes in cold parts of northern Europe. Is it realistic, or desirable, to have
common EU rules in this field?
The bathing directive has been improved over the years, in the sense that it is now somewhat
more flexible. However, the relevant question is whether bathing-water quality in Europe
should be regulated from Brussels in any manner. Are the decisions in this field more efficient if
they are taken by the EU, instead of by local or national authorities?
WORKING HOURS
The Working Time Directive (93/104/EC) lays down regulations on matters such as how many
breaks employees can take, and how much holidays they are entitled to. The directive’s
headline regulation is aimed at limiting the average working time for employees in the EU to 48
hours a week. A large majority of the population in the EU probably agrees that it is necessary
to have clear labour market legislation. This is in the interest of both the employer and the
employee. However, are EU rules more efficient than national rules? Are the member states not
capable of deciding their own labour market legislation by democratic procedures and by
negotiations between trade unions and employers?
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EU countries are democracies with full respect for human rights. They have functional legal
systems, including freedom of expression and freedom of organization. The latter means that
the employees are allowed to establish and belong to trade unions.
Rules that make sense in one country might be controversial in another due to varying
economic development, labour market structures, national conditions and traditions. In the UK,
employees can volunteer to work more than 48 hours a week and can in principle work
unlimited hours. The current Labour government in the UK does, as in all countries, have a
political mandate from the voters. If the political majority in a democratic country is in favour of
flexible rules on working hours should the EU then overrule such a political expression? After
all, it is not oppressed populations of tyrannical dictatorships we are talking about, but the
citizens of EU countries, which are supposed to meet high democratic standards.
TRAFFIC SECURITY
The directive on special provisions for passenger vehicles comprising more than eight seats in
addition to the driver’s seat (2001/85/EC) aims to secure the safety of passengers in buses.
After conciliation between the EU Parliament and the Commission, a number of very specific
rules were included in the directive, such as the following paragraph: “When the passenger
door is open, the retractable step shall be securely held in the extended position. When a mass
of 136 kg is placed in the centre of a single step or a mass of 272 kg is placed in the centre of a
double step the deflection at any point on the step shall not exceed 10 mm.“
Another example of detailed regulation in the directive is that the manufacturing of existing
low-floor buses with a gangway slope of 12.5% should be stopped within a period of three
years, and the provision of a non-slip surface for all sloping areas in buses should be required.
Furthermore, the conciliation negotiations resulted in a broader definition of “persons of

reduced mobility“ to include not just the elderly and the disabled, but “all people who
experience some difficulty when using public transport, such as people with sensory and
intellectual impairments, wheelchair users, people with limb impairments, people of small
stature, people with heavy luggage, pregnant women, people with shopping trolleys, and
people with children (including children in pushchairs)“.
The directive includes safety rules on all buses so they could be used by persons of reduced
mobility in accordance with the definition above. However, it did not take into consideration
that the member states have chosen different systems for transport of elderly and disabled
people. Sweden has a certain transportation service for persons of reduced mobility. Vehicles
that are used for this service (taxis and buses) fulfil strict safety criteria. The system with a
certain transportation service for disabled people worked satisfactorily. But the country had to
implement the EU rules, even in vehicles that are not used for the purpose of transporting
disabled people or persons with reduced mobility.
Directive 96/53/EC on weights and dimensions in road transport sets out the maximum
allowable length for buses in international traffic. But since the length of buses varies in the EU
the rules caused irritation at the national level. Directive 96/96/EC on roadworthiness tests for
motor vehicles and their trailers sets out detailed rules on how the member states should
conduct motor vehicle inspections. After long debates and negotiations it was decided, among
other things, that windscreens must be replaced if scratches are found on them during regular
motor vehicle inspections in the member states.
159
The added value of EU rules compared with national rules within the field of traffic security
could be debated in many cases. The geographical conditions in the EU differ, in particular the
climate, and recommendations and legislation that might be valid in one country, are not
necessarily practical in another. It becomes somewhat comical when in its report on the
European Road Safety Action Programme (A6-0449/2006) the European Parliament “calls on
the Member States to acknowledge the dangers inherent in driving vehicles (in particular
commercial vehicles) with snow and ice on their roofs and, on that basis, to draw
uprecommendations for the establishment of a comprehensive network of ‘snow removal
areas’“. Is this a recommendation for Finland, as well as for Malta?
HUNTING
The EU does not have a common hunting policy, but a number of EU directives affect hunters,
as well as the possibility for local and national authorities to make decisions related to hunting
and nature conservation.
The Habitats Directive (92/43/EEC) and the Birds Directive (79/409/EEG) aim to protect certain
predators and birds in the member states. The directives aim to ensure that the populations of
rare species in the EU are kept stable. However, the populations of specific species differ
radically within the EU. It is therefore difficult to apply the same directive from Gibraltar to the
border of Murmansk.
Species that are rare in one member state might be common in another EU country. The county
administrative board in Sweden’s fourth largest city, Uppsala, was in favour of protective
hunting of rooks, which are very common in the city, causing problems in terms of noise and
guano. However, protective hunting was not a possible option due to the fact that rooks are
protected in EU’s Birds Directive. The Commission proposed to the local authorities to fell trees,
remove tree branches or to cover the tree tops with net. The local authorities had to accept the
opinion of the Commission, knowing that those specific measures caused new problems, in
particular for other bird species in the area.
There are similar examples where local authorities in member states advocate protective
hunting of bird species, for example cormorants, or of predators, such as wolves, but where the
Commission’s response was in the negative due to the fact that the species in question are rare
in the EU as a whole, even if considered to be common at the local level.
The question arises as to whether the local authorities in the member states have a better
knowledge than the Commission about species that should be protected at the local level, and
whether they are in a better position to take the necessary measures to maintain the desirable
population levels of certain species.
OTHER ISSUES - FROM CIRCUS TO URBAN ENVIRONMENT
The European Parliament report on new challenges for the circus as part of European culture
(A6-0237/2005) proposes a number of harmonization measures for circuses in Europe. The
report “Calls on the Commission to introduce specific measures to ensure that the circus is
recognised as forming part of European culture“ and “Calls on the Commission [...] to create a
standardisation mandate for the European Committee for Standardisation (CEN) to prepare a
comprehensive set of standards relevant to mobile circus facilities, including finalisation of
current work on the Safety Standard for Temporary Structures (such as tents), to facilitate the
movement of circuses among the Member States through harmonisation and thereby
contribute to the conservation of the European classical circus and public safety“.
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The Parliament report on the thematic strategy on the urban environment (A6-0233/2006)
includes a number of detailregulating proposals. In this report, the Parliament “believes that
more attention should be paid to preventing and removing dirt, litter, graffiti, animals’
excrement and excessive noise from domestic and vehicular music systems“. In addition, the
report has views on congestion charges, parking limitations and town planning within the EU.
The Parliament report on film heritage and the competitiveness of related industrial activities
(A6- 0101/2005) put forward a number of proposals on how the member states should archive,
catalogue and collect films. Member states should also “promote the use of the film heritage as
a way of strengthening the European dimension in education and promoting cultural diversity;
foster and promote visual education, film studies and media literacy in national educational
systems“. In fact, even the EU Constitution states that action by the EU shall be aimed at
encouraging cooperation between Member States and, if necessary, supporting and
complementing their action in the area of artistic and literary creation, including the
audiovisual sector (Article III-280).
The proposed EU Constitution states that the “Union shall complement the action of the
Member States in the tourism sector, in particular by promoting the competitiveness of Union
undertakings in that sector“ (Article III-281) and that Union action shall be aimed at
“encouraging the development of distance education“ (Article III-282). It could be seen as
somewhat contradictory that the same constitution that underlines the importance of
subsidiarity and introduces a major innovation in this regard, even suggesting that the national
parliaments should be directly involved in monitoring the proper application of the subsidiarity
principle, should also include areas such as tourism and distance education.
The debate on whether the subsidiarity principle is followed or not is of importance not only for
the academic record, or in order to provide some entertaining examples of questionable
proposals and legislation from the EU institutions. It is important because it is a vital question
concerning democracy and at which level decisions should be taken.
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SUBSIDIARITY AT THE SERVICE OF TECHNOCRATIC CENTRALISM
By Christophe Beaudouin (February 2007)
IMAGINE A SYSTEM UNDER WHICH A NON-ELECTED BODY IS ITSELF IN A POSITION TO EXTEND

THE LIMITS OF ITS POWERS AND THAT EACH EXTENSION PROCESS IS IRREVERSIBLE. IMAGINE
THAT THE LAWS ENACTED BY THIS CENTRAL NONELECTED POWER GRADUALLY REPLACE ALL
PREVIOUS LAW, A PROCESS UNDERPINNED BY INTENSE PROPAGANDA TO THE EFFECT THAT IT
IS ‘FOR YOUR OWN GOOD’ AND BEING DONE IN THE NAME OF ‘PEACE’. WELCOME TO THE
EUROPEAN UNION.
Worded more in the language of political philosophy than that of legal science, the principle of
subsidiarity, as now formulated, comes close to begging the question, In order to work in
practice, it should have provided a set of rules governing the demarcation between the powers
of the supranational and those of the national authorities.
However, this is not the case, the allocation of powers being neither the spirit nor the objective
of subsidiarity. The conceptual confusion currently surrounding the construction of the
European Union does nothing to dispel the ambiguity or artificiality of the arguments being
advanced. Hence the definition contained in the second paragraph of Article 5 of the Treaty of
Maastricht could serve to either restrict or widen the scope for Community action. There is no
denying that it has constantly been diverted from its purpose in order to strengthen the first
Community pillar and open the way for action in areas beyond those recognised as being the
exclusive remit of the Community. While ‘any action by the Community shall not go beyond
what is necessary to achieve the objectives of this Treaty‘ (third paragraph) the objective is still
‘an ever closer union among the peoples of Europe‘. In view of this, the longterm result can
only be the communitisation of the entire Union and the merging of its pillars, that is to say
completion of the federal process. The Constitutional Treaty, scheduled for review in 2009, can
only bring forward the deadline.
THE EUROPEAN UNION, A FEDERATION … WITHOUT A FEDERAL UNIFIER
The European federalism now emerging is so unusual in nature that it can be difficult to
identify as a true federation. The reason it is so singular is that it is artificial.
First of all, one would search in vain for a model of European unification in the Capetian
tradition of the ‘forty kings who made France’. The great achievement of the Capetians that
they had the political will to unify the French provinces into a nation. However, the
construction of France was only possible over the centuries as a result of slow and patient
assimilation by the French Crown of various peoples, some of which undoubtedly had their
own particular culture but no genuine state comparable to those in Europe today, which we are
seeking within the space of one generation to bring together into an integrated whole.
Furthermore European federalism is artificial because it is not national, unlike the United States
for example, the federal archetype and the first but also the only one of its kind, created from
scratch by immigrants. More widely, we can see that the federal forms of political organisation
which have succeeded, that is to say those in which a collective feeling of belonging has been
created at federal level, are all in new countries emerging in the wake of a wave of immigration
into lands originally unpopulated or sparsely populated (by the Aboriginals in Australia or the
Indians in America). As Professor Guy Carcassonne points out, the United States was able to
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draw up a Constitution even before it really existed as a country ‘because of the existence of
almost virgin territory simply waiting to be conquered‘.
However, ‘there is nothing of the kind here. No European power has the option of achieving
domination by massacring a few local tribes‘ (Le Monde, 24 March 2001). As far as the German,
Swiss or American federal models are concerned, they clearly did not arise from the unification
of different nations under a superimposed federal structure but, on the contrary, the
organisation in federal form of an already existing nation. There is therefore no comparison
between a national federal model (the United States for example) and the supranational
federation prototype which is being developed in Europe.
THE INVERSION OF SUBSIDIARITY MARKS THE END OF THE ORIGINAL COMMUNITY

MODEL
Eurosceptics are constantly being accused of seeking to ‘destroy the Community model’.
Nothing could be further from the truth, since the Community model has already been
destroyed not by eurosceptics but by rampant federalism in the European Community. This is a
silent revolution which has never been revealed fully in all its implications. It is nevertheless the
prime factor responsible for cutting Europe off from its nations and for the drift towards ‘a
Europe without nations’1. What did the Community model originally consist of? It was, in a
nutshell, a subtle balance between national sovereignty and measures to encourage
cooperation. On the one hand, the sovereign nations meeting in the Council, acting in the main
unanimously under the supervision of the national Parliaments and, on the other, institutions
designed to encourage cooperation: the Commission, with its exclusive power of initiative,
clearly useful for producing coherent drafts and the Court of Justice, with its task of ensuring
that the Treaties were implemented.
However the institutions in which cooperation was achieved - and this is the crucial point -
could not outweigh national sovereignty since, at that time, the Commission’s exclusive power
of initiative had to be reconciled with the need for unanimity in the Council. In addition, the
interpretative powers of the Court of Justice were in the very nature of things limited by the
fact that Community law was no preeminent. Sovereignty remained uncompromisingly in tact.
Even if European treaties prior to Maastricht contained within them veritable federalist ‘viruses’,
they nevertheless remained concealed. There was a general consensus in favour of cooperation
while respecting sovereignty. Recent difficulties can only be explained by a total absence of
democratic transparency, not to mention the mendacity on the part of governments
concerning the supranational path to be followed by the European construction in the wake of
the Treaty of Rome. The doors were sprung open following the introduction of majority voting
in the Council and the unilateral proclamation by the Court of Justice of the absolute primacy
of Community law. This is what destroyed the original Community spirit, upsetting the balance
between sovereignty and cooperation, as Europe embarked upon the path of federalisation.
Anomalies of every kind began to occur regarding the functioning of the institutions. Firstly,
the national parliaments, which had occupied a central position under the previous system of
majority voting in the Council, found themselves being sidelined as the European Parliament
came to the forefront, claiming the right to act as a sovereign higher assembly, despite the fact
that, in the absence of a European nation, it still enjoyed only residual legitimacy in the eyes of
the people.
Furthermore, while the original Community was a common organisation at the service of
sovereign nations, remaining subordinate to them, the Union of today, on the contrary claims
for itself a prominent role in defending the overriding general interest by virtue of a supreme
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right. As a result, the principles of subsidiarity have been reversed, this being the third anomaly.
Nations now have scarcely any control over the areas in which they have delegated power to
the Union, which sets its own limits and gives its own interpretation, which it then declares to
be paramount.
All these problems caused by federalisation are technical in nature and incomprehensible to
the man in the street. However, their effects can be clearly seen in the major political slew
which is occurring in Europe today: the weakening, not to say the progressive undermining of
democracy and the seizure of power from nations by bodies over which they have no control.
THE UNION IS CEASELESSLY WIDENING ITS OWN LIMITS AND SUPERIMPOSING ITS OWN
LEGISLATION ON THAT OF THE MEMBER STATES
The objective behind the principle of subsidiarity as reviewed under the seventh protocol to
the Treaty of Amsterdam is to establish a novel form of Community and national legislative
hierarchy which is nevertheless in accordance with the case law established by the Court of
Justice following the 1964 Costa v. Enel judgment, of which paragraph 2 establishes the
absolute validity of the ‘acquis communautaire‘, to date, i.e. the powers already acquired by the
Community which can no longer be called into question by a present or future Member State
of the Union under the principle of subsidiarity.
What is worse, the text of the Protocol states that application of the principles of subsidiarity
and proportionality ‘shall be without prejudice to the principles established by the Court of
Justice concerning the relationship between national law and Community law‘.
What are these principles established by case law and made into Union law under the Treaty of
Amsterdam by means of a discreetly annexed protocol and not easily accessible to the
uninitiated? Basically, they establish the absolute primacy of Community law, including
secondary legislation, over the national laws of each of the Member States, including their
constitutional laws.
As is frequently the case, the Treaty of Amsterdam leaves it up to the judges to couch in legal
terms what politicians fear to state explicitly: the fact that national laws and constitutions,
which have been democratically approved, are now fully subordinate to regulations and
directives issued by a technocracy, a development which has become increasingly pronounced
under successive treaties. Politicians have disowned their responsibilities by cultivating
ambiguity and vagueness, while strengthening the, position of the Court of Justice, making it
into an oracle. One key article of the draft Constitution, Article I-6, is a departure from this
practice in so far as it declares unambiguously and for the first time the absolute primacy of
Community law over national laws. Taken together with Article I-7, which endows the Union
with a legal personality, enabling it to take the place of nations at international level, it marks
the official and – what is unprecedented in history – agreed end to European States as
sovereign States.
SUBSIDIARITY DIVERTED FROM ITS PURPOSE IN SUPPORT OF ULTRA-CENTRALIST

FEDERALISM
The principle of subsidiarity, is usually considered to be the antidote to centralism, in fact in its
current wording perfectly reflects the irresistible march towards European centralisation. It
must be said that centralism is a conditioned reflex of all ideologies and that European
federalists have always been steeped in ideology. Ideology is in fact the ‘logic of an idea’ and
not a reality, as demonstrated by Hannah Arendt, it is the ‘tyranny of logic’, which means that
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the criterion of truth is supposed to be situated in the internal coherence of the system of
thought based on it and not in the closeness to reality of the successive conclusions to which it
leads. This explains why, at any given time, ideology may enter into contradiction with the
reality of things as they are.
At European level, those who claim to be the mouthpieces of ‘Europeanist’ ideology think that
they know better than national institutions and elected representatives what is good for the
European public. On the basis of this logic they deduce that decisions and actions must be
guided from the centre, which sees itself as being at the summit of the federal edifice. It is in
this way that the principle of subsidiarity has been interpreted wrongly, i.e. to their advantage,
by the European Commission and the Court of Justice in Luxembourg.
With the conscious or unconscious complicity of European leaders, the supranational are less
concerned with defending the interests of Europeans than with endlessly increasing their own
powers so as to build at any cost an ultra-centralist federation already centred around them,
notwithstanding repeated expressions of democratic revolt, culminating in the resounding
events of 29 May 2005 in France.
NOTE:
1 Georges Berthu A Europe without nations - the essence of the projected European Union
Published by François-Xavier de Guibert, December 2004.
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THE PRIMACY OF COMMUNITY LAW
By David Sehnálek (June 2008)
THIS PAPER AIMS TO PRESENT A GENERAL INTERPRETATION OF THE PRINCIPLE OF THE

PRECEDENCE OF COMMUNITY LAW AND ITS RELATION TO FUNDAMENTAL RIGHTS AND
FREEDOMS AS THEY ARE DEFINED IN EC/EU LEGISLATION AT PRESENT, AND TO CONSIDER
POSSIBLE CHANGES AFTER THE ENTRY INTO FORCE OF THE LISBON (REFORM) TREATY. IT WILL
EXAMINE THE VALIDITY OR OTHERWISE OF THE PROPOSITION THAT THE ENTRY INTO FORCE OF
THE CHARTER OF FUNDAMENTAL RIGHTS WILL LIMIT THE SOVEREIGNTY OF THE MEMBER
STATES AND COULD RESULT IN SOME OF THEIR OLDER LEGISLATION BEING REVISED DIRECTLY
BY EC/EU INSTITUTIONS.
INTRODUCTION
By becoming a Member State of the European Communities (‘Communities’) on 1 May 2004,

the Czech Republic fundamentally affected the structure of the legal system governing its
territory. The law of the European Communities entered into force here, alongside national law,
and now both these systems constitute parts of one legal order in force and applicable in the
Czech Republic. It is worth mentioning that on accession the Czech Republic accepted the
acquis communautaire fully and unconditionally, including all regulations and directives.
The parallel existence of the two legal systems also presents problems in their application. Ever
since the establishment of the Communities there have been instances of one and the same
legal problem falling under the rules of both legal systems. Such ‘clashes’ were not dealt with in
the founding Treaties of the individual Communities. Regulations governing mutual relations
between the two systems, namely between national (i.e. Czech) law and Community law, were
laid down only subsequently, in the case-law of the European Court of Justice.
It must be stressed at this point that the European Court of Justice does not have legislative
power. Its judgments do not establish a precedent; unlike for example court judgments in
countries governed by Anglo-Saxon law. They cannot, therefore, be considered to be an
additional formal and generally binding source of law. The authority and significance of ECJ
judgments are laid down in Article 220 of the Treaty establishing the European Community (‘EC
Treaty’). It states that it is the task of the Court to ensure that Community law is observed in the
interpretation and application of the EC Treaty. The ECJ is thus competent to give the only
authentic and correct interpretation of Community law. That interpretation must be respected
and taken into account by national courts, which must apply Community law correctly.
THE COEXISTENCE OF LEGAL SYSTEMS – NATIONAL AND COMMUNITY
As stated above, the question of a possible ‘clash’ between national and Community law has so
far been dealt with only in the case-law of the European Court of Justice. Although its creative
judgments have not always been received favourably by the Member States, in practice they
have for the most part been respected. A watershed judgment was the Van Gend en Loos
judgment, in which the ECJ stated that the Community constitutes a new legal order of
international law, under which the states have limited their sovereign rights, albeit within
limited fields, and which affects not only the Member States but also their nationals.
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Independently of the legislation of the Member States, Community law not only imposes
obligations on individuals, but is also intended to confer rights upon them. This idea was
further developed in the COSTA v E.N.E.L. ruling, in which the ECJ stated that by contrast with
ordinary international treaties the EEC Treaty has created its own legal system, which, on the
entry into force of the Treaty, became an integral part of the legal systems of the Member
States and which their courts are bound to apply.
The Community thus creates its own legal system, relatively independent of national law,
which is supranational in character and directly binding not only on the EU institutions and
Member States, but also on their nationals.
The interpretation and application of this law must ensure its effectiveness (effet utile). Two
main principles of application help to achieve this goal: the principle of the direct effect and the
principle of precedence1. Due to the limited scope of this paper we shall not deal with the
former.
THE PRINCIPLE OF THE PRECEDENCE OF COMMUNITY LAW
The principle of the precedence2 of Community law over national law was first formulated in
the abovementioned COSTA v E.N.E.L. judgment. The ECJ stated that the integration into the
laws of each Member State of provisions that derive from the Community make it impossible
for the states to accord precedence to a unilateral and subsequent measure over a legal system
accepted by them on the basis of reciprocity. The application of the law cannot vary in
individual states due to subsequent domestic legal provisions without endangering the aims of
the Treaty and causing discrimination. The obligations ensuing from the EC Treaty would thus
not be unconditional but merely incidental if they could be called into question by subsequent
legislative measures by the signatories. The national courts must thus give precedence to
Community law over national law.3
The above principle is very broad and needs to be defined in more specific terms. The key
question is to what extent that principle should be applied. The problem is that formally the EC
Treaty is an international treaty, which in the Czech legal environment should take precedence
over Czech law, but not over the Constitution. Article 10 of the Constitution states that
international treaties that are ratified with parliament’s approval and that are binding on the
Czech Republic form part of its legal system, and where they differ from the law, the
international agreement should be applied.4
The approach outlined above is not, however, the one favoured by the ECJ or the legal
community in general.5 Community law as a whole takes precedence over national law. Even
the sources of secondary law take precedence over the sources of the supreme legal power of
the Member States. The ECJ confirmed this in the case of Internationale Handelsgesellschaft
mbH,6 where it ruled that the validity of measures adopted by the institutions of the
Community can only be judged in the light of Community law. The introduction of special
criteria for assessment stemming from the legislation or constitutional law of a particular
Member State would, by damaging the substantive unity and efficacy of Community law, lead
inevitably to the destruction of the unity of the common market and jeopardise the cohesion of
the Community.
In other words, if for example a Community measure ran counter to a fundamental right as
formulated by the constitution of a Member State, the measure would still have to be applied
by the institutions of the state in precedence over its own constitution (in the Czech Republic
the case in point would be the Charter of Fundamental Rights and Freedoms).
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This doctrine has not been universally welcomed by the Member States and particularly their
highest courts. Undoubtedly most famous is the resistance of the French Conseil d’Etat and the
German Constitutional Court7 in cases regarding fundamental human rights and excessive
jurisdiction on the part of the EU institutions. Even today it cannot be stated without
reservations that the principle of the precedence of Community law has been fully accepted,
but objections to it have softened.8
To complete the interpretation of the principle of the precedence of Community law we must
mention the Simmenthal judgment. In that case the ECJ confirmed the principle of the
precedence of Community law resulting from previous judgments and stressed that the direct
applicability of Community law means that its rules must be fully and uniformly applied by all
Member States from the date of their entry into force and for so long as they continue in force.
In accordance with the principle of the precedence of Community law, directly applicable
measures of Community law render automatically inapplicable any conflicting provisions of
current national law and also preclude the valid adoption of new national legislative measures
to the extent to which they would be incompatible with Community provisions. The opposite
conclusion would, according to the ECJ, amount to a corresponding denial of the effectiveness
of obligations undertaken unconditionally and irrevocably by Member States pursuant to the
Treaty, and would thus imperil the very foundations of the Community.
The Simmenthal judgment clearly indicates the duty of the national authorities to apply
Community law and to protect the rights conferred by it upon individuals, by refusing, if
necessary, to apply any conflicting provisions of national legislation. It is immaterial whether
such national provisions preceded the Community legislation or whether they were adopted
subsequently. Meanwhile, provisions of Community law must be given full effect immediately
and in accordance with a judgment or the case-law of the ECJ.
It is not necessary to wait for any conflicting national provision to be set to one side by
legislative means. The precedence of Community law is not absolute, however. It concerns only
the precedence of application of Community law over national law. It does not abolish the
conflicting national provision, which is just not applied in that specific case.
PROTECTION OF FUNDAMENTAL RIGHTS AND FREEDOMS IN THE EU
Situation before the adoption of the Charter of Fundamental Rights

I have briefly mentioned above that the subject of the precedence of Community law also
touches upon the protection of fundamental rights and freedoms and I shall deal with the
question in more detail now. The EC Treaty does not contain any list of fundamental rights and
freedoms. This is due to the fact that the Communities were originally conceived as a basis for
economic cooperation. However, even while pursuing its economic aims the EU may encroach
upon the rights of individuals. In the famous Stauder9 judgment, the ECJ emphasised the
importance of respecting the fundamental human rights enshrined in the general principles10
of Community law and protected by the European Court of Justice.
The next key judgment with regard to fundamental rights and freedoms is the Hauer
judgment.11 In that judgment the ECJ confirmed that fundamental rights form an integral part
of the general principles of the law, the observance of which is ensured by the Court. In the
Rutili12 judgment the ECJ also identified constitutional traditions common to the Member
States as a source of these rights. It also mentioned the European Convention for the Protection
of Human Rights and Fundamental Freedoms (ECHR) as another source of defining basic rights
and freedoms, which is logical given that all the EU Member States are signatories to that
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Convention. It thus represents a common standard for the protection of fundamental rights.
This was subsequently confirmed by the Member States in the Maastricht Treaty.13
The Charter of Fundamental Rights

The EU also aims to create its own framework for the protection of fundamental rights and
freedoms.
That effort is reflected in the Charter of Fundamental Rights and Freedoms (‘Charter’)
proclaimed in Nice on 7 December 2000.14 The Charter has not yet become part of primary law
of the Community. It was incorporated into Part II of the Treaty establishing the European
Constitution, but due to the fate of that Treaty it has never become legally binding.15
In practice, however, this claim is called into question by the judgments of the ECJ. In the
Parliament v Council case16, the ECJ states that while the Charter is not a legally binding
instrument, its principal aim, as is apparent from its preamble, is to reaffirm ‘rights as they
result, in particular, from the constitutional traditions and international obligations common to
the Member States, the Treaty on European Union, the Community Treaties, the European
Convention on Human Rights, the Social Charters adopted by the Community and by the
Council of Europe and the caselaw of the ECJ and of the European Court of Human Rights’.17
Advocate General Maduro expresses the opinion that although the Charter cannot in itself
constitute a sufficient legal basis for the creation of rights capable of being directly invoked by
individuals, it is nevertheless not without effect as a criterion for the interpretation of the
instruments protecting the rights mentioned in Article 6(2) of the EU Treaty. From that
perspective, according to Maduro, the Charter may have a dual function. In the first place, it
may create the presumption of the existence of a right, which will then require confirmation of
its existence either in the constitutional traditions common to the Member States or in the
provisions of the ECHR. In the second place, where a right is identified as a fundamental right
protected by the Community legal order, the Charter provides a particularly useful instrument
for determining the content, scope and meaning to be given to that right.18
To summarise the present situation in the area of the precedence of Community law and the
protection of fundamental rights and freedoms, we can state the following: The principle of the
precedence of Community law does not yet constitute part of primary law, but it ensues from
the ECJ case-law. This principle is generally accepted by the national authorities of the Member
States, despite certain objections.
EU law at present does not contain any definitive list of fundamental rights and freedoms. The
Treaty on European Union contains only a reference to the European Convention for the
Protection of Human Rights and Fundamental Freedoms as the minimum standard for
protection and also refers to the constitutional traditions common to all Member States.
The Charter of Fundamental Rights is not as yet a legally binding instrument. In spite of that, it
is, rather pragmatically, taken into account in the judgments of the ECJ. In the case of the
Charter becoming legally binding, the principle of precedence would become relevant to its
application, with all its consequences. In relation to the Member States and possible fears of
further limitations of their sovereignty in favour of the EU, a ‘safety clause’ has been
incorporated in the form of Article 51, which states that the provisions of the Charter apply to
the institutions and bodies of the Union. They apply to the Member States and their authorities
only when they are implementing EU legislation. The Charter does not establish any new
powers or amend any of the powers defined by the Treaties.19 Taking into consideration the
rather militant approach of ECJ case-law so far, we clearly should not overestimate the
importance of this provision.
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THE PRINCIPLE OF PRECEDENCE AND HUMAN RIGHTS IN THE LISBON TREATY
In the concluding part of this paper I would like to focus on a question that arises in relation to
present developments in the EU and on possible changes in the law after the entry into force of
the Treaty of Lisbon amending the Treaty on European Union and the Treaty establishing the
European Community (‘Lisbon Treaty’).
The precedence of Community law

The Lisbon Treaty contains no provisions that amend in any way the principle of the
precedence of Community law. At first glance there seems to be no change in the status quo.
However, at the Conference of the Representatives of the Member Sates held in Brussels on 3
December 2007, a number of declarations were made. One of them is Declaration No 17
concerning primacy, in which the Conference recalls that, in accordance with well settled
caselaw of the Court of Justice of the European Union, the Treaties and the law adopted by the
Union on the basis of the Treaties have primacy over the law of Member States under the
conditions laid down by the said case-law.20
It is my opinion that this declaration alters the status quo significantly. Although the
Declaration does not have the same legally binding force as the Lisbon Treaty itself, it
represents an indisputable written record of what amounts to unconditional acceptance of this
principle by all the Member States, and this for the first time in EU history.
Fundamental rights and freedoms

An important provision regarding fundamental rights is found in Article 6 of the EU Treaty, as
amended by the Lisbon Treaty, which states that the Union recognises ‘the rights, freedoms
and principles set out in the Charter of Fundamental Rights of the European Union on 7
December 2000, as adapted at Strasbourg, on 12 December 2007, which shall have the same
legal value as the Treaties’.21 The Charter will thus at last become a legally binding document
and part of EU law.22
I do not think, however, that the changes mentioned above will be of any great practical
significance to individuals. The binding effect of the Charter cannot be understood as a new
way of accessing a legal remedy for individuals who feel that the national authorities have
violated their fundamental rights and freedoms. The Charter only sets limits for the execution
of power, and applies only to EU bodies or to the authorities of the Member States when they
are implementing EU law. The protection of the rights and freedoms of individuals is a logical
consequence: if we start from the presumption that these fundamental rights are protected at
national level by all the Member States, then they must be equally protected after the transfer
of certain executive powers from the Member States to the Community. Meanwhile, the
existing level of protection can be deemed sufficient. Its minimum standard is firmly
established by the fact that all the Member States are simultaneously bound by the European
Convention for the Protection of Human Rights and Fundamental Freedoms, which is also
recognised as a minimum standard by the EU.23
The benefit of the binding effect of the Charter lies mainly in the fact that it strengthens the
legal safeguards for individuals and simplifies the work of the national authorities in applying
EU law. The weakness of the present system, based not only on the ECHR but also on the
constitutional traditions common to Member States, lies in the difficulty of ascertaining the
contents of these traditions given the large number of members. The Charter, with its
unequivocally formulated fundamental rights and freedoms, will undoubtedly be more
comprehensible and predictable.
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The only problem could occur in cases where a national law affords its citizens much higher
protection than the EU legislation.24 In that case the authorities of the Member State in
question would face the difficult task of giving precedence to a lower Union standard over their
national standard, which is more favourable for the individual.
In my opinion, however, this problem is rather theoretical at present. I am not aware of any
such case in relation to the Czech Charter of Fundamental Rights and Freedoms. On the other
hand, recent experience with the implementation of Council Decision 2002/584/SVV on the
European arrest warrant and extradition procedures demonstrates that such problems cannot
be ruled out altogether.
CONCLUSION
The adoption of the Lisbon Treaty will have far-reaching consequences in the area of European
integration. They may not look as impressive as they were meant to be in the Treaty
establishing the European Constitution, but their actual effect is comparable.25 One of the
manifestations of the changes is the fact that the Charter of Fundamental Rights of the
European Union will be legally binding. The Charter itself does not confer any new powers on
the EU. It should not therefore result in any further limitation of sovereignty of the Member
States; it should, however, afford vital protection to their citizens from possible abuse of power
by any authority on EU territory.26 In other words, the rights enshrined in the Charter must not
be considered in isolation, but in connection with the EU’s existing or new powers. The Czech
Republic could possibly be vulnerable to some other provisions of the Lisbon Treaty (e.g. the
fact that the amendment of Article 228 will make it easier and faster to impose financial
penalties on a Member State for failing to transpose EU legislation,27 or the fact that the existing
three-pillar structure with its relatively clearly distinguished first supranational pillar and two
intergovernmental Union pillars is being abolished).28 Furthermore, the ECJ has already been
applying the Charter in its case-law: granting it legally binding status will thus only mean
harmonising the de jure situation with the de facto situation.
It may be concluded that the Lisbon Treaty strengthens cooperation between the EU Member
States and simplifies the present confusing EU structure. On the other hand, in the area of state
sovereignty there are no major changes in the status quo. There is no major extension of the
EU’s competences. From the viewpoint of the Czech Republic and other Member States, the
revolutionary step was taken when they joined the EU. The amended Treaty is just another step
in the process of European integration.
I am of the opinion, therefore, that the validity of the opening proposition has been disproved.
There will be no possibility of either existing or past national legislation of the Member States
being revised directly by the EU institutions (for example, the Beneš Decrees in the case of the
Czech Republic) and it will continue to be impossible even after the entry into force of the
Reform Treaty. The European Court of Justice does not any such jurisdiction now, nor will it
have it in the near future ( i.e. after the entry into force of the Lisbon Treaty).29
The fact that the scope of the Charter is limited to the scope of the European Union precludes,
in my opinion, even the revision of such controversial past legislation as the so-called Beneš
Decrees, for example, even in cases where the provisions of the Charter would in fact have
direct effect. These questions are not at present regulated under EU law and that situation will
not change with the entry into force of the Reform Treaty. The ECJ thus cannot be competent
to answer them, not even in a reference for a preliminary ruling. In order for the Court to be
able to deal with such a question, the rule to be interpreted would have to be a Community
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rule or there would have to be a conflict between the national source and a rule or principle of
Community law (e.g. a national provision conflicting with one of the articles defining the
fundamental freedoms of movement of goods, persons, services or capital).30
In the case of the above-mentioned Beneš Decrees, it could be argued that their introduction
and application contravened the present principle of non-discrimination on the basis of
nationality, which is undoubtedly one of the EU‘s legal principles.31 I am nevertheless
convinced that it would be outside the ECJ’s jurisdiction to rule in that matter. Firstly, such
revision would clearly contravene another general legal principle, i.e. the principle of no
retrospective action, and secondly, as mentioned above, these Decrees do not fall within the
scope of EU law, and a simple reference to one of its principles could not be deemed sufficient.
The ECJ has also let it be known on several occasions that it does not intend to deal with
questions outside its jurisdiction and those that touch on EU law only marginally or purely
theoretically. One example would be the Kremzow case32, in which the Court stated that it
could not give the interpretative guidance required for the national court to determine
whether the national legislation was in conformity with the fundamental rights whose
observance the court ensures33 in a case where the situation did not fall within the field of
application of Community law. Accordingly, provisions of national law not designed to secure
compliance with Community laws do not fall within the field of application of Community law
even if there is a purely hypothetical prospect that they could impede a person from exercising
some of the rights conferred upon him by Community law.
NOTES:
1 The ECJ’s judgments do not create law, but formulate the existing law where necessary. The
courts of the Member States must apply Community law correctly, and the ECJ judgments in
references for a preliminary ruling in prejudicial proceedings constitute the source of its
correct interpretation. For more on the legal aspects of ECJ judgments, see also: Tyč, V.
Zaklady prava Evropske unie pro ekonomy, 4th updated edition. Prague: LINDE PRAHA a.s.,
2004, p. 78 and following.
2 Judgment of 5 February 1963, Case 26/62, NV Algemene Transport- en Expeditie
Onderneming van Gend & Loos v Netherlands Inland Revenue Administration.
3 Judgment of 15 July 1964, Case 6/64, Flaminio Costa v E.N.E.L.
4 Sometimes also primacy.
5 The principle of precedence applies only to Community law. EU law under the second and
third pillars is based on the intergovernmental, not supranational, principle.
6 Although the Van Gend en Loos judgment does not expressly mention the principle of
precedence, it can be interpreted as such.
7 See also M. Bartoň, Novela Ustavy a mezinarodni pravo, Via Iuris, 2002, No 1, p.2.
8 Comp. J.Syllová, Euronovela Ustavy ČR, Právní rádce, 2002, No 5, p. 38.
9 Judgment of 17 December 1970, Case 11/70, Internationale Handelsgesellschaft mbH v
Einfuhr- und Vorratsstelle für Getreide und Futtermittel.
10 There is ample literature available on this topic, both Czech and foreign, comp. W. Matli, A.
Slaughter, Constructing the European Community Legal System from the Ground Up: The Role of
Individual Litigants and National Courts [quoted 21/1/2008], available at
http://www.jeanmonnetprogram.org/papers/96/9606ind.html , also M. Bobek, Hledani modu
vivendi ESD a německeho Spolkoveho ustavniho soudu [quoted 21 January 2008], available at
http://www.europeum.org/disp_article. php?aid=541&cid=0&nolang=1&page=44&type=0.
11 Comp. Reich, N. Judge-made `Europe a la carte’: Some Remarks on Recent Conflicts between
European and German Constitutional Law Provoked by the Banana Litigation, European
Journal of International Law, 1996, Vol. 7, No. 1, pp. 103-112.
172
12 Judgment of 9 March 1978, Case106/77, Amministrazione delle Finanze dello Stato v

Simmenthal SpA.
13 See judgment of 12/11/1969, Case 29/69, Erich Stauder v City Of Ulm, Sozialamt.
14 On the principles of Community law, see Týč. V. Působeni prava Evropske unie ve sfeře českeho
pravniho řadu – Uvodni studie in Sbornik z workshopu konaneho na Pravnicke fakultě MU v Brně
dne 26.9.2006 Evropsky kontext vyvoje českeho prava po roce 2004 , Brno, Masarykova
univerzita, 2006, pp. 10 – 28.
15 Judgment of 13 December 1979, Case 44/79, Liselotte Hauer v Land Rheinland-Pfalz.
16 Judgment of 28 October 1985, Case 36/75, Roland Rutili v Ministre de l‘intérieur.
17See Article 6(2) of the Maastricht Treaty, which states: The Union shall respect fundamental
rights, as guaranteed by the European Convention for the Protection of Human Rights and
Fundamental Freedoms signed in Rome on 4 November 1950 and as they result from the
constitutional traditions common to the Member States, as general principles of Community law.
18 On the genesis of the Charter ,see P. Eeckhout, The EU Charter of Fundamental Rights and the
Federal Question, The International Journal of Comparative Labour Law and Industrial
Relations, 2006, no. 22/3, p. 422
19 For more on this topic, see P. Šturma: Vztah Evropske umluvy o lidskych pravech a evropskeho
prava, Bulletin Advokacie, 2004, No 7/8, pp. 19-30.
20 Judgment of 27 June 2006, Case C-540/03, European Parliament v Council of the European
Union.
21 Ibidem, paragraph 38.
22 Paragraph 48 of Advocate General M. Poiares Maduro’s Opinion of 14 December 2006, Case
C-305/05.
23 This is confirmed in the Explanations relating to the Charter of Fundamental Rights (2007/C
303/02). The explanation on Article 51 states: ‚As regards the Member States, it follows
unambiguously from the case-law of the Court of Justice that the requirement to respect
fundamental rights defined in a Union context is only binding on the Member States when they
act in the context of Union law (judgment of 13 July 1989, Case 5/88 Wachauf [1989] ECR 2609;
judgment of 18 June 1991 ,ERT [1991], ECR I-2925; judgment of 18 December 1997, Case C-
309/96 Annibaldi [1997] ECR I-7493). The Court of Justice recently confirmed this case-law in the
following terms: “In addition, it should be remembered that the requirements flowing from the
protection of fundamental rights in the Community legal order are also binding on Member
States when they implement Community rules...” (judgment of 13 April 2000, Case C-292/97,
paragraph 37 of the grounds, not yet published) Of course this rule, as enshrined in this Charter,
applies to the central authorities as well as to regional or local bodies, and to public
organisations, when they are implementing Union law.’ This explanation is not legally binding
but is a valuable tool of interpretation.
24 Also annexed to the Final Act is the Opinion of the Legal Service of the Council of 22 June
2007, which states: ‘It results from the case-law of the Court of Justice that primacy of EC law is a
cornerstone principle of Community law. According to the Court, this principle is inherent to the
specific nature of the European Community. At the time of first judgment of this established
caselaw (Costa/ENEL, 15 July 1964, Case 6/64) there was no mention of primacy in the Treaty. It is
still the case today. The fact that the principle of primacy will not be included in the future Treaty
shall not in any way change the existence of the principle and the existing case-law of the Court
of Justice’.
25 The Treaties means the Treaty on European Union and the Treaty on the Functioning of the
European Union; see Article 1 of the Treaty on European Union as amended by the Lisbon
Treaty.
26 In this respect, I would like to point out that the Czech Republic made a declaration on the
EU Charter of Fundamental Rights. In that declaration, which in fact does not add anything
new to the established situation, the Czech Republic stresses that the provisions of the
Charter apply to the Member States only when they are implementing EU law, not
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introducing or applying national provisions that are independent of EU law. I consider such
a declaration to be necessary for decision-making, although due to the position of the Czech
Republic in the EU it will be of no great practical significance.
27 It is worth noting that Article 6 of the EU Treaty as amended by the Lisbon Treaty establishes
the conditions for the Union (now having gained legal personality, which the EU is still
lacking) to accede to the European Convention for the Protection of Human Rights and
Fundamental Freedoms.
28 On the contrary, due to the wording of Article 6 of the EU Treaty, such a situation cannot
arise in the relationship between the EU and the ECHR.
29 The fact that the Lisbon Treaty does not differ greatly from the Treaty establishing the
European Constitution becomes apparent on closer comparison of both texts. For more on
this issue, see for example Reactions and comparisons in the Lisbon Treaty and the European
Constitution: A side-by-side comparison [quoted 11 February 2008], available at
http://www.openeurope.org.uk/research/comparative.pdf.
30 In a broad sense including both national and EU authorities.
31 The new paragraph 3 of the original Article 228 of the Treaty states: When the Commission
brings a case before the Court pursuant to Article 226 on the grounds that the Member State
concerned has failed to fulfil its obligation to notify measures transposing a directive adopted
under a legislative procedure, it may, when it deems appropriate, specify the amount of the lump
sum or the penalty payment to be paid by the Member State concerned which it considers
appropriate in the circumstances. If the Court finds that there is an infringement it may impose a
lump sum or a penalty payment on the Member State concerned not exceeding the amount
specified by the Commission. The payment obligation shall take effect on the date set by the
Court in its judgment. Interestingly, according to the ISAP database (http://isap.vlada.cz), the
Czech Republic had not as of 7 February 2008 transposed a total of 65 Directives into its
legal system. This means that for these Directives the compulsory notification process has
not, or has only partially, been completed.
32 With a degree of sarcasm one might say that the Lisbon Treaty itself is highrisk by doing
little to simplify the status quo and EC and EU structures, and by being practically
unreadable for ordinary citizens (and there is still no consolidated, nor even a working
version of the Treaties as amended by the Lisbon Treaty accessible to Czech citizens in their
own language to date, i.e. 12 February 2008).
33 For more on this topic, see Šturma, Vztah Evropske umluvy o lidskych pravech a evropskeho
prava, Bulletin Advokacie, 2004, No 7/8, pp. 19-30.
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IS THE COMMITTEE OF THE REGIONS

PROMOTING CLOSENESS AND SUBSIDIARITY?
By Markus Nyman (June 2006)
THE COMMITTEE OF REGIONS (COR) COULD, AT LEAST IN THEORY, PLAY A CONSTRUCTIVE ROLE
FOR ADVOCATES OF A LIMITED EU-COOPERATION. MARKUS NYMAN FROM THE SWEDISH
DELEGATION OF THE IND/DEM GROUP ASK THE CRUCIAL QUESTION WHETHER THE COR FULFIL
IT’S MANDATE AND WHETHER THE INSTITUTION DEMAND THAT MORE DECISIONS ARE MADE
ON THE NATIONAL, REGIONAL OR LOCAL LEVEL.
The European Union was originally at least according to the initial mainstream description-an
intergovernmental co-operation between independent national states. The EU of today
however, has developed into something different: It is looking more and more like a federal
state, having its own common foreign- and security policy, its common currency and having
far-reaching ambitions to develop a common defence policy.
The Committee of the Regions (CoR) was established in order to let local and regional
representatives of the Member States to be consulted when new proposals were made in areas
that had repercussions at regional or local level. It had to promote local and regional
perspectives on political issues and uphold the view that the nation state and its regions should
have the last word on certain political issues that particularly affected their citizens. The
fundamental task of the CoR was therefore to safeguard that decisions were taken at “the
closest practical level”, which means at national, regional or local level. As such, the CoR was
supposed to defend the “closeness” and subsidiarity principles
The Maastricht Treaty, by which the CoR was established, set out five such areas for
consultation: economic and social cohesion, trans-European infrastructure networks, health,
education and culture. The Amsterdam Treaty added another five areas to this list -
employment policy, social policy, the environment, vocational training and transport. With 317
members since the 2004 enlargement, the CoR could -at least in theory- act as a strong
counterweight to the ongoing transfer of decision-making powers to Brussels.
Does the Committee fulfil its mandate to ensure that the closeness and subsidiarity principles
are respected? Is the CoR a necessary and desirable institution, given the fact that it is financed
from the EU-budget, last year with an amount of 55,4 million euro?
OPINIONS FROM THE COR ON COMMISSION PROPOSALS
A compilation of opinions from the CoR on 33 proposals from the Commission during February,
April and July 2003 shows that the CoR supported the position of the commission in 29 cases
(23rd Report on the action taken on the opinions delivered by the Committee). The CoR
encouraged, in general terms, the Commission to respect local and regional conditions in many
of its opinions. But it never questioned whether the EU was indeed the level to guarantee a
“more efficient” decision-making.
The Commission neglected the opinion of the CoR in the following 5 cases:
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● Firstly, when consulted on the Commission´s White paper on European Governance, the
CoR requested that regions should be allowed to appeal directly to the ECJ in
Luxemburg if it considered that a legislative proposal was in conflict with the
subsidiarity principle (COM 705/2002 final, CoR 19/2003, July 2003). With reference to
Article 8.2 of the Protocol on subsidiarity and proportionality annexed to the proposed
EU-Constitution, that demand was not given any follow- up so far. However, even if
given such competence, it would obviously be difficult for the CoR to represent all
regions in Europe and to act in the name of a single region’s interest in a specific case.
The regions differ widely, both with regard to their economic strength and political
powers.
● In a second case, the CoR demanded increased influence for the regions as to the
supervision of minimum rules of safety in tunnels on European roads (COM 769/2002
final, CoR 93/200, July 2003). The Commission did not accept that demand on the basis
that it would lead to watered-down legislation.
● Thirdly, the forestry and environmental programme Forest Focus aims to protect the
forests of Europe and should be a complement to similar national and regional
surveillance-programmes. The Commission argued, against the opinion of the CoR, that
interventions by local authorities in the organization, structure and work of this EU-
programme would be unnecessary (COM 404/2002 final, CoR 345/2002, February 2003).
● Then, as the EU has an extensive co-operation with countries outside the Union within
higher education through the Erasmus World-programme (COM 401/2002 final, CoR
327/2003, April 2003), the CoR wanted to give local and regional authorities the
possibility of monitoring and supervising this programme. The Commission did not
consider this request to be compatible with the “special character” of the programme.
● Finally, the directive “Television without Frontiers” (89/553/EEC): A cornerstone of the

EU’s audiovisual policies. The CoR recommended that regional and local productions
should be marketed and supported within the framework of this directive. The
Commission rejected this request on the basis that the directive would become too
extensive and that it would be difficult to guarantee equal conditions for different TV-
producers.
It is worth noting that, in the 33 cases studied, the Commission often justifies its will to
centralize decision-making by referring to the subsidiarity principle: Against the original
purpose of that principle to limit EU decision-making, the definition set out in article 5 TEC
permits the (usual Commission) interpretation that the most efficient and practical level for
decisions on, for example, forestry, tunnels and the supervision of education within the
Erasmus World-Programme, is the EU level.
Although, as stated above, the CoR should safeguard the closeness and subsidiarity principles,
it generally does not demand that decision- making should be devolved (from the EU) to
national, regional or local levels.
It is also worth noting that the CoR has underlined that the principle of subsidiarity should be
concretised and complemented by the principle of solidarity. It argues that the subsidiarity
principle should not be disadvantageous for poor regions. The consequence: A re-
nationalisation of power must be avoided (CoR Bulletin EU 3-1999).
Decision-making is therefore not only considered from the perspectives of the level on which a
decision should most appropriately be made (subsidiarity) or that it should always be made on
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the lowest level (closeness), but from the perspective of solidarity. A fair distribution of
resources should, according to this interpretation, be centrally guaranteed.
The CoR therefore supports, generally speaking, the idea of a strong and effective EU. The
interest of the CoR can therefore not consist in bringing about stronger member-states. In all
33 analysed cases, the CoR opposed re-nationalisation of decision- making: Weak Member
States favour strong regions.
The CoR and the Commission have therefore one thing in common, their mutual interest in
limiting the powers of national parliaments. This is a democratic problem, given the fact that
the EU has a widely recognized democratic deficit.
OPINIONS FROM THE COR ON THE EU-CONSTITUTION
One of the most important roles for the CoR during the work of the convention on the the EU
Constitution was to make sure that the subsidiarity principle would not only refer to national
governments and parliaments, but also to the local and regional levels of decision-making.
The CoR tabled 40 amendments to the draft EU Constitution. However, only three of these
were accepted. While two of them related to territorial cohesion in the regional policy, the
third demanded that explicit reference was made to local and regional levels in the
subsidiarity clause (article I-11.3)
The result of the work of the CoR during the convention has widely been described as a failure
for the regional lobby. What is striking is that the CoR has no objection to the Constitution as
such, although it further centralizes decision- making.
SUMMARY
The examples cited indicate that there are reasons to doubt the CoR’s fulfilling its mandate to
ensure that the subsidiarity and closeness principles are respected.
The CoR is giving, rather unsurprisingly, priority to the local and regional level, without
advocating decentralization of power to the benefit of member-states. Strong member-states
might challenge or question the power of the regions, and the Commission has therefore often
one interest in common with the CoR, namely to limit the influence and power of the
respective member-states.
In addition, the CoR gives additional legitimacy to the proposals of the central Commission,
since the Commission always can refer to the fact that is has “consulted” an organization that
should represent the regions of the member states, and ensure that the subsidiarity principle is
followed.
The CoR is as an organization that raises many other issues. To start with, is it desirable and
defendable to have an EU-funded body considering proposed legislation? Furthermore, the
citizens of the member states have no influence in the nomination of candidates to the CoR.
This raises the question if the political views of the members of the CoR are representative of
the population of the member states, or if the members of the CoR might have a more
federalist and integrationist political view than those they are supposed to represent, given the
fact that they are nominated by the member states and are finally accepted by the Council.
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Another question: Is it possible at all for an organization like the CoR to represent the diverse
regions of Europe as a homogenous group? Big wealthy regions with a high degree of political
power might have quite different interests as small peripheral regions in countries with a
centralized political system.
Besides all these insufficiencies, the analysed cases fail to provide any evidence for a concrete
influence on the proposals of the Commission.
As the CoR is no a clear counterweight to the ongoing centralization process of the EU, it can be
regarded as not fulfilling its mandate.
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THE WHITE HORSE OF BUREAUCRACY
By Martina Rozsívalová
Parkinson: Given that work (and especially paperwork) is elastic in its demands on
time, it follows that there need be little or no relationship between the work to be done
and the size of the staff to which it may be assigned. Likewise, the lack of occupation is
not necessarily revealed by manifest idleness. The task to be performed swells in
importance and complexity in direct proportion to the time allotted for the task
What do British historian Cyril Northcote Parkinson, Czech author Franz Kafka and British writer
George Orwell have in common? Although they lived in different times, they all described how
far red tape, the socalled paper tiger, or as we say in Czech, the white horse of bureaucracy, can
get in our lives’ way.
‘WORK EXPANDS SO AS TO FILL THE TIME AVAILABLE FOR ITS COMPLETION.’
‘Work expands so as to fill the time available for its completion.’ This was the opening sentence
of the humorous essay Professor Parkinson published in The Economist in 1955.
Parkinson did not believe that a growing civil service reflects a growing workload. The essay
proposed the contrary, based on the results of a study of the British civil service. Parkinson was
particularly qualified to make such a statement, having worked in the British civil service and
experienced first hand how bureaucracy operates. Given that work (and especially paperwork)
is elastic in its demands on time, it follows that there need be little or no relationship between
the work to be done and the size of the staff to which it may be assigned. Likewise, the lack of
occupation is not necessarily revealed by manifest idleness. The task to be performed swells in
importance and complexity in direct proportion to the time allotted for the task. The
importance of Parkinson’s Law lies in the fact that it is a law of growth based upon an analysis
of the factors by which that growth is controlled.1
George Orwell wrote ‘Nineteen Eighty-Four’ in 1948. The novel, set in an imaginary totalitarian
future, made a deep impression across the globe and entered popular use with its title and
many phrases, such as ‘Big Brother is watching you’, ‘Newspeak’ and ‘Doublethink’. It tells the
story of Winston Smith, a functionary at the Ministry of Truth, whose work consists of editing
historical accounts to fit the government’s changing policies. The adjective ‘Orwellian’ alludes
to the system depicted in Nineteen Eighty- Four. It can refer to any form of government
oppression, but it is particularly used to refer to euphemistic and misleading language
originating from all-knowing government bodies with a political purpose to impose control
over its citizens (Ministry of Love, Ministry of Truth).2
The third author, Franz Kafka, a Czech-born, German-speaking writer, became famous for his
posthumously published novels describing the alienation of 20th century man. Kafka’s
nightmares of dehumanization, bureaucratic labyrinths, and totalitarian society have much in
common with the works of George Orwell (Nineteen Eighty- Four; Animal Farm). The term
‘Kafkaesque’ has become part of our modern vocabulary, describing some vague notion of a
dark, bureaucratic and hopeless world. Typically, Kafka’s stories revolve around a protagonist
who is caught up in a frustrating and sometimes fearsome web of bureaucracy, petty politics,
or other circumstances that render his life fruitless and meaningless. The protagonist is a
person like many of us, often in some professional middle class role – a doctor, a land surveyor,
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a senior bank clerk, or a salesman – who is confronted by faceless and nameless low level
bureaucrats who control access to the high level bureaucrats who make the critical decisions
that affect lives individually and collectively. This bureaucracy forms an impenetrable barrier
towards resolving the issues confronted by the protagonist.
A SELECTION OF EU ABSURDITIES 2005-2008, OR HOW ELASTIC THE SCOPE OF WORK OF

A FUNCTIONARY IS
So how do these wisdoms apply to the European Union’s regulatory framework?
In various ways, the EU’s propensity towards the nightmares portrayed by Orwell and Kafka is
by way of the bureaucracy detailed by Parkinson. Here are some examples of EU legislative acts
and reports adopted or dealt with by the European Parliament (EP) which are reminiscent to
the works of Parkinson, Orwell and Kafka. What characterises these bureaucratic measures is
their excessive nature, adding no value to the product, but making it more expensive and
problematic for producers.
SPECIAL MEASURES TO ENCOURAGE SILKWORM REARING
The Council Regulation (EEC) No 845/72 of 24 April 1972 laying down special measures to
encourage silkworm rearing has been substantially amended several times. Silkworm rearing is
of some importance to the economies of certain regions of the Community. This activity is a
source of additional income for farmers in those regions. Measures therefore had to be adopted
to help ensure a fair income for silkworm rearers. To that end, measures had to facilitate the
adjustment of supply to market requirements, and a European aid replacing all national
silkworm aid should be granted for silkworm rearing. The growers should make sure that aid is
granted to silkworm rearers for each box of silkworm eggs used, on conditions that the boxes
contain a minimum quantity of eggs, to be determined, and that the worms have been
successfully reared. The aid per box of silkworm eggs shall amount to EUR 133.26.
COMPULSORY ELECTRONIC SHEEP IDENTIFICATION OF OVINE AND CAPRINE ANIMALS
In December 2007 MEPs voted on a planned compulsory introduction of electronic

identification for ovine and caprine animals as amended by the Committee on agriculture and
rural development in an earlier date, i.e. on 31 December 2009.
This proposed Council regulation3 has led to severe criticism from farmers‘ groups because it is
feared that the extra cost and administration will seriously harm this particular farming sectors,
forcing many to give it up altogether. Already now, sheep farming offers low financial returns
and added financial and administrative pressure could prove to be the killer blow. Almost 10
months after the vote, MEPs woke up with a feeling that individual electronic tagging is
unnecessary and overbearing. So a cross-party group of MEPs launched a new campaign
through a written declaration to stop the compulsory electronic tagging (EID) of sheep and
goats. The declaration should prompt a European Parliamentary debate on the subject,
provided it is signed by over half the 785 MEPs. Good luck to the farmers!4
HARMONISATION CONCERNING FARM AND FORESTRY MACHINERY AND VEHICLES
The EP’s committee on legal affairs regularly supplies plenary sessions with different reports on
directives concerning harmonisation of various types of machinery and vehicles. Hinting at
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these examples does not intend to detract the necessity of safety devices but to demonstrate
the immense volume of EU legislation.
For example, concerning forestry tractors, member states have to comply with the following
directives (adopted by the EP during the December 2007- February 2008 plenary sessions):
- Directive on the coupling device and the reverse of wheeled agricultural or forestry tractors;5
- Driver-perceived noise level of wheeled agricultural or forestry tractors;6
- On the suppression of radio interference produced by agricultural or forestry tractors

(electromagnetic compatibility);7
- On rear registration plate lamps for motor vehicles and their trailers;8
- Installation of lighting and lightsignalling devices on wheeled agricultural and forestry

tractors.9
Another striking example is the EP’s legislative resolution on the proposal for a directive on the
retrofitting of mirrors to heavy goods vehicles registered in the Community.10
A CERAMIC SHEEP
EU regulation includes such absurd examples like the definition of ceramic sheep as an article
designed essentially for the interior decoration of homes, relating to the classification of certain
goods in the so-called Combined Nomenclature. In the Commission regulation it is literally
stated that the goods described in column 1 of the table set out in the Annex shall be classified
within the combined nomenclature under the CN code as indicated in the column: “An article,
in the form of a sheep, measuring approximately 10 cm in height. A knitted fabric, representing the
fleece, covers most of the ceramic body leaving part of the head and four hoofs visible. The fabric is
glued on the ceramic body.”11
QUALITY STANDARDS ON COMPOST
The proposed EC directive on soil protection aims at establishing harmonisation of standards

on compost. Article 10 reads as follows: “The use of compost shall be encouraged with the aim of
maintaining soil fertility, enhancing soil organic matter levels and fighting erosion. For that purpose
Member States shall adopt compost quality standards (TA)”.12 It is another way of saying that
‘since farmers are not specialists in their field, the central planners should see to the quality
standards they are missing.’
NUMBER OF SEXUAL PARTNERS
“How many sexual partners have you had?“ was a question the EU wanted to ask.
Eventually, the EP’s Committee on employment and social affairs in the European Parliament
did not approve the Commission’s proposal to collect information about women’s private lives
in the 2011 EU population census. The amending proposal was intending to include the
collection of rather personal information, including such matters as when a woman started an
intimate relationship with a partner, or if partners share/d a household. Many MEPs argued that
the EU’s line of questions was too intimate and biased, as the questions focused only on
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women. Eurostat argued that such information is often important for fertility statistics. Yet
collecting such information goes beyond the powers of the European and national institutions.
In effect, the final regulation on population and housing censuses did not include the
controversial amendments.13
GIVING CITIZENS A VOICE – ‘DEBATE EUROPE’
In 2008, the European Commission launched ‘Debate Europe’, an initiative under the so-called
Plan D: Dialogue, Democracy and Debate, launched in 2005 after the French and Dutch
rejection of the proposed EU constitution, and designed to increase citizens’ involvement in the
European Union‘s decision-making process or in other words, to promote active European
citizenship. 14
To enhance Plan D’s mission of promoting active European citizenship, ‘Debate Europe’ uses a
variety of communication strategies to amplify and integrate the citizen’s voice into
policymaking on any number of EU-related subjects.15
A very interesting example on how to work together on such strategy in practise is shown in a
recent speech by Margot Wallström within an exchange of views with Irish Minister for Foreign
Affairs, Micháel Martin, at the Constitutional Affairs Committee. Commissioner Wallström wants
“to pool the resources“ on a new massive campaign aiming to again try to persuade Irish voters
to vote in favour of the Treaty of Lisbon. The Irish voters, it seems, got it all wrong so they need
to vote again. The Commissioner is calling the following an effective, democratic
communication:
“...The referendum was very little related to the Lisbon Treaty. Taxation, Irish neutrality, abortion,
gay marriage and euthanasia dominated the campaign even if these issues - certainly important per
se - were not directly related to the Treaty.
The main reason for the NO vote and for the abstentions was a lack of information and
understanding of what the Treaty is about......We must not forget that today, 24 Member States have
completed political approval for the Treaty. By the end of the year, this figure is likely to rise to
26....We are solutions-oriented and willing to know on which issues Irish society requires
reassurance.
Any solution has to be respectful of the position already taken by the very large majority of the
Member States and acceptable to the Irish people. The Commission will work with the Government
of Ireland and the Presidency – as it has being doing in the past for other cases – to find solutions
that may be acceptable by all. The decision to create a Sub- Committee on Ireland’s future in the EU
is a step in the right direction. It will help shed some light on how Ireland envisages its future in the
EU and to point the way to solutions.
...A more emotional no campaign worked better than a more factual yes... Unless we pool our
resources and work together on this, we will see in the future more surveys showing that people do
not have enough information to make fair and objective judgements about the EU’s
decisions...Effective communication, I believe, plays a central part in the EU democracy...“.16
The question is whether only the no voters misunderstood the Treaty. Maybe the yes voters
misunderstood it too. So while citizens are to be given a voice, they should not disagree with
the European project, otherwise they may have misunderstood the issue. The motives of those
who voted ‘yes’ apparently did not need to be analysed, for only they understood what they
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were voting for. This means that the voice the EU wants to give citizens is conditional on
whether they agree with the Commission’s views.
The Commission is now focused on public relations ‘because the citizens do not realize how
much they benefit from the EU and if they were more informed about the benefits of the
internal market and the other policies of the EU and learned more about how the EU works,
they would inevitably started to love it’(!). It is certainly true that many citizens do not know
much about the EU. However, there is little evidence providing that citizens with more
information about the EU and its policies would increase popular support for the project.
Opinion polls reveal that public understanding about the EU has increased over the last decade
at the same time as public support has declined. Why is that? Maybe as people learn more
about the EU they also start to understand that economic integration benefits only some social
groups, that the beneficiaries of significant amounts from the EU budget are difficult to
identify, and that it is almost impossible for them to change the direction of EU policies.
PROMOTING EU CITIZENSHIP AND EU CONSCIOUSNESS
A new programme Europe for Citizens, in force since January 2007, has been planned for EU
citizens as an opportunity to interact in initiatives and projects with a European profile in order
to foster citizens’ participation, development of their European identity and sense of ownership
of the European project as well as to enhance tolerance and mutual understanding between
them. Through this programme, citizens ought to be involved in transnational exchanges and
cooperation activities which should contribute to “developing a sense of belonging to
common European ideals and encouraging the process of European integration”.17
The EU wants to be visible in areas where people can relate to it, so it promotes EU citizenship
in simple daily life, such as sports, the ‘milk to school‘ project, phone charges, or cultural events
such as concert festivals.
CONCLUSIONS
So was Parkinson right? Dealing with EU legislation and activism on a daily basis, we might
naturally identify ourselves with the protagonists – the heroes of the stories, who, in spite of the
frustration, persevere in their struggles. However, when thinking about our day-to-day lives, we
wonder what could be done in order not to become entirely mindless and complacent toward
acting out the minor roles in Kafka’s writings. How far can EU regulations still go?
The EU is a complex system of multilevel governance which does not function as a classical
parliamentary democracy. It comprises a system of bureaucratic experts and respective
committees‘ networks which makes it possible to enforce certain national, regional or social
interests. The procedures are often informal, dependent on contacts, yet tied with a thorough
bureaucratic baseline. As new powers have been passed to the EU during the past 20 years,
concerns about the ‘democratic deficit have intensified.18
Prof. Simon Hix believes that the main problem with democratic deficit, when producing
policies on the EU level involving a ‘notional average European citizen’, is a lack of a real
political debate and a political choice about these policies. That means that the EU is not really
a democratic polity. Democracy is, as Hix emphasizes, a competition for political office and over
the direction of the policy agenda. Yet in the EU no such competition exists. Furthermore, the
new treaty reforms are unlikely to bring the EU closer to the citizens, and may even undermine
the legitimacy of the EU further if a second attempt to ratify a new treaty is rejected. As a
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solution he suggests to change some of the informal practices and procedures of the EU
institutions. Hix thinks that the EU should become more politicized and gradually modify its
stiffness into a real political contest.19
Since the EU currently consists of 27 countries having different historical experiences and
political cultures and traditions, we might be careful with giving more powers to the European
Parliament and the Commission, or to support qualified majority voting as a standard
procedure in the Council. As Michael Oakeshott, British philosopher and a dominating figure of
conservative thought emphasized, the public administrative and personal life management
should better be guided by the principle of familiarity. Once we are to orientate ourselves in a
certain situation and use our skills accordingly, we need to be familiar with it.20
The values described by the British philosopher are lacking in most international organizations,
including such specific organisation like the European Union is. In fact, the real examples of
familiarities within the cope of Europe are born in the national or family background. Nobody
exactly knows what the ‘EU identity‘ is or what it should be...
The extension of qualified majority voting in the Council (which would follow the entry into
force of the Lisbon Treaty) would simplify the adoption of European regulation, effecting even
very private realms.
Given the tremendous legislative capacity of the EU - which often seeks a very detailed
regulation in all possible aspects- the life in the EU could in some time become hardly bearable
and literally Orwellian.
Only the future of currently unknown affairs will answer the question of how elastic the
evolution of EU bureaucracy can be.
NOTES:
1 C. Northcote Parkinson, Parkinson’s Law or The Pursuit of Progress (London, 1958).

http://www.berglas.org/Articles/parkinsons_law.pdf
2 Orwell, George: Nineteen Eighty-Four (London, 1949).
3 Proposal for a Council regulation amending Regulation (EC) No 21/2004 as regards the date
of introduction of electronic identification for ovine and caprine animals (COM(2007)0710)
4 European Parliament legislative resolution of 13 December 2007 on the proposal for a Council
regulation amending Regulation (EC) No 21/2004 as regards the date of introduction of
electronic identification for ovine and caprine animals (COM(2007)0710 – C6-0448/2007 –
2007/0244(CNS); report Graefe zu Baringdorf (A6-0501/2007)
5 (COM(2007)0319 – C6-0175/2007 – 2007/0117(COD)); Mayer report (A6-0474/2007)
6 (COM(2007)0588 – C6-0344/2007 – 2007/0205(COD)); Speroni report (A6-0019/2008)
7 (COM(2007)0462 – C6-0256/2007 – 2007/0166(COD)); Speroni report (A6-0018/2008)
8 (COM(2007)0451 – C6-0252/2007 – 2007/0162(COD)); Mayer report (A6-0017/2008))
9 (COM(2007)0192 – C6-0108/2007 – 2007/0066(COD)); Mayer report (A6-0022/2008)
10 (COM (2006) 0570 – C6-0332/2006 – 2006/0183 (COD)); Costa report (A6-0124/2007)
11 Commission regulation concerning the classification of certain goods in the Combined
Nomenclature (EC) No 1462/2006 of 2 October 2006
12Legislative resolution of 14 November 2007 on the proposal for a directive establishing a
framework for the protection of soil and amending Directive 2004/35/EC (COM(2006)0232 –
C6-0307/2006 – 2006/0086(COD)); Gutierrez-Cortinez report (A6-0410/2007)
13 Regulation on population and housing censuses (EC) No 763/2008
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14 COM (2005) 494 final

15Http://ec.europa.eu/commission_barroso/wallstrom/communicating/conference/dialogue/i
ndex_en.hm
16 Reference: SPEECH/08/499 Date: 06/10/2008
http://europa.eu/rapid/pressReleasesAction.do?reference=SPEECH/08/499&format=HTML&
aged=0&language=EN&guiLanguage=en
17 “Europe for Citizens” http://ec.europa.eu/citizenship/index_en.htm
18 Andreas Follesdal (University of Oslo) and Simon Hix (London School of Economics): Why
there is a democratic deficit in the EU: A response to Majone and Moravcsik In: Journal of
Common Market Studies, Vol.44, Issue 3, pp.533-62.
19 For instance, the Council should fully open up and thus become more transparent and the
European Parliament should have more powers granted (such as the ability to amend all
areas of the budget); hence more would be at stake in the European elections. In Simon Hix:
‘What’s Wrong with the European Union and How to Fix it‘, Polity (29 January 2008).
20 Paul Franco: The Political Philosophy of Michael Oakeshott (New Heaven, 1990). dec3:Layout
1 25/03/2009 15:44 Page 35
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186
Chapter 4
The Charter of Fundamental Rights
Patrick Louis, octobre 2007 – Bruxelles:
Chers collègues, "un nouvel homme des droits de l'homme est né qui n'a plus
que le nom en commun avec son ancêtre de 1789", c'est en ces termes dépités
que le philosophe Marcel Gauchet résume la Charte des droits fondamentaux
qui vient d'être proclamée ici-même et à laquelle l'article 6 du traité de
Lisbonne donne force obligatoire.
À bien des égards, on le sait, les multiples droits qu'elle consacre viennent
contredire les droits et libertés protégés par nos constitutions nationales. Or, le
droit européen est supérieur au droit national, même constitutionnel. Dès lors,
que restera-t-il du principe de laïcité face à l'article 10 de la Charte, qui affirme
que la liberté de religion implique la liberté de manifester sa religion en privé
et en public? Que restera-t-il du principe d'égalité face aux articles 20 et
suivants de la Charte, qui dressent un catalogue de droits victimaires fondés
sur l'appartenance à un groupe? Que restera-t-il du principe de liberté, qui est
un droit à l'autodétermination, face aux articles 6 à 19, qui le confondent avec
des droits de créance, simple pouvoir d'exiger d'autrui une prestation?
On voudrait accélérer la transformation du citoyen acteu r de son devenir en

vulgaire consommateur, passif prestataire de services, que l'on ne s'y prendrait
pas autrement! À ceux de mes collègues qui seraient attachés aux droits et aux
libertés séculaires de leur nation, protégés par leur Constitution, je ne dis qu'un
mot: réveillez-vous!
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LIMITING FUNDAMENTAL RIGHTS IN THE INTERESTS

OF THE MARKET1
By Frank Keoghan (March 2008)
SHOULD THE PROPOSED LISBON TREATY OR RENAMED EU CONSTITUTIONAL TREATY COME

INTO FORCE, WE WOULD RELY ON THE EUROPEAN COURT OF JUSTICE TO RULE IN FAVOUR OF
CITIZENS OR WORKERS IF A DISPUTE AROSE BETWEEN THEM AND THEIR GOVERNMENTS
REGARDING THE INTERPRETATION OF ANY OF THE MEASURES PROPOSED IN THE CHARTER.
In this instance the Court would become the forum of last resort, and its findings would have
force throughout the European Union. However, the European Court of Justice has already
made it clear in at least two cases that ‘the fundamental rights recognized by the Court are not
absolute, but must be considered in relation to their social function. Consequently, restrictions
may be imposed on the exercise of those rights, in particular in the context of a common
organization of the market, provided that those restrictions in fact correspond to objectives of
general interest pursued by the Community...2’; and in a later case the Court has stated that ‘it is
well established in the case law of the Court that restrictions may be imposed on the exercise of
fundamental rights, in particular in the context of a common organisation of the market...3’
It is clear from these precedents that the ‘fundamental rights’ that would be conferred on us by
the Lisbon Treaty4 would not be fundamental at all, but could be varied or restricted in the
interests of a ‘common organization of the market’ or to advance ‘objectives of general interest
pursued by the Community’.
In a democratic society, restrictions on the exercise of human rights must be prescribed by law
and must be necessary to safeguard the common good. It follows from the reasoning of the
European Court of Justice that, as rights are subject to limitations, restrictions on the EU
fundamental rights are also legitimate, and that the European Union would be acting
effectively as a State in restricting those rights5.
But in this instance the limitations on human rights are justified by reference to the objectives
of the Community and in particular the organisation of the common market. National
Constitutions and the European Court of Human Rights allow those restrictions on
fundamental rights that are considered to be necessary in a democratic society. But in a
democratic society politics is connected with the contestability of what counts as the common
good. On the EU level, however, the common good is identified primarily with the good of the
market and a fixed idea of utility. The market becomes in effect the substitute for democracy,
and human rights become marketised. In General Provisions Governing the Interpretation of
the Charter6 (i.e. the Charter of Fundamental Rights), the ‘Explanation’ associated with Article
52 states explicitly that limitations may be placed on the rights and freedoms recognised by the
Charter.7 Echoing the judgement of the European Court of Justice, it states that these
‘limitations may be made only if they are necessary and genuinely meet objectives of general
interest recognised by the Union.’ The important question in these circumstances is: what are
‘objectives of general interest’ - and could they possibly be commercial interests? Could
citizens’ rights and workers’ rights really be limited in the interest of market forces?
The ‘general interests’ recognised by the Union are elaborated in Articles 2 and 3 of the Treaty
on European Union (TEU) and assume a further legal importance in the Charter8, which makes it
188
clear that ‘the Explanations drawn up as a way of providing guidance in the interpretation of
the Charter of Fundamental Rights shall be given due regard by the Courts of the Union and of
the Member States.’9 This constitutionally binding condition would require courts to take the
Explanations into account in formulating judgments.10
These Explanations are cleverly presented in a non-binding ‘Notice from European Union
institutions and bodies’, but are then made legally binding through Article 52 (7) of the Charter,
quoted above11.
‘General interests’ are presented in the Explanations12 as the ‘objectives’ set out in Article 2 TEU
dealing with ‘The Union’s Values’ and ‘other interests’ protected by specific provisions of the
Treaty, as for example the new Article 4 TEU, which obliges the Union to ‘respect... Member
States’... national identities, inherent in their fundamental structures, political and
constitutional’ and ‘their essential state functions, including... maintaining law and order and
safeguarding national security’. The interpretation of ‘identity’ in this Article is not benign, nor
does it aim to foster a sense of cultural or national identity. Instead it looks towards essential
state functions, and primary among those under this Treaty would be the smooth functioning
of the market. Indeed it stipulates that: ‘The Union shall establish an internal market … based
on balanced economic growth and price stability.13’
Elsewhere the Treaty records the accession of the Union to the European Convention on the
Protection of Human Rights and Fundamental Freedoms14, but Protocol 5, Article 3, qualifies
this accession by stating that ‘the accession of the Union shall not affect the competences of
the Union or the powers of its institutions.’ This clearly indicates that ECJ rulings will take
precedence over those of the European Court of Human Rights, should their findings possibly
diminish the powers or competences of the Union.
It is apparent that the requirement to establish ‘balanced economic growth and price stability’
imposes a constitutional imperative on the method of organising the market; and should those
who seek to change this economic model begin to gain such significant support as to pose a
threat to the model, the ‘general interests’ of the Union could be protected and fundamental
rights varied by Union or national legislation. This in turn would be likely to be supported by
the European Court of Justice. Those who would oppose the privatisation of public services in
the Union might suffer similar sanction as they might, for instance, be found to impede the
realisation of ‘price stability’. It would also be unlawful to campaign against any of the
measures in the Charter15.
Any challenges to the interpretation of these provisions made to the European Court of Justice
would be so costly and time-consuming that most rulings would be enforced by default.
Nonetheless, it is notable that trade unions throughout the European Union have welcomed
Article 28 of the Charter, which appears to grant the right to strike, and this has been used by
many of the affiliates of the European Trades Union Congress as a rationale for supporting the
Treaty. However, the operation of repugnant legislation at the national level would not be
influenced by the Charter. Although the Charter Article states that workers may ‘take collective
action to defend their interests, including strike action,’ the Explanation in Declaration 12
qualifies this by stating that ‘the limits for the exercise of collective action, including strike
action, come under national laws and practices, including the question of whether it may be
carried out in parallel in several Member States.’
But there is a sting in the tail: ‘subsidiarity’! The Charter directs that ‘the provisions of this
Charter are addressed to the institutions, bodies and agencies of the Union with due regard for
189
the principle of subsidiarity and to the member states only when they are implementing Union
law.’16 ‘Due regard for the principle of subsidiarity’ is spelt out in the case law of the European
Court of Justice in the following terms: ‘It should be remembered that the requirements
flowing from the protection of fundamental rights in the Community legal order are also
binding on Member States when they implement Community rules...17’ This means that
draconian labour legislation already in force in a Member State can be preserved under the
subsidiarity clause, while on the other hand the Union can limit labour rights in order to satisfy
the ‘objectives of general interest’ of the Union – as recently demonstrated by the Laval and
Viking cases. This is a win-win situation for business interests and the big corporations.
The Charter guarantees ‘freedom to conduct a business in accordance with Community law.18’
This is qualified in the Union’s objective of ‘an internal market … based on balanced economic
growth and price stability’. In effect, this imposes a treaty obligation to establish a neoliberal
economic model, something that is normally the subject of contestation between competing
political parties and ideologies.
This neo-liberal stricture is further strengthened by the Union’s commitment to ‘the

progressive abolition of restrictions on international trade and on foreign direct investment,
and the lowering of customs and other barriers19’, and by the legally binding Protocol 6, which
states that, ‘considering that the internal market as set out in Article 2 of the TEU includes a
system ensuring that competition is not distorted... the Union shall, if necessary, take action
under the provisions of the Treaties, including under Article 308 of the Treaty on the
Functioning of the European Union.20’ And, just to ensure undistorted competition, the Council
may use the notorious ‘Flexibility Clause’ to extend the scope of the Treaties in practice in all
areas, with the exception of common foreign and security policy, as long as the European
Parliament approves21.
When the commitment to ‘price stability’ is read in conjunction with the right to conduct a
business in accordance with Community law, great doubt is cast not only on the future of State
enterprise but on sections of the civil service. If, for instance, a payroll contractor decided that
they would like to compete with public agencies in the provision of tax returns and the
Government refused to co-operate, an appeal to the European Court of Justice - especially if
the contractor could be shown to provide the service at a lower cost - could well be ultimately
successful.
ECJ Case 4/73 points to limits to this right, in stating that it should, ‘if necessary, be subject to
certain limits justified by the overall objectives pursued by the community’. This seems fair
enough, but when it is read in conjunction with the Union’s objectives outlined above, it leads
to the inevitable conclusion that our State companies and public services would be at
increased risk.
Finally, it is worth noting that, in response to a query on 6 October 2006, the President of the
Commission Jose Manuel Barroso declared that the Charter had already been used 117 times to
adopt legislation in the EU, even though it currently has no legal standing.22
NOTES:
1 The main references used in this article are from the Official Journal of the European Union
C303, and C306, Vol. 50, December 2007.
2 Hubert Wachauf v. Bundesamt für Ernährung und Forstwirtschaft, C-5/88, summary, para. 2,
and grounds, para. 18.
3 Kjell Karlsson and Others, C292/97, grounds, para. 45.
190
4 The Lisbon Treaty would bring an EU Constitution into being by amending the Treaty on
European Union (TEU) and the Treaty Establishing the European Community (TEC),
henceforth to be known as the Treaty on the Functioning of the Union (TFU). These two
amended Treaties, with their declarations and protocols, would comprise the new EU
Constitution
5 The statement that the Charter will be legally binding will now be inserted in Article 6 (1) of
the Treaty on European Union, replacing Article I-9 of the Constitution. This avoids
reproducing the text of Part II of the original Constitutional Treaty in the text of the revised
Treaties/Constitution while producing the same legal effects.
6 Now to be interpreted in accordance with the general provisions in Title VII of the Charter,
governing its interpretation and application, and with due regard to the Explanations
referred to in the Charter that set out the sources of those provisions. This is a change of title
only.
7 ‘... it is well established in the case-law of the Court that restrictions may be imposed on the
exercise of fundamental rights, in particular in the context of a common organisation of the
market …’
8 At Article 52 (7).
9 Declaration Concerning the Explanations Relating to the Charter of Fundamental Rights. The
declaration covers thirty-five pages.
10 As it is noted in the preamble to the Explanations: ‘Although they do not as such have the
status of law, they are a valuable tool of interpretation intended to clarify the provisions of
the Charter’ and have been freely used by the ECJ.
11 Article 6 TEU, grants the charter itself ‘the same legal value as the Treaties’.
12 2007/C303/02
13 Article 3(3) TEU. This can be compared with ‘The Member States and the Union shall act in
accordance with the principle of an open market economy with free competition,’ Chapter
II, Article III 69 (1)
14 TEU, Article 6.
15 Charter, Article 54.
16 Article 51 of the Charter
17 Case C-292/97, grounds, para. 37.
18 Charter, Article 16.
19 TFEU, Article 118.
20 This was Article 1:3 (2) of the Constitution, on the Union’s objectives, but was changed at the
insistence of M. Sarkozy. It stated: ‘The Union shall offer its citizens. . . a single market where
competition is free and undistorted.’ Its removal was lauded as a win for social democracy,
but this important statement is now included in a legally binding protocol annexed to the
Treaty, where it has precisely the same legal effect while allowing proponents to maintain
that it is not in the Treaty.
21 Article 308 states: ‘If action by the Union should prove necessary, within the framework of
the policies defined in the Treaties, to attain one of the objectives set out in the Treaties, and
the Treaties have not provided the necessary powers, the Council, acting unanimously on a
proposal from the Commission and after obtaining the consent of the European Parliament,
shall adopt the appropriate measures.’ Furthermore, TFU, Article 249B (TEC), empowers the
Council of Ministers by majority vote to give the Commission the power to make laws - so-
called delegated regulations - supplementing or amending so-called ‘non-essential
elements’ of European laws or framework laws. The catch is that it is the Commission which
decides what is ‘essential’.
22 http://www.futureofeurope.parlament.gv.at/ sides/getAllAnswers.do?reference=E-
20063544&language=ET
191
WHAT WILL REMAIN OF THE FRENCH 1789 HUMAN AND CITIZENS’

RIGHTS?
The Lisbon Treaty: fundamental rights as against human rights
By Anne-Marie Le Pourhiet (March 2008)
With the absolute primacy of European law over national and constitutional law (“Declaration
No 17 concerning primacy” annexed to the Lisbon Treaty), the law enshrined in what is known
as the ‘Fundamental Rights’ Charter will override all constitutional rights and freedoms. History
will record that at the end of the 20th century, the foolhardy leaders of the country which
invented human and citizens’ rights and spread them throughout the world accepted, either
deliberately or by choosing to turn a blind eye (which comes to the same thing) that with a
stroke of a pen, the 1789 Declaration, the 1946 Preamble (social rights), and the Principles
recognised by the laws of the (Third) Republic, all of which were placed at the forefront of our
political and legal principles by the Preamble to the 1958 Constitution, would be swept away.
Anne-Marie Le Pourhiet, Professor of public law at the University of Rennes I, has unpicked this
charter of our new human rights.
A sentence by Marcel Gauchet could sum up the European Charter of Fundamental Rights: ‘A
new descendant of human rights is born who has nothing but his name in common with his
1789 ancestor’ (‘When human rights become policy’ Le Débat, No 110).
The simple fact that the term ‘human rights’ has been replaced by ‘fundamental rights’ in the
text of the Charter clearly shows that the issue has become germanised. The Lisbon Treaty has,
however, not totally abandoned the expression ‘human rights’, because it is there in (new)
Article 2 TEU among the Union’s ‘values’: ‘The Union is founded on the values of respect for
human dignity, freedom, democracy, equality, the rule of law and respect for human rights,
including the rights of persons belonging to minorities’ (note the deplorable way this sentence
is expressed).
The reference to the rights of minorities was not in the initial text of the ‘Giscard Convention’
and was added later, no doubt under pressure from the Hungarians. Its appearance among the
values in Article 2 TEU rather than among the fundamental rights in the Charter may seem
surprising but is a result of the fact that the ‘Herzog Convention’ also refrained from
mentioning them in the Charter (except for nondiscrimination based on ‘membership of a
national minority’; see below) because of opposition from the Mediterranean countries and
particularly France and Spain, which did not want to see imported into their territory the
problems of Central and Eastern European countries that the latter wanted included in the text.
As there was no desire to change the text of the Charter, minority rights were therefore
included in the values of the new Article 2 TEU. This poses two major problems.
Firstly, it is fairly perverse to dare to rank the rights of minorities among human rights when we
know that the philosophy of human rights is entirely built on the premise of an individual who
is unencumbered by any adherence to, and refuses to recognise, any body, group or
corporation standing between the citizen and the Nation. As Alain Finkielkraut notes, ‘the
concept of human rights was constituted against the power of the tribes’1 and now we are
daring to include tribal rights among human rights! Another sham.
192
Then, while the fundamental rights referred to the Charter must be interpreted ‘in harmony
with the constitutional traditions common to the Member States’ (Art. 52), this is not the case
for the values listed at Article 2 TEU.
Contrary to what the Constitutional Council declared in its decision of 19 November 2004, the
rights of minorities will therefore not have to respect national constitutional principles.
Moreover, prohibiting discrimination based on ‘membership of a national minority’ (Art. 21)
risks descending rapidly into claiming specific rights in an ideological climate where equality
under the law has come to be considered an expression of a dominant position.
Dignity has become the essential element of post-modern law, including criminal law, although
this term, which has no objective legal meaning and is therefore open to every kind of personal
interpretation, risks becoming a real catch-all, which will greatly facilitate government by
judges.
The equality established a priori is equality under the law (Article 20). But strangely it goes
together with an Article 21 devoted to nondiscrimination (an inelegant term which is not
French) which seems redundant, because equality under the law presupposes a lack of
discrimination under the law. But instead of being limited to nondiscrimination in general, it
has been thought necessary to satisfy every community by going through a litany of many and
various adherences which have little to do with each other and look a bit like Noah’s Ark.
However to be certain that no lobby group has been forgotten, Article 21 takes care to state
‘such as’, so that a few more wagons could be hitched on when the associations of bald people
or fat people make themselves known. The post-modern tendency to ban any discrimination,
however, carries within it the seed of abolition of hierarchies, discernment and value judgment
and risks leading us straight to obligatory idiocy. A fine prospect of totalitarianism.
Despite and contrary to this principle of equality under the law, Article 23, which deems it
necessary to add equality between women and men although non-discrimination on grounds
of gender has already been established, contradicts this by stating that ‘The principle of
equality shall not prevent the maintenance or adoption of measures providing for specific
advantages in favour of the underrepresented sex’ (sic). This means that we start by banning
discrimination but nevertheless accept positive discrimination in favour of women, which is
clearly no less than negative discrimination against men. You might as well say that we are
giving up the principle of equality under the law as soon as we have established it and that
other categories of the ‘oppressed’ will very soon obtain the same privileges as women.
In the register of bans on discernment, Article 9 on marriage and the family already heralds
some legal U-turns. While Article 12 of the European Convention of Human Rights, like all the
international texts dealing with this question, states ‘men and women of marriageable age
have the right to marry and to found a family, according to the national laws governing the
exercise of this right’, the Charter prefers the formula: ‘The right to marry and the right to found
a family shall be guaranteed in accordance with the national laws governing the exercise of
these rights’. There is no certainty that the cultural and religious diversity of Article 22, or
subsidiarity, will stand firm for very long against the homosexual lobby which we guess is no
stranger to this change of wording.
The cultural, religious and linguistic diversity enshrined in Article 22 seems a priori to concern
diversity between the Member States, that is to prevent the Union from imposing uniformity. It
is, however, not certain that this provision will be read and interpreted in this way by minority
groups advocating diversity within states. It seems that some have seen it as a first step
towards recognition of ‘national minorities’ rather than ‘national diversities’2. Taking this
193
together with the now explicit recognition of the rights of people belonging to minorities in
Article 2 TEU, the French Republic can expect new legal upheavals.
At all events the omnipresent moralistic dogma in this Lisbon Treaty can only lead to
‘standardisation’ of nations and peoples and the denial of their specific characteristics. As this
standardisation tends to be influenced by Anglo-Saxon and German thinking, countries with a
Latin culture will face a greater threat. The Buttiglione affair and the recent UN report criticising
Italian women for being too sexual and maternal presage a bleak cultural future. The
emasculating and standardising effect of the hackneyed thinking that runs throughout the
Constitution demonstrates a ‘soft’ totalitarianism that is already well entrenched. The French
‘no’ to the European constitution has expressed, apart from a legitimate rejection of illogicality
and servitude, quite simply a leap forward for civilisation.
NOTES:
1 ‘Un voile jeté sur la République laïque ‘, Le Monde, 25 October 1989.

2 Guy Braibant, La Charte européenne des droits fondamentaux de l’Union européenne, éd. du
Seuil, 2001.
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FUNDAMENTAL RIGHTS AND FREEDOMS:

THE DAWN OF AN UNPRECEDENTED LEGAL REVOLUTION
By Christophe Beaudouin (March 2008)
Article 6 of the revised Treaty on European Union gives the Charter the same legal status as the
Treaties. European law, which now concerns virtually the entire field of law, takes precedence
over the law of the Member States, including constitutional law (“Declaration No 17 concerning
primacy” enshrining the case law of the Court of Justice in Luxembourg). It is that same Court
which will now determine human rights and fundamental freedoms, instead of the national
courts. However, the philosophy of the Charter is, from many points of view, different from, and
sometimes in contradiction with, constitutional principles that are recognised and protected in
our Member States. When this Charter enters into force, because of its almost unlimited scope,
it will be the greatest transfer of powers from member States to the Union ever seen in the
history of European integration.
TOWARDS THE DOWNFALL OF DEMOCRACY?
According to the traditional concept inherited from Jean-Jacques Rousseau, democracy is the
political system in which sovereignty belongs to the people. President Abraham Lincoln
summed it up in an excellent turn of phrase which is today included in a number of
constitutions: ‘government of the people, by the people, for the people’. Therefore, in order for
democracy to exist, it is not sufficient to make technical provision for the ‘right to vote and to
stand as a candidate’ (Articles 39 and 40). First we need a ‘people’, i.e. a community of men and
women who feel that they are heirs to the same history and who adhere to the same values and
same political project to form a nation. But the Charter itself admits in its Preamble that there is
no European ‘people’, but ‘peoples of Europe’. So why then proclaim that the European Union
‘is based on the principles of democracy’? Can there be a supranational democracy? Can there
be a democracy without a people?
A depoliticised super-state
In actual fact, the EU ideal is not ‘government’ but ‘governance’ and the ‘rule of law’, in the
sense of a depoliticised State, removed from the vagaries of popular will and successive
majorities. Rather than being a sovereignty of peoples it considers itself ‘democratic’ because it
is based not on peoples but on that much-vaunted transnational ‘civil society’ – i.e. various
middlemen and pressure groups proclaiming themselves to be ‘representative’ – which was
officially invited to take part in the drafting of this Charter.
The shift began in Strasbourg, with a judgment of 31 July 2001, in which the European Court of
Human Rights stated that ‘Democracy requires that the people should be given a role’ (ECHR 31
July 2001, Refah Partisi, RD publ. 2002, p. 1493). So the people now have only a mere ‘role’
which they are magnanimously ‘given’? Of democracy as a ‘government of the people, by the
people, for the people’ there is nothing left but a ritual reference to a reality deemed to be
outmoded. That is probably why the democratic ‘Nos’ of the French and Dutch in 2005 are now
being circumvented, on the quiet, by a Treaty of Lisbon which is being presented as absolutely
marvellous for citizens, but which our leaders are taking great care not to put forward for public
approval via a referendum.
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TOWARDS NEW DEFINITIONS OF OUR FUNDAMENTAL RIGHTS
A disregard for freedom

The Charter of Fundamental Rights devotes an entire chapter to Freedom (Articles 6 to 19).
From a philosophical point of view, up to now freedom has been regarded as a power of self-
determination.
The Charter, on the contrary, confuses it with “claiming rights”, i.e. simple powers to demand a
service from others, such as the right to the ‘protection of personal data’ (Art. 8) or the ‘Right to
education’ (Art. 14). We are seeing the citizen as the driver of his or her destiny being
transformed into a passive consumer and the public powers as a service provider.
This Charter thus shows a certain disregard for freedom, which, according to legal tradition, has
always been synonymous with ‘human dignity’. Now, Article 1 makes it into a higher, rival
principle. In place of a liberating dignity the Charter is establishing a liberticidal dignity, making
it, in its Preamble, subject to some rather odd ‘duties … to the human community’. According
to this redefined principle of dignity, there is apparently an abstract ‘human nature’ which has
to be defined by the ruling classes and judges according to their own subjective assessments,
to restrict the exercise of each freedom.
Public space and religion

The principle of the separation of the State from religion, which in France we call laïcite
(secularism), is a fundamental, constitutional principle. French judges regularly enforce it, for
example, by prohibiting civil service officials from manifesting their religious beliefs in the
course of their duties (CE, opinion, 3 May 2000, Miss Marteaux, AJDA 2000, p. 602). However,
Article 10 of the Charter appears to affirm the contrary, by proclaiming that freedom of religion
‘includes … freedom ... in public or in private, to manifest religion’. This is in fact taken from
Article 9 of the 1950 European Convention on Human Rights, which can -under certain
circumstances- be incompatible with the principle of secularism, following a judgment that was
delivered by the Court of Human Rights in Strasbourg (ECHR, 15 February 2001, Mrs Dahlab v
Switzerland, AJDA 2001, p. 480). In this case, the ECHR appears to accept, by converse
implication, that public officials may wear a veil, arising from their religious beliefs, when
performing their duties.
A pandora’s box of claims by “minorities”

The principle of equality, meanwhile, is the subject of Articles 20 and 21, which proclaim that
‘Everyone is equal before the law’ and that any discrimination based, inter alia on ‘ethnic origin’
or ‘membership of a national minority’, shall be prohibited. However, this principle of non-
discrimination does not exclude ‘positive’ discrimination, a principle that may be claimed by
groups which consider themselves to be at a disadvantage because of a specific characteristic.
The following Articles – 22 and 23 – give them the right to ‘specific advantages’, pointing out
that ‘the Union shall respect cultural, religious and linguistic diversity’ (Art. 22) as far as national
minorities are concerned. This apparently laudable principle of ‘nondiscrimination’ is worded
in such a way as to brush aside the principle of equality before the law without distinction, and
now concerns not only gender but also skin colour, religion, opinions...genetic features,
disability, age and sexual orientation.
One can imagine what a Pandora’s Box this is opening: ‘communities’ of all kinds will now be
able to go to court to call into question national structures and laws under the pretext of an
attack on this or that specific feature. What is more, the Charter no longer protects ‘national or
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social origin’, as the European Convention on Human Rights did, but rather ‘ethnic or social
origin’. Communautairisms rather than political Nation, the origin of individuals rather than the
wish of those individuals to live together: that appears to be the ideological matrix of this
Charter. It is a budding challenge to the traditional concept of the nation state, the defining
feature of which is that, on the contrary, it unites citizens who are equal before the law, with no
distinction of race, origin, gender or religion, around that which they have in common, viz., a
political project and a desire to live together, over and beyond any kind of specific
characteristic, which is a matter for private life.
In spite of the activism of the lobbies which act in their name, let us remember that these so-
called communities do not really want different treatment, but on the contrary, want a right to
equality in indifference. Let us take the example of the famous ‘Proposition 227’, through which
the LatinAmerican immigrants of California had to fight to obtain, by referendum, the abolition
of the bilingual education imposed on their children. In their view, such education delayed
their children’s integration into US society by depriving them of equal opportunities… What an
ironic backlash for the champions of communautairism!
CONCLUSION
Democracy and republican values are therefore at the dawn of a silent and unprecedented
legal revolution. But does the Union really have the means to fulfil its ambitions? Nineteen out
of 54 articles are taken almost word for word from the 1950 European Convention on Human
Rights. This Convention was drawn up not by the European Union but by the Council of Europe,
which has some 40 Member States and its own court, the European Court of Human Rights in
Strasbourg (ECHR). In order to try to avert the risks of differences in interpretation between the
courts of Luxembourg and Strasbourg, each court has been asked to bring its case-law into line
with that of the other, so that the Member States of the two organisations are not split between
the Charter and the Convention in a case of jurisprudential schizophrenia. The Union’s
accession to the Convention is therefore the solution that has been found to remedy this risk.
But this accession will inevitably place the CJEC under the authority of the ECHR, since the
Luxembourg Court’s interpretation of the Charter will thus be subject, as far as these 19
‘common’ articles are concerned, to the Strasbourg Court’s interpretation of theConvention.
Does that mean that with regard to fundamental rightsthe EU will be dependent on another
organisation? Is it not capable of inventing its own values, on which its political legitimacy
should be founded? Does the Union not haveany plausible justification that is not purely
economic?
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THE IMPACT OF THE CHARTER OF FUNDAMENTAL RIGHTS
An interview with Professor Peter M. Huber (March 2008)
Professor Huber, the Lisbon Treaty is scheduled to enter into force in 2009. Do you think this
is cause for celebration?
Yes, in my opinion. The treaty of Lisbon brings primary law, the EU constitution, closer to reality.
It puts an end to the never-ending process of centralisation and entails new procedures which
seem more democratic than the rules presently applied.
In your opinion, should the ratification process be accompanied by as many referenda as

possible? If so, why? If not, why not?
Yes. Although referenda make the ratification process more difficult and entail the risk of
failure, experience shows that they guarantee a better acceptance of European institutions and
European integration itself. Even if the ‘output’ of European legislation and administration may
contribute to legitimating the EU in the long run, it is rather hazardous to rely on it. European
citizens want to be taken seriously, they want to take responsibility and do not want to be
treated as underage children whom politicians take care of.
Would you advise opponents of the Lisbon Treaty to lodge a complaint for breach of the
Basic Law [German Constitution]? If so, why? If not, why not?
No. I think that the limits the Basic Law sets up for European integration are not violated. The
precedence of European law over national constitutional law, one key issue, is not fixed as the
Constitutional treaty originally wanted. The so called ‘passerelle’-clause is a problem, because it
diminishes the role of Member States as ‘masters of the treaty’; but it doesn’t end this role,
especially as every Member State will also be free to leave the EU.
Under Article 6 of the new EU Treaty, the Charter of Fundamental Rights is to have the same
legal value as the Treaties. What does that mean in real terms for the Union, the Member
States and citizens of the EU?
I’m not sure whether Art. 6 of the new Treaty has an immediate effect on EU-law. The European
Court of Justice has recognized Fundamental Rights since 1969, and the present Art. 6(2) EU
says that they are part of the EU´s constitutional order as far as they are guaranteed in the
common heritage of the Member States and the European Convention on Human Rights.
Nevertheless, it has not been settled, in the ECJ´s case law so far, whether those Fundamental
rights provide individual rights or only general principles. The Charter will have some effect in
this direction and it might also deepen the judicial control of EU legislation. Both issues are of
some importance for European citizens.
What has changed as compared with the Constitution which was brought down by the
French and Dutch referenda?
This question is difficult to answer. The constitutional treaty has been maintained in its
substance, but all the declamatory provisions have been omitted. As the referenda were not
required by constitutional provisions either in France or in the Netherlands, it is up to those
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governments and to the political debate in those Member States to decide whether the people
can be left outside this time.
One of the arguments used by those who favour the ‘juridification’ of the Charter is that a
‘plethora’ of rights can never do any harm. Do you nevertheless have reservations,
particularly as to possible competence and demarcation issues concerning the scope of the
Charter, its relationship to the individual Member States’ constitutions and the European
Convention on Human Rights, and the case law relevant to the interpretation of the Charter?
Fundamental rights foster ‘unitarisation’ if judged by a constitutional court. We know this fact
from the American as well as from German constitutional history, and there are quite a few
judgements of the ECJ which show that similar things will happen at EU level. As we do have
quite a solid regime of fundamental rights guaranteed by the European Court of Human Rights
(ECHR) and the European Convention on Human Rights, and as most of the EU Member States
have sophisticated guarantees also at national and regional level, my perspective is a little bit
ambivalent. There are especially doubts as far as the binding effect regarding the Member
States is concerned, a problem which Art. 51(1) deals with.
Is it not possible that this will lead to a lack of legal certainty and hence to a confusion of law
and/or powers which will tend to detract from the notion of improving protection of
fundamental rights?
Yes, definitely.
How, precisely, will relations between the Charter and the European Convention on Human
Rights, and between the judicial powers of the ECJ and those of the Court of Human Rights
regarding case law, develop? Do you see any difficulties in determining the legal status, and
in predicting the legal consequences, of the EU’s accession to the European Human Rights
Convention?
Until now, the ECJ sticks closely to the case law of the ECHR. It is doubtful, however, whether
this line can be maintained if the Court has to find its own approach concerning the Charter.
The first sentence of Article 51(1) of the Charter seeks to clarify that the Charter applies only
to ‘the institutions and bodies of the Union with due regard for the principle of subsidiarity
and to the Member States only when they are implementing Union law’.
-Should the Charter thus be binding only on those who make and enforce European law?
-Could the monitoring of compliance with the Charter thus be regarded as an exclusively
Community competence?
-If so, how can this be reconciled with the non-applicability of the subsidiarity principle in
fields where the Community has sole competence?
Art. 51(1) codifies the case law which the ECJ has developed since the ERT case in 1991. But, at
least in the German version, it also entails an amendment to this case law which can be traced
back to the influence of the Bundesrat´s representative in the Convention. Until then the ECJ
ruled that Member States were also bound by European fundamental rights ‘within the scope
of Union law’. Art. 51(1) now states that the Charter applies: ‘only when they are implementing
Union law’. It thus reduces the scope of application. This is subsidiarity put into practice.
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As far as the ultra vires problem is concerned: not only the German constitutional court, but the
majority of Member States, claim that they have the last say over whether the EU stays within
its competences or not. According to the dogmatic construction of the Basic Law, it is the
German Constitutional Court which watches over the lawful application of the treaty.
How can the restriction prescribed by the first sentence of Article 51(1) of the Charter be
guaranteed if:
-the Member States not only have to implement and comply with Union law but also have
to apply domestic law ‘in accordance with Union law’ (i.e. they have to disregard
domestic law which is not in compliance with Union law),
- the Charter contains fundamental rights applicable in areas in which the Union has no
competence, or in which its competences are limited (e.g. the right to life and the ban on
the death penalty, given that the Union has no competence in the field of criminal law),
-some areas fall within the area of responsibility both of the Union and of the Member
States, or alternate between the two?
There are plenty of possibilities to misuse the competences. It is therefore up to the

cooperation between the ECJ and national courts to provide that the Charter will not be
applied in a manner that fosters centralisation.
Will national courts, administrations and legislatures not find it impossible in the long term
to ‘resist the temptation’ to refer to the Charter?
This will be inevitable in all those cases where European law has to be applied by national
courts and administrations or where national parliaments have to implement EU-directives.
Will the requirement for a uniform and universally applicable Union law which has absolute
precedence over domestic legislation, and for which - in respect of its interpretation and the
determination of its scope - the ECJ is ultimately responsible, not also lead in the medium to
long term to greater uniformity of the fundamental rights enshrined in the Charter at all
levels, including national and local?
There is no such requirement. The legal order of the EU is an order of mutual influence,
coherence and cooperation and an order in which the Member States remain the ‘masters of
the treaty’. National constitutions will therefore keep their present significance as basis for the
EU-law, as sources of legal inspiration and as boundaries.
In your opinion, what will the EU be like when the Lisbon Treaty is in place?
The development of the EU under the Treaty of Lisbon will continue organically as before. I
think that there is much more space for democratic participation and subsidiarity. Just think of
the stronger role national parliaments will play in the new legal order, or of the initiative
European citizens will be entitled to. Via the ‘double majority’ the Treaty of Lisbon will realise
the principle of equality better than the present treaty does and it entails the chance that the
institutional reforms will slow down. This will give citizens the opportunity to get accustomed
to the EU and its institutions and to accept them on the basis of good experiences they
hopefully will have made in the time to come.
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Chapter 5
The Future of the Euro
Nigel Farage, January 2009 – Strasbourg:
Mr President, do enjoy the 10th birthday of the euro because I very much
doubt you will be celebrating the 20th. What we have seen this morning has
been reminiscent of the old Soviet times. Do you remember when the five-year
plans were announced to be successes often before they were even launched,
with much talk of record harvests and wonderful production figures for
tractors? Much like those days, we have been treated this morning to a
succession of unelected, ageing bureaucrats telling us what a great success
the whole thing has been. It is all delusional stuff.
The idea that the ECB has done a good job is extraordinary. It was last July
when the European Central Bank put interest rates up, just at the very moment
that the markets were going into meltdown and rates were being slashed
across the rest of the world. Of course none of this surprises me because what
this euro is all about is a political class imposing its will upon the peoples of
Europe. Remember that only two countries – Denmark and Sweden – had a
referendum on the euro and both of them said ‘no’, that little word that you try
and avoid if you possibly can.
The euro zone has never been tested but it is about to be. Spain is in economic
trouble. Italy, as German economists at the time said, should never have
joined the euro, but the situation in Greece is, I think, where we should focus
our attention. Thousands of young people out on the streets demonstrating,
demanding their government does something, demanding that their
government cuts rates, demanding that their government devalues. But the
Greek Government is stuck inside the euro straitjacket. There is nothing it can
do. There is nothing that a future general election can do in Greece to change
anything. When people have taken away from them the ability to determine
their own futures through the ballot box, then I am afraid that violence
becomes the only logical alternative.
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What you have done with this euro is you have trapped people in an economic
prison. You have trapped people in a Völkerkerker from which it will take great
courage to get out. It will take leadership, or possibly the inevitable economic
meltdown. You can boo, you can jeer, but remember this: Britain outside of the
euro has been able to devalue, has been able to slash interest rates. We have
been able to do the things that we need to do. Jeer on if you like, but have you
noticed that on the bond markets this morning Greek bonds are trading 233
basis points higher than German bonds? Now I know that most of you in this
room will not even know what that means and those that do will do their best
to ignore it. You can go on burying your heads in the sand if you want. You
can ignore the markets if you want to, but in time the markets will not ignore
you.
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“THE EURO AND THE OCA”:

WILL THE MONETARY UNION COLLAPSE?
By Peter Henseler (November 2006)
PETER HENSELER OFFERS SOME BACKROUND TO AN INTERVIEW GIVEN BY PROF. PAUL DE

GRAUWE TO JOHAN CORTHOUTS, PUBLISHED ON THE FLEMISH DAILY 'DE MORGEN' ON 18
MARCH 2006.
In 1961 Robert A. Mundell published a small article in the American Economic Review on “A
Theory of Optimum Currency Areas”. In the 1990s several economists took up Mundell’s ideas,
for example by asking whether Europe could be an Optimum Currency Area (B. Eichengreen
1990) and by analyzing the real exchange rates within and between Currency Areas (J. v.
Hagen/ M.J.M. Neumann 1994). One of the most important books on the economics of
monetary integration dealing with the theory of Optimum Currency Areas (OCA) and the costs
and benefits of monetary integration was published in 1992 by Paul De Grauwe, Professor of
Economics at the University of Leuven, Belgium. It is now available in the 5th edition (2003)
titled “Economics of Monetary Union”.
The OCA theory postulates that the candidate countries for a Monetary Union (MU) should
form an area which is sufficiently similar, if not homogeneous, from an economic and social
point of view (concerning common economic and social standards and performances) to
provide a stable basis for the common currency. As MU means centralization of monetary
policy and giving up national exchange rate autonomy, asymmetric economic shocks cannot
be absorbed by national exchange rate policy any longer (in particular by devaluation of the
national currency to regain competitiveness of national goods and services on the world
market). The OCA theory therefore developed several criteria or conditions which justify giving
up exchange rate autonomy by entering the MU. These are in particular:
- sufficient flexibility of wages in the future MU;

- sufficient labour mobility in the future MU (i.e. within and between the MU member
candidates);
- freedom of capital mobility within the MU;
- stability of the real exchange rate behaviour (variability) between the candidate countries
which is measured by the price level and cost ratios (in real terms) between the candidate
economies.
Although freedom of capital was introduced on 1 July 1990 and at the same time linked to the
first stage of the European MU (thus pulling down already one of the most important bastions
of national economic policy), the other criteria in reality are not fulfilled (although freedom of
movement for workers is legally guaranteed by the Treaty). This causes economic and social
disparities between the MU member countries, putting the MU at risk - even of collapsing, as a
whole, or of losing those members, who are under pressure because of significant disparities. In
the latter case perhaps that “hard core” of countries which had already linked their currencies
together before the first stage of the MU started, namely Germany, The Netherlands and
Austria, would remain. Moreover this area, which is nearly identical with the Holy Roman
Empire of the German Nation, would, according to the empirical findings of the OCA
economists, mostly fulfill the OCA criteria mentioned above.
To minimize the risk mentioned above several compensation mechanisms are necessary,
namely:
203
- more funds for the Union budget to establish a (partly automatic, partly discretionary) fiscal
equalization system (as in the European federal states) in a more effective way than is provided
by the structural funds up to now,
- maybe by augmenting national contributions to the Union budget,
- if this would turn out to be not possible or not sufficient, maybe by introducing Union taxes,
in particular income taxes (i.e. partial centralization of taxation policy);
- more Union competences (centralization) in the field of income policy, social policy,
employment and labour market policy, in particular to improve the comparative advantages
and thus the competitiveness of the MU economies and the European economy as a whole,
which, in the world of neo-liberal theories, would mean more deregulation, but, in eurocratic
practice - presumably - more re-regulation at the supra-national level.
To guarantee all these things would inevitably lead to Political Union. Centralization of
monetary policy alone would thus turn out to be insufficient, because of the political limits of
purely economic integration and – apart from this – the deficits of political legitimacy of the
ECB would become evident. All this has been well known in the world of academic economics
since 1961, when Mundell published his groundbreaking article on the OCA theory, for which
he was awarded the Nobel Prize in 1999.
Besides all this – and particularly in the case of rising unemployment – a lot of contradictions
and inconsistencies would become evident between economic policy instruments, namely,
between supply-side oriented OCA conditions (flexibility of wages, movement of labour and
capital) and demand-side oriented national fiscal policy instruments. The latter will come more
and more under pressure because of the requirements to achieve the Maastricht and Stability
Pact criteria (although these criteria may be viewed as the simplistic, “vulgar-economics”
approach of monetarist epigones). Thus, if the EU member states refuse to provide more
funding for the Union budget – to counteract economic disparities between the member states
(in particular those of the MU, but even more with respect to the MU candidates) – the second
best solution would be to maintain sufficient budgetary autonomy at the national level, even
by allowing increasing national budget deficits. This, however, would contradict the Stability
Pact criteria. If, in the really worst-case scenario, neither sufficient funds for establishing a fiscal
equalization mechanism on the supra-national level, nor sufficient funding of the national
budgets, can be provided, we shall perhaps experience a lot of Mezzo- Giorno effects within the
MU!
In any case, if the Union does not succeed in minimizing the risk, the MU could collapse. This is
the central message of Prof. De Grauwe in an interview given to the Flemish newspaper De
Morgen on 18 March 2006. Prof. De Grauwe is, as one of the most distinguished monetary
economists, also a member of the Group for Economic Policy Analysis, which is advising EC
President Barroso. He was also a member of the Belgian Senate until 2003.
NOTE:
The interview of 'De Morgen' with Prof. De Grauwe has also been republished,
with 'De Morgen's kind permission, in EUWatch, issue 3, November 2006, at:
http://indemgroup.eu/fileadmin/user_upload/groupdocs/euwatch/euwatch03-oct-
nov2006.pdf
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POLITICAL UNION: THE END GAME OF THE EURO
An interview with Paul De Grauwe by Karoly Lorant,

co-editor of EUWatch (November 2006)
If there are problems with the euro in Western Europe what are your thoughts about the east
European countries?
I think the problems are the same for the east and west European countries. East European
countries, when they join the euro - which is their intention since they have signed to do so if
the conditions are satisfied - will face the same problem as in the West. And this problem is that
in the absence of political union there is no mechanism that tries to redistribute across
countries when they are hit by different shocks, in the way we have within nation states, where
we see that there is redistribution through a centralised budget when regions are experiencing
different economic conditions. That is one reason and it has long been identified by
economists. The other reason why it is difficult to sustain a monetary union without political
union is that when nation states in Europe continue to exist as they do, you have what we call
‘idiosyncratic shocks’ all the time. This has a sociopolitical origin and developments in one
particular country might be rather different from other countries because the political systems
are different. There are elections, and some politician comes out and promises a lot of things
and then the budget gets out of hand and that creates divergent movement which then
becomes very difficult to adjust to. So these are the two reasons why I believe that without
more political union a monetary union will be difficult to sustain. I am not predicting that the
eurozone will disappear, I am just predicting that there will be big problems for a number of
countries and then at some point the temptation to get out may become overwhelming.
The east European countries are facing serious problems even now. One can see, for
example, what is going on in Hungary. What would you suggest for these countries, what can
they do at this stage?
Well of course the new member states are not yet part of the eurozone, except for Slovenia that
will soon join. So the problems do not arise in the same way for the new member states
because they always have the option of adjusting the exchange rate if something happens that
they cannot easily adjust to. Of course they have joined the European Union and that creates
new pressures and new problems but personally I think this can be overcome. However not
only Hungary is in a difficult situation but also other central European countries. But I would not
talk about the new member states as a whole because there are so many differences among
them. Some countries, like Slovakia, are doing relatively well while others have more problems,
like Hungary. It turns out that it is very difficult for open countries, especially countries that
have recently opened, to manage the macroeconomy in a stable way, and I think the
Hungarian experience shows this.
In Hungary, for instance, one of the biggest problems is that the country ran into debts
decades ago and now its foreign debt is very high, and since the interest rate is higher
thaneconomic growth the debtto-GDP ratio is increasing. Is there any solution in this
situation?
Well I think this is not the first time this happens. Let me refer to my own country, Belgium,
where we were almost world champions in government debt and exactly the same situation
happened. The nominal interest rate was higher than the nominal growth of GDP, which
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creates a dynamics of increasing indebtedness. But this can be counteracted by creating a

surplus in the primary budget, making sure that spending (spending without adding the
interest payments) has a surplus that generates the revenue to service the debt.
In this way the debt-GDP ratio can be decreased. That is what happened in Belgium. It was not
easy, but we have reduced the debt-GDP ratio from a level of close to 140 percent in the early
1990’s to about 95 percent today.
But, of course, that meant reducing spending, increasing taxes for many, many years. So, it can
be done but it is tough and politically difficult.
There is a difference between a country that is indebted to its own citizens and a country that
is indebted to foreigners, because foreigners can exert more pressure on the country. There
are a lot of examples from the developing world. What can be done in this case?
Yes of course one has to make a distinction. When the debt is held by foreigners that creates a
stronger pressure. But the conditions to get out of indebtedness are definitely the same as
those when government debt is held domestically. A problem arises of course, when large
sections of the economy are not competitive. This seems to be the case in Hungary. Then
macroeconomic adjustment will be necessary and finally it will hurt many people. Any
government that tries to do it will not make itself popular and this seems to be the case in
Hungary today.
Coming back to Western Europe and the eurozone, if we can clearly foresee what will
happen, as an adviser to the Commission and Mr. Barroso, what is your advice?
Well I would certainly advise that the Commission should try to convince the member states to
move forward in the integration process. There is a kind of integration fatigue in Europe today.
Most countries just want to move to a certain integration, and it seems most people think that
it is enough. It is clear that we need more political integration to make the eurozone a
sustainable institution in the long run. The commission and the commission president have a
great responsibility because they are the only institutions that can make clear that this has to
be done. Now I realise that in the short run not much can be achieved. Look at how the
discussions have been concerning the budget. Most people do not want to increase the size of
the European Budget. And there is no momentum today to go forward, yet I think that there is
a responsibility of the Commission to continue, to hammer on this because this is an unfinished
business.
This year is the fiftieth anniversary of the Hungarian revolution. At the time, it was destroyed
but later people accepted the communist regime because there followed a fast economic
growth and an improvement in the people’s everyday life. Do you think that the main
problem in the European Union might be that there are no really good results? Do you think
that projects like airbus, or fast train would be better than forcing the liberalisation of
services of general interest?
Yes, I agree with you that with successful projects people’s attention can be focused on the
positive things you mentioned. But one can have doubts that this can be applied to the process
of political unification. Now I do not want to be misunderstood. All I am saying is that here we
have the eurozone, which is a great achievement in a way. It is something exceptional. I am just
saying that if you want to preserve it in the long run we are forced to go to ask for more
political union. Most Europeans tell me: we do not want political union; then I, as an economist,
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say that’s fine, I mean it is not a problem at all if you do not want a political union. How can I say
that you are wrong? You want to keep your own little place and your own habitat and this is
fine, and I have no problem with this. But think also about the consequences and this could
very well be that in the longer run the eurozone will disappear.
Do you think that there might be a solution in between, something similar to the Breton
Woods agreement?
The Bretton Woods agreement was very unstable. It would not last if applied today. Do not
forget that the Breton Woods agreement was an agreement among countries after the Second
World War that maintained fixed exchange rates. There was no capital mobility and that made
it possible. The exchange rate was fixed at the end of the forties and remained so in the fifties
and a large part of the sixties. There were few crises (with the pound Sterling in the mid-sixties
and then with the German mark), but on the whole there was stability. However, capital could
not move freely. As soon as capital started to move freely the system collapsed. So applying the
Bretton Woods system today with fixed exchange rates would mean that we turn back the
financial integration in Europe that we have achieved. And, okay, fine with me, but I am not
sure we want to do this. We are in a world where trade integration and financial integration are
two sides of the same coin. I mean, turning back financial integration in Europe would also
mean turning back trade integration.
Is it not possible to establish some kind of financial fund that can counterbalance the rapid
capital movements?
Do you mean some kind of European Monetary Fund? That will not work. In the European
monetary system there was a system of swap agreements. Each central bank was committed to
provide its own currency when another central bank got into trouble. When there was
speculation against the lira, people were selling lira and buying mark, then the Bundesbank
was there to provide the necessary liquidity, to provide the German mark. But at a certain
moment the size of the speculative movements became so big that the German Bundesbank
refused to go on doing this. So I do not think that this is a realistic goal, we cannot go back to
this. We would have to go back to the situation of the seventies and this has been shown to be
unstable. So I do not think that it is a good option.
So this means that we have two options: either more political union and a centralised
budget, or face the foreseeable economic and social problems.
That is right. That is the choice we have. If we want to keep the eurozone as an entity, then in a
way we are condemned to move forward towards political union. If we do not want political
integration then the future of the eurozone in the longer run is at stake.
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THE BIRTH AND DEATH OF THE EURO
By Anthony Coughlan (November 2006)
THE EURO IS MORE A POLITICAL THAN AN ECONOMIC PROJECT. IT IS A POLITICAL PROJECT

USING ECONOMIC MEANS THAT MOST ECONOMISTS BELIEVE ARE INHERENTLY UNSUITABLE.
The political project is to help turn the European Union into a highly centralised Federal-style
State under the political hegemony of Germany and France, with the other EU members
grouped around them.
"We need this united Europe," said Spanish Premier Felipe Gonzalez on the eve of locking
together the eurozone exchange rates in 1998. "We must never forget that the euro is an
instrument of this project." Commission President Romano Prodi wrote at the same time: "The
pillars of the nation state are the sword and the currency, and we changed that."
German Chancellor Gerhardt Schröder said in 1999: "The introduction of the euro is probably
the most important integrating step since the beginning of the unification process. It is certain
that the times of individual national efforts regarding employment policies, social and tax
policies are definitely over. This will require to bury finally some erroneous ideas of national
sovereignty. National sovereignty in foreign and security policy will soon prove itself to be a
product of the imagination."
FRANCE AND GERMANY - MIDWIVES TO THE EURO
The euro would not exist if Germany's Chancellor Helmut Kohl and France's President Francois
Mitterand had not decided on it in the early 1990s. For them the euro was essentially a political
scheme to reconcile France to Germany's sudden reunification. "I like Germany so much that I
prefer two of them," France's President Charles de Gaulle said once, referring to the two States
of divided Germany. Now Gorbachev was permitting German reunification virtually overnight.
Mitterand tried but failed to talk him out of it. To reconcile a worried France to the prospect of a
reunified German State, with 17 million extra Germans on her eastern border, Kohl agreed to
abolish the Deutschemark, the great symbol of post-war Germany's economic achievement,
and share with France the running of a new European currency.
In return France agreed to closer political union with France, a common EU foreign and security
policy, and in due time an EU army with the French-German duo effectively commanding it. In
eurojargon this was Monetary Union for Political Union. Or, put crudely, it was the
Deutschemark in exchange for the Eurobomb! Germany is forbidden by the post-war treaties to
have nuclear weapons. This way she could get her finger on a collective EU nuclear trigger.
Germany and France would captain an EU world power together, as they could no longer hope
to be world powers separately. As foretaste of the future they established that same year a
Franco-German army brigade, with French and German officers jointly in command. It still
exists as the nucleus of the coming EU army.
Naturally the citizens of the various European countries did not want to abolish their national
currencies. In Denmark and Ireland the people had to be asked in referendums. In 1992 the
Danes rejected the Maastricht Treaty, which was the legal basis for the euro.
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Their europhile Government then pushed it through by making them vote a second time,
without making any changes to the treaty. In France Mitterand held a referendum on
Maastricht, confident that it would easily go through. It was the votes of France's overseas
territories that won him a narrow 51% majority and thereby helped to abolish the franc. The
German people were wholly against abolishing the D-mark. Indeed recent opinion polls show
that they would very much like to have it back again. Unfortunately their constitution does not
permit referendums, so their eurofanatical political elite pressed ahead regardless. British
public opinion forced John Major's Conservative Government to opt out of the euro. Sweden
has no legal opt out from the euro, but its government has been unable politically to push it
through. The "common position" of the 15 EU Member States in their accession negotiations
with the 10 recent EU Members from Central, Eastern and Southern Europe was that the
newcomers had all to agree to abolish their national currencies and adopt the euro in due time
- even though Britain, Sweden and Denmark intended keeping their currencies. There could be
no clearer evidence of the EU's fundamentally antidemocratic, imperialistic character. When the
East Europeans were client states of the USSR during the Cold War, the Russians never told
them that they must adopt the rouble!
WHY COUNTRIES NEED THEIR OWN CURRENCIES
It is not sentiment, but enlightened self-interest, that makes people want to hold on to their
national currencies. It is democracy in other words, the desire for national independence and
self-rule. All independent States have their own currencies. All currencies belong to
independent States. Possession of its own currency enables a government to control the rate of
interest, which is the domestic price of a currency, and with that the money supply and volume
of credit in an economy, so that these may serve the interests of its citizens. Or to control the
foreign exchange rate, the price of a currency in terms of other currencies, which governs the
terms on which a country conducts its foreign trade and which can be vital for its economic
competitiveness.
These policies are now decided for the 12 Member States of the eurozone by the European
Central Bank in Frankfurt - theoretically in the interests of the eurozone as a whole, in practice
in the interests of Germany and France, who make up half the eurozone's population. Thus at
present Germany needs low interest rates to encourage investment and reduce its nearly 5
million unemployed. The Republic of Ireland had an economic boom from 1993 to the present.
It has needed higher interest rates to reduce inflation and hold back soaring prices, especially
for dwellings. The interest rate that suits Germany does not suit Ireland, and vice versa. The EU
Central Bank maintains the same interest rate across the eurozone for economies at different
stages of the economic cycle, with different levels of productivity, different resource
endowments and different degrees of exposure to economic shocks. The unsuitability of the
ECB's one-size-fits-all interest rate regime is shown clearly by the contrast between Ireland and
Germany. The welfare of their respective citizens requires different policies, but they must
suffer the same one because the EU says so.
THE "BLACK HOLE" OF THE EUROZONE ECONOMY
These days the eurozone looks more and more like an economic Black Hole. Its core economies,
Germany's and France's especially, are in poor shape. When the euro was established Germany
insisted that the EU Central Bank be run like the German Bundesbank. It is independent of
political control and its sole brief under the Maastricht Treaty is to keep prices stable and
inflation under 2%. The eurozone economy may suffer deflation and job losses may soar, but
that is no concern of the ECB. Its deflationary policy mandate encourages recession instead of
countering it. In addition the Germans insisted that the eurozone members be bound by the
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Growth and Stability Pact. This lays down that if countries run budget deficits of 3% or over of
their national product a year because of recession, falling taxes and rising unemployment, they
must cut public spending further - which makes recession worse - or else face fines that could
amount to of billions of euros.
The irony is that when Germany and France found themselves in breach of these rules, the EU
Commission did not seek to bully them like it bullied smaller-size Ireland and Portugal when
they broke the rules.
The other irony is that when pushing for the euro Germany's rulers were so busy seeking to
impose monetary discipline on the Italians and others, that they took their eye off the ball and
themselves joined the eurozone at too high an exchange rate. They exchanged the D-mark for
the euro at a rate which burdened themselves with an implicitly overvalued currency. This
makes it harder for their export industries to sell abroad, and easier for foreign firms to sell to
Germany. This has increased German unemployment. All this is due to the political love-affair
with the euro of Germany's political elite.
When the euro was launched in 1999 the EU's europhiles and eurofanatics said confidently that
it would soon become a strong world reserve currency like the dollar, as people would switch
from dollars into euros. Instead the opposite happened. The euro weakened against the dollar
and British pound. Indeed in its first few years it was the euro's weakness that proved to be the
main thing helping the competitiveness of the eurozone economy, Germany's and France's in
particular.
Now this looks like changing. The coming years could put the eurozone under great strain. The
Americans are likely to want to boost their economy by acting aggressively to let the dollar fall,
so stimulating US exports to Europe and making EU exports to America less competitive. A
major rise of the euro against the dollar would threaten the competitiveness of eurozone
industry, but there is nothing individual eurozone countries can do about it, as they no longer
have national currencies of their own. Another cause of strain is that China's currency, the yuan,
is linked to the dollar, so that if a weakening dollar makes US exports more competitive in
eurozone and other world markets, it makes China's exports more competitive too.
Is was therefore no wonder that in September 2003 the people of Sweden, one of the most
educated and politically sophisticated in Europe, said No to jumping into the eurozone's
economic Black Hole by 56% to 42% on a turnout of 81% of voters. Sweden's economy is doing
very well outside the eurozone, as is Britain's and Denmark's.
WHY THE EURO CANNOT LAST
One can confidently predict that the euro will not last. The only question is how long will it
continue. It might be gone in a few years, or it might last decades. But certain it is that as long
as it lasts it will generate problems and tensions for the peoples of the eurozone.
"There is no example in history of a lasting monetary union that was not linked to one State,"
said Otmar Issing, German governor of the EU Central Bank. History is full of examples of
abandoned currency unions. Where now is the USSR rouble, the Austro- Hungarian thaler, the
Czechoslovak crown or Yugoslav dinar? Yet these currencies belonged to real, longestablished
States, multinational political unions that were also monetary unions and, more importantly,
that were fiscal unions, bound together by common taxes and services, which is something the
EU is not and never can be.
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All sovereign States are fiscal as well as monetary unions. They have common taxes and public
services throughout their territories. This means that their poorer regions and social classes pay
on average lower taxes and receive more public services than their richer areas and classes.
These expressions of national solidarity mean that there exist automatic resource transfers from
richer regions within a country to compensate poorer regions to some extent for the drawback
of their not having their own currency, interest rate and exchange rate, with which to balance
their payments with the rest of their national economy. Despite this, poorer areas suffer from
migration of capital and workers to richer areas within national economies, but less than what
would happen in the absence of these fiscal transfers.
There is no such solidarity in the EU monetary union however, such as to induce the rich
Eurozone countries to compensate the poorer ones for loss of key economic powers. Of course
some international solidarities exist between EU members, but nothing that compares to the
solidarity that binds national States together and makes their citizens willing to pay taxes to a
common government because it is THEIR government, which they willingly obey, with all the
authority and legitimacy that derive from that.
EU monetary union is not a fiscal union. Taxes and public spending are overwhelmingly
national in the EU, and likely to remain so. Brussels funds amount to a mere 1.2% of the EU's
annual gross product, whereas national taxes and spending typically amount to one-third or
more of national products. There is thus no realistic likelihood of the richer EU countries being
willing to pay the vastly greater sums to Brussels in the name of a common "Europeanism" that
would compensate the poorer EU countries for surrendering their ability to use a national
exchange rate and interest policy to balance their national payments.
The only thing that countries threatened with such imbalance inside the eurozone can do
about it, is to accept lower wages and profit rates compared to their competitors, or, if people
are not willing to do that, to join the jobless at home or else emigrate abroad. Neither the
eurozone nor the wider EU has the solidarity that marks a nation or people. There is no EU
"demos", no EU national community, no EU political "We, " with which citizens can identify and
accept the authority of, and for which is some circumstances they are willing to die. Rather
there are the EU's many nations and peoples.
Foreign exchange rates of currencies are always fixed for political reasons and there is nothing
more rigid than a monetary union. This is the fundamental reason why the euro is bound to
generate tensions and antagonisms between the different members of the eurozone as long as
it endures. The common interest rate and exchange rate that suit some countries will not suit
others, and people will gradually realise that their governments have surrendered key policies
for advancing the national welfare because of the folly of their uncritical europhilia.
For this reason most monetary economists believe that the euro is bound to fail, although it
could last years or even decades, as the rouble and thaler did, while generating policy conflicts
and international tensions as long as it does last. In fact the euro is likely to make the national
question, the right of nations and peoples to self-rule and self-determination, the principal
issue of European politics for years to come. This will happen as countries which in the past
possessed empires and which through them suppressed the national independence of others,
discover the drawbacks of being ruled by foreigners, that is, by people they do not elect, who
are not responsible to them and who pursue policies that are against the basic interests of their
citizens.
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212
Chapter 6
Financial crisis
Kurt W. Rothschild, EUWatch, May 2009:
Restrictions on national monetary and fiscal policies in the EU make it difficult

for member countries to initiate a national policy aiming at recovery and
employment. But there could still be room for expansive action in some EU
countries which then could act as locomotives for the EU as a whole. But since
these expansive actions can only be modest within the present EU rules they
would only be taken if there is some certainty that they will have a visible
effect in the home markets and not be dissipated at once to other countries...
But exactly this is forbidden through the “single market” and competition rules
of the EU which demand that public projects must be announced EU-wide
with contracts offered to the best bidder. This necessarily reduces the motive
for a country which – in line with EU policy – is responsible to secure prosperity
within its borders to act as a locomotive. It would have no guarantee that the
home market would benefit sufficiently from such an action.
Peter Henseler, EUWatch, December 2008:
Undoubtedly the Euro protects itself against irrational speculative currency

attacks, but neither does it prevent the slopping over of the crisis to the real
economy nor does it remove real economy disparities. On the contrary, as the
present automobile industries crisis and dramatically increasing
unemployment show, the real economy crisis will even intensify.
János Plenter, EUWatch, December 2008:
Rules of globalization in general and the complex maze of EU regulations

have hamstrung the ability of national governments to protect the economies
and the financial structures of their countries from harmful external effects.
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PRISONER´S DILEMMAS, LOCOMOTIVES AND THE EU -

SOME CONSIDERATIONS IN CONNECTION WITH THE WORLD
CRISIS*
By Kurt W. Rothschild (May 2009)
Conformity of judgement is not the rule when it comes to characterisations and explanations of
economic phenomena. But hardly anybody would deny that the economic crisis which started
in 2007 is the biggest set-back since the World Economic Crisis of the thirties of last century.
Both with regard to extent and severity they show sufficient similarity to ask for comparisons.
And the swiftness of world-wide action to prevent a break-down of the banking sector and the
development of deflationary spirals shows that it is not impossible to learn from history.
But while the two world crises are comparable with regard to extent and severity they are not
completely identical in nature. The world of 2007 was not the world of 1929. And this demands
a consideration of special elements and policies in the present environment. Two elements
which are of special importance in the new situation as compared with the earlier crisis are the
vastly increased importance of the financial sector both in general and in its role as the main
trigger of the crisis, and the existence of the European Union with its unifying effect on
economic policy in the decisive European countries. The following considerations will deal with
aspects connected with these special factors.
The dramatic changes in the financial sphere in the USA and their rapid global extension which
started the World Crisis were the reason that to begin with one talked only of a Financial Crisis.
The opinion was widespread that remedial action in the fields of financial policy and financial
institutions would be sufficient to bring the crisis to a quick end and hopefully would provide a
basis for avoiding such crises in the future. The quick reaction of national measures to prevent
bank failures was a first and impressive result of this position. That the financial crisis could
affect the “real economy” to some extent was of course realized in principle from the very
beginning, but the force with which the real economy was ultimately hit, turning the Financial
Crisis into a formidable Economic Crisis with world-wide effects on economic growth and
unemployment, was only fully realized when the process was already on its way.
But when we look at the widespread discussions and actions dealing with the crisis and the
means of ending it (please note that this article was written in spring 2009) one can see that
considerations regarding fighting the crisis and planning reforms for a better future are far
more directed to the field of finance than to matters connected with the “real economy”, with
the world of goods, services, employment etc. which after all is the basis of material and social
welfare. To some extent this priority of the financial aspect can be explained by the earlier
appearance of the financial crisis with its discussion already in full swing when the extension
into the real field became visible. And the financial problem remained of course relevant in
connection with securing satisfactory conditions for the real field. Nevertheless it seems
strange and dangerous that there is not an equally intensive and critical discussion about
shortcomings and necessities for reform and action to overcome present and future setbacks in
the real economy. This is particularly dangerous because the social and political consequences
of a deep and long-lasting economic depression are – as history has shown – formidable.
On the theoretical front this tendency to concentrate on the financial aspects of the crisis can
be partly explained by the basic assumptions of neoclassical and neoliberal economics which
include the belief that free national and international markets for goods and services are a
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sufficient guarantee for a more or less stable development provided that the financial basis is
sound and inflation can be kept under control. This belief found its expression in the idea of a
new age of “successful moderation” expressed before 2007 by many economists including the
present head of the Federal Reserve Bank Bernanke, meaning that with the achievement of low
inflation an undisturbed economic development had been secured. Seen from such an angle it
is of course understandable to regard the financial crisis as the principal cause of the present
economic crisis which has to be tackled in order to be able to return to “business as usual”. A
different picture is however presented by “heterodox” theories with their long tradition of
studying trade cycles and other disturbances. Their studies show the existence of endogenous
instabilities in the market process as such which cannot be dealt with (solely) through
manipulations of the financial apparatus. In fact the force and speed with which the recent
financial crisis has pushed the “real economy” into recession and depression can only be
explained by taking into account the fragility of the free market system.
It seems therefore that the present situation demands an equal amount of deliberations and
efforts in the field of the real economy as has been devoted to the financial sphere. Direct
action for achieving economic growth and full employment should be given equal weight to
the financial strategies now and later if crises of the recent and present extent are to be
avoided and overcome. Quite a lot of experiences and recommendations from earlier periods
exist already which could be used as a starting point. I am not going to discuss this wide and
partly contradictory field in detail, but want only point out a particular difficulty in starting an
upward development with special reference to the EU.
The decisive aspect of an ongoing recession is the widespread insufficiency of demand in the
consumption and investment sectors with mutually negative enforcements. In a more or less
“free” market economy this presents a particularly telling example of a “prisoner´s dilemma”
situation. This is particularly obvious in the investment aspect. All firms have an interest in a
lively and growing economy where production and investment is profitable. Seen from the side
of a single producer the ideal situation would be that all other firms have high employment
and pay high wages leading to a high level of demand while he or she can keep wages and
other costs at a low level and thus be particularly competitive. With isolated action firms have
no possibility of influencing the first part of such an (individually) “ideal” scenario and are
therefore led to the sole acceptance of the second part, concentrating on attempts to reduce
wage demands and other costs including investment expenditure. With all firms following this
strategy in search of competitiveness total demand – investment and consumption – remains
depressed. All firms would be better of if they could come to an agreement collectively to invest
and to pay growth-oriented wages which would move the economy to a higher level.
But such collective action is not possible in a purely privately regulated market system. Some
sort of economic policy action must come from the outside when a quick exit from a recession
is to be achieved. One obvious improvement could be to have a large sector in the economy
which is not infected by the prisoner’s dilemma logic of the private market economy. This idea
was stressed by the American economist Hyman Minsky who already in the eighties of the last
century foresaw the danger of repeated financial and other crises. He suggests the need for
“big government”, i.e. the need to establish a state-controlled sector for a broad range of public
and semi-public goods and services whose running and investment expenditures would have a
noticeable impact on the economy as a whole. By an anti-cyclical investment and expenditure
policy such a sector could help to set a floor to recessions and to ease recovery. It is not difficult
to see that such a policy runs counter to the current neoliberal tenet which demands “slim
government” and the privatisation of as many public activities as possible in order to widen the
field for profitable private activities.
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Less far-reaching are indirect actions, i.e. policies which aim at improving demand and cost
conditions in order to induce firms to increase production and investment. One possibility is
the use of monetary policy. By lowering the rate of interest and creating conditions for easier
access to credits the costs of investment are reduced and – so one hopes – recovery will be
encouraged. This hope rests however on insecure assumptions. In a recession or crisis when
demand is low and the future chances for recovery are uncertain investment does not
necessarily respond readily to lower credit costs. Waiting for better times is preferred to risky
action in bad circumstances.
Another doubtful strategy are measures to create downward pressure on wage demands and
trade union rights. This is – quite apart from social and fairness considerations – largely
counterproductive because the cost advantages so gained are lost to a large extent by the
decrease in consumer demand due to the reduction of wage incomes. Wage constraint and
protectionist measures can however improve the competitiveness of exports and thus lead to
increased demand and employment. This involves however a “beggar-my-neighbour”
situation. The advantage is achieved at the cost of other countries whose balances of payment
deteriorate and who suffer from the reduced demand for their products with subsequent
unemployment effects. And if many or all countries try to follow such an export-driven
employment policy it will only lead to lower wages and protectionism all round with negative
effects on employment.
Since these indirect methods of starting a recovery are of such doubtful effect the most
promising public action in absence of a large public economic sector is a sizable increase in
expenditure on goods and services by the government and regional authorities even if this
involves budget deficits. This increased demand and the following multiplier effects on
production and employment will in turn lead to an increase in tax revenues. But while this is an
efficient policy it too is hampered by a Prisoner´s Dilemma situation. It will work well when
many or all countries decide collectively to follow such public expansionary policies. But if they
are applied only in one country a considerable part of the expenditure and the additional
incomes will be spent on imports. Instead of creating the desired employment effects the
country would be faced by an undesired deterioration of the balance of payments. (This effect
does not occur when most countries follow such an expansionary policy so that imports and
exports increase simultaneously in all countries with limited balance of payments difficulties.)
This balance of payments problem can of course be reduced by protectionist measures,
keeping the rise of imports under control. But this would not only lead to efficiency losses;
retaliatory action by other countries would hit exports and would thus undermine the desired
expansion.
This problem of leakage of public expenditure to other countries is much greater for small
countries and small regions than for big countries which spend a larger part of income within
their own area and have therefore lower import propensities. This fact provides the basis for
the “Locomotive” concept which came into use after the “golden years” in the sixties of last
century had come to an end. The idea is that in the case of an international recession one or
several big countries with a dominant home market should start a large-scale expenditure
offensive which would stimulate immediately their domestic economy but would also lead to
increased imports connected with this expansion (comparatively smaller than in the case of
smaller countries but considerable in view of the size of the economy). This will start a positive
development in other countries leading to an all round recovery of international trade, growth,
and employment. Two examples of such Locomotive effects were the stimulating effects of the
German reunification boom on the surrounding smaller countries and on a larger scale the US
consumption and expenditure explosion on many developed and underdeveloped nations.
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In connection with the infection of the “real world” economy through the Financial Crisis the
emergence of a “Locomotive” would have been (or still is) an understandable proposal. But the
problem is to find such a Locomotive. The US, with their huge domestic market a “natural”
candidate, have dropped out because they are too deeply involved in the crisis which they
have initiated. Neglecting the very special case of China (which potentially could act as an
impressive Locomotive) Europe is an obvious theoretical alternative. If the European Union had
achieved the status of a fully united political and economic body with a common economic
policy not only directed towards price stability but also towards full employment it could
indeed have played an important role as an initiator of international recovery. But in its present
stage of partial integration where policy questions regarding economic growth and
employment are left to the responsibility of the national governments the EU as such is not
capable of making such a contribution.
But could not Europe be a positive influence if a Locomotive can be found within the EU
leading to a recovery in the European area as a whole which then could spread to other parts of
the world? Could not Germany or France or – even better – Germany and France combined
take on such a role? The answer is that under the present framework of the EU such a strategy
cannot be expected. The core of the difficulty lies in the neoliberal basis of the EU concept with
its belief in the efficiency of a system of free unregulated markets and competition in a world
characterized by change and disturbing elements. This outlook is particularly visible in the
institutions of the independent Central Bank with its uncontrolled power to follow a single-
minded policy of price stability and the Maastricht Treaty with its strict limitations on the fiscal
policy of the member governments. This arrangement means that both monetary and fiscal
policies which have been the main tools of governments to deal with recessions and other
disturbances are taken out of their hands while at the same time leaving them with full
responsibility for achieving national prosperity. This contradiction is justified by an ideology
which maintains that if price stability is secured private markets and competition will be the
best way to overcome economic disturbances. Interference through government action
(monetary or fiscal) would make things only worse. While it is easy to see from historical records
that this view cannot be maintained it is equally easy to see that it corresponds very well with
the interests of the big financial and transnational concerns which have become increasingly
dominant with the new possibilities for international organisation and activities created by the
micro-electronic revolution.
These restrictions on national monetary and fiscal policies in the EU make it difficult for
member countries to initiate a national policy aiming at recovery and employment. But there
could still be room for expansive action in some EU countries which then could act as
locomotives for the EU as a whole. But since these expansive actions can only be modest within
the present EU rules they would only be taken if there is some certainty that they will have a
visible effect in the home markets and not be dissipated at once to other countries. More
concretely: If a country wants to stimulate production and employment in the private sector it
must advertise its projects in order to obtain tenders from private firms being then able to
choose the most favourable offers. If the object of a project is not only its usefulness but also or
even predominantly its role as an impulse for the national economy an optimal result will be
achieved if tenders of domestic firms are given priority. This will make certain that at least the
first round of the added demand will be effective within the country. But exactly this is
forbidden through the “single market” and competition rules of the EU which demand that
public projects must be announced EU-wide with contracts offered to the best bidder. This
necessarily reduces the motive for a country which – in line with EU policy – is responsible to
secure prosperity within its borders to act as a locomotive. It would have no guarantee that the
home market would benefit sufficiently from such an action.
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It should be stressed that the EU argument in support of this prohibition of nationally oriented
projects, viz. that they are protectionist and therefore – sinning against the free trade dogma –
inefficient, cannot be maintained. Like many other cases this is an example where traditional
policy propositions which are meaningful in a stable full employment economy lose their
validity in times of recession and unemployment. Permitting a country to uphold national
restrictions in its expansionary activities does not destroy free trade conditions, but on the
contrary lays the basis for a recovery of an international trade which has been reduced because
of the recession. The force of the Financial Crisis has already led to the revision and neglect of
the strict budget rules of the Maastricht Treaty. Other revisions in the EU constitution should
follow giving more weight to meet the problems and dangers in the “real economy”.
NOTE:
* This article is a special contribution of Prof. Kurt W. Rothschild to this EUWatch issue and has
not been published in previous EUWatch editions.
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THE FINANCIAL CRISIS:

STRENGTHENING OR WEAKENING THE EU?
By Peter Henseler (December 2008)
THIS ARTICLE COMMENTS ON SOME RECENT ANSWERS GIVEN TO THE OLD QUESTION ‘DO WE
NEED A EUROPEAN ECONOMIC GOVERNMENT?’ (GOUVERNEMENT ÉCONOMIQUE) WHICH AT
THE SAME TIME COULD ALSO GIVE AN ANSWER TO THE QUESTION OF WHETHER THE EU WILL
BE STRENGTHENED OR WEAKENED BY THE CURRENT FINANCIAL CRISIS. THESE QUESTIONS
WERE RAISED IN THE CONTEXT OF THE PREPARATION OF THE WASHINGTON FINANCIAL
WORLD SUMMIT (G-20 SUMMIT, IN PUBLIC OPINION ALSO CALLED ‘EMERGENCY SUMMIT’) BY
THE EU HEADS OF STATE OR GOVERNMENT IN THE RUN-UP TO THEIR INFORMAL MEETING ON 7
NOVEMBER 2008. ANGELA MERKEL GAVE HER ANSWER TO THE FIRST QUESTION IN HER PRESS
BRIEFING ON THE MEETING’S MAIN RESULTS. THE SECOND QUESTION RELATING TO THE
STRENGTHENING OR WEAKENING OF THE EU MAY BE ANSWERED TWOFOLD: (1) FROM THE
POINT OF VIEW OF THE RELATION BETWEEN DECENTRALIZED AND CENTRALIZED INSTITUTIONS
AND COMPETENCES, AND (2) AS FAR AS THE EU’S ROLE IN RELATION TO THE USA AND THE
REST OF THE WORLD WITHIN A GLOBALIZED ECONOMY IS CONCERNED.
The following comments are mainly focussed on the first aspect, namely concerning two
reasons for interventions by any centralized authorities and competences like those of the EU,
in particular dealing with the consequences of the Monetary Union (MU). Both of them are
provided by well established concepts of economic theory, namely (1) the theory of Optimum
Currency Areas (OCA) and (2) dealing with transnational (cross-border) aspects and
externalities. Thus, the answer to the old question mentioned above under these circumstances
is at a first glance a ‘YES’. Under these conditions this would also mean strengthening the EU.
For further and more detailed discussion see the respective articles in EUWatch, Issue 3
(October/ November 2006), on "The Future of the Euro" and Issue 5 (February 2007), on
"Subsidiarity – A Limit to EU Competence?".
Looking at the ‘soft headline proposals’ of the summit meetings’ outcome, however, the
correct answer would be ‘weakening’ rather than ‘strengthening’. This can of course be seen
definitely only when concrete results are visible in the spring of 2009 having put the headline
proposals into action as intended by the summit proposals. Thus the main conclusion to be
drawn at the moment is that any new institutional structure like an economic government is
not sufficient. It only makes sense if we have substantial policy concepts which (as a necessary
condition) should be realized by this new structure. These concepts are - despite all summit
efforts - still missing or at least not yet visible.
The former Austrian Chancellor Alfred Gusenbauer (in office until the new federal government
was appointed on 2 December 2008) recently stated in relation to the financial crisis: ‘I do not
want to imagine where we would stand today, if we did not have the Euro. … The Euro is the
only currency which was not attacked by speculation, it has established itself on the market as
the strongest currency and it functions as a stability anchor.’
Yes, he may be right, but it applies only within the context of the financial markets’ view
[Finanzwirtschaft]. In terms of the ‘real’ economy [Realwirtschaft] there is no reason to forget all
the economic and social disparities between Euro-countries putting the Monetary Union (MU)
at risk – even if its collapse, in particular if compensation mechanisms (for some examples see
below) are not sufficient in the absence of the well known criteria of an ‘Optimum Currency
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Area’ (OCA). These criteria are in particular wage flexibility, labour mobility and freedom of
capital. Only a political union could ultimately guarantee all the functioning of these
compensation mechanisms. This was pointed out clearly by the OCA economists, among them
Robert A. Mundell (Nobel Prize winner in 1999) and Paul De Grauwe (distinguished financial
economist at the University of Leuven and adviser to EC President Barroso) – see the interviews
with De Grauwe reprinted in EUWatch, Issue 3 (Oct./ Nov. 2006). One essential element of a
political union and at the same time necessary (even if not sufficient by itself) condition for its
functioning is an economic government.
So, undoubtedly, the Euro protects itself against irrational speculative currency attacks, but
neither does it prevent the slopping over of the crisis to the real economy nor does it remove
real economy [realwirtschaftliche] disparities.
On the contrary, as the present automobile industries crisis and dramatically increasing
unemployment show, the real economy crisis will even intensify. Irrespective of this, the Euro
depends on the removal of these disparities by those mechanisms developed by the OCA
theorists to minimize the risk of any MU collapse. Otherwise the MU’s breakdown is risked.
Those who are sceptical towards more centralization in the fields of substantial policies that
would create compensation mechanisms will have to shoulder the responsibility for having
deliberately or negligently exposed the MU to the risk of failure or breakdown. These
centralized compensation mechanisms consist either in providing more funds for the Union
budget by additional financial contributions of the Member States or in introducing EU
taxation – both in order to establish an efficient financial equalization system. This would
become necessary in order to create some kind of insurance system (including also financing
unemployment relief) against external economic shocks. Furthermore, it would imply more
Union competences in economic policy matters which would no longer remain under the main
responsibility of the Member States as it is under the present legal status of the Treaty.
So, given that the OCA criteria are not fulfilled, MU postulates as a ‘first best’ solution more
centralization in the fields of economic policy matters including additional budgetary funding,
but it does not mean centralization in all kinds of matter. We are faced with a rather complex
structure of competences: some having to be centralized and others which have to remain
decentralized, i.e. in the hands of Member States. In this sense, the OCA theory implications are
twofold and even partly contradictory because they try to integrate two different and even
conflicting economic paradigms. If Member States refuse to provide additional funding of the
Union budget to counteract economic disparities among them, or if the introduction of a Union
tax is not accepted, the ‘second best’ solution could only consist in maintaining sufficient
budgetary autonomy at national level – even by allowing increasing national budget deficits to
enable Member States to manage their economic problems at home by themselves. This,
however, would conflict with the Stability Pact criteria leading to contradictions and
inconsistencies between the supply-side oriented OCA conditions (flexibility of wages, labour
mobility, freedom of capital movement within the MU) and the demand-side oriented national
fiscal policy instruments. Whereas the former are being influenced by monetarist and so-called
‘neo-liberal’ ideas (focussing on cut-back management of public budgets), the latter is
experiencing a Keynesian ‘revival’ of anticyclical budget policies. The main economic policy
instruments, which - in this sense of ‘second best’ conditions - have to be kept in the hands of
Member States (i.e. under primary responsibility of Member States according to the present
legal status), concern employment policy and social policy matters.
To sum it up preliminarily: If the Union will not succeed in minimizing the risks pointed out by
the OCA theory, the MU could collapse. Thus, the postulated political union should not only
guarantee the functioning of compensation mechanisms, but also overcome deficits of political
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legitimacy of purely monetary economic integration. This has to be provided by changing the
character of economic policy from a mere matter of ‘common concern’ which has to be
coordinated (leaving the primary responsibility of Member States untouched) to a matter of
primary Union responsibility, in addition to specialized economic policy sectors which are
already part of the exclusive or shared Union competences. Employment and social matters,
however, should stay under the primary responsibility of the Member States. This means that
the existing coordination mechanisms in these areas should remain untouched, although parts
of these areas may also get under pressure for more centralization, e.g. the harmonization of
social insurance systems as a consequence of the common market freedoms. But in principal,
keeping these areas decentralized can be well justified by the subsidiarity principle (cf. the
Treaty formula ‘better achieved’ by the Union not being fulfilled). These aspects have been
widely ignored by the OCA theory.
This leads to the second case in which centralized interventions are needed.
For this purpose let us consider the individual Member States as individual actors, and the
Community/ Union as a whole as a collective actor. External effects (externalities, spillovers)
mean that any individual rational activity which affects others for the better (in the case of
external economies or positive external effects) or for the worse (in the case of external
diseconomies or negative external effects) cannot be taken into account by these others
paying for external economies or being compensated in the case of diseconomies. If these
effects cannot be ‘internalized’, e.g. by direct negotiations on compensation payments
between those causing and those being affected by these externalities, a ‘higher authority’,
usually the State, will have to intervene.
This is especially so in cases where the external effect cannot be attributed to a particular group
of individuals, or where market prices do not exist as a measure for compensation payments.
The analogous model applies to the relation between the EU Member States as individual
actors and the Community/ Union as a higher authority and collective entity that is capable of
internalizing external effects between Member States (e.g. transnational environmental
pollution). It can apply even in the case of transnational issues originating from outside the
Community/Union and whose effects are unequally distributed between its Member States,
e.g. the refugee problem.
In this situation too, considerations based on the subsidiarity principle come to the fore.
Looking at the present financial crisis, EU and national interventions can also be justified by the
subsidiarity principle in the case of cross-border effects of the crisis whose causes and
consequences also have cross-border phenomena and therefore have to be dealt with in this
context. Undoubtedly, we will need interventions both at national level and supranational
(Union or even global) level. But at the same time interventions which occur exclusively on the
national level are not sufficient (not efficient enough). Thus the main question is whether the
problem can be ‘better’, i.e. more efficiently, solved at Union or national level (cf. the Treaty’s
subsidiarity formula ‘not sufficiently achieved’ by Member States, but ‘better’ achieved by the
Union). Needless to say, in the age of globalization it is obvious that a centralized intervention –
in this case by a central regulatory authority – is absolutely necessary. This argument becomes
even clearer when we consider that deregulation of transnational capital flows following the
freedom of capital ideology of the ‘neo-liberal’ economic mainstream paradigm has intensified
globalization and, vice versa, globalization has evoked even more deregulation. In this spiral,
the fateful and disastrous financial market innovations could prosper.
Under these subsidiarity aspects, should the OCA conditions not be fulfilled, a European tax on
speculative financial transactions could be considered, not least to get additional funds for
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financing compensation payments. And, as such European tax may not be sufficient, a world-
wide tax should be introduced. Yet even such kind of taxation would not suffice to counter
speculative international financial transactions. Thus an EU-wide or even worldwide financial
regulatory authority should be envisaged. Considering all these aspects when raising the
question ‘Do we need a European economic government?’ to overcome all these negative
phenomena, the answer undoubtedly would be ‘Yes’.
Yet it should also be stressed that in the age of globalization a mere European financial
regulatory authority, or even any kind of worldwide institutional structures are, by themselves,
not sufficient. What seems to be necessary is a substantial concept which is foreseen to be
realized by any new institutional structure like the idea of an economic government. There are
serious doubts whether such a substantial concept already exists, given that it has not (or at
least not yet) been provided by the recent European and world summits. Perhaps clearer
results will be seen when concrete action plans based on the G-20 summit’s concepts will come
into effect next year.
It is pure coincidence that in the event of the financial crisis the question of a European
economic government was again raised under the French presidency by Nicolas Sarkozy, as this
is in line with an old French postulate based on the typical French tradition of etatism dating
back to Colbert, the French minister of finance under King Louis XIV. It conflicts with the anti-
statist neo-liberal mainstream, which perhaps will be overcome under the influences of the
present crisis. These mainstream ideas were fully unfolded under the dominant ideology of the
freedom of capital mobility established on 1 July 1990 and later linked to the first stage of the
MU. Now we seem to harvest its rotten fruit.
In the mid-1990s, the Germans (Theo Waigel) advocated the Maastricht Stability criteria, strictly
following the neo-liberal monetarist mainstream.
This was answered by the French proposal of a gouvernement economique which was
immediately rejected by Germany because it feared that this would threaten the European
Central Bank’s independence. The outcome was (1) the adoption of the Stability Pact at the
Amsterdam summit and (2) the establishment of the Euro-Group composed of the finance
ministers of the Euro-countries as a compromise answer to the French demand.
Apparently Sarkozy – perhaps following his specific personal ambitions – is trying to revive the
old idea of an economic government by setting up the Euro-Group in the composition of the
heads of state or government. Yet this has not found consensus at the informal meeting of
heads of state or government on 7 November 2008. Thus, the opportunity to institutionalize
undoubtedly necessary re-regulation procedures of deregulated financial markets was wasted
because not even the institutional structure to manage this kind of re-regulation has found
consensus. Also, when differentiating between supervision and regulation, it is the supervision
of deregulated markets that may be given priority, not necessarily more regulations. But even
with respect to this more ‘modest’ approach, the summit did not give satisfactory answers. (The
real cause of this may be found in the independence ideology of the ECB.)
Instead, the European leaders agreed on stressing the necessity of the existing coordination
procedures among all 27 Member States (and not exclusively among the Euro-countries),
whatever this could mean. In Angela Merkel’s words: "The Council in the composition of the
heads of state or government… is of course a body dealing with economic questions – just call
it economic government. The crucial point is that it covers all 27 Member States."
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When preparing the G-20 summit in Washington, one week after the European summit, the EU
heads of state or government only found minimal consensus concerning an effective and
efficient strategy to overcome the present crisis and to counteract all future irrational market
manoeuvres. According to the German weekly news magazine SPIEGEL (No. 46, 10 November
2008) the European proposals to the Washington summit of 15 November have to be
characterized as well-intentioned headlines rather than precise propositions. These proposals
did not dare to foil the intentions of the US Treasury Secretary to bail out the banks with
taxpayers’ money but would not bail out the taxpayers with sufficient regulation or at least
supervision of the banking sector.
According to SPIEGEL, it was expected that even these very ‘soft’ European regulatory proposals
would be refused by the Americans in line with their strong neo-liberal anti-statist ideology
(although, after all, the US administration is highly statist vis-ŕ-vis citizens but not vis-ŕ-vis the
banking cartel). This ideology is still publicly advocated by the President in office (but not yet
by the President-elect) who strongly opposes new regulatory state interventions and additional
international ‘super-authorities’ to overcome the crisis. These soft European ‘headline
proposals’ consisted of ‘five specific approaches’, namely to
- submit rating agencies to registration, surveillance and rules of governance;
- adopt principles of convergence of accounting standards;
- decide that no market segment, no territory, and no financial institution should escape
proportionate and adequate regulation and at least oversight; establish codes of conduct to
avoid excessive risk-taking in the financial sector, including the systems of remuneration;
- strengthen the role of the IMF by giving it initial responsibility, together with the Financial
Stability Forum (FSF), of recommending the measures needed to restore confidence and
stability.
The two most important proposals were expected to be the most controversial topics of the G-
20 Washington summit. These were (1) the ‘catch-all line’ of complete and overall (global)
regulation and oversight of all kinds of ‘innovative’ high-risk financial operations and products
of the financial industries, including their location in ‘tax havens’ (third indent), and (2)
overcoming the IMF’s identity crisis by giving it a key role in avoiding future crises (last indent).
Nothing was said, however, on how all these proposals could be achieved and what kind of
sanctions should be foreseen to make them effective. The FSF mentioned in the last indent
would, according to the proposal, consist of high level officials of the G-7 finance ministries,
central banks and financial supervision authorities. Similar recommendations had already been
presented one month ago in the Forum’s follow-up report on ‘Enhancing Market and
Institutional Resilience’ to the G-7 finance ministers (see http://www.fsforum.org/). The same
had been suggested by the OECD in its "two pillar action plan in response to crisis": "First, align
regulations and incentives in the financial sector so that market operators act in a tighter oversight
and risk management environment. Second, review and upgrade national policies and improve
policy coordination at the international level to restore the conditions for economic growth."
So what was the outcome of the Washington financial world summit, also publicly known as
the "emergency summit"?
Prior to the summit, expectations had been played down. It was said that the summit would
only be the beginning of a longer process (without saying in what direction) and that there
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would be no Bretton Woods II. It was not officially stated of course, that the real reasons of this
modest outcome had to be seen in the light of the fact that national interests, influenced by the
financial corporations (mostly located in the City of London and Wall Street), were still too
divergent, even across Europe, when it came to the hardlyveiled old conflict concerning the
establishment of an economic government. President Bush, who hosted the summit,
consequently stated in his opening address ‘that the problem did not develop over night, so it
will not be solved over night’. Of course he did not say that regulators had ‘overslept’ the whole
problem, as Barry Eichengreen (distinguished financial economist at the University of California
in Berkeley) said in an interview with Frankfurter Allgemeine Zeitung (FAZ). Moreover, the
Presidentelect avoided taking part in the summit. Apparently he did not want to be associated
with a possible failure of the summit, as commentators said.
In the aftermath of this modest outcome, going back to the initial question (‘Financial crisis:
strengthening or weakening the EU?’) the answer would more likely have to be ‘weakening’,
rather than ‘strengthening’, and that the casino behaviour of financial market operators will be
prolonged (the heart of the beast presumably has to be located in the secretive US Federal
Reserve which is controlled by the banking cartels, not by the Treasury or even the Congress).
By abstaining from ‘clear-cut’ interventions into anarchic, boundless and irrational financial
market behaviour, political leaders will not succeed in getting back the ghost of unlimited
(non-supervised) deregulation into the bottle. They do not recognize that they have weakened
themselves by it.
This is paradoxical. To escape the paradox, the most efficient risk management that could be
adopted would include prohibiting all kinds of so-called financial market innovations which go
beyond conventional share trading on the stock exchange. The latter would still comprise
enough speculative elements to evoke the traders’ and their clients’ thrills, and leave the
principles of free market economy and ‘good old’ capitalism untouched. There would be
enough range for their deployment. These dubious ‘innovations’, also showing at first glance
impressing new coinage (neologism), are short selling, derivative market operations, hedge
fund industries, credit default swaps (CDS), the creation of real estate ‘bubbles’ by bundling
and selling subprime mortgages, assetbacked securities (ABS) and collateral debt obligations
(CDO). All this has perverted risk sharing. What originally was believed to be a useful instrument
now turns out to be a virtual attempt of risk abolition by shifting it away. This was managed by
creating tradable products labelled as useful ‘financial innovations’, which in fact were high-risk
speculations, perverting stock exchange into betting offices. In short, the banking institutions’
created credit out of thin air, i.e. derivatives – multiple credit that does not exist because it has
no real collateral, but on which they receive interest. Like a ‘pyramid scheme’, its survival
depends on the creation of more credit for new clients.
Of course, any prohibition hurts purism of market radical neo-liberalism, in particular in its
Anglo-Saxon version (not so much however, as far as the German tradition of social market
economy, the French tradition of etatism, the Austrian tradition of social partnership and the
Scandinavian welfare state tradition are concerned). But it has to be recalled that neo-liberalism
only legitimizes the interests of the financial capital, not those of the ‘real’ capital, as the
Austrian economic researcher Stephan Schulmeister pointed out recently.
The SPIEGEL (No. 47, 17 November 2008) bluntly stated that the crash had been caused by
capital crime and compared the bankers to sports car drivers supervised by policemen on
horsebacks. It is feared that this will not be change, even by transnational supervisory
authorities, because ‘money is like gas: it is not possible to get hold of it, it always searches for
the fastest way to maximum profit. Only prohibitions could help in this situation.
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Yet this radical solution will not be applied, not even approached, given that the US strictly
oppose any kind of ‘heavy-handed’ intervention. This did, however, not hinder the US to pump
such amounts of [fresh] dollars into banks, which only cynics would not regard as a heavy-
handed intervention: 700 billion US Dollars were provided by the Treasury Asset Relief Program
(TARP) as defined under the Emergency Economic Stabilizing Act, and, according to CNBC, the
complete ‘Financial Crisis Balance Sheet’ (including Federal Reserve operations, Federal
Housing Administration operations and others) amount to the unimaginable sum of 4.2 trillion
US Dollars (see http://www.cnbc.com/id/27719011).
European countries did the same, providing huge amounts partly for guarantees and partly for
increasing banks’ capital resources. Even if the money including interests have to be paid back
within a few years after the bank’s ‘recreation’, these measure do not mean granting a loan but
in fact nationalization of property shares (at least limited in time) corresponding to the amount
granted by the State, although in legal terms no strict conditions securing the State’s interests
are to be stated. The German ‘rescue package’ amounts to 500 billion, the Austrian one to 100
billion Euros.
The explicit summit commitment ‘that any reforms must be in line with free market principles’
has underlined further abstention from ‘heavyhanded intervention’, of course with the
exception of monetary grants. The summit has contented itself with the aim of possibly
reaching the most modest success: that (at least) the risks linked with the above mentioned
financial market ‘innovations’ could be made transparent. This could be reached by closer
cooperation, common and more effective standards of regulation, supervision and rating. Only
for this purpose, broad principles and a detailed action plan were set out. But it was made clear
that all this would only be the beginning of a longer process of regulatory reform, the first steps
of which are foreseen to be agreed in a follow-up summit meeting in the spring of 2009.
Much of the consensus seemed to be achieved in relation to the overall regulation and
oversight of all kinds of financial market operations. According to the Financial Times, European
leaders won a partial victory in this regard. No clear consensus was achieved, however, on the
future role of the IMF. Major concerns still seem to persevere in Asian and Latin American
states, not least because of their negative experience with the Fund’s strictly neo-liberal policy
reform proposals in the past, and in the US, probably due to its general scepticism towards
international organizations. There is no doubt, therefore, that the creation of a world financial
supervision authority remains utopian. Agreement was only reached to set up supervisory
colleges consisting of national supervisors and regulatory authorities for major cross-border
financial institutions. Regulation of the financial sector will thus remain under the primary
responsibility of the nation states. In the above-mentioned interview Barry Eichengreen raised
doubts with respect to the efficiency of such a college, because there would be ‘much
discussion but less decision’. He would clearly prefer a ‘World Financial Organization (WFO)’
analogous to the WTO, enabling each country to follow its own policy but submitting itself to
common standard rules. In his view, this could be a compromise between the present status of
insufficient national regulation, which undoubtedly is not satisfactory, and the illusion of a
global supervision authority.
So the real outcome of the summit effort is: Let us wait and see. It is feared that this does not
give rise to optimism. Meanwhile, tax payers’ money keeps bailing out the failed financial
institutions.
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THE EU IN THE TURMOIL OF THE FINANCIAL CRISIS

THE PARTICULAR VULNERABILITY OF CENTRAL AND EAST
EUROPEAN COUNTRIES
By János Plenter (December 2008)
THE CURRENT FINANCIAL CRISIS WHICH IS PLAYING HAVOC WITH THE ECONOMIES OF OUR
PLANET HAS BEEN LONG FORESEEABLE. IT STARTED IN AUGUST 2007 AND FOR A WHILE THERE
WERE HOPES THAT IT WOULD GET MORE MODERATE IN 2008. YET, CONTRARY TO THOSE
EXPECTATIONS AND DESPITE EFFORTS TO CONTAIN IT, THE CRISES HAS BECOME MORE
WIDESPREAD AND MORE SEVERE IN RECENT MONTHS AND THE GOVERNMENTS AND
FINANCIAL AUTHORITIES APPEAR TO BE UNABLE TO FIND AN EFFECTIVE, UNIVERSAL SOLUTION
TO THIS GLOBAL FINANCIAL PHENOMENON.
It is beyond the scope of this paper to discuss the substance of this financial crisis. Nevertheless,
in view of the extraordinary nature of this financial calamity a statement is warranted about its
true cause. And, to put it simply, the root cause of this global disaster is the extremely large
debt burden which has been built up in the industrialised world over the past several decades;
a debt burden which grew so big that the real economy was unable to service it any more. To
put it more bluntly, we are witnessing the bankruptcy of the global real economy in face of the
global debt burden, imposed upon it by the financial dictatorship of the global banking system.
The forms of this unprecedented financial disruption which brings back the memories of the
1930s are numerous and the crisis has reached a stage where it is beginning to seriously hurt
the real economy in many countries, particularly in those of the OECD group.
The purpose of this paper is to provide a brief review of how this global financial crisis affects
the economies of the EU and, more specifically, Central Europe, which is a region with special
economic and social characteristics within the European Union. The basis of such an analysis
can only be a clear understanding of how the financial crisis has so far affected the major
economies that are the sources of this financial turmoil.
THE FEATURES OF THE CURRENT FINANCIAL CRISIS
The facts indicate unequivocally that in the leading economies of the West the major
consequences of the financial crisis are so far the following:
A world-wide liquidity crunch in the credit markets, more specifically in the money markets;
The circulation of money has almost completely frozen up in the banking system, interbank
lending is in deep freeze, banks are reluctant to transfer any funds to each other;
A dangerous erosion of capital for all the major banks and financial institutions, due to the large
amount of non-performing assets in the banking system and a sharp decline of the market
value of shares in the banking sector, both in the US and Europe;
A sharp decline in the stock markets world-wide, with huge losses for investors, and with
serious damaging effect on household wealth;
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A sharp tightening of credit conditions for home owners, declining real estate prices, with
steadily growing number of individual bankruptcies;
Massive financial intervention of the states in order to save the banking system with taxpayers’
money, in sharp contrast with the prevailing economic policy of neo-liberalism, which has been
hostile to any role of the state in the economy;
Indications of a gradual spill-over of the financial troubles into the real economy (falling sales,
production cutbacks, and layoffs);
Huge increase in government budget deficits, as a consequence of the massive bailout of the
banking systems by the states.
As the financial crisis has been spreading from America to Europe over the past 12 months, so
grew the recognition in Europe of the need to set up a financial defence mechanism in order to
contain the looming financial disaster. It has turned out, in the meantime, that the banking
system of Europe has become much more deeply involved in the speculative financial games of
Wall Street than it was previously thought. The huge sums of bail-out agreed upon by the 15
eurozone countries on October 12 appear to have saved the European banking system from a
meltdown, but the problems of the real economy, which is now facing an unprecedented de-
leveraging and lack of access to funds, remain unanswered.
It is a remarkable feature of this financial crisis that it was first believed to be an isolated
American affair. Of course, in a world economy of a globalised nature, where business is
dominated and determined by a closely integrated global network of banks and other financial
institutions, the turmoil was bound to spread and to affect every economy, although in
different ways and to different degrees. The region of the EU and the CEEC countries in Europe
is a clear case in point.
THE PARTICULAR VULNERABILITY OF THE CEEC COUNTRIES
The economies of the CEEC region (Central Europe, for simplicity) have several common
features which play a role in the way the global financial crisis affects these economies.
In pointing out just some of them, their by far most critical common problem is a relatively high
foreign indebtedness. According to some very recent data, the external debt of e.g. Hungary
amounts to about 96 percent of the country’s GDP, and the relevant data in the case of both
Bulgaria and Estonia is 101 percent, in Poland, around 81 percent, in Romania around 70
percent, in Slovakia 80 percent. The Czech Republic has the best external debt position, with 40
percent of the GDP.
In a statement issued in October 2008, the IMF came to the conclusion that due to the large
foreign debts, Central Europe is the most exposed region among the emerging economies. In
view of the huge debt service burden, the IMF analysis forecast the collective current account
deficit for this region to rise in 2008 to a whopping 7.2 percent of total gross domestic product,
which is twice the shortfall as recently as in 2002.
In order to re-finance the huge current account deficits, the countries of Central Europe need
massive new loans from the world banking system, but the current contraction of the world
credit markets and the reluctance of the banks to lend, pose enormous difficulties for the
region to maintain its overall financial and economic stability.
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A recent report from a financial research institute paid special attention to the quality of
sovereign debt from this region. The outcome was rather frightening. In the event that
counterparty risk should spread from corporations to sovereigns, the countries in Central
Europe among the most at risk would be Bulgaria, Estonia, Lithuania, Ukraine, Latvia, Romania
and Hungary. The most recent troubles of trading in bonds issued by Hungary appears to be a
sad confirmation of this forecast.
In order to highlight the true dimensions of external debt, here are some data concerning the
total foreign debt of several CEE countries, in absolute figures, as of early 2008, in billion US
dollars:
Bulgaria 44
Czech Republic 58
Hungary 110
Poland 268
Romania 84
Slovakia 56
Closely related to the grave problem of external debt is the fragile nature of the currencies of
the CEE countries. The national currency of many countries in the region is particularly
vulnerable because of the vast current account deficits associated with external debt. These
currencies could come under attack quickly if any doubts occur in the financial markets about
the ability of some country to service its external debt. It was an ominous sign to this effect that
in September 2008 the Romanian leu lost 5.9 percent against the euro, the Hungarian forint 9.9
percent, the Polish zloty 6.6 percent, and the Czech crown 3.3 percent. The Hungarian forint
lost a further 2 percent in one day, October 14.
Of course, national banks are supposed to have enough foreign currency reserves to stave off
attacks on their currencies, but history shows that even some major industrial countries proved
unable to withstand a massive attack on their currencies.
LACKING POSSIBILITIES OF NATIONAL GOVERNMENTS TO PROTECT THEIR ECONOMIES

AND FINANCIAL STRUCTURES
Next to the number one problem of external debt, another serious weakness of most CEE
countries is the limited possibilities of the governments to control the economic and financial
situation in their own countries. Rules of globalization in general and – after the 2004 adhesion
to the European Union – the complex maze of EU regulations have hamstrung the ability of
national governments to protect the economies and the financial structures of their countries
from harmful external effects.
While expanding eastward, the major tenet of EU economic policy was – and still is – the free
flow of goods and capital. But it has proved to be a oneway street, as it had been predicted by
many at the time. Essentially, capital moved only from the major western economies to Central
Europe and no investment capital was flowing from Central Europe to western countries, since
in the poorer Central European region there was no capital of any significance for investment in
Western Europe. The same story applied to the free flow of goods. After 1990, when Central
Europe’s economies became liberalized, western multinationals launched an unprecedented
invasion of Central Europe, and with the active cooperation – or connivance – of local
governments they have acquired the most valuable productive assets and destroyed
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thousands of smaller local firms which did not have the financial strength to withstand that
brutal onslaught, in the name of the freedom of the markets.
As a result of that onslaught, the share of foreign direct investment (FDI) in Central Europe is
stunningly high. A survey in 2005 established the following data (in percent of GDP):
Bulgaria 34,3
Czech Republic 48,1
Latvia 28,7
Lithuania 29,1
Hungary 55,9
Poland 31,3
Romania 24,2
Slovakia 32,8
To understand the true significance of these figures one should note that the average FDI in the
15 EU members before the enlargement was 33.1 per cent, but this was more than offset by a
42.7 per cent direct investment of these economies in other countries.
The harmful economic and social consequences of this extreme dominance of foreign capital
are now becoming especially clear, when the multinationals, under financial pressure
themselves, are trying to reduce their own problems at the expense of other economies where
they operate, mainly by closing down production in various regions, including that of Central
Europe. And the countries of Central Europe have hardly any production structures of their own
to fall back on in times of crisis, since most of those structures and plants have been destroyed.
Furthermore, when reviewing the special situation of Central Europe, we cannot miss a brief
reference to the state of the financial markets in Central Europe, more particularly to the
banking sector:
Like most of the production facilities in the real economy, the banking sector is also dominated,
directly or indirectly, by foreign banks, mostly from France, Germany, Austria and Italy. In
Poland, for instance, foreign banks own 70 percent of the entire banking system. In Hungary,
the only Hungarian bank with significant Hungarian ownership (OTP Bank) is struggling to
survive. If it fails, the banking industry in Hungary would be 100 percent under foreign control.
In Slovakia, the total banking sector is already under the control of foreign banks which
acquired the previous Slovak banks in the process of their privatization. In response to the
global financial crisis, Slovakia took certain steps in order to prevent foreign banks from
drawing assets from their Slovak branches, in case some of those banks wanted to solve some
of their problems at the expense of their operations in Slovakia.
This is, indeed, only one specific risk under the given circumstances. A much greater risk,
however, is that the governments of Central European countries have no knowledge of the true
financial conditions of the banks which operate large networks in their economies, since the
headquarters are beyond their jurisdiction. If any of them collapses, the failure would cause the
collapse of their networks in Central Europe, with huge financial and economic losses for these
economies.
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DISCRIMINATORY AGRICULTURAL SUBSIDIES
Finally, one should recall the treaties of 2004 which provided the framework for Central Europe
to join the EU. These treaties forced Central Europe to accept a highly discriminatory
arrangement concerning agricultural subsidies. Although Central Europe pays the full
contribution to the EU’s own resources, the initial subsidy received by the new Member States
was only 25 percent of the subsidy enjoyed by the previous members and -through a slow
gradual increase- parity will be reached only in 2013. As a result, the highly subsidised
agricultural products of these countries are being dumped on the markets in Central Europe,
destroying agricultural production, increasing rural unemployment and contributing to the
current account deficits.
The list of factors which make Central Europe more vulnerable to the global financial crisis
could be expanded further, beyond the several points mentioned above. Nevertheless, even
the several points made should prove beyond doubt that the unprecedented loss of financial
and economic freedom of this region, reminiscent of colonial dependences of the past, makes
this region much more exposed to the financial turmoil and much more defenceless than the
dominating economies of the European Union.
Most governments of Central Europe hold an opposite view, but these are the same
governments which were claiming just a few months ago that the financial turmoil would have
no meaningful impact on Central Europe. These governments do not level with the public,
although such hypocrisy will only increase the misery of the unprepared individual.
As a matter of fact, in Central Europe we can already pinpoint some of the most damaging
economic and social consequences of the financial turmoil. Some of them are already quite
visible, others are emerging. Notably:
(1) Countries with large current account deficits and exposed to large external debt will have
difficulties refinancing foreign debt. As a result, their currencies will be under serious pressure,
including speculative attacks on the currencies. The IMF and other institutions will pressure
these governments to continue servicing their external debt at any price, including further cuts
in social spending, cuts in government spending in general and increasing taxes. The economic
and social byproduct of the austerity measures will be further unemployment and further
misery of the people. Unemployment and poverty will be exacerbated by the fact that in the
wake of destructive globalization very few locally owned companies are left over to absorb the
newly unemployed.
(2) As a consequence of high external debt, the percentage of debt service in the export
revenue of Central Europe is bound to grow, leaving less for national consumption. A survey in
2005 revealed a level which was excessively high already at that time:
Bulgaria 31,5
Estonia 13,7
Hungary 31,0
Latvia 37,4
Lithuania 16,5
Poland 28,8
Romania 18,3
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(3) Real estate prices will decline; particularly single family homes purchased with bank loans
will be hit hard. As banks tighten credit conditions, loans for buying homes or refinancing
existing debt will be hard to obtain, and the credit squeeze will cause – in all probability – an
increased number of foreclosures and repossessions. Lower property values will reduce the
aggregate wealth of the nations. .
HAS THE EUROPEAN UNION BEEN BUILT ON FALSE ECONOMIC AND MONETARY-
FINANCIAL PREMISES?
In conclusion of this brief analysis one can raise a final and fundamental question about the
European Union itself. It is now obvious that the modern world has been built on false
economic and monetary–financial premises. Does this conclusion apply to the European Union
as well? If the answer is yes, what are the areas where changes would be most needed and –
realistically – what changes can be expected, if any? This is an important issue, while the
eventual response of the EU in the area of economic, monetary and fiscal policy, or in the area
of institutional arrangements, will significantly determine the way Europe and its people will
adapt to a changing world and the eventual response of the EU will also determine the ability
of Europe to maintain at least a minimal prosperity and well-being of its population for
generations to come. Ultimately, Europe‘s political and economic order could be at stake.
What are, then, some of the most urgent changes to be made in the realm of the EU and within
its competence?
First and foremost, interference with the smallest details of business and industry should be
abandoned. Thousands of directives, describing in minute details how a product should look
like, how it should be made or produced, should be scraped. The maze of unnecessary
regulations kills business initiative, destroys employment and results in shrinking absolute
purchasing power of the European public. And the numerous scandals show that even the
stated objectives of this policy are far from being achieved. 19th century Europe knew hardly
any governmental system of product regulations, yet the economy was booming. If Europe
wants to be competitive in a global world, the first task is to restore the freedom of business –
and freedom of the individual – to produce things they wish and the way they decide to
produce, with full responsibility for any wrong decision. This would be the best economic
stimulus the EU could provide in fighting recession in Europe.
It might also be opportune to examine, within the framework of a judicial review, whether the
myriads of EU business regulations and restriction are contrary to fundamental human rights
that include the right and freedom of everybody to use his or her own resources according to
his or her discretion, for the purpose to achieve his or her best happiness.
As it is now, the EU harmfully restricts the business initiative of millions in Europe, while in
actual fact not protecting the health and safety of the public. Statistics show this.
Secondly, it is time to review and modify the Stability and Growth Pact, which is an integral part
of the Maastricht Treaty. More particularly, the provision to keep the budget deficit of the
member countries under three percent needs a thorough reexamination. It is an arbitrary
number, never proved scientifically, and most member states have been permanently having
trouble implementing it. Unfortunately, monetary theory is of no help in solving the problem.
The issue is closely related to the creation and supply of money, another big area of theoretical
uncertainty.
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In our era, in the era of fiat money (or paper money), when money is created at the discretion of
human beings (mostly by the banking system, including the Central Banks), fiscal imbalances
can occur due to monetary imbalances, outside the control of governments. In order to be able
to respond to changing monetary circumstances, governments need more fiscal flexibility. The
three percent limit denies them this flexibility. One idea could be to link the advisable limits of
budget deficit to unemployment.
Thirdly, it is time to create a totally free market within the EU for agricultural products, as it is for
manufactured goods. The current, restrictive agricultural policy, together with any forms of
CAP, should be abolished. It is an economic absurdity that with the help of quotas and
subsidies the EU effectively restricts the optimal use of land within Europe, although land is the
most valuable and irreplaceable asset in every economy. If freed from all the political shackles,
the agriculture of Europe could absorb a great number of rural and urban unemployed – a
highly desirable objective.
Fourthly, for the benefit of all the peoples of Europe, the world financial crisis necessitates a
thorough review of the role of the European Union in the framework of pan–European efforts
to create an ‘ever closer Union’. Two grave shortcomings of the EU are already obvious:
- First, while in many areas the EU is enforcing a harmful policy of restrictions, in other areas it is
pursuing a reckless policy of liberalism, notably in trade relations with other continents. These
harmful policies made Europe an easy victim of the world financial crisis and they are largely to
blame for the great hardship and misery that the peoples of Europe have to suffer in order to
contain the economic consequences of the financial collapse.
- The other shortcoming is the lack of efficiency of the EU when confronted with a global
economic and financial disaster. Where was the EU when the crisis started in 2007? What
actions did the EU take ever since? Practically nothing! All measures of financial defence were
taken by the member states separately, each on its own behalf. The EU is only a framework for
these actions, which could have been taken without the current framework of the EU, in a
coordinated way. The euro as a common currency however has proved to be a much more
efficient instrument of cohesion and joint action than the EU policies. This fact should be a
sobering lesson.
As a counterweight to this lack of efficiency, we can witness a visible surge of sovereign

decisions by many member states. This is inevitable, since the EU – despite all its rhetoric to the
contrary – has proved unable, so far, to project an economic vision of Europe, where sacrifices
and benefits of member nations are well balanced for the common well-being of all the
peoples of Europe. No doubt, this is an enormous challenge. But Europe will see a slow but
steady re-emergence of the role of sovereign member states in shaping their own economic
and financial destiny, and the EU might find itself irrelevant if a truly common economic and
social vision is not found.
Beyond the empty rhetoric, like competitiveness, cohesion, convergence, etc., the EU needs a
thorough reappraisal of its policies. In view of the growing economic and social instability in
Europe the EU should offer solutions for the common fear of the great majority of Europeans,
and its proclaimed objective should be the economic and social security of every European
through the common efforts of every European.
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By the mere weight of its threat the global financial crisis appears to have jolted the EU out of
its self-delusion and complacency. Important changes appear to have gained momentum in at
least three areas.
First, the benefits of the eurozone have become obvious as a main instrument of monetary and
financial defence, particularly for smaller countries. There are indications that for most of the
smaller countries outside the eurozone the crisis will accelerate the process of adhesion to the
zone.
Second, after decades of benign neglect the banking sector will be subject to more scrutiny –
and possibly supervision – on the part of the EU. Since money is the central instrument of
economic activity, monetary issues cannot be merely left to the banking system. The real
economy – and the taxpayers – must be protected against the greed and monopolistic power
of the banking network.
Third, the rule of reckless liberalism in economic policy is likely to be over. This fact can turn out
to be a great benefit of the global financial crisis, even if the price for this change is terribly
high. As part of the changing philosophy, the state is again an acceptable partner in the
economy as it is actually saving the reckless free market from extinction. It is an absurdity to
deny the state its role in the producing sphere of the economy, but to demand from it to fix all
economic and social damages caused by the free market, notably in the field of
unemployment. For the EU, to acknowledge and support the role of the state in the economy is
absolutely essential. It could be the touchstone of its sincerity to change.
FINAL REMARKS
Looking ahead into the future one cannot emphasize enough that a way out of the present
crisis can only be found if one tries to treat its true cause, not the side effects. And the true
cause is the huge global imbalance between the astronomical sums charged to the real
economy on a global scale and the inability of the real economy to service this debt.
The European Union can do much to answer this challenge within its own sphere of
responsibility. Fundamentally, the EU needs to revise its financial structure, de-centralise the
collection of public revenues and abandon some of its pet projects. Some suggestions to this
effect:
Member states should be encouraged to reduce their VAT by 1 or 2 percent, and at the same
time empower the municipalities to impose a local levy on local commerce, as a way to
improve their impoverished financial situation. More money would be spent for issues that
really affect the life of the citizen, with less bureaucracy.
Instead of financing various local projects, the EU could much more effectively help the
economic efforts of Member States by abandoning such activity and by reducing the Member
States’ contributions to the EU’s resource based on the gross national income (GNI), which
accounts for around 69 % of total EU revenue.
The ability of the banking sector to deluge the public with credit must be restrained. This can
be achieved though various means, e.g. by establishing a legally binding higher capital
requirement within the EU. Contrary to official views, the problem is not too little credit (debt)
but too much credit, which becomes an impossible burden to service anymore. The global
financial crisis demonstrates that any boom built on credit is a false boom. There is a great
opportunity for the EU to develop an economic system where boom and lasting prosperity is
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not built on credit (debt!), but on a more rational concept of the economy, where production
and consumption is determined by the existing purchasing power in the economy, without
credit.
There is a widely held economic assumption that man’s economic activities are driven by two
factors: fear and greed. In substance, the neoliberal concept of economic policy has been one
that approves and advocates greed, with all its disastrous consequences as we are seeing
today. The EU could take the initiative to construct an economic model that severely restricts
the role of greed in economic relations amongst human beings, while maintaining individual
incentive to work. A move in this direction would be of epochal significance in the history of
mankind.
In times when the EU is struggling with so many issues of immediate concern, the idea appears
to belong to fantasy. But people are really prone to new ideas only when in distress. And
Europe is now in distress.
Yet as the world crisis brings new institutional arrangements into being (G-20 Group, enhanced
role of the IMF, etc.), the European Union will lose some of its powers to solve its own problems
at its own discretion, while EU Member States will be under pressure at home to find their own
solutions. All this is bound to weaken the position of the European Union.
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THE IMPACT OF THE FINANCIAL CRISIS ON

THE EUROPEAN UNION
By Mogens Ove Madsen (December 2008)
“Speculators may do no harm as bubbles on a steady stream of enterprise. But the position is
serious when enterprise becomes the bubble on a whirlpool of speculation. When the capital
development of a country becomes a by-product of the activities of a casino, the job is likely to
be illdone”
J.M. Keynes (1936): The General Theory of Employment, Interest and Money
No doubt, neither the collapse of Wall Street in 1929 and the following depression are
forgotten, nor is Keynes‘ monetary theory of production and his policy-proposals.
Recently, Citigroup economists wrote in an equity research report that the heart of capitalism is
under pressure and, much more horrifying, that much of the economic pain still lies ahead,
including job losses, business failures, mortgage arrears, repossessions and debt warnings. But
this crisis did not start yesterday. As a matter of fact it is one of the best-predicted crises in
history, and it manifested itself a few years ago, in 2004, when the US interest rates began to be
raised. At that time the US housing market began to suffer, with prices falling and a rise in
homeowners defaulting on their mortgages. In recent years, banks have switched over to a new
model, selling the mortgages on the bond markets. This made it much easier to fund additional
borrowing, but it has also led to abuses, as banks no longer had the incentive to carefully check
the loans they granted. By 2005, sub-prime lending had spread from inner city areas to the
entire United States. But as a consequence of the American monetary policy, by 2006 default
rates on sub-prime loans in particular rose to record levels. From the beginning of 2007, the
value of mortgage bonds started to fall to about 20% to 40% of their original value, and the
banking sector faced huge losses as a result of the sub-prime crisis.
In the summer of 2007, the sub-prime mortgage lending began to ripple, setting off financial
problems around the world. Two Examples: In August, the French bank BNP Paribas triggered a
sharp rise in the cost of credit and told investors that they would not be able to withdraw
money out of two of its funds, because it could no longer value the assets in them owing to a
complete evaporation of liquidity in the market. Banks began to refuse to do business with
each other and the interbank Libor rate went up – a measure of how much banks distrust each
other. The UK bank, Northern Rock, relied heavily on the markets, rather than on savers‘
deposits, in order to fund its mortgages lending. The onset of the credit crunch dried up its
funding by September 2007. Not that the business plan of Northern Rock was different from
those taken by most other banks – it was the rapidity of its expansion that led to its downfall.
The result was a loan from the Bank of England that amounted to Ł25 billion.
As a result, conditions in the interbank credit markets became strained, and banks turned to
their central banks for liquidity. This development reached a peak in September 2007, but there
have since been a number of further waves where tensions have risen as more losses were
revealed. In 2008, the financial turmoil has developed more heavily. In March, Bear Stearns
become the American Northern Rock and in the most dramatic rescue of a major US bank for
years, the Federal Reserve Bank of New York and its commercial rival JPMorgan Chase agreed
to a temporary cash injection. In early September two large US firms, Fannie Mae and Freddie
Mac, which account for nearly half of the outstanding mortgages in the US, were taken into
conservatorship by the US government. The Treasury Secretary stated that the two firms’ debt
235
levels posed a “systemic risk” to financial stability and that in the absence of action the situation
would worsen. In the UK, the Nationwide announced that it would merge with two smaller
rivals, the Derbyshire and Cheshire Building Societies. And a few days later, the Wall Street bank
Lehman Brothers posted a loss of many million dollars for the three-month period ending in
August.
The financial crisis has led to substantive measures being taken in an attempt to restore market
confidence and provide market liquidity where it was needed. Further weakness in the financial
institutions has resulted in some nationalisations. The Icelandic financial sector expanded
dramatically overseas and in October 2008 Iceland became the first Western nation to ask the
IMF for support even if the state took over the country’s three biggest banks.
The crisis has taken effect worldwide and requires urgent global action. Leading economists
like Barry Eichengreen and Richard Baldwin recommend three basic policy responses: Quick
bank recapitalization, deposit and loan guarantees and a macroeconomic stimulus; all three
actions globally coordinated. The Belgian economist Paul de Grauwe argues that the crisis has
reached a stage that is beyond the reach of central banks alone. He recommends instead full-
scale nationalisation of the core parts of the banking system as the only option through which
lending to the nonbanking sector can be resumed.
And what about the European Union? What is the impact of the crisis and will it be possible for
the EMU to deal with it? In a paper from the European Commission (29.10.2008) it is stated that
all Member States will be affected by the crisis and it is likely that unemployment will increase,
demand will fall, and fiscal positions will deteriorate.
But the Commission‘s paper is unclear on several points, especially regarding the problem-
description, and in particular the one related to the institutional arrangements in the EMU. Let
us take three examples:
European banks have been extremely busy in using the potentials of free capital movements.
According to the Bank for International Settlements, the western European banks account for
three-quarters of the total $ 4.7 trillion in cross-border bank loans to Eastern Europe, Latin
America and emerging Asia – a sum that vastly exceeds the scale of both US subprime and Alt-
A debacles. The lending spree has been a European play. Europe is in jeopardy of becoming the
second epicentre of the global financial crisis, which this time would unfold in Europe rather
than America. Traders are paying close attention as the contagion moves from the periphery of
the eurozone into the core. They are tracking the yield spreads between Italian and German 10-
year bonds, the stress barometer of monetary union.
Since July the European single currency has now shed more than a fifth of its value (Chart 1).
This is a dramatic fall coming from the threat of a global recession. The US dollar seems to be
safer and the ECB might still have room for further interest cuts to pump cash into the
economies of Europe, which would mean that the Euro would no longer be as attractive as the
dollar or the yen. This will also increase the risk of capital flight from Europe. There will be an
imminent danger that Eastern Europe’s currency pegs will be smashed (unless the EU
authorities wake up to the full gravity of the threat), which in turn would trigger a dangerous
crisis for the EMU itself. At the moment, the system is in some way paralysed and it can well
offset a very deflationary effect.
236
Chart 1
USD/euro
1,70
1,60
1,50
1,40
1,30
1,20
1,10
1,00
0,90
0,80
0,70
1999 Jan
2000 Jan
2001 Jan
2002 Jan
2003 Jan
2004 Jan
2005 Jan
2006 Jan
2007 Jan
2008 Jan
2009 Jan
Source: http://www.x-rates.com/d/USD/EUR/data120.html
A recent analysis has shown that economic confidence in Europe fell to a seven-year low in
September, the worst since 9/11. The financial crisis moves from the banks brokerages to
factories, shops and homes. A decrease is expected in exports, consumption and investment.
Some of the big Eurocountries are already balancing on the edge of the 3% budget deficit in
the public sector. We have come very close to a breach of the requirements of the Stability and
Growth Pact, but a quick recovery, or at least an avoidance of a depression, requires the
possibility of discretionary fiscal policy.
In some short introductory remarks, the President of the EU Commission sketched a 19/11 plan
in Strasbourg. First, the plan will be a timely, targeted, and temporary fiscal impulse, and
second the Commission will try to make a “smart mix” of regulation, R&D, state aids, EU and EIB
funds to make forward-looking investments in key sectors like cars, construction and enabling
technologies. This will eventually be presented as a European plan “from crisis to recovery”.
This might mean that the Commission will go to the borders or maybe beyond the borders of
the institutional arrangement of the EMU, and especially of the Stability and Growth Pact. This
will certainly be necessary in view of just some of the described problems above. And to go
further - remembering the political work of Keynes, a New Worldwide Bretton Woods currency-
agreement is more urgent than ever.
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238
Chapter 7
Defence
Esko Seppänen, EUWatch, June 2008:
In the new Treaty of Lisbon, the status of non-alliance of these countries is at

risk. Little by little, even the non-aligned are enticed into relinquishing the
military aspects of their sovereignty into supranational
hands.
Esko Seppänen, EUWatch, June 2008:
How credible is the non-aligned status of Finland if it performs offensive and

possibly illegal operations and expresses its readiness to participate in the
military hard core of the EU?
Franz Leidenmuehler, EUWatch, June 2008:
A much less delightful new regulation in the Treaty of Lisbon is the

introduction of a Defense Alliance clause. With this new clause of mutual
defense the EU will develop into a military alliance like NATO or the former
Warsaw Pact.
Claude Gaucherand, EUWatch, June 2008:
The fight against terrorism has provided the NATO war machine with new
horizons.
Claude Gaucherand, EUWatch, June 2008:
We saw Parliament hastily ratify the Lisbon Treaty, that slightly simplified
version of the draft Constitution, thereby leaving the future President of the
European Council free to pursue his own policy, while a White Paper on
defence – the broad outlines of which are already known – will console him in
the decisions that have already been taken.
239
Manfred Rotter (professor of international law at the University of Linz),

quoted by Peter Henseler, EUWatch, June 2008:
The obligation to provide aid and assistance, which is now a legal

requirement, will undeniably at some stage require concessions to be made
regarding either the CSDP or the principle of neutrality.
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FINLAND AND THE MILITARISATION

OF THE EU’S NON-ALIGNED MEMBER STATES
By Esko Seppänen (June 2008)
In February 2008 in Munich the United States Secretary of Defence Robert Gates requested the
other member states of NATO to send troops to Southern Afghanistan to fight “terrorism” (i.e.
Pashto nationalism). Otherwise, so he said, NATO itself could break down.
Should the US really abandon NATO (and leave Europe), it could be the starting point for the
EU’s development of a European military alliance. The activities of NATO would continue
without the US presence, resources and command.
With the Treaty of Lisbon (which should be called the new EU Constitution) the European
Union is already prepared for this unlikely eventuality. A new defence dimension is included in
the Treaty of Lisbon, as the virtual military alliance West European Union (WEU) has been
dropped altogether. Its military responsibilities have been transferred to the EU itself. The WEU,
however, still exists.
There are six non-aligned Member States in the EU: Austria, Cyprus, Finland, Ireland, Malta and
Sweden. In the new Treaty of Lisbon, the status of non-alliance of these countries is at risk. Little
by little, even the non-aligned are enticed into relinquishing the military aspects of their
sovereignty into supranational hands. In the long run, the EU does not favour political diversity,
even though it may be obliged to tolerate limited diversities.
The Treaty of Lisbon eradicates the pillar structure of the existing treaties, rendering defence
and related matters a clearer objective. In addition to the Common Foreign and Security Policy
(CFSP), it introduces the new European Security and Defence Policy (ESDP).
ESDP comprises both the territorial defence of Member States under the auspices of NATO and
demanding military operations outside common external borders under the auspices of crisis
management.
In the future, those Member States participating in the “permanent structural cooperation” (a
new concept introduced by the Treaty of Lisbon), will be the military hard core of the union.
The Treaty of Lisbon gives the participants the possibility to act on their own in the name of the
whole of the EU and operate the resources and troops organised by them. The first EU battle
troops are an embryonic form of this cooperation.
The French president Nicolas Sarkozy has announced a plan to gather a pioneer European
military alliance of the six biggest countries (G 6), and such a group will be launched next year
after the Lisbon Treaty‘s ratification and entry into force. The countries taking part in this
alliance would have to spend 2 % of their GDP on defence; an approach manifested in the
Lisbon Treaty, which stipulates the binding commitment of all EU countries “to improve their
military capabilities”. The French initiative is focusing on how to squeeze a greater effort on
military spending from its EU partners, especially pressing Germany to boost military
capabilities.
241
Although the activities under permanent structured cooperation are open to all members, they
may, in practice, be closed for smaller countries. They are coordinated - and the entrance
criteria for the latecomers are controlled - by the supranational European Defence Agency.
It is important to note that the Member States, while progressively increasing their military
capabilities, do not strengthen territorial defence in Europe, but rather prepare to operate
outside the union borders (if need be illegally, i.e. without a UN mandate).
For the non-aligned countries the most important aspects in the Treaty of Lisbon concerns the
common defence commitment.
A crucial feature of any military alliance is that its members commit themselves to collective
defence against aggression from outside. As written in Article V of the North Atlantic Treaty, the
members give each other a mutual security guarantee “taking forthwith, individually and in
concert with the other Parties, such action as it deems necessary, including the use of armed
force, to restore and maintain the security of the North Atlantic area”.
The EU has no territorial defence of its own.
The territorial defence of NATO members of the EU is provided for by NATO, and the Treaty of
Lisbon provides for perfect NATO compatibility for all this kind of action by the EU.
In the new treaty, NATO´s mutual security guarantee could not be extended to include the non-
NATO members of the EU. Such a decision is not in the competence of the NATO members of
the EU - and not in the interest of the non-aligned Member States either.
In 2003, the Convention drafting the EU Constitution suggested that the EU should provide a
security guarantee to all its members with its own resources. The proposal was presented in the
form of a legally non-binding declaration, which Member States could either sign or not. Not
signing was an option reserved for the non-aligned countries that did not want to participate in
the virtual military alliance formed by the signatory countries. The status of the nonaligned
could thus remain intact.
At the Intergovernmental Conference (IGC) of 2003, Italy, then holding the presidency of the
Council, proposed this declaration to be transferred into the Constitution as a legally binding
article. It was proposed that if a Member State was the victim of an armed aggression on its
territory, other members should have an obligation of aid and assistance by military and other
means in their power (in accordance with Article 51 of the United Nations Charter).
The sentence included the aid by “military means” as a binding commitment. During the IGC
the article was, however, inserted into the Constitution without these words, and that
formulation was then copied into the Lisbon Treaty as such, i.e. without the wording “military
means”. In Article 42(7) TEU as amended by the Lisbon Treaty, there is now an obligation to
provide assistance (by all the means in the Member States) power, but not necessarily military
assistance.
In the new treaty, there is only one obligation to give military aid to another Member State: In
the socalled “solidarity clause” (which is, by the way, not included in the ESDPpart of the Lisbon
Treaty) in the cases of preventing terrorism or acting after a terror strike. As to what terrorism is,
this is open to interpretation.
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Without an explicit mutual defence commitment, the EU is not a military alliance - but it is
increasingly militarised by continuously improving the military capabilities of the Member
States (to implement EU crisis management operations, including peace-making and other
offensive actions).
If my country Finland (or any other non-aligned Member State) performs offensive and possibly
illegal operations and at the same time expresses its readiness to participate in the military hard
core (permanent structured cooperation) of the EU, one can ask, how credible the nonaligned
status of that country is, even if it is (officially) not committed by any mutual defence clause.
Finland’s EU membership and its commitments have already resulted in a new formulation of
the Finnish non-alliance status. According to the official government’s statement, Finland is not
a militarily non-aligned country anymore, but a country which is not a member of any military
alliance yet militarily allied with the other EU members.
The new security and defence policy (ESDP) is the way by which the EU erodes the military
diversity of the union. The non-aligned Member States that want to be sovereign in matters of
war and peace are enticed to align themselves militarily; an alignment which Finland has
already done by (re-)formulating its international status in order to become compatible with
the new ESDP of the union.
In that case, the government has acted against the will of its people.
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FROM COMMON MARKET TO COMMON DEFENSE

THE COMMON FOREIGN, SECURITY AND DEFENSE POLICY OF THE
EU AFTER LISBON
By Franz Leidenmuehler (June 2008)
WITHIN THE PAST TWO DECADES THE EU HAS TRANSFORMED FROM A COMMON MARKET
ORGANIZATION TO AN ALLIANCE OF MUTUAL DEFENSE, NOT LEAST BY THE TREATY OF LISBON,
WHICH HAS NOW BEEN RATIFIED BY TWELVE MEMBER STATES; RECENTLY, ON 9 APRIL 2008 BY
AUSTRIA, A PERMANENT NEUTRAL COUNTRY.
THE DEVELOPMENT OF CFSP AND CFSDP
In its origins, the EU was an economic project with the goal of establishing a common market.
Early attempts in the 50s to build a European Defense Community failed because of the
resistance of the French parliament. It lasted until the 70s, when the first steps to establish a
European Foreign Policy were made. With the Treaty of Maastricht (Treaty on European Union) in
1992 a Common Foreign and Security Policy (CFSP) was established.
With the Treaty of Amsterdam some tasks of ‘crisis management’ outside the territory of the
Union (the so called Petersberg tasks) have been introduced into the EU Treaty (TEU). Article 17,
paragraph 2, TEU provides that “[t]he European Union will fulfill humanitarian and rescue tasks,
peacekeeping tasks and tasks of combat forces in crisis management, including peacemaking.“
All decisions within the CFSP have to be made by unanimity; that is the clear wording of the
Treaty. If one State doesn’t want to participate in an action, but does not want to prevent the
other Member States from doing it, this State can make a so called “constructive abstention”.
Military capabilities to fulfill the tasks of Article 17 TEU have not been created by the Treaty.
This was done at meetings of the European Council, by the Heads of State or Government, in
Cologne and Helsinki in 1999. These events are considered as the starting points of the
Common Foreign, Security and Defense Policy (CFSDP). Through the so called “Helsinki
Headline goal” it has been agreed to build up military capabilities to fulfill the crisis
management operations until 2003. These troops - national capabilities standing ready for
European tasks - do therefore not have an explicit legal base in the Treaties. Later on, the same
process set off the so called “Battle groups”. These groups are also aimed at fulfilling crisis
management operations, but are foreseen to be ready for action within a much shorter period
than the rest of the ‘Helsinki Headline’ troops.
So the EU is currently a military actor, but limited to crisis management. Today, the EU is not a
defense alliance with a mutual military assistance clause, or even further, a common European
army.
THE CONSTITUTIONAL TREATY AND THE LISBON TREATY
The Constitutional Treaty

To improve the process of European integration, the idea emerged at the end of the 90s to
develop a “European Constitution”. Having a closer look, this seems to be just a label. The EU
always had a constitution, but it hadn’t been called so. It was just called “Founding Treaties”.
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For different reasons the attempt to establish a European Constitutional Treaty failed. In the
opinion of the author, it was especially the labeling as “constitution” that let public opinion to
take the floor. Had the “Treaty on a Constitution for Europe” been called “Treaty of Rome”,
nobody would have taken notice of it, as was the case with the Treaties of Amsterdam and Nice.
But be that as it may, referendums in the Netherlands and in France came to a negative result
on the treaty.
The Treaty of Lisbon

The Treaty of Lisbon, signed by the Heads of State or Government of the 27 Member States on
13 December 2007, is the follow-up Treaty in reaction to the failing of the Constitutional Treaty.
One could say that the only difference is the name; the content is nearly the same.
Currently (May 2008), the Treaty is ratified by 12 states. The Treaty of Lisbon will come into
force after ratification by all Member States. Ireland stands out in particular as it has to hold a
referendum for constitutional reasons and this will be held in June. But assuming that all
Member States say “Yes” to the Treaty of Lisbon, there will be some interesting changes by this
Treaty in the field of CFSDP.
CHANGES IN THE FIELD OF CFSDP
First, what will not change: We still need unanimity in the Council for any action in the field of
CFSDP. Aside from that, there are nevertheless four important innovations in the field of CFSDP
introduced by the Treaty of Lisbon: (a.) the armament clause, (b.) the enlargement of the range
of crisis management missions, (c.) the so called “permanent structured cooperation”, and last
but not least, (d.) the defense alliance clause.
a. The Armament Clause

Article 42, paragraph 3 TEU (Lisbon version1) provides that “the Member States shall undertake
progressively to improve their military capabilities“. For this purpose a “European Defence
Agency” is founded.
Later on we will have a closer look on the tasks that the European military capabilities are
foreseen to fulfill, but first: crisis management operations. This raises hopes that this armament
clause does not mean a quantitative leap, but rather an improvement of the equipment’s
quality, in order to effectively fulfill the crisis management tasks. This would mean, for example,
that it is not about tanks, but about the overall improvement of transport capabilities.
b. Enlargement of the Range of Crisis Management Missions

At the moment, Article 17, paragraph 2 TEU considers “humanitarian and rescue tasks,
peacekeeping tasks and tasks of combat forces in crisis management, including peacemaking“ as
possible tasks for EU crisis management missions.
When the Treaty of Lisbon enters into force, there will be a much broader range of tasks: Article
43, paragraph 1 TEU (Lisbon version) states that the tasks, “in the course of which the Union may
use civilian and military means, shall include joint disarmament operations, humanitarian and
rescue tasks, military advice and assistance tasks, conflict prevention and peacekeeping tasks, tasks
of combat forces in crisis management, including peace-making and postconflict stabilization [as
an example for the latter we have the new planned stabilization mission to Kosovo]. All these
tasks may contribute to the fight against terrorism, including by supporting third countries in
combating terrorism in their territories.“ Aside of political considerations most of these tasks are
not problematic in a legal sense, as they depend per definitionem on the consent of the
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concerned third countries. But if there is no consent of the relevant parties (especially in the
case of the tasks of combat forces in crisis management, including peace-making), the question
of UN Security Council mandates is of relevance. We will come back to this later on.
c. The “Permanent Structured Cooperation”

Article 42, paragraph 6 TEU (Lisbon version) is the legal base for a kind of differentiated
integration (“Europe of different speeds”).
Those Member States whose military capabilities fulfill higher criteria and which will make
more binding commitments to one another in this area with a view to the most demanding
missions can establish such a “permanent structured cooperation” and thereby form a closer
group or alliance.
As a result, with the Treaty of Lisbon the concept of differentiated integration is for the first
time extended to the field of CFSDP. Until now we only know it in the so called first pillar of the
EU, the internal market; the Monetary Union, for example.
After the Treaty of Lisbon enters into force, this permanent structured cooperation will then
serve as the legal base for the so called “battle groups”. As already mentioned, these “battle
groups” lack a legal basis at the moment. For the future, Article 42, paragraph 6 TEU (Lisbon
version) will serve as legal ground for the establishment of “battle groups” and for those already
existing; Article 43, paragraph 1 leg. cit. will serve as a legal basis for their actions.
This leads to the question of UN Security Council mandates for EU action outside of its territory.
Excursion: The Question of UN Security Council Mandates

The relation to the UN as a whole and especially to the UN Security Council is not only of
importance for the neutral members, but for all Member States, as according to international
law military force within the territory of third states is only legal with the consent of the third
state, when exercising the right of self-defense, or with a mandate of the UN Security Council;
this, according to chapter VII of the UN Charter.
In the aftermath of the Kosovo crisis in 1999 there have been intense discussions about so
called “humanitarian intervention” outside the framework of the UN Charter. But inasmuch as
today’s discourse, and partially resulting from the Lisbon Treaty, there are a lot of arguments for
the subordination of the EU to the UN Charter.
To begin with, every single EU Member State is a party to the UN Charter and is thereby bound
as a State within all its actions. But the EU as such has also bound itself to the UN Charter
through provisions in the current EU Treaties; and these bindings would be increased by the
Treaty of Lisbon. Presently, only Article 11 TEU refers to the “principles of the UN Charter“. Here
one could argue on whether this only refers to the principles and not the laws, as had been the
case with the debate on the Kosovo crisis.
But now by the Treaty of Lisbon these references to the UN Charter are increased. Article 3,
paragraph 5 TEU (Lisbon version) calls for the “strict observance and the development of
international law, including respect for the principles of the United Nations Charter“.
Moreover, Article 21, paragraph 1 TEU (Lisbon version) is worth mention, as it refers to the UN
Charter four times. There is in particular paragraph 2 (c), which refers not only to the
“principles”, but to the “purposes and principles” of the UN Charter. And, without doubt, the
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highest purpose of the Charter is to maintain international peace and security by taking
collective measures (Article 1 UN Charter).
Again, in the Chapter on CFSDP the UN missions have the aim “to strengthen international
security in accordance with the principles of the United Nations Charter” (Article 42, paragraph 1
TEU, Lisbon version).
So, without doubt, by the Treaty of Lisbon the EU subordinates itself to the UN Charter and
submits to the UN Security Council the main responsibility for the promotion of world peace.
Additional to that, some States, e.g. Ireland and Malta, consider the UN Security Council
mandate as an absolute prerequisite to any EU external action.
And because of unanimity it needs only one State to obstruct EU action without a UN mandate.
As a result, one can say that EU crisis management is not a competitor to the UN, but much
more a servant to the world organization in the absence of the latter’s own troops.
According to Article 43 of the UN Charter “all Members of the United Nations, in order to
contribute to the maintenance of international peace and security, undertake to make available to
the Security Council, on its call and in accordance with a special agreement or agreements, armed
forces, assistance, and facilities, including rights of passage, necessary for the purpose of
maintaining international peace and security“. The EU is now doing exactly that: increasing
troops and making them available to the needs of the UN Security Council. Therefore, this part
of the Treaty of Lisbon - specifically the provision of a legal base for the “battle groups” and its
strict binding to UN mandates in so far as it is obligatory by international law- can be
welcomed.
d. The Defense Alliance Clause
A much less delightful new regulation in the Treaty of Lisbon is the introduction of a Defense
Alliance clause. With this new clause of mutual defense the EU will develop into a military
alliance like NATO or the former Warsaw Pact.
During the negotiations on the draft Constitutional Treaty in December 2003 the Italian
presidency made an initiative for a strict clause of mutual defense within the new EU Treaty.
This provision was comparable to Article 5 of the NATO Treaty and states: “If a Member State is
the victim of armed aggression on its territory, the other Member States shall have towards it an
obligation of aid and assistance by all means in their power, in accordance with Article 51 of the UN
Charter“.
This strict clause would not have been compatible with the status of neutrality of Ireland,
Finland, Sweden and Austria and therefore, after the respective submissions by these countries,
the clause has been modified.
The wording of the new Article 42, paragraph 7 TEU (Lisbon version) now contains a second
sentence, the so called Irish formula: “This [meaning the obligation of assistance] shall not
prejudice the specific character of the security and defence policy of certain Member States.“
So we are now faced with a curiosity: the European Union is becoming a defense alliance, yet
the neutrals (in the meantime also Malta and Cyprus) have no obligation to assistance.
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Therefore we have a mutual defense obligation between 21 States and a one-sided defense
obligation of these 21 in favor of the 6 neutrals.
Curious, but nonetheless a status which is compatible with the status of permanent neutrality.
Therefore there are no consequences for the neutrals, even though the EU mutates into a
defense alliance.
ON THE LACKING NECESSITY OF A DEFENSE ALLIANCE CLAUSE
The development of the EU into a defense alliance by the Treaty of Lisbon raises the question of
sensibility, necessity and functionability of such a clause in case of the EU.
Alliances forming a collective defense make sense in a situation of menace, as their function is
deterrence. And the addressee of this deterrent function is a potential enemy state. ‘If you
attack one of us, you will get a reaction from all of us!’.
This deterrence function against enemy states is the only sense of a defense alliance. But if we
have a closer look at the current situation of the European Union there is no enemy state in
sight that has to be deterred. Javier Solana postulated in his European Security Strategy dating
from 2003 that there is presently no threat to Europe resulting from another State. Threats,
according to Solana, are resulting much more from terrorism or from instability in other regions
of the world. And terrorists cannot be deterred by a mutual defense clause, as in the case of
enemy states. So there exists no rational cause for establishing a defense alliance at the
moment.
Much more, transforming the EU into a defense alliance would not deliver more security, but
create more insecurity. Because a defense alliance, built without necessity, makes neighbors
nervous, since they have to suppose that they are potential recipients of the alliance’s
deterrence function. So as a result, this clause of mutual defense in the Treaty of Lisbon is not
only senseless, it would be creating even more insecurity and has thereby a destabilizing
function.
There would have been enough more important tasks to be reached by the Lisbon Treaty. So,
for example, although now the EU is a defense alliance (without necessity) it still does not have
a real common foreign policy. As long as we have the principle of unanimity in decision
making, there will not be a real common foreign policy. A common position will only exist if all
27 Member States agree on a topic. If only one State disagrees, there is no EU position. We have
tragically witnessed this in the case of the illegal Iraq war launched by the US and their allies. Of
the then 15 EU Member States seven supported the war, seven were against it, and Austria
“stood in the middle”, as the former Federal Chancellor Schuessel pointed out. As a result, the
EU did not have a common position on that war.
So in the opinion of the author it would make much more sense to concentrate on the
development of a real common foreign policy, rather than building up a senseless and
dangerous military alliance.
NOTE:
1
The article numbers quoted correspond to those the consolidated version of the Lisbon Treaty
published on 16 April 2008;
http://www.consilium.europa.eu/uedocs/cmsUpload/st06655.en08.pdf
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AFTER THE LISBON TREATY, WHAT IS OUR DEFENCE STRATEGY

AND WHAT KIND OF FOREIGN POLICY DOES IT SERVE?
By Claude Gaucherand (June 2008)
‘War is merely the continuation of politics by other means’ - Clausewitz
Defence policy has to be the corollary of foreign policy for any world power and the military
apparatus that a state creates for itself has to be consistent with the objectives and ambitions
that it has set; any lack of consistency at this level will come at a heavy price. This is also the
time to make long-term plans for the future, for such apparatus will serve for decades to come.
This kind of policy-making therefore has to be national rather than partisan in nature.
If under De Gaulle we believed that a country only has its own interests to protect, then it has
to be said that it was the interests of the French people that were being preserved, and with a
firm eye on the horizon. For those whose responsibility it is to conceive and implement such
policies it is essential at all times to take the long-term view.
Is this still the case in France today after the signing of the Lisbon Treaty and the umpteenth
modification of the Constitution following its ratification by Parliament?
SITUATION UPDATE
After François Mitterrand’s two terms of office as President, which followed on from the Valéry
Giscard d’Estaing period and the first term in office of Jacques Chirac, the central themes of
France’s foreign policy during the period 1981 to 2002, which were in fact clearly revealed
during the first Gulf War and the Balkans conflict, can be summed up as follows:
- the liberal Europe that was shaped by Brussels goes on to become the Europe of Maastricht,
which is vigorously supported by François Mitterrand (‘France is my country, Europe is my
future’);
- at the United Nations France makes great efforts to preserve its role as a permanent member
of the Security Council;
- gradual reinstatement in NATO: France’s military exclusion is used in the same way as its
cultural exclusion, while nuclear deterrence remains a national issue;
- opening up to the East accompanied by a disengagement from Africa.
In the area of national defence, and after 10 years of continuous effort with a budget of about
3% of GDP, the end of the Warsaw Pact and the break-up of the USSR was the signal for huge
savings to be made, the dividends of peace, while Maastricht – with its so-called European
defence policy integrated into an Atlantic framework – would seek to impose new restrictions,
the dividends of Europe and of NATO. The ‘cohabitation’ period 1997-2002, when the French
Presidency was of a different political colour to the majority of the National Assembly, was to
see the army budget cut to less than 2% of GDP, on par with the European average – apart from
the UK – and serving as a variable within the State budget, which is itself shackled by the need
to observe the ‘convergence criteria’. Army professionalisation became a fact of life without any
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real national debate or referendum: steps were taken to ensure that our armed forces could be
integrated into NATO, while at the same time our commitments were multiplying under the
banner of the UN, NATO and Washington in the Persian Gulf, in Bosnia and then in Kosovo, to
the point of going to war with a dismembered Yugoslavia.
Since 9/11 the French army has been engaged in Afghanistan alongside the US forces, and then
as part of the UN-mandated International Peacekeeping Force.
At the same time the process of privatisation launched in 1986, which was accelerated by
Lionel Jospin from 1997 on, in line with Brusselsdirected liberalism, has served to limit the
State’s control of the arms manufacturers and this drove the industry, via mergers and alliances,
to become Europeanised and ‘Atlanticised’ as the markets dictated. While the countries of
Eastern Europe, newly independent after 1991, waited outside the door of the European
Community, the United States – masters of NATO – invited them to join the Atlantic Alliance
and then to welcome in new US bases, which were now being sited even further into the
eastern sector.
With Mitterrand France was counting on a European defence system that could become the
second pillar of the Alliance on an equal footing with the American version, with France
bringing to the party its economic power, its advanced technologies, its diplomacy, its global
and African interests, its nuclear deterrence and … a concept for European defence that
unfortunately was not shared by any of its partners, not even Germany. As soon as he realised
this, Jacques Chirac opted for even greater, though still incomplete, reinstatement of the
integrated command organisation.
Yet the master plan of his predecessor still endured, namely to build the second pillar of the
Alliance by economic, diplomatic and military means, though by way of even greater
integration in NATO in order to please France’s partner nations, which were becoming
increasingly more numerous and which more than ever wanted to remain under the protection
of the great superpower.
CHANGE OF PERSPECTIVE
2002: Jacques Chirac, now free of the restraints of ‘cohabitation’, master at last of his own
foreign and defence policy, had to face up to the Iraq crisis. Paris then had to recognise a new
situation developing: the major enlargement of NATO by various Eastern European countries in
the summer of 2002, the accession of some of them to the European Union and the obvious
signs of their allegiance to Washington. At the same time Europe was dividing between the
supporters of international law and the sabre-rattlers: the Paris-Berlin axis, notably
strengthened by Moscow, stood against Washington, and France dared to wield its right of
veto on the Security Council.
This difference in assessment served to highlight the split between public opinion on either
side of the Atlantic, with the Anglo-American press dragging France’s name through the mire.
The ‘Arab’ policy that was abandoned in 1991 made a discrete reappearance, though was
inhibited by continuous pressure from European partners, while the post-9/11 media hype
echoed with the sound of the battle against terrorism against a background of war between
civilisations and Islamism that was now being identified with terrorism.
Another consequence was that while eight European governments assured Washington of
their support in the war and then in the subsequent occupation of Iraq, public opinion
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throughout Europe was seen to be opposed to such a policy. Was this the first sign of the
citizens of Europe splitting from the NATO-ised Europe being created in Brussels?
THE IRAQ CRISIS: A FOREIGNPOLICY LITMUS TEST FOR THE UNITED STATES AND FOR
MOST EU MEMBER STATES
The Iraq crisis serves as a pointer for ‘superpower politics’ on the threshold of the fourth world
war, which started in 1991, the year that witnessed the triumph of the United States of America
and the emergence of China as an intact and monolithic power. This policy has its practical side
and it has its advocates too; it has convergent explanations and, since June 1997/September
2000, it has been given an ideological, political, military and economic foundation: ‘the Project
for the New American Century’, as drawn up by R. Cheney, D. Rumsfeld, P. Wolfowitz, R. Perle, E.
Abrams and several other eminent neo-conservatives, in other words President Bush’s
entourage. This Project declares the global preeminence of the United States of America, which
is to be achieved by various means, including unilateralism and preventive military action, and
also affirms the military doctrine whereby other world powers are to be denied access to any
technologies that might give them parity in this area. It depicts the UN as leftist, anti- Zionist
and anti-imperialist.
The practical side is that of strengthening NATO, that economic and political machine, that war
machine that has been reshaped as an offensive alliance as it celebrates its 50th anniversary: in
June 1991 James Baker, US Secretary of State under George Bush, stated in Berlin that America’s
aim was to create a trans-Atlantic community stretching from Vancouver to Vladivostok, which
meant that within 20 years the frontiers of NATO – America’s military arm – would reach right
up to those of China. For Madeleine Albright, ‘America is a European power that has set out to
re-draw the borders of the Balkans and from now on NATO can intercede without a UN
mandate’.
Because of the technical standards imposed on its members, the Alliance constitutes an
instrument for economic domination and for political and military subjection that enables it to
secure the loyalty of those who sit on international bodies, including the Security Council, and
to spread the cost of its military operations. It also solicits customers for the US arms industry.
The policy of maintaining a state of permanent crisis in the Middle East serves various purposes,
one of these being the desire to control oil reserves. The US economy is structurally in deficit:
relocation is hitting the industrial sector, while consumption is being encouraged by way of low
interest rates, which has resulted in a public deficit that exceeds even the colossal sum spent
on the national defence budget. To deal with this problem the US has to attract capital from
the world’s savings accounts: one way to do this is to increase the barrel price of oil, which
Japanese, Chinese and Europeans have to pay for in dollars. The petrodollars that have been
accumulated by the crisis find a natural refuge in the United States, where they offset the cost
of consumption and further boost an all-powerful arms industry. The fight against terrorism has
provided the NATO war machine with new horizons. Here we are far removed from the North
Atlantic…. as if terrorism can be fought with armies: it is first and foremost the result of despair
and its deep-rooted causes, and therefore its curative treatment, are obviously political in
nature, even though we clearly need the police and the intelligence services to combat its
immediate effects and to protect society from those engaged in it.
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WHAT KIND OF FOREIGN AND DEFENCE POLICY DOES FRANCE NEED?
The Gaullist way

France’s defence policy has to take these facts into account along with all the economic,
diplomatic, cultural and military lessons that are to be learned: do we want a multipolar or
unipolar world? Primacy of international law or the rule of force and preventive military action?
Respect for the sovereignty of nations or the right to interfere? Sovereign independence or
subjection to the superpowers? Controlled economy or unrestrained liberalism? Openness to
Islam, Russia and China or adherence to human rights as a fundamental principle?
Independence comes at a cost, namely a latent war with Washington and its European
followers in all areas. We are facing a long, insidious and multifaceted conflict, the age-old
struggle of nations against empires, and one that involves every type of weapon imaginable:
military perhaps, diplomatic certainly, economic and financial of course, and – even more
insidiously – cultural too. It can no longer be a secret to anyone that since 1945 relations
between Hollywood and the Pentagon have been extremely close; the media have provided a
very effective vehicle, and control of this sector has played a key role in combating
disinformation, while English, the imperial language, has sought successfully to impose itself as
the only official language for international bodies of all kinds.
In spite of the protestations of ‘long-standing Franco-American friendship’, our nation has been
confronted with all these weapons since 1958.
What was needed was a strong resolve based on informed public opinion so that we could,
firstly, pursue a break-away policy through the French people’s rejection of the draft European
‘Constitution’, the revision of the Maastricht Treaty and follow-on versions, the denunciation of
the North Atlantic Treaty and the return to national control of command of the armed forces;
and secondly, make a real effort to create a defence system based more than ever on all-out
nuclear deterrence: it is clear that supremacy in this area is still the only comprehensive
insurance against a potential aggressor who refuses to have his policies questioned and who
respects nothing but the rule of force.
A defence policy that also requires the State to regain control of the armaments industry, it
being in the vital and strategic interests of the nation not to leave this sector in the hands of
faceless financial groups.
This is a long and difficult road, involving various ‘creature comfort’ sacrifices based on
collective solidarity.
If it is true that a body divided is condemned to perish, then any defence policy must strive to
restore national unity: it must do this on a sociological level by opposing all forms of ethnic and
religious ‘communautarisme’; in this context the restoration of national service, both civil and
military, would constitute a key element in the homogenisation of society and would provide
an opportunity to assess the nation’s health and cultural status at a time when illiteracy affects
nearly 10% of the population.
The speech given by Dominique de Villepin to the UN General Assembly suggested a return to
Gaullist thinking in the area of diplomacy and defence, something that was given concrete
expression in the rejection of the draft European Constitution by the citizens of France and the
Netherlands in the spring of 2005.
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The Nicolas Sarkozy way

With the election of Nicolas Sarkozy, that devoted supporter of US neoconservatives, France
opted to follow a different path. With the agreement – or the complicity? – of part of the
opposition, we saw Parliament hastily ratify the Lisbon Treaty, that slightly simplified version of
the draft Constitution, thereby leaving the future President of the European Council free to
pursue his own policy, while a White Paper on defence – the broad outlines of which are
already known – will console him in the decisions that have already been taken. We can
decipher these through a whole series of clues:
- in the Middle East: no Arab policy to speak of, just one special friend, Israel;
- in Washington: not an occasional ally but a friend of long standing; - in the Balkans:
unparalleled haste to recognise an independent Kosovo, that major state the size of a French
department, which also happens to be home to the exceptionally important US base of Camp
Bondsteel;
- in Afghanistan: a regiment is sent at the request of the US to provide reinforcement in the

field, while the European allies are now beginning to recoil from their involvement in an
endless war;
- as regards Iran, France has committed itself, in the words of the President, to supporting any
military action that may be decided against that particular country by acting alongside the
forces of the Atlantic Alliance;
- in the media battle surrounding China and Tibet, France has been quick to launch an attack
on the Middle Kingdom;
- as far as nuclear deterrence is concerned, we now have confirmation of a reduction in

capability here with the abandonment of the second aircraft carrier, while the President is
suggesting that our nuclear arsenal might eventually be ‘Europeanised’;
- in the European Parliament a majority of the French Members supported a motion calling for
the EU to be given a permanent seat on the UN Security Council, in return for which France
might possibly give up its own place.
The full significance of all these indications, all these signs, has become apparent with the
official announcement at the NATO Summit that France’s armed forces are to be returned to
integrated NATO command in 2009. This will certainly please President Bush.
From now on France’s foreign and defence policy will be quite transparent: abandoning any
ambition to play a special role in world affairs inevitably to become a submissive vassal state, a
member of a European club itself subjugated and dedicated to supporting the policies that
have been decided in Washington with an Atlantic organisation now devoted to a new style of
colonial warfare that is to be waged in the name of the fight against terrorism, the defence of
Good versus Evil, civilisation versus barbarism, and all founded on the right of interference in
others’ affairs. So, all told, nothing much has really changed.
The only challenge left to us is to become top of the European class, even if the competition is
fairly stiff from the United Kingdom, the ‘preferred one’, and Germany, that pillar of central
Europe.
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But does this really represent the philosophy of our nation in its relations with the rest of the
world? Alexis de Tocqueville said we should remember that ‘our people, when banished from
their homes and excluded from their way of life, are prepared to risk all, ungovernable the moment
they see sign of resistance somewhere, never subjugated to the level that they cannot throw off the
yoke.’
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FRANCE, NATO AND EUROPEAN DEFENCE
By Tomas Vasalek (June 2008)
THIS ARTICLE ANALYSES THE POSSIBLE OUTCOME OF NICOLAS SARKOZY’S INITIATIVE FOR
FRANCE’S RETURN TO NATO’S MILITARY COMMAND. THE AUTHOR OVERVIEWS THE DIFFERENT
POSITION OF THE MAIN MILITARY POWERS OF NATO (USA, UK, FRANCE AND TURKEY), AND
PROVIDES POSSIBLE WAYS FOR RECONCILIATION BETWEEN NATO AND THE EUROPEAN
UNION’S SECURITY AND DEFENCE POLICY.
Soon after his election as French president, Nicolas Sarkozy signalled that he would like French
officers to return to NATO’s military command. Sarkozy’s predecessor, President Jacques Chirac,
viewed relations between NATO and the European security and defence policy (ESDP) as
essentially a zero-sum game: what was good for one was bad for the other, and vice versa.
Sarkozy’s words now suggest that the ruinous quarrel between Europe’s two main security
organisations may be nearing an end.
Brothers in arms or brothers at war?

NATO and the EU make very poor friends. Even though the membership of both institutions
overlaps to a large degree (21 of the 27 EU member-states are also in NATO), the two barely
talk. Worse, they compete for the member-states’ defence money, and for the attention of
others. For example, in 2005 they could not agree on who should support the African Union’s
mission in Sudan, so each organisation now runs its own operation there. Occasionally, the
rivalry between the EU and NATO leads the memberstates to sabotage much needed
equipment purchases, like when France slowed down NATO’s plans to acquire a fleet of C-17
transport aircraft.
This competition leaves everybody worse off. Member states divide their already scarce
defence budgets between the EU and NATO. Both institutions have given their members a long
‘shopping list’ of new equipment needed for military operations (the so-called ‘capability
goals’) but the EU and NATO have failed to fully reconcile those lists. Each organisation is thus
asking the same cash-strapped governments for slightly different things. Not surprisingly,
when either institution tries to put military force in the field, it invariably finds that its
memberstates, torn between competing NATO and EU requirements and desperately short of
defence money, do not have enough troops and weapons.
Sarkozy’s predecessor is partly to blame for this state of affairs, but the roots go deeper.
Bureaucratic rivalry is behind much of the problem. Also, Turkey (which is in NATO but not in
the EU) and Cyprus (which is in the EU but not in NATO) use their memberships in the
respective institutions to settle scores with each other. And for a long time the US hampered
attempts to develop a European security and defence policy, although it later became more
positive.
To unblock the EU-NATO relationship, the allies will need to address many of the issues just
mentioned, and to do so more or less simultaneously. First, Britain and France must seize on
Sarkozy’s initiatives, or the hopes for better EU-NATO relations will evaporate. Britain and
France form the undisputed core of European defence. They are the main providers of troops,
and the largest producers and buyers of military hardware. The two countries are alone in
Europe in having a truly global, strategic, expeditionary mindset, and the forces to back up
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their ambitions. They virtually invented ESDP at the Chirac-Blair summit in St Malo in 1998. If
these two disagree, little happens in Europe on defence.
France also needs to reach a deal with Washington on which NATO command posts should go
to French officers. But the US may want something from France – namely more troops for
Afghanistan. And the US will resist French calls to make the EU, in effect, one party at the NATO
table. Washington will seek to preserve the alliance as a grouping of 26 member-states, rather
than see it become a forum for US-EU consultations.
Last but not least, for the EU and NATO to really start co-operating, Turkey needs to drop its
opposition to NATO sharing sensitive information with Cyprus and Malta (which are both
members of the EU, but not NATO). Turkey has blocked much formal contact between the two
bodies and prevented common planning between the EU and NATO for situations like a
potential crisis in Kosovo (prompting some memberstates to accuse Turkey of playing with
peacekeepers’ lives). Turkey might be tempted into allowing more cooperation if the EU offers
it greater access to its defence plans. But such a deal would prove controversial with a number
of EU countries, especially Cyprus and Greece.
France: Priorité Europe?

The French policy in the past was designed to turn the EU into an alternative to NATO, to make
NATO irrelevant, and, by doing so, to reduce US influence in Europe. But it made terrible sense
militarily: while the global demand for peacekeeping troops has sky-rocketed in the past ten
years, EUNATO squabbles have left Europe as a whole divided and weakened.1 European
countries are now ill-prepared to deploy troops in Africa, Central Asia, and elsewhere where
they are needed.
Sarkozy does not share Chirac’s penchant for competing with America, and he and his team are
more keenly aware of the insecurity around Europe’s borders. So they have essentially told
NATO that France will stop playing politics with defence, and that both the EU and NATO
should get on with the job of building and operating military forces.
However, the French offer to return to full participation in NATO, while tremendously
important for EU-NATO relations, is not the top priority for all of the French elites. People close
to Sarkozy say that the president is genuinely keen on returning to NATO’s core, with no strings
attached. But much of the French foreign policy establishment prioritises the EU, and, more
specifically, the task of converting Europe’s national militaries of varying size and relevance into
a stronger and more unified force, under the ESDP initiative. And much of this establishment, as
well as many senior French politicians, remains viscerally hostile to the idea of moving closer to
NATO. So in order to sell the idea of fully returning to NATO, Sarkozy needs to extract a price: to
strengthen ESDP. That is the gist of the proposals he first unveiled in August 2007 to a
conference of French ambassadors, and which he subsequently expanded in a September 21st
2007 interview with the New York Times.
The current French emphasis on strengthening ESDP could yet derail the rapprochement with
NATO. Paris appears to assume that by offering to behave reasonably towards NATO, it will
encourage its allies to sign up to the French vision for European defence. But the reality is
different. The UK would welcome France’s return to full participation in NATO, but it remains
lukewarm to many French ideas on ESDP.
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Not the best of friends: France and the UK on ESDP

British diplomats say that France is already behaving in a far more friendly and co-operative
manner at NATO meetings than it did under Chirac. They also seem heartened by some French
ideas for ESDP, particularly those aimed at putting pressure on other EU member states to raise
their defence budgets. But UK officials resist the French proposal that the EU create a
permanent centre for planning and commanding military operations.
France’s renewed interest in EU operational planning leaves the UK government in a

paradoxical situation. It has always wanted NATO and the EU to co-operate closely. Britain now
has the best opportunity in a decade to achieve just that. But the full French return to NATO
and the prospect of better EU-NATO relations hinges on a compromise with France on the
unloved EU operational headquarters. And if France succeeded in beefing up the ‘operation
centre’, it would, ironically, put more distance between the EU and NATO. This is because future
EU missions would almost certainly be planned and commanded by the EU rather than NATO.
Britain and France clearly need to find a compromise that allows France to claim progress on
ESDP, but also meets the UK’s desire for closer EU-NATO cooperation. This will not be easy
because the two sides have already been through the argument over EU operational
headquarters once, in 2003, and both parties walked away from it embittered.
A Franco-British compromise?
As things stand, the EU and NATO member- states, when considering a new operation, have to
choose between using a minuscule group of planners with both civilian and military expertise
(the EU’s operation centre), and a big, stateof- the art, military headquarters run by NATO. But
what both institutions really need is a robust civilianmilitary capacity.
Some NATO countries, including the UK, have long argued that NATO should be allowed to
plan its operations in conjunction with nonmilitary bodies, such as the EU, but possibly also the
UN or even nongovernmental organisations. The argument makes perfect sense: every single
military operation that NATO has carried out in the past decade has involved important
elements of nation-building. And that is a task for policemen, judges and administrators, as
much as soldiers. But NATO war planners are currently not allowed to involve civilian
organisations in drafting their plans, even though those plans often assume that civilians will
be deployed alongside NATO’s military forces.
Furthermore, France has opposed the idea of joint civilian-military planning at NATO, in part for
doctrinal reasons. The Chirac government feared that allowing NATO to co-ordinate with
civilians would undermine the EU’s status as a unique provider of both military and civilian
resources.
But NATO is not planning to start commanding thousands of police officers; it merely wants to
be able to co-operate with those organisations, like the EU, that have police and judges and
other civilians at their disposal. The UK government should tell the French that the EU could
add more operational planners if and when France allows NATO planners to start working with
civilian organisations in planning NATO military operations. This approach would strengthen
both the EU and NATO.
In an ideal world, the EU and NATO would not just co-locate but share operational planning
headquarters. They both rely on essentially the same pool of military forces. The obvious
difference is that five NATO allies – Canada, Iceland, Norway, Turkey and the US – are not in the
EU. But this has not kept the five from contributing troops to EU operations anyway. The US has
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pledged policemen to the EU mission in Kosovo, and a Turkish plane flew EU peacekeepers to
Africa. So it would make sense for the EU and NATO to also use one headquarters rather than
two, even if the two are next to each other. But the symbolic value of the EU possessing its own
military headquarters is proving too much of a lure for France and many others in the EU. Such
‘co-location’ is the second best solution, and one that could satisfy both French demands for
more EU military autonomy and UK insistence on a close relationship between ESDP and NATO.
Les Américains
The US is not only NATO’s largest member but also the holder of the highest command posts in
the organisation. As such, the US will need to agree with France which jobs in the NATO
command structure should be assigned to French officers. This is more difficult than it sounds:
the US as well as a number of European allies will need to give up as many as 900 posts. France
has in fact already attempted to rejoin NATO’s command structures once, in 1995. But the deal
fell apart precisely because Washington would not give France as prominent a role in
command structures as France wanted.
This time, however, US officials have signalled that a deal with France should be feasible. A
change in US priorities since 1995 makes this possible. To Washington, the mission in
Afghanistan is now the most pressing task on NATO’s agenda. The alliance has activated a
number of operational commands to direct NATO troops in the country. This means that the
composition of the permanent commands (which France wants to return to, but which do not
play an active role in fighting the Afghanistan war) has declined in importance. Washington will
find it easier to make room for French officers; the posts that the US and other allies would have
to give up are no longer central to the allies’ war plans.
But at some point Washington and Paris will need to address the place of the EU within NATO.
Sarkozy wants the EU to have its own role in the alliance, acting as a sort of a caucus. But
Washington (as well as Canada, Iceland, Norway and Turkey) will hesitate to use NATO if they
cannot talk with individual EU countries, and if EU member-states’ diplomats need to leave the
room every few minutes for EU-only consultations.
Yet if the integration of Europe’s foreign and defence policies continues, NATO will have to
resolve its ‘EU question’. The decision should be made on a pragmatic basis. At the moment,
the EU is too divided on major security issues like Russia or Iraq. If the EU insisted on having its
own personality in NATO before it could speak with one voice on key security issues, which
would only frustrate the Americans and discourage them from taking NATO seriously.
The EU needs to demonstrate to its non-EU allies that there is value in dealing with the
European Union rather than with individual memberstates. A simple rule of thumb should
apply: the EU should demand a special seat at the NATO table only if and when it agrees that
that seat would replace the individual memberstates, and if it feels confident enough to fill that
seat with a representative who has real decisionmaking powers.
Not to be forgotten: Turkey and Cyprus

For NATO and the EU to start fully cooperating on defence, Turkey will have to drop its
opposition to closer ties between the two institutions. France and Turkey have historically
worked in a perverse harmony, with France resisting closer EU-NATO ties from its EU perch, and
Turkey doing the same from its chair at NATO’s table – and each for diff e rent reasons.
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Turkey’s arguments against closer military links with the EU rest on a technicality (namely that
two non- NATO EU member-states, Cyprus and Malta, do not have an agreement with NATO on
protecting classified information).
But it is widely understood that Turkey has opposed close NATO links with the EU as a way of
punishing the Union for having admitted Cyprus while dragging its feet on Turkey’s
membership application. Turkey has a long-running dispute with Cyprus, whose northern part
it has occupied since 1974.
As long as Turkey’s obstinacy in NATO was balanced by France’s obstinacy in the EU, Ankara
had little reason to shift its stance. But France’s decision to stop blocking EU-NATO ties will now
isolate Ankara and put pressure on it to rethink its opposition.
Although it will be difficult to entice Turkey into an agreement, both Turkey and the EU have a
lot to offer each other. Turkey wants to be a part of Europe’s defence policy. Its army is very
capable, and is Europe’s largest. At the same time, Europe does not have sufficient troops to
fulfil all of its peacekeeping commitments, and it is already relying on Turkish help for some of
its operations. Turkey also wants to be a part of the European Defence Agency, the EU body
that works to pool procurement and production of military hardware.
Thus -in parallel to Turkey´s EU accession process- the EU should offer Turkey a partnership on
ESDP, as a 2006 CER pamphlet suggested.2 Europe would benefit by securing better access to
Turkey’s military resources. Turkey, as a contributor to EU operations, would gain a say in
shaping Europe’s security and defence policy. And the agreement could pave the way to better
EUNATO co-operation.
Beyond current debates

Once NATO and the European Union have moved past the most immediate hurdles to France’s
full membership in NATO, UK opposition to an EU operational headquarters, and Turkey’s
reluctance to see closer NATO ties with the EU, other issues will need to be addressed.
The relative decline in Europe’s military capabilities is accelerating. EU member-states are not
sending as many troops to Afghanistan as the operation commanders have requested, and
they have failed to provide enough soldiers for the NATO response force. They are equally
unlikely to develop the EU’s battle groups into as powerful a force as originally planned. Most
of the responsibility for this lies with the European governments, and their unwillingness to
raise defence budgets or to even make the case for higher defence budgets. But the
competition between the EU and NATO also weakens Europe’s defence capabilities.
Since both organisations follow different paths to boost their member states´ military
strengths, both institutions should, at a minimum, clearly designate one member-state
government as the lead co-ordinator for a given capability in both organisations, as an October
2006 study by the European Parliament proposed.3 This would guarantee that for each military
skill, both institutions are pursuing the same path to improvement. Eventually, the two lists of
priorities, EU’s ECAP and NATO’s PCC, should merge into one.
Furthermore, the EU and NATO need to reach an agreement on sharing some critical
technology such as heavy airlift. Without transport ships and aircraft, neither the EU nor NATO
can move their troops and weapons to areas of conflict. A number of European countries have
already created ‘coordination cells’ that help both the EU and NATO to make better use of
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transport planes and vessels (both commercial and military). These cells should be merged into
one European military mobility unit.
The list could go on. For example, the EU battle groups should accept NATO standards for
‘certification’ – the process through which the alliance verifies whether the member-states
have really met all their promises on a given capability or a military unit.
The few proposals listed above would be a good start. Europe needs a strong military muscle to
exercise credible global influence. And the members of both organisations have much to gain if
NATO and the EU stop their senseless squabbles. They should meet Sarkozy part of the way,
because NATO will grow stronger, too, if it and the EU stop competing for Europe’s defence
money. NATO and the EU will sink or swim together. After a decade of European ‘civil wars’
between NATO and the EU, common sense may at last prevail.
This article is a shortened version of the policy brief “France, NATO and European defence”,
published by Centre for European Reform in March 2008 (www.cer.org.uk) and is reproduced by kind
permission of the author.
NOTES:
1 While in 1998 the UN deployed 14,000 peace-keepers worldwide, by 2006 the figure had
increased fourfold to over 70,000. Centre on International Co-operation, ‘Annual review of
global peace operations 2006’, Rienner, 2006.
2 Charles Grant, ‘Europe ’s blurred boundaries: Rethinking enlargement and neighbourhood
policy’, CER pamphlet, October 2006.
3 Paul Cornish, ‘EU and NATO: Co-operation or competition?’, Policy department external
policies, European Parliament, October 2006.
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A CALL TO VOTE NO AGAINST THE MILITARISTIC

TREATY OF LISBON
By Tobias Pflüger (June 2008)
SINCE THE FIRST EUROPEAN MISSIONS WITHIN THE CONTEXT OF THE CFSP TOOK PLACE THE EU
SENDS ITS TROOPS EVER MORE FREQUENTLY INTO MISSIONS AROUND THE WORLD.
The Treaty of Lisbon (also known as the Reform Treaty) was signed on December 13, 2007.1
When ratified, this treaty will fundamentally alter the way the European Union works, especially
in the area of the so called Common Foreign and Security Policy (CFSP) which will then become
even more aggressive and militaristic.
The document, which has been hammered out in an extremely undemocratic way, is scheduled
to be ratified in all Member States by the end of 2008. Therefore, as this article lays out, all
progressive forces interested in a democratic and peaceful European Union are looking forward
to the referendum in Ireland on the 12th of June, hoping that the population will forcefully
reject this militaristic treaty.
UNDEMOCRATIC: CHANGING THE EUROPEAN UNION BEHIND CLOSED DOORS
The forerunner of the Treaty of Lisbon was the European Constitution which had been rejected
by the populations of France and the Netherlands in 2005. After much disorientation on how to
proceed, the German EU Council Presidency took the initiative in the first half of 2007. The final
Reform Treaty was concluded behind closed doors in the summer and finally signed in
December 2007 while the European public had absolutely no say in this process.
But this “new” Treaty of Lisbon is largely congruent with the European Constitution, as for
example the former Irish prime minister Bertie Ahern made perfectly clear: “I think all the
changes that we’ve made are all changes for the worse but thankfully they haven’t changed the
substance - 90 per cent of it is still there.”
As the population in France and the Netherlands will not be asked once again, this is a heavily
undemocratic way to ignore the referendums in 2005. Until May 8, 2008, thirteen countries had
already concluded ratification, most of them without even having a consolidated version of the
treaty, assembling the whole text in one document. Such a version – which would have been a
prerequisite for anyone except the technocrats in Brussels and the responsible delegates of the
national governments to be able to read the document – was not available before April 15,
2008. One can scarcely imagine a more direct way of signalling to the European public that no
discussion is desired. So Ireland will be the only country where the population has the option to
say No to this undemocratic and militaristic treaty!
MILITARISM VIA TREATY
Over the last several years, the European Union embarked on a process of rapid militarization.
The first major step in this context was the decision in 1999 to create a rapid reaction force of
up to 60,000 soldiers on the field. This army was declared partially combat-ready in 2003. In
addition to those troops, in the same year, the decision was taken to build up so called Battle
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Groups, highly flexible units consisting of 1500 soldiers each. The first of the 22 planned Battle
Groups has been declared operational in 2007.
In 2003, the first European missions within the context of the CFSP took place: Concordia in
Macedonia and Artemis in Congo and in December 2004 the mission in Bosnia- Herzegovina
(Althea) has been taken over from NATO. Since then the European Union sends its troops ever
more frequently into missions around the world: Up to now, more than 20 such missions have
taken place, most recently in Chad, Guinea-Bissau and in Kosovo.
So, the militarization of the European Union is already proceeding with “lightning speed”
(Javier Solana). But this process will gain another great boost with the Treaty of Lisbon because
all the military aspects already previously criticised in the European Constitution have also been
transferred into the Lisbon Treaty. The central points of the criticism were and still are:
a) with an almost unlimited range of tasks

Article 43 (1) names among others “joint disarmament operations”, “tasks of combat forces in
crisis management” and “post-conflict stabilisation” as well as “supporting third countries in
combating terrorism in their countries” as potential tasks for future wars of the European
Union, thereby substantially enlarging the range of possible military missions.
In order to conduct these wars, the Reform Treaty details the tasks of the Battle Groups in
Protocol 10 (1b) where they are defined as units “either at national level or as a component of
multinational force groups, targeted combat units for the missions planned, structured at a
tactical level as a battle group, with support elements including transport and logistics, capable
of carrying out the tasks referred to in Article 43 of the Treaty on European Union, within a
period of five to 30 days, in particular in response to requests from the United Nations
Organisation, and which can be sustained for an initial period of 30 days and be extended up to
at least 120 days.”
b) Solidarity Clause: Europe as a military alliance acting within its territory

With article 222 (1), the Treaty introduces a so called Solidarity Clause obliging all member
states to come to the assistance of any member state subject to a terrorist threat or attack by all
means necessary, including military ones. Thereby, the European Union is turning into a
military alliance. Furthermore, the solidarity clause for the first time opens the door for using
the military within the territory of the European Union.
c) Collaborating with NATO: de-neutralizing the neutrals

The preamble to Protocol 10 calls for a more assertive role of the European Union in security
and defence matters in order to “contribute to the vitality of a renewed Atlantic Alliance.”
Furthermore, Protocol 11 underscores that “the policy of the Union […] shall respect the
obligations of certain Member States, which see their common defence realised in NATO, under
the North Atlantic Treaty and be compatible with the common security and defence policy
established within that framework.”
As Susan George pointed out, this will have serious implications for the neutral states such as
Ireland: “There is a special Protocol which makes clear that the European Union will never have
a security policy that is different from NATO. That to me is very worrying; signing on to the
policies of NATO which we don’t know will be in the future.”2 So the fact is that the
militarization of the European Union goes on with this treaty and the treaty brings the EU closer
to NATO.
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d) Armament obligation by Treaty

Article 42 (3) contains the – up to now inconceivable – obligation to invest more money in the
armament sector: “Member states shall undertake progressively to improve their military
capabilities.” The European Defence Agency, which was established in 2004, is tasked by the
Treaty of Lisbon to supervise the observance for this instruction.
Moreover, according to the treaty (Article 45), the European Defence Agency is tasked to
“support defence technology research” as well as to “contribute to identifying and, if necessary,
implementing any useful measure for strengthening the industrial and technological base of
the defence sector.”
e) Final institution of an own EU military budget

The currently valid Nice Treaty prohibits the institution of an EU military budget. This has up to
now proved to be a considerable impediment for Europe’s militarists. Therefore, the Lisbon
Treaty (Article 41) for the first time opens the door to establishing a defence budget, called
“start-up fund”. The European Parliament will have no control over this budget. To make it
clear: Should the treaty be ratified, then this will be the first time that the EU budget can be
used for military purposes.
f) No parliamentary or juridical control option of EU interventions

Only the heads of state and government can decide to undertake EU combat missions. The
European Parliament in the Lisbon Treaty has only the right to be “heard” and “briefed” (Article
36), it may not participate in the decision. Since the European Court of Justice (Article 275) also
has no influence in this area, the separation of powers in this decisive question of war and
peace is de facto eliminated.
POWER SHIFT FROM THE SMALLER TO THE STRONGER STATES
The Treaty of Lisbon will dramatically change the distribution of power within the European
Union in favour of the big countries.3 For this purpose, two aspects of the treaty are of utmost
importance. First, member states who are willing and militarily capable to build an avant-garde
group within the realm of the CFSP, are enabled by the Lisbon Treaty to establish a so called
“permanent structured cooperation” leaving all others behind closed doors. Thereby, the
consensus principle currently holding for this area can be leveraged out: “Unanimity shall be
constituted by the votes of the representatives of the participating Member States only” (Article
46). As Protocol 10 clarifies that only those Member States which are participating in the main
European equipment programmes and contributing Battle Groups to combat missions are
allowed to enter this exclusive club, countries unwilling to pursue these policies could end up
being completely sidelined in most parts of the European security policy.
The second major “innovation” in this context is the introduction of double majority voting in
the most important EU body, the Council of the Heads of State and Government. Thereby,
Germany will nearly double its share of vote in the Council from 8.4% to 16.73% (the other
winners are France, Great Britain and Italy) while all other states will significantly lose influence.
The Lisbon Treaty (Article 9C) is aimed to introduce this dramatic power shift as normal practice
starting in 2014.
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CONCLUSION
It is in light of the dramatic effects that the Treaty of Lisbon would have on the further
militarization of the European Union, that the progressive forces all over the continent are
hoping that the Irish population will reject this treaty.
NOTES:
1) Consolidated versions of the Treaty on European Union and the Treaty on the functioning of
the European Union, Brussels, 15 April 2008, 6655/08. References in the text are referring to
this version document.
2) Purcell, Bernard: Ahern makes light of latest concessions on EU treaty, The Independent,
24.06.2007.
3) Treaty of Lisbon changes to the EU institutions - Good or bad for small Member
States? URL: http://www.forumoneurope.ie/index.asp?locID=366&docID=1599
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Chapter 8
Immigration
Nigel Farage, EUWatch, January 2007:
The erosion of the nation-state’s key-power to apply its own immigration-

policy is precisely where our problems come from.
One of the strongest deficiency in the present debate is the idea that massive
immigration can solve long-term economic problems.
Hans Blokland, September 2006 – Strasbourg:
We need a European policy for illegal immigration. This however implies that
member states cannot always act independently. Spain recently legalised
700,000 immigrants without consulting the other member states. These kinds
of actions cannot go together with the wish to receive help from the other
member states!
The Netherlands and Germany had major problems with a large flow of
immigrants in the late nineties. They urged for solidarity at the time. France,
Spain, Italy and Portugal however blocked every solution at a European level.
Now it is the other way around and the northern member states are not to
keen to help. It is however essential to come to a European solution.
Klaus Heeger, EUWatch, January 2007:
Member States have different experiences with immigration. They are facing
different economic situations, demographic challenges and social standards.
Those EU countries which oppose Community “solutions” have nevertheless to

face the consequences of single-handed national actions by other Member
States.
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DO WE NEED SOLUTIONS AT EU LEVEL FOR

THE IMMIGRATION PROBLEM?
An interview with MEPs Nigel Farage and Johannes Blokland (January 2007)
What does the term “immigration” mean to you? Does it include the temporary or
permanent establishment of EU citizens from another Member States?
Farage
Certainly the term “immigration” includes the arrival and establishment, in a country, of the
nationals (not “citizens”, please!) of all other countries. The regrettable existence of
EUinstitutions does not justify or excuse any exception to this.
Blokland
On a European level, it first of all concerns immigrants that come from outside of the European
Union. Secondly, it concerns people that will remain in the country for a longer period of time.
Temporary workers that will return to their country of origin are no immigrants but we have to
discuss both.
In this context what are to your mind the experiences of the 2004 enlargement with regards
to the free movement of citizens, workers and services, and to the freedom of establishment?
Blokland
The effect of the enlargement on the number of temporary workers in Europe is seriously
underestimated. The problem, e.g. in Great Britain, illustrates that a lot of people who come for
temporary work end up staying longer and establish there own society. In The Netherlands we
have similar experiences with a Polish community. They mainly work in the flower industry in
the Westland area.
Farage
The free movement of people and goods among the early members of the EEC, which had
comparable standards-of-living, did not result in the huge migrations we now see from poorer
to richer countries of the EU, which is exacerbated by migrants from countries, which are not
EU-members, and who gain entry initially to those poorer EU-countries.
What has to be the lesson for the 2007 enlargement?
Farage
The steeper the wealth gradient, the more pronounced the migration-flow.
Blokland
The first lesson is that member states handle the immigration problem in their own way.
Consequently, we cannot speak of one way to solve the problem. Furthermore, there has not
been enough scientific research to evaluate the actual impact of temporary workers on local
situations. We have to listen to the people who lost there jobs to immigrants to see what the
real impact is. They can tell us about the situation. On another level I also feel that we need
more time before opening the borders to new member states.
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Do in your view workers from other Member States contribute to the national economies or
are they a danger for indigenous workforce?
Farage
As things stand, the latter is true. Under a sane, selective immigration-policy, the former would
be the case.
Blokland
In the view of the local workers they may be dangerous. Because they feel they might lose their
jobs. However, many of the unemployed in The Netherlands would not wish to do the work of
the immigrants, e.g. in the horticulture or flower industry. When EU Member States decide to
accept candidate members they also have to accept that the new members fully participate in
the EU. And that includes the freedom to work in another member state.
When it comes to legal and illegal immigration from thirdcountry nationals, what are the
main dangers for the EU or the Member States?
Blokland
The main danger for the EU is that bureaucrats in Brussels think that all problems can be solved
with a directive from an office in Brussels. In my opinion immigration touches the heart of a
country and its identity. The member states have to strongly work together in the Council and
tackle the consequences of immigration together.
Farage
The exacerbation of migration flows up the wealth-gradient, as I said, together with the
collapse of national systems for dealing with asylum-seekers and illegal immigrants, the
accumulation of ghetto-ised minorities, which become hot-beds of extremism, civil disorder
arising from integrationist favouritism - or a (real or imagined) lack of it - the loss of national
consensus and, using all of this as an excuse, the curtailment of democracy and the imposition
of a centralised autocracy. Just what the eurocrats want, apparently!
Why cannot asylum-seekers be obliged to claim asylum in the first EU-country they come to,
and only in that country?
What are the best ways to fight illegal immigration and to tackle legal immigration within
the European Union? Is a European coherent and coordinated approach necessary?
Farage
No. The erosion of the nationstate’s key-power to apply its own immigration-policy is precisely
where our problems come from. That power should be restored immediately, and the myth
that immigration will solve any “demographic deficit” roundly debunked.
Blokland
First of all we have the reality of Schengen. This means open borders with free movement of
persons. This implies that member states have to work together to fight illegal immigration as
immigrants will not be stopped at borders anymore than EU-citizens. It is up to the EU to
coordinate measures and up to the member states to carry out the implementation. The
European Union does not have to dictate a common policy for legal immigration. That should
be left up to the member states.
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In this context, what would solidarity among the Member States entail as regards to legal
immigration (asylum seekers and other refugees, economic immigrants, etc.) and to illegal
immigrants (e.g. regarding some national legalisation practices or the problems arising from
the arrest and the custody of illegal immigrants)?
Farage
It would mean the assertion of each country’s right to have its own immigration-policy and its
own border-control. “Good fences make good neighbours”, as they say.
Blokland
Solidarity means that we have a common asylum system. Each member state has signed the
same treaty for refugees. Therefore it is not necessary to have a common system of how to
implement these rights. As a result of Schengen, we need solidarity on the financial
consequences of illegal immigration. So all the member states have to pay for border control at
the borders of the EU even though their country is not located at an EU border.
Do you think the EU needs legal immigrants to tackle the ageing of its populations and the
low birth rates?
Blokland
I think that the EU as a whole does not need legal immigrants to solve the ageing problem of its
population. Some member states may need legal immigrants. But I am not persuaded of a
general need for immigrants.
Farage
I do not regard the EU as needing anything besides abolition. If you refer to European nations,
then I would say that nations always benefit from the right degree of immigration and that this
degree might be higher than otherwise, given the low birth-rate in Europe; but what are we
doing about the essential problem of low birthrates? Marriage and families are being
discriminated against at the same time as the floodgates to inappropriate immigration - much
of it artificially stimulated by foreign wars and punitive tradepolicy - are being opened.
Officialdom is acting with callous disregard for indigenes and immigrants alike, and most
commentators are looking in the wrong direction.
This has to stop. It will stop - but will it stop in time to preserve civilisation?
Are common approaches as to the support of the integration of third-country nationals

legally residing within the EU needed?
Blokland
No, the integration policy falls under national law.
Farage
Not at all - and we should all benefit from observing a variety of approaches, which we could
then emulate or reject according to their merit.
It is actually being discussed to move the areas of (legal) immigration to the co-decision
procedure of Article 251 TEC (which would mean the move from unanimity to qualified
majority with the European Parliament co-deciding). What is your opinion of this? Is it
necessary? What would change in practice?
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Farage
Need you ask? This is another step down the slippery slope to chaos and unbridled, centralised
dirigisme, as I have explained above.
Blokland
A majority of the Members of the European Parliament wants codecision on legal immigration.
I do not feel that this would be helpful. The member states themselves have the best insight of
what is needed in their country. They know of the skills needed in their region. The European
Parliament has a very progressive opinion on immigration. However, their opinion does not
always match with reality on the streets, the schools and the workplaces.
What is your opinion on the direction the EU is taking when it comes to immigration, taking
into account the results of the last informal October summit in Lahti and the expected
conclusions of the December Summit?
Blokland
The focus of the Lahti summit was to establish a coherent and integral policy to solve the
problem of illegal immigration. And that means that individual measures, as taken the last few
years, are not sufficient. We can have more influence on migration if Europe establishes
coherent policy.
Farage
Again, my position is already clear. All the assumptions being made at these summits are the
same assumptions as the ones which created the current problem. Unless there is a radical
departure from such assumptions soon, the disasters I have outlined will be inevitable.
What do you consider as the strongest deficiencies in the present debates at European and at
national levels when it comes to immigration?
Blokland
Perhaps the fact that the European Union has to recognize that directives from Brussels
sometimes create more problems than provide answers. Good policy stands or falls with its
implementation. The problem with directives from Brussels is that there often appears to be a
gap between the political desire to do something and the concrete implementation. You then
have to face bureaucracy because there are certain rules member states have to abide, but
which do not actually do anything to solve the problem.
Farage
The idea that massive immigration can solve long-term economic problems. The notion that
huge numbers of immigrants can be cosily integrated into host nations. The fiction that
democratic consensus can arise, or persist, in linguistically and culturally diverse societies. The
lie that the abolition of civil liberties will control terrorism. The absurd assumption that a
transnational aristocracy, like the EU, can be, or even desires to be, of any genuine assistance in
the frightful crisis we face.
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A EUROPEAN APPROACH TO THE REFUGEE PROBLEM IS NEEDED
By Jan Harm Boiten (January 2007)
AT THE LAST SUMMIT OF THE EUROPEAN LEADERS IT BECAME CLEAR THAT THERE IS NO
COMMON APPROACH FOR THE PROBLEM OF ILLEGAL IMMIGRATION IN THE EU. ON THE OTHER
HAND, A COMMON POLICY ON THE COMMON EUROPEAN ASYLUM SYSTEM BEGINS TO TAKE
SHAPE. MEMBER STATES CAN LEARN FROM EACH OTHER ON HOW TO HANDLE ILLEGAL
IMMIGRATION AND HOW TO ESTABLISH A BETTER AND MORE HUMANE POLICY ON ILLEGAL
IMMIGRATION. HOWEVER, BEFORE ANY OF THIS CAN HAPPEN, THE LEADERS OF THE
EUROPEAN UNION HAVE TO REACH A POLITICAL CONSENSUS
TAMPERE
The progress of the Hague Programme was the theme of the Justice and Home Affairs
Ministerial Meeting held in Tampere, Finland, at the end of September. This programme is
ambitious but its implementation leaves much to be desired. Consequently, ministers were
faced with the difficult task of achieving greater unanimity in making headway with
Commissioner Frattini’s legislative programme. At any rate, it became clear that there was
agreement on one matter, namely the need to combat illegal immigration. Opinions differed,
however, as to the approach to be taken. The Member States are now competing amongst
themselves to introduce ever stricter legislation. As a result, the burden is shifting from country
to country as policy becomes more stringent.
If the Member States continue along this path, the policy will never have any chance of success
as there is no ready-made solution to this problem. However, a distinctly pro-active and more
comprehensive international and European policy is required. This policy must be balanced.
The informal summit in Lahti, held in October, concurred with this conclusion and that is good
news. Pressure of circumstances is bringing about a realisation that an integrated approach is
necessary.
The proposals presented recently by the European Commission are very much in keeping with
an integrated approach. They constitute a first step which must be taken further.
As regards asylum policy, the Commission issued a communication on improving and

intensifying practical cooperation between the Member States on asylum policy. In addition,
there is to be additional money to improve the operation of Frontex. Therefore, both initiatives
merit an assessment focussing on European cooperation on asylum and migration.
Returning to Finland, at the European Summit in Tampere in 1999 conclusions were adopted to
create a policy framework to permit the development of an asylum and immigration policy. The
Treaty of Amsterdam provided the relevant legal basis. This led to the approval of the asylum
procedures directive in 2005. The first phase of a Common European Asylum System was
thereby completed. The Council took this forward in the 2004 Hague Programme. The objective
of the second phase is to establish a common asylum procedure by 2010. In order to achieve
this, appropriate structures must be set up to facilitate practical cooperation.
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PRACTICAL COOPERATION
At the beginning of 2006 the Commission issued a communication on taking the common
asylum system forward by means of practical cooperation. There are three objectives, namely
the development of a single asylum procedure for the EU as a whole, the joint compilation and
application of country of origin information, and the improvement of cooperation in special
circumstances.
However, recognition of the need for a common asylum system does not mean there will be no
problems with regard to practical cooperation. Seeking to implement the three objectives by
means of practical cooperation will itself give rise to very specific questions and problems.
ADMINISTRATIVE PROCEDURES
The development of a single asylum procedure cannot be achieved solely by establishing

where changes must be made to administrative procedure. The political will to make such
amendments is also necessary. It is significant, therefore, that in October it was evident that
only six of the twenty-five Member States had introduced into their legislation the minimum
requirements for processing an asylum application. Consequently, differences remain even
though a commitment was made to implement the European rules. There must be outcomes
also in terms of administrative procedure. One outcome could be that an asylum application
leads to refusal. Refusal must lead to the departure of the asylum seeker and a draft return
directive is currently being considered by the European Parliament, specifically to bring about
such departure. A credible asylum policy is not possible without a consistent return policy.
Practical cooperation will therefore have to take account of the fact that return, no matter how
politically contentious, is implicit in the common system.
SAFE COUNTRIES OF ORIGIN
The second problem involved in practical cooperation is the way in which countries are to
compile country of origin information. The aim is to achieve this by drawing up common
guidelines on the production of country of origin information. The aim is also to set up some
kind of database available to the Member States and an effort will be made to find a pragmatic
solution to the translation of information in line with policy. This information is not neutral but
forms the basis for assessing whether a country is safe and asylum applications can therefore
be refused. The information must be reduced to a list of safe countries so that those people do
not gain access to the asylum procedure.
Consequently, it is necessary not only to collate information but also to assess it in a similar
manner. This is the greatest stumbling block. In the Netherlands there is already discussion of
the reliability of the information and sources relating to countries of origin. The question is
whether the sources are reliable and, above all, whether they may be made public. This is not
self-evident as regards the assessment of countries of origin where there are human rights
problems and countries which form the point of departure for asylum seekers. We also have
one Member State which has difficulty with drawing up an assessment. Therefore, the drawing
up of an assessment is very sensitive politically and will be no less so in the case of a European
list.
It is also evident that the drawing up of such a list can be at odds with Member States’ own
relations with non-member countries. By gathering information on countries of origin for the
purpose of policy decisions the Union is entering into foreign policy.
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Nonetheless, such a list is necessary. Without country of origin information it is very difficult, if
not impossible, to assess an asylum application. Basing a common policy merely on
information without carrying out an assessment would lead to arbitrariness and not a common
system.
A common list of safe countries of origin is therefore necessary to create an unequivocal

European asylum system. However, the necessary political juggling will still be required to
bring this list into being.
SPECIAL SITUATIONS
In the case of special situations in particular it is becoming repeatedly clear that the burden is
being shifted and not spread. The third objective attempts to spread the burden of asylum
applications more evenly over the European Union. If the burden is spread more evenly there
will also be scope and political willingness to improve the level of protection for asylum seekers
and not merely to seek minimum harmonisation. But the improved treatment of refugees
appears to be compromised at present. The competition which arises between Member States
could itself result in the level falling below that specified in the ECHR and that would be
undesirable.
NEED FOR JOINT ACTION
The Member States agree on the need to harmonise asylum law. Improving the situation of
asylum seekers is politically feasible only if at the same time measures to stem illegal
immigration are taken. However, the Member States have different views on the actual
approach to be taken. This became very evident again at the end of September when the
southern European Member States requested assistance from the northern Member States. The
influx of illegal immigrants was so great that there was an appeal for solidarity within the
European Union. Such an appeal for solidarity is not new. The Netherlands and Germany made
such an appeal in the 1990s. At that time there were significant problems with the influx of
asylum seekers. Within the Union these countries pressed for burden sharing and solidarity.
However, France, Spain, Portugal and Italy blocked any solution at European level. Things can
change. Now these countries are calling for a European approach in the face of a similar
problem. However, the northern Member States are not heeding this call.
Therefore, the Commission regards increased funding for Frontex as a short-term solution. This
agency which coordinates the surveillance of external borders is to be given greater manpower
and resources to do its work effectively. That means that professional assistance will be
provided in situations where a Member State’s own border surveillance is inadequate. In
addition, Frontex is to highlight any shift in the migration flow to allow action to be taken in
good time.
These measures should have an effect in the short term. In the long term, however, work must
be done on consolidating cooperation between Member States to combat illegal immigration.
A common approach to illegal immigration is needed, working in collaboration with the
countries of origin. Accordingly, at the Lahti summit the Netherlands Prime Minister quite
rightly called on the other Member States above all to provide 0.7% of GDP as a contribution
towards development aid. In addition, urgent work should be done on the return directive.
Diplomatic relations with countries of origin can speed up the actual return of illegal migrants
residing here.
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BALANCED POLICY
It is necessary to pursue a balanced policy. The Member States also emphasised this fact at the
informal summit in Lahti. However, the questions to be raised as regards practical cooperation
on the European asylum system demonstrate that many more questions need to be answered
before this becomes reality. Political agreement does not always mean political will and even
less political willingness to carry out implementation.
In terms of illegal immigration the development of political agreement is still in its infancy.
There is a lack of support even for sharing the burden involved in guarding the external
borders. We therefore consider that a package of measures is needed to stem mass illegal
immigration and at the same time to provide scope for a humane asylum policy.
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IMMIGRATION POLICY: FROM LOSS OF

SOVEREIGNTY TO LOSS OF IDENTITY?
By Christophe Beaudouin (January 2007)
AS THE PRESSURE OF MIGRATION FROM THE THIRD WORLD GROWS, THE MEMBER STATES ARE
OBLIGED TO PURSUE A COMMON IMMIGRATION POLICY TO MANAGE MIGRATORY FLOWS
WHILE OBSERVING HUMAN RIGHTS. THE PROBLEM LIES IN THE MANIFEST IMPOSSIBILITY OF 25
OR 30 COUNTRIES AGREEING ON A COMMON CONCEPTION OF THE PRESENCE OF THIRD-
COUNTRY NATIONALS IN EUROPE, SINCE THE SITUATIONS IN THE VARIOUS COUNTRIES DIFFER
WIDELY, AS DO THE NATIONAL APPROACHES.
The Member States have nonetheless embarked on an unprecedented process beginning with
the opening of their common borders and the abolition of their individual political capacity for
action (see I below): they are thus forced to rely on the Community policies on immigration and
asylum (II) and allow the supranational institutions to take the lead, steering Europe away from
a nation-based towards a communitarian approach (III).
I. THE MEMBER STATES HAVE ABANDONED THEIR BORDERS AND SURRENDERED

CONTROL OF THEIR IMMIGRATION POLICIES
By definition, responsibilities for managing territory and migratory flows come under the
heading of policing powers in the broadest sense – an expression of public authority over a
given territory and its population (the three basic components of a state). Since 1 January 2005,
however, within the Schengen Convention-Amsterdam Treaty area, in which border
checkpoints have been eliminated (see 1 below) the nation states have no longer had free
sovereign responsibility in this field (covering policy on border controls, asylum, visas and all
aspects of the free movement of persons) (see 2). Article III-267 of the European Constitution
provides for these transfers of responsibility to be completed and firmly established (see 3), and
in the meantime the European Councils at Tampere and The Hague have attempted to
implement an ambitious programme (see 4).
1) The Schengen Agreement abolished checks at internal borders
A – The countries involved

Signed on 14 June 1985 by five countries (France, Germany, Belgium, Luxembourg and the
Netherlands), the agreement was extended to 13 EU Member States, the UK and Ireland being
excepted. Denmark was granted a derogation whereby it could participate without accepting
Community-wide applicability of the ‘Schengen acquis’. Other participant countries are Norway
and Iceland (members of the Nordic Passport Union) and Switzerland recently voted in favour
of joining.
The ten new countries that joined the EU on 1 May 2004 have undertaken to apply in full the
‘Schengen acquis’, which became part of the Community acquis with the signing of the Treaty
of Amsterdam. To date, however, checks at the internal borders with these countries have not
been abolished and to do so would require a unanimous decision.
B - Content
Concluded in parallel with the Treaties, the Schengen Agreement puts into practice the
principle of free movement of persons and goods by eliminating physical checks at the Union’s
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internal borders. At the same time it provides for closer cooperation in managing the
movement of persons (by means of common visas, asylum and immigration policies) and in
policing and legal affairs, notably through the ‘Schengen Information System’ and the ‘Eurodac’
files on asylum seekers.
2) The Treaty of Amsterdam placed core areas of asylum and immigration policy under
Community control
The relevant section of the treaty is Title IV on ‘visas, asylum, immigration and other policies
related to free movement of persons’, which aims to establish a body of European law on
asylum and immigration applicable throughout the Union.
A - Content: all legislation on asylum, visas and immigration

The areas in which the Community is responsible for legislating on these matters are set out in
Articles 63(3) and 63(4): conditions of entry and residence; illegal immigration and illegal
residence, including repatriation of illegal residents; the rights and conditions under which
nationals of third countries who are legally resident in a Member State may reside in other
Member States ; title IV also enables ‘proceedings for failure to fulfil obligations’ to be taken
against Member States in the European Court of Justice (ECJ); the ‘Schengen acquis’ is
integrated into EU law. European legislation in the areas concerned shall not prevent any
Member State from maintaining or introducing national provisions that are compatible with
the treaty.
B – Decision-making procedure: qualified majority voting

In conjunction with the Treaty of Nice (December 2001), the Treaty of Amsterdam provided
that as of 1 May 2004 the Member States should gradually relinquish their right of veto. In fact,
most measures concerning immigration, asylum and border controls continued to require
unanimous decision making until 1 January 2005. Only a section of visa policy was subject to
qualified majority voting in the Council of Ministers in codecision with the European
Parliament.
The European Council of 4 and 5 November 2004 decided to activate the ‘bridging clause’
provided for in the Treaty of Amsterdam, with the result that as of 1 January 2005 the
‘Community method’ became generally applicable, including for measures concerned with
border checks and combating illegal immigration. This means that Commission has the sole
right of initiative and that the legislation it proposes is adopted by the Council on a qualified
majority vote. The legislative process is further complicated by the need, under the codecision
procedure, for the Council and Parliament to agree on the adoption of European laws.
Measures concerning legal immigration are the only ones that continue to require unanimity in
the Council and simple consultation with the European Parliament. When the Treaty of
Amsterdam was signed, derogations were granted to three countries, the UK, Ireland and
Denmark, which can thus elect to participate or not in particular decisions.
3) A reminder of the European Constitution’s provisions (Article III-267)

The German Government having announced that it intends, on assuming the Presidency of the
Union in the first half of 2007, to restart the process of ratifying the Treaty establishing a
Constitution for Europe – accompanied by a declaration – it is useful to summarise what the
Constitution would add to the current provisions on immigration, namely: the aim of achieving
an ‘integrated external border management system’; the aim of establishing a ‘common
European asylum system’; the introduction of legal bases for the adoption of measures to
promote integration of third-country nationals and for the conclusion of readmission
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agreements with third countries; the principle of solidarity and sharing of responsibility,
including its financial implications, among the Member States; provision for the ECJ to have full
and comprehensive powers of scrutiny over all relevant areas; a shift to qualified majority
voting on measures concerning legal immigration; giving binding legal force to the Charter of
Fundamental Rights (Part II of the Constitutional Treaty) and making the Union a signatory to
the European Convention on Human Rights, which would have significant impact on asylum
and immigration issues directly affecting individuals’ rights, particularly inasmuch as the
Charter lends official weight to the principle of ethnicity.
At the same time the ECJ is already pre-empting matters by seeking to give effect to the
Charter in law (see Case C 173/99, Broadcasting, Entertainment, Cinematographic and Theatre
Union, Opinion of Advocate General A. Tizzano, delivered on 8 February 2001: ‘it [the Charter]
includes statements which appear in large measure to reaffirm rights which are enshrined in
other instruments (...) the relevant statements of the Charter cannot be ignored; in particular,
we cannot ignore its clear purpose of serving, where its provisions so allow, as a substantive
point of reference for all those involved.’
The Court has also largely incorporated the Fundamental Rights into the general principles
common to Member States. The European Court of Human Rights in Strasbourg, meanwhile,
already widely censures the Member States’ application of the European Convention. Finally,
the blurring of the Union’s policy ‘pillars’ would effectively abrogate the Schengen
Convention’s safeguard clause (see below on the Regulation 562/2006 ‘establishing a
Community Code on the Rules Governing the Movement of Persons across Borders (Schengen
Borders Code) which seeks to make its use contingent on the agreement of the Commission
and the other Member States.)
4) The European Council lays down multiannual guidelines for European immigration policy
On 15 and 16 October 1999, at the Tampere European Council, the Heads of State and
Government decided that asylum and immigration should be among the Union’s priorities, and
laid down four guiding principles for Union policy in these areas:
- introduction of a special ‘codevelopment’ policy of economic aid to countries of origin, in an

effort to stem migratory flows at source by creating employment in the countries concerned. It
should be noted that this aid from the European public purse is paid directly to the states in
question and tends not so much to stimulate economic activity as to line the pockets of leaders
and senior civil servants in their governments;
- integration of third-country nationals who have chosen to reside and work on Union territory
by granting them ‘a set of uniform rights which are as near as possible to those enjoyed by EU
citizens’ (thus potentially including the right to vote, already an entitlement of all EU citizens in
every Member State);
- management of immigration with the emphasis on combating networks involved in illegal

immigration and human trafficking; recognition of the right to seek asylum, on the basis of the
Geneva Convention, as an inviolable and sacrosanct right.
At the European Council in The Hague on 5 November 2004, the Heads of State and
Government adopted a new multiannual programme reflecting the provisions of the European
Constitution and providing for: the creation by 2010 of a ‘European asylum system’ with a
Community Asylum Agency, common visaissuing centres and the introduction of biometrics on
identity cards, an ‘integrated external border management system’, a European border police
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force, partnerships with third countries of origin or transit, and a European fund for the return
of migrants.
II. FACED WITH A FLOODTIDE OF MIGRATION, EUROPE´S DIFFICULTIES REFLECT AN

INITIAL MISCONCEPTION
The difficulties or impossibilities of an ‘Europeanised’ immigration policy essentially reflect an

initial misconception: the initial step of eliminating border checks was taken before it was even
recognised that efforts to harmonise migration policies would founder on the extreme variety –
not to mention the conflicting agendas – of national approaches. The generalised application
of qualified majority voting since 2005 is intended to help ‘overcome’ the differences, and the
new system of calculation provided for in the European Constitution reinforces this.
Since Amsterdam and Tampere the EU has adopted some 20 texts that deliver very little in
terms of added value: on asylum, four directives and two regulations (see 1); on borders and
visas, three regulations (see 2); on immigration, six directives, one regulation and one decision
(see 3, 4 and 5).
1) Asylum policy
The legal ‘instruments’ adopted seek to establish: a clearer system of determining the Member
State responsible for examining an asylum claim, minimum standards on the reception of
asylum seekers, a joint definition of the qualification of third-country nationals as refugees and
beneficiaries of subsidiary protection, and a temporary protection system capable of coping
with a mass influx of refugees. On 1 December 2005, the Asylum Procedures Directive was
adopted. 2005. The Dublin Convention (of 1 September 1997) stipulated that the state
responsible for receiving and taking charge of an applicant for asylum and examining the
application should be the Member State which – voluntarily or otherwise (i.e. whether through
the issue of a visa or through a failure of border checking) – admitted the applicant to EU
territory. The Convention remained a dead letter, and a new system known as ‘Dublin II’
provides that the state responsible shall be that on whose territory the applicant has continued
to reside, with the possibility of proceedings being taken in the ECJ against states that fail to
meet their obligations. At the Seville European Council (in June 2002) several countries
including France rejected a proposal from the UK, supported by Germany and Italy, to set up
centres for processing asylum claims outside the Union or on its borders.
2) Visa policy
Schengen introduced a uniform visa for short stays as well as the Schengen Information System
(SIS) which allows the Member States to exchange identification details for purposes of refusing
admission. In addition the Member States have adopted a common list of 120 third countries
whose nationals are required to obtain visas (March 2001) and have made it obligatory for
third-country nationals to have their travel documents (passports) stamped when they cross
the EU’s external borders (Regulation of 13 December 2004). In practice there have been
problems with the implementation of this measure because the Member States’ procedures,
particularly in airports and on cross-border trains, differ. The actual issuing of visas continues to
be the preserve of individual Member States. The introduction of biometric identifiers on
passports and visas: the passports of citizens of EU Member States must include digital
photographs by 2006 and fingerprints by 2008. A draft regulation makes similar provisions in
respect of the passports of thirdcountry nationals resident in or travelling to the EU, but
technical difficulties still have to be overcome. Throughout the Union some 10 million visas are
issued annually and that number is growing fast. In France, for example, between 1996 and
2001, the total number of visas issued to Algerians rose from 48 000 to 277 000; the number
issued to Moroccans rose from 60 700 to 147 000; the number issued to Tunisians went up from
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48 000 to 80 000 and the number issued to Chinese nationals rose from 34 000 to 91 000. These
socalled ‘tourist visas’ (valid for three months) are issued, in four cases out of five, following an
invitation from a family member, and one in 10 of the people to whom they are issued prolongs
his or her stay on Union territory illegally.
3) Combating illegal immigration
A – The relevant texts

Following the Tampere, Seville and Thessalonica European Councils the following texts were
adopted:
- Directive of 28 June 2001 concerning sanctions for carriers guilty of failing in their duty to
check travel documents;
- Directive of 28 November 2002 defining the facilitation of unauthorised entry, transit and
residence;
- Directive of 29 April 2004 designed to help combat trafficking in human beings through the
issue of residence permits to third-country nationals who cooperate with the competent
authorities in dismantling the traffickers’ networks;
Various texts to facilitate mutual recognition of decisions and assistance with the expulsion of
illegally resident third-country nationals.
France also took the initiative of organising ‘European grouped flights’ in cooperation with a
number of other countries.
B – In practice
Less than one quarter of decisions to deport is implemented. In France, for example, the
number of persons actually deported in 2004 was only 15 500 out of almost 70 000 deportation
decisions. Schengen on the other hand obliges Europe as a whole to accept the mass
legalisation of immigrants by any of its governments. In February 2005, for example, the
Spanish Government, without prior notice to its partners, took an initiative to regularise 700
000 illegal immigrants, who can thus now travel, reside and work throughout the Schengen
area. Italian and French Governments did the same in 2006. A further effect of the initiative was
to create a powerful ‘pull’ to migration in Africa, leading hundreds of unfortunate individuals to
risk their lives in a frontal assault on the borders of the enclave of Spanish Morocco (around
Ceuta and Melilla) in October 2005. Some 30 mass legalisation measures have been
implemented in anarchic manner since the 1970s, and their incidence increased in the 1990s.
External borders (to the east and south of the EU) are riddled with holes. The 10 new EU
Member States are expected to join the Schengen area in 2007, when controls at their
respective borders are due to be lifted. Many of these borders are, however, insecure, for
example: the border between Ukraine and the Slovak Republic (although only 100 km long),
where fact-finding Members of the French Senate saw for themselves the ineffectiveness of the
checks;Poland’s problematic 1 100 km of borders with the Russian enclave of Kaliningrad,
Belarus and Ukraine; the 2 000 km of external borders that the EU will acquire in Romania when
that country joins the Union on 1 January 2007. In addition, Sea borders, particularly around
Cyprus and Malta in the Mediterranean, are vulnerable.
To cope with the expected flood of migrants the EU has assumed authority that it cannot
exercise. The Seville European Council (21 and 22 June 2002) confined itself to announcing the
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creation of a European Agency for the Management of Co-operation at the External Borders. In
2004, disillusioned by the ‘precedent of Europol (...) which failed to deliver the expected
results’, the French Senate supported the proposed creation of a European border police force
(comprising national contingents). Certain states, including Poland, opposed the plan, refusing
to allow border guards of other nationalities to operate on their territory.
At the same European Council, however, France, Sweden and the Commission opposed the
principle of taking sanctions against third countries that were deemed not to have cooperated
fully in combating illegal immigration into the Union – a concept promoted by Prime Ministers
Aznar, Blair and Berlusconi.
Finding themselves hoist by their own petard, several states have attempted to cooperate
outside the framework of the treaties – the ‘G5’ meeting (of France, Germany, Spain, the UK and
Italy) in la Baule in 2003 being one example: the issues here included police cooperation at
external borders and a call for the Schengen safeguard clause to be retained. Similarly on 27
May 2005, a seven-nation agreement known as ‘Schengen plus’ (involving France, Germany,
Spain, Austria, Belgium, the Netherlands and Luxembourg) attempted to strengthen
crossborder cooperation against illegal immigration.
Europe hinders the conclusion of bilateral readmission agreements. Although the Commission
has been mandated to negotiate 11 readmission agreements since 2000, only four agreements
have been signed: with Hong Kong, Macao, Sri Lanka and Albania. In this field, as in others, the
best results have so far been obtained by states acting outside Community procedures: Italy
and Spain are currently signatories to readmission agreements with the major source countries
of the Maghreb, and Germany has similar agreements with central and eastern European
countries.
It is understandable that the negotiation of readmission agreements should be a bone of

contention between the Commission and the Member States. States such as France and
Germany are keen that, once a certain time has elapsed following the breakdown of
negotiations conducted by the Commission, they should recover their authority to conclude
bilateral agreements.
The Commission categorically rejects such arrangements and has taken proceedings against
Germany in the ECJ for having negotiated a bilateral agreement with China after the Council
had mandated the Commission to negotiate such an agreement on behalf of the Union.
4) Policy on legal immigration

Pending the eventual adoption of the European Constitution after 2007, legal immigration
remains one of the policy areas subject to unanimous decision making in the Council. The
Directive adopted on 22 September 2003 on the right to family reunification stipulates the
family members to whom the right shall apply and the nature of the entitlements conferred,
particularly in respect of access to the labour market. A highly controversial measure, it has
been challenged by Parliament in the ECJ.The Directive adopted on 25 November 2003
concerning the status of thirdcountry nationals who are long-term residents sets out the rights
accorded to such persons, who, in particular, will have the option of residence in other Member
States. A further two directives aim to facilitate the admission of students and researchers from
third countries.
5) Integration policy
Despite the absence of any relevant legal basis in the treaties, the European institutions have
taken a number of measures to encourage and support the integration of legally resident third-
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country nationals. In November 2004, for example, the Commission published a European
manual of ‘good practice’ in this field.
III – THE COMMISSION’S AGENDA IS A MULTICULTURAL EUROPEAN NATION IN AN OPEN

TERRITORY
In an open territory with the states politically pruned, the Commission will have a relatively free
hand as it attempts a radical re-shaping of the European map according to its own agenda –
that of a supranational institution intrinsically hostile to nation states and (as Montesquieu
knew) by nature bent on the limitless inflation of its own authority. The European Union is thus
working to complete the elimination of borders (see 1 below) and create a new political space,
into which the Commission proposes to increase the flow of economic migrants – reasoning
that this will counter ageing in the European population (see 2) – and within which people are
less and less seen as citizens of a nation (see 3).
1) Brussels proposes complete realisation of a ‘frontier-free area’

On 15 March 2006, the European Parliament and the Council adopted the Regulation 562/2006
‘establishing a Community Code on the Rules Governing the Movement of Persons across
Borders (Schengen Borders Code)‘, its aim being to develop legislation based on the ‘Schengen
acquis’. The proposal contains a concepts which is a particular focus of concern: The possibility
of a state having recourse to the Schengen ‘safeguard clause’ (Article 2(2) of the Convention of
19 June 1990) will henceforth depend on the Commission and the other Member States
deciding that such recourse was appropriate (articles 23-24 of regulation 562/2006). The aim of
the original safaguared clause was to allow states, when faced with a threat to public order or
national security, to reintroduce checks at all or some of their borders for a limited period.
States often use the clause on the occasion of sports events or political summits (such as the G8
meetings or – in an irony of the system – certain European Councils). Under the new Regulation
it will no longer be up to the state concerned alone to assess the circumstances and decide
whether re-introducing border checks was appropriate.
2) Brussels proposes sustained economic immigration as a miracle cure for population

ageing
In a Green Paper presented on 11 January 2005, the European Commission outlines an ‘EU
approach to managing economic migration’. It states that: ‘Between 2010 and 2030, at current
immigration flows, the decline in the EU-25’s working age population will entail a fall in the
number of employed people of some 20 million. […] while immigration in itself is not a solution
to demographic ageing, more sustained immigration flows could increasingly be required to
meet the needs of the EU labour market and ensure Europe’s prosperity.’ It adds that ‘common
criteria for the admission of economic migrants’ are essential in order to combat the practice of
third-country nationals entering illegally without any guarantee of a declared job. The rest of
the Green Paper is largely concerned with proposing policies designed to overcome the fact
that the Member States still have sole responsibility for determining the number of economic
migrants allowed to enter their territory. It envisages European legislation complementing
national measures and following an approach based on categories of candidate for economic
immigration (employed or self-employed, by sector where labour shortages exist, and by
geographic origin through agreements with third countries) and/or on different types of
admission procedure (a normal procedure with priority going first to EU citizens, then to long-
term residents, and so on; an accelerated procedure which could be used by a country facing a
labour shortage in a particular sector; and a ‘green card’-style pre-selection procedure). The
paper reviews the questions of economic migrants’ rights and cooperation with countries of
origin and transit.
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On 21 December 2005 last, following on from the Green Paper, the Commission presented a
‘Policy Plan on Legal Immigration’ and announced that four directives would be drafted in the
period 2006 to 2009 dealing with conditions of entry and residence for certain categories of
worker (highly skilled workers, seasonal workers, intracorporate transferees and remunerated
trainees). The directives would have to be adopted unanimously by the 25 Member States (as is
policy for matters concerning legal immigration). For seasonal workers in agriculture,
construction and tourism, Brussels envisages a ‘residence/work permit allowing the third-
country national to work for a certain number of months per year for 4-5 years. Entry and exit
stamps should prevent abuses.’ The aim is to reduce illegal employment which is seen as a
pernicious form of social dumping. Brussels will also propose an accelerated admission
procedure for immigrants with a university degree, noting that more than half the graduate
migrants from North Africa and the Middle East live in Canada and the United States. To avoid
accusations of profiting from ‘brain drain’, the Commission advocates closer cooperation with
countries of origin through the introduction of ‘temporary migration’ arrangements, facilitating
mutual coming and going across the Mediterranean. Lastly the Commission proposes a
directive setting out the rights (social and training entitlements etc.) of all workers admitted to
the EU who cannot yet claim long-term resident status.
The proposal came at a time when the German Government was announcing its intention to
substitute local job seekers for 10% of the 325 000 foreign workers employed seasonally in
agriculture in Germany. France, responding to consultation on the Brussels proposals, pointed
out that the practical effect of the various legal immigration procedures on flows of illegal
immigration was as yet unproven. By contrast, Italy and Spain have quota systems for recruiting
workers to meet the demand for unskilled labour and in 2002 and 2005 they undertook mass
legalisation operations which were criticised by Paris and Berlin.
The main criticisms of the proposed approach are set out below. At a time of increasing
deindustrialisation in Europe and riots in certain peri-urban areas as a result of failed
assimilation policies, the European Commission is seeking to ‘develop’ what it calls ‘economic
immigration’ – a label that makes no difference in practice and a concept completely at odds
with the reality of high unemployment afflicting Europe’s largest countries. As Nobel Prize
winning economist Maurice Allais has pointed out: ‘To ensure that its economy functions, a
country needs to maintain its infrastructure: schools, universities, hospitals, housing, roads,
factories, offices, etc. In all the industrialised countries the total reproducible national capital is
approximately equal to four times the national income. It follows that, in order to integrate an
immigrant worker properly, a country has to mobilise saved capital approximately equal to four
times that worker’s annual earnings in order to put in place the facilities that the worker
requires (...) And if the worker arrives with his wife and children the amount of saved capital
needed will be equivalent to between 10 and 20 times the worker’s annual earnings.’ (Capital,
June 2000)
If the aim is to counter the demographic deficit with an equivalent number of immigrants,
Europe would need up to 25.2 million immigrants annually (!) to sustain the balance between
its active and retired populations (figure from a Council of Europe study). According to the UN,
Europe would need 1.4 billion immigrants by 2050 to replicate its demographic profile of 1995.
The Commission’s global, standardised approach typically disregards the diversity of situations
in the different EU countries: the populations of the United Kingdom and France are expected,
unlike those of the other EU countries, to continue growing; the employment situation also
varies: France, for example, is supporting a rate of unemployment equivalent to 10% of the
total working population whereas it’s to 5,7% in U.K ; there are differences too depending on
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whether countries have a long tradition of immigration – France already has a significant inflow
of legal migrants, more than 100.000 of whom enter its labour market annually (300.000
including illegal migrants) – or have only recently become destinations for migration like Italy
and Spain ; another factor is the existence of historic ties developed by certain EU countries
with countries of origin (Frenchspeaking Africa and the Maghreb countries in the case of
France, and the Commonwealth countries in the case of the UK).
3) What remains of a nation state?

What remains of the sovereignty of a state which no longer decides freely for itself its criteria
for offering asylum, issuing visas or admitting immigrants, a state whose territory is gradually
ceasing to be delimited by borders in the traditional sense? What remains of the identity of a
nation when – encouraged by this weakening of state authority – it is subject to continual
inflows of migrants who will -as a result from the principles of non-discrimination- benefit from
more and more rights towards that state? Government, territory and population – the three
core components of the state – are apparently in the process of falling apart.
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THE IMMIGRATION AND INTEGRATION PROBLEMS THE EU AND ITS

MEMBER STATES ARE FACING
By Karoly Lorant (January 2007)
AS THE NUMBER OF IMMIGRANTS INTO THE EU GROWS EVERY YEAR, WILL THE EU FIND
SOLUTIONS ABLE TO PLEASE BOTH THE IMMIGRANTS AND THE CITIZENS OF THE EU MEMBER
STATES AS WELL?
GLOBAL MIGRATION
Over the past 15 years, the number of people crossing borders in search of a better life has
been rising steadily. At the start of the 21st Century, one in every 35 people is an international
migrant. Globally the stock of migrating people increased from 75 million in 1960 to 191 million
in 2005. However, compared to the world population the ratio hardly increased. It means that
the ongoing globalization does not considerably modify migration tendencies.1
According to the UN High Commission for Refugees, 13.4 million people around the world were
considered as refugees in 2005. Worldwide, a further one million applied for asylum that year or
had their applications still pending. These figures do not include the 4.1 million Palestinian
refugees assisted by the UN Relief and Works Agency.
In the European Union Germany has the largest refugee population with close to one million.
Most of them are from the former Yugoslavia, Turkey, Iraq and Iran.
HISTORY OF MIGRATION INTO THE EU2
During the 1950s, most West European countries still registered a negative migration balance.
Some countries (for instance Greece, Ireland, Italy, Portugal and Spain) lost a substantial
number of their citizens emigrating for economic reasons either to overseas or to other
European countries.
West European countries began to “import” guest workers in the early 1960’s to fill jobs, which
the own nationals would not accept. These guest workers came mainly from the Mediterranean
(to France) and from Turkey (to Germany). The present French Muslim communities trace their
origins back to a wave of immigration in the twelve years between 1961 and 1973. After
France’s withdrawal from Algeria more than a million French citizens migrated back to France.
Most European countries closed their doors to labour immigration in the 1970s, following the
first Arab oil embargo and the subsequent economic downturn. Yet since then, some 500,000
immigrants – primarily family reunification cases – and 400,000 asylum seekers arrived in West
Europe every year, originating mainly from Central and North Africa and the Middle East.
Furthermore, the number of yearly immigrants has increased threefold since 1994 (see Chart 2)
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Chart 1
Natural increase in population and net immigration

(thousands), EU25
4 000
3 000
2 000
1 000
0
-1 000
-2 000
1960
1965
1970
1975
1980
1985
1990
1995
2000
2005
2010
Natural increase Net immigration
Sources: - Population statistics Eurostat 2004 - Population in Europe: first results.
Eurostat, Population and social conditions 16/2006. Author: Giampaolo Lanzieri
In Central and Eastern Europe, the “iron curtain” restricted the number of emigrants. The
situation changed in 1989-90, when the “iron curtain” fell. The travel restrictions ended and civil
wars and ethnic cleansing led to massive emigration to neighbouring countries and to Western
Europe. As a result of economically, politically and ethnically motivated emigration, most
countries of Central and Eastern Europe recorded a negative migration balance. Due to
emigration, some countries lost up to 3% of their population.
POSITION AND ACCEPTANCE OF IMMIGRANTS3, 4
Since the 1980’s, as the impact of globalisation became stronger, the prospects for immigrants
deteriorated. A substantial proportion of the employment opportunities, which many
immigrants had originally come for (largely in the manufacturing sector), had been replaced by
highly developed service sectors such as health care, finance and high technology. The lack of
sufficient qualification -and often language skills- put these new opportunities beyond reach of
many immigrants and their children. As a result, unemployment rates tend to be very high
among immigrants. E.g. 24% of the working-age Turks in Germany are unemployed, which
amounts to almost two and-a-half times the national average.5 According to the Montaigne
Institute, a Paris-based think tank, the unemployment rate for North Africans in France hovers
around 30 percent, which is more than three times the country’s overall rate.
Besides the problems mentioned above, there is a growing concern among the West-European
population over the fast-growing Muslim communities. The size of the European Muslim
communities has tripled over the last 30 years. This rapid growth is caused both by immigration
and the high fertility rate in the traditional Muslim communities. Whereas one-tenth of the
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French population is now Muslim, it is five percent in Germany and six percent in the
Netherlands. While the UK’s Muslim population is only 2.5 percent, Muslims have become large
minorities in some small British towns.
According to a study published by the PEW Forum on religion and Public Life6, many European
cities
Chart 2
Net immigration EU-25 (thousands)
2 500
2 000
1 500
1 000
500
0
1985
1986
1987
1988
1989
1990
1991
1992
1993
1994
1995
1996
1997
1998
1999
2000
2001
2002
2003
2004
2005
2006
2007
2008
Source: http://www.freerepublic.com/ focus/f-news/1723126/posts
have sizeable Muslim minorities. Currently, they make up at least 25 percent of the inhabitants
of Marseille and Rotterdam, 20 percent of Malmo (Sweden), 15 percent of Brussels and
Birmingham, and 10 percent of London, Paris and Copenhagen. The amount of illegal
immigrants from Muslim societies is estimated up to half a million per year.7 In Central and
Eastern Europe, Muslim populations remain virtually nonexistent.
Many Europeans have the feeling that the fast-growing Muslim population will cause social
conflicts. Muslims rightly demand political recognition, greater entitlements and preservation
of their Islamic identity. For many West Europeans immigration is largely thought of in
connection with crime, and the idea of multiculturalism is rather difficult to convey. In addition,
the view is rather widely spread among West Europeans that Muslim societies are not willing to
integrate themselves into Western societies.
Even the most tolerant Europeans consider that multiculturalism should not become a threat to
the fundamental values of the European model of democracy. This implies that immigrants
should give up at least these parts of their cultures and religions which may be in conflict with
those values.
This general perception openly appears over the question of Turkish EU membership.
According to a recent poll carried out by the LH2 agency for RMC radio in November 2006, 58
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percent of the French are against Turkish membership.8 In Germany, the situation appears to be
more or less the same as a recent poll reveals that 63 percent of Germans are opposed to it.9 A
Eurobarometer survey of spring 2005 showed that an overall of 52% of the citizens within the
EU are against the admission of Turkey.10
ARGUMENTS FOR IMMIGRATION
A report by the United Nations11 emphasized the strongest argument for the free flow of
immigration. As the population growth is diminishing rapidly throughout the industrialized
world, the report states that in order to keep the population at its present level until 2050,
Europe would need 1,6 million new immigrants every year, that is to say 80 million people by
2050.
As Romesh Ratnesar put it: “Opening Europe’s borders would be more than a gesture of
goodwill – it would also be an act of selfinterest. Europe’s economies are in dire need of extra
manpower.
Immigrants can provide Europe with valuable resources as it enters the new economy, by filling
the low-wage jobs that Europeans do not want, and injecting the technical expertise that
Europeans do not possess.”12
And Joseph Chamie, director of the U.N.’s population division, stated: “Employers want more
labour at a low price and people with money want more services—and it’s difficult to see how
that can come about with a declining population. The sooner European governments look at
migration as a solution, the easier it will be to adjust”.
In a speech delivered to the European Parliament on 29 January 2004, UN Secretary-General

Kofi Annan emphasized that although countries have the right to decide whether to admit
migrants or not, Europeans would be unwise to close their doors. This would not only harm
their long-term economic and social prospects, it would also lead more and more people to try
to enter through back doors – by asking for unjustified political asylum or by seeking the help
of smugglers. “A closed Europe would be a meaner, poorer, weaker, older Europe, an open
Europe will be a fairer, richer, stronger, younger Europe”, UN General Secretary said.
The European Commission (EC) has also strongly argued in favour of immigration. In a
communication of 2003, it pointed out that the EU population, due to decreasing fertility rates
and longer life expectancies, is ageing, thus leading to a likely decrease in the EU-25 working
population from 303 million to 297 million by 2020. A smaller labour force means less
economic growth: economic migration is therefore necessary for sustained economic growth.13
Jonathan Faull, EU Justice Freedom & Security Director General, stated on 15 May 2006 that:
“The EU strongly believes that migration can be beneficial to sending and
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Attitudes of Europeans towards minorities

• actively tolerant (21%): they are not disturbed by minorities, they favour the
accommodation of minority cultures by the host society, they support policies in
favour of minorities
• passively tolerant (39%): they do not insist on the complete abandonment of minority
cultures, but are less supportive of positive actions towards these groups
• ambivalent (25%): they are not disturbed, but they are in favour of complete
assimilation into the majority culture rather than of cultural diversity
• intolerant (14%): they have strong negative attitudes, they feel disturbed by
minorities, they favour complete assimilation into the major culture and/or
repatriation.
Source: The social situation in the European Union 2002: Analysis by the European
Monitoring centre on Racism and xenophobia (2001) on the basis of the data of
Eurobarometer 53 (Attitudes towards minority groups in the European union)
receiving countries and to the migrants themselves - provided there is a dialogue and
cooperation on all matters of concern: legal migration, better use of migrant remittances,
connecting diaspora to the country of origin and addressing the negative sides like brain drain,
illegal migration, trafficking and smuggling of human beings. Closing frontiers will not keep
people out. We have to admit that such simple answers do not exist in an increasingly
globalised world and where more and more people will move, out of choice or because they
are forced to.”
Germany’s Independent Commission on Migration14 also favours immigration. In a 2001 report

it concluded: “We need immigration to Germany because its population is getting older: life
expectancy is increasing while the number of children born per family remains low and the
number of births is decreasing”.
Employers who are experiencing skilled-labour shortages have also been calling on
governments to open up their labour markets for foreign workers. “Immigration restriction
should also be removed for people with relevant skill” – says the European Round Table of
Industrialists in their message to the 2003 Spring European Council.15
ARGUMENTS AGAINST IMMIGRATION
Europe is overpopulated
The current EU 25 population is too high for long-term sustainability. Europe is one of the most
populated regions on Earth. Recent world growth has put very heavy pressure on the
environment. With a zero net immigration, the Rising Fertility scenario (of the UN study) would
lead eventually to a population stabilized at about 40% of the present level, which is not much
different from the population at the beginning of the 20th Century. It creates a brief peak in the
dependency ratio, but after 2050 the dependency ratio would begin to improve.16
Labour market needs do not justify immigration

The high level of unemployment in most European countries shows that there is no general
shortage in labour force.
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Shortages in some sectors are mainly due to low wages. The low participation rate – especially
among immigrants already present – also contradicts the need of influx of further migrants. For
instance in Italy only 52% of the “working age” population (15–64 years old) are presently
employed, because of chronic unemployment combined with generous welfare and retirement
benefits. However, the unemployment rate of young immigrants under 24 often peaks to
45%17.
Free flow of labour is not always a solution

Free trade advocates claim that the free movement of workers must be the correlative to the
free movement of goods and services. However, one cannot put human resources on the same
level with goods, services or capital stocks. Whereas a good is simply consumed, migrant
workers need and have families; they need education, vocational training, social and health
care.
Immigration will increase the burden on the Member States´ welfare systems
In most European countries, social and health care services are partly free, while the taxpayers
pay the costs. Cheap-wage immigrants may bring some benefits for entrepreneurs, yet they
also represent a burden for the social and health care systems.
Immigration cannot counterbalance ageing

The Commission itself, which in general stands for immigration, also stated in a report of 2002
that immigration alone can never counterbalance the effects of an ageing population and
cannot solve the EU’s labour market problems (Social Situation in the European Union, 2002).
As former Commissioner for Employment, Anna Diamantopoulou, said: “Immigration will help
fill some gaps in our labour market but it has no impact on our basic employment policy
message: we still need radical reform, with a focus on increased participation rates for women
and older workers, if we are to achieve sustainable labour markets and pensions systems.”
A MISSION IMPOSSIBLE?
It becomes clear from recent literature on immigration that the “official” opinion of the
European Union differs from that of some European governments and is quite in opposition to
the opinions of most of the citizens within the EU. Given the growing lack of support for
immigration, the political tone in the Member States has become more radical. While Nicholas
Sarkozy urges a common asylum policy and common efforts to halt the illegal immigration, the
Italian parliament has passed a series of anti-immigration measures. And while UK Home
Secretary David Blunkett proposed a “Nationality, Immigration and Asylum Bill” which would
impose stricter measures against people coming into the country seeking asylum, Jonathan
Faull, Director General of the EU Justice Freedom and Security DG, strongly believes that
migration can be beneficial to both countries of origin and of destination.
It is therefore quite unlikely that the European leaders will find a solution which is able to
please both the immigrants and the citizens of the EU Member States as well.
NOTES:
1 Source: http://esa.un.org/migration/ index.asp?panel=1

2 Source: World Migration 2003 UN (Chapter 13)
3 http://epp.eurostat.ec.europa.eu/portal/page?_pageid=1996,39140985&_dad=p
ortal&_schema=PORTAL&screen=detailref&language=en&product=Yearlies_new_p
opulation&root=Yearlies_new_population/C/C1/C11/caa14608
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4 Source: (1) An Uncertain Road Muslims and the Future of Europe. The PEW FORUM on religion
and public life. The Forum is a Project of the PEW Research Center December 2004.
http://pewforum.org/ docs/index.php?DocID=60 (2) The Demise Of Western Europe
December 13, 2004 By Brian W. Peterson
http://www.conservativetruth.org/article.php?id=2666
5 Source: Timothy M. Savage: Europe and Islam: Crescent Waxing, Cultures Clashing. The Center
for Strategic and International Studies and the Massachusetts Institute of Technology. The
Washington Quarterly • 27:3 pp. 25–50.
http://www.twq.com/ 04summer/docs/04summer_savage.pdf
6 Figures cited in Matt Surman, “Turks Arrived Decades Ago in Germany and Made Themselves
at Home, Despite Outsider Status,” The Associated Press, Oct. 7, 2004.
7 http://pewforum.org/publications/ reports/muslims-europe-2005.pdf
8 Figures cited in Timothy M. Savage, “Europe and Islam: Crescent Waxing, Cultures Clashing,”
The Washington Quarterly, Summer 2004, p. 25.
9 Source: http://www.freerepublic.com/ focus/f-news/1723126/posts
10 Source: http://www.expatica.com/ actual/article.asp?subchannel_id=26&story _id=31208
11 Eurobarometer 63 Spring 2005. National Report. Turkey Executive Summary
12 United Nation Population Division. (2000). Replacement Migration: Is it a Solution to
declining and Ageing Populations?. New York, NY: United Nations
13 Knocking on Europe’s Door. Despite efforts to keep them out, an influx of immigrants is
recasting the Continent’s identity. European economies need more of them. By Romesh
Ratnesar London TIME EUROPE July 03, 2000 VOL. 155 NO. 25
14 Communication from the Commission to the Council, the European parliament, the
European Economic and Social Committee and the Committee of the Regions on
immigration, integration and employment. Brussels, 3.6.2003 COM (2003) 336 final
15 Independent Commission on Migration to Germany, 2001:11 (The so-called Süssmuth
Commission, named after its President Rita Süssmuth.).
16 The European Challenge – Message from the European Round Table of Industrialists to the
Spring European Council, March 2003
17 Lindsey Grant : “Replacement Migration”: The UN Population Division on European
Population Decline. Population and Environment: A Journal of Interdisciplinary Studies
Volume 22, Number 4, March 2001
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IS THERE A EUROPEAN SOLUTION FOR IMMIGRATION?
By Klaus Heeger (January 2007)
IS THE EU ABLE TO DEVELOP AN OWN IMMIGRATION AND ASYLUM POLICY APPLICABLE FOR
ALL ITS 27 MEMBER STATES OR WILL THE EXTREMELY DIFFERENT HISTORICAL EXPERIENCES,
ECONOMIC SITUATIONS, DEMOGRAPHIC CHALLENGES AND SOCIAL STANDARDS IN THE
FUTURE 27 MEMBER STATES MAKE SUCH COMMON POLICY IMPOSSIBLE?
With the EU facing the sixth enlargement in its history, certain issues, which have always been
characterised by particular sensitivity, will not become more easily manageable at EU level. To
those issues belong immigration policy and closely related asylum, visa and border control
policies.
As EU enlargement may in itself be regarded as “a grandiose migration management strategy”

which shifts “the common external border to the East and widens enormously the area of
freedom of circulation”1, the free movement of persons and services from acceding countries,
which in the past belonged to the “traditional third countries”, is still perceived as
“immigration” in the frame of public debate2.
Yet given the fact that, with the accession of the new countries, as well as Romania and
Bulgaria, their citizens will in principle benefit from full rights as European citizens and from the
four freedoms, “protective” measures will only apply on a temporary basis3. Therefore EU
immigration policy is and will be limited to issues of legal or illegal immigration of third country
nationals, and to related policies of asylum, visas and border control.
As the 14-15 December 2006 European Council will focus on both the imminent enlargement
and the implementation of the “The Hague” Programme, it is expected that the Summit will
endeavour to take further initiatives to develop the EU area of freedom, security and justice and
give more impetus to policy in relation to asylum, visas, border controls and immigration.
Among other matters, the possibility of changing the decision-procedure in the area of legal
immigration to qualified majority voting in the Council, with the European Parliament co-
deciding, will certainly be on the agenda4.
Recent events in the Mediterranean, where almost 3000 “boat-people” have been drowned so
far in this year alone5, call for a stronger responsibility, and thus competence, on the part of the
EU. The need for “more solidarity and fair sharing of responsibility including its financial
implications”6 in this area of policy appears to be more urgent than ever.
Against that background, the question whether or not the Community should dispose of more
competences and enact more efficient and coherent measures in the area of immigration
seems worth a closer look.
THE DEVELOPMENT OF AN EU IMMIGRATION POLICY
European cooperation in the field of immigration and asylum is a relatively recent

phenomenon as up to now European countries rather competed among themselves to get the
“best” immigrants than they actually cooperating to have a common policy7.
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The early 1980s saw a growth in political will to overcome the “euro-sclerosiss” of the seventies
and to revive integration and guarantee the application of the common market principles,
especially so far as the free movement of persons was concerned.
As the Member States were unable to reach an agreement on the question whether internal
border checks should be abolished8, only France, Germany, Belgium, Luxembourg and the
Netherlands signed the 1985 Schengen Agreement. Yet since the 1985 agreement limited itself
to the target of abolishing these controls (Articles 17-33), it was only in 1990 that a further
convention, the Schengen Agreement Applying the Schengen Agreement of 1985, was drafted
and signed. When this came into effect in 1995, it “abolished the internal borders of the
signatory states and created a single external border where immigration checks for the
Schengen area are carried out in accordance with a single set of rules. Common rules regarding
visas, asylum rights and checks at external borders were adopted to allow the free movement
of persons within the signatory states without disturbing law and order”9.
Meanwhile in 1987 the Single European Act had come into force, providing for the
establishment of the single market by 1992 and for decision-making by qualified majority for
internal market rules (Article 100a TEEC, now 95 TEC).
Yet it was only with the Maastricht (1993) and Amsterdam (1999)10 treaties and with the
conclusions of the Tampere summit meeting (1999)11, that an overall EU approach to
immigration and asylum was launched.
These developments show that the initial step of eliminating internal border checks was taken
before “compensatory” measures such as external management of borders, the coordination
between police, customs and the judiciary, the Schengen Information System, and, above all,
the tackling of immigration issues were envisaged.
THE CHARACTERISTICS OF A POTENTIAL EU IMMIGRATION POLICY
Before asking whether or not the Community should dispose of more competences and enact
more efficient and coherent measures in the area of immigration, answers must be provided
regarding the potential features of such a policy.
If there are to be EU immigration and asylum policies in these fields should they be oriented
“towards interception outside the EU and deflection or rejection” or towards “access to and
protection within the EU”12?
Although some measures were taken in the frame of the Tampere Programme13, the EU was
often blamed for “poor quality “communitarization”, converging at the bottom, where
common minimum standards would coincide with the lowest common
denominator”14.
The Hague Programme seemed to set new objectives, underlining the positive aspects of
immigration through the definition of “a balanced approach to migration developing a
common immigration policy at Union level”, through aiming at the integration “so as to
maximise the positive impact of migration on the society and economy” and through the
establishment of a common asylum area.
Already in its Communication of November 200015, the Commission stressed that legal
immigration constitutes a resource and took the view “that the «zero» immigration policies of
the past 30 years are no longer appropriate”16. In 2002 it stated that “immigration must not be
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viewed strictly as a problem, but should also be seen as a positive phenomenon”17. In the
framework of a further communication and report18, the Commission then suggested a more
extensive admission of third-country nationals, justifying the need for legal immigration
because of the demographic developments.
The latest European approaches19 seem to seek a compromise between on the one hand the
preventions of immigration (strengthening border controls, plans to combat illegal
immigration, return action programmes, programmes for financial and technical assistance to
third countries in the area of migration and asylum, readmission agreements, etc.)20 and on the
other hand the integration of legal immigrants21.
In the light of these orientations and the ever more strident claims for greater coherence
within, and more responsibility and competence for, the EU, is it actually able to develop an
own immigration and asylum policy applicable for all its 27 Member States?
Or will the extremely different historical experiences, economic situations, demographic

challenges and social standards in the future 27 Member States (see below) make such
common policy impossible?
DUE TO THE HIGH NUMBERS OF IMMIGRANTS, IMMIGRATION HAS ALWAYS BEEN A

PARTICULARLY SENSITIVE ISSUE TO BE DEALT WITH AMONG MEMBER STATES
Whereas the numbers of asylum seekers in all EU Member States have been dropping
continually from some 425,000 in 2002 to some 230,000 in 200522, net immigration into the EU
has been rising over the past years to reach its provisional climax in 2004 with a net
immigration23 of approximately 2.000,00024. Not to mention those already illegally residing in
the different Member States25, another estimated 400,000 people cross the EU’s borders each
year without the necessary travel documents26.
Against this background it is not surprising that the area of immigration is more sensitive for
the Member States than those of asylum, visa and border control policies. Up to now the
Member Sates´ attitude towards EU initiatives in the fields of illegal immigration and the legal
immigration of refugees and other migrants”27 has been extremely reluctant. This reluctance is
also indicated by the fact that the provision of the TEC relating to legal immigration was not
subject to the obligation of adopting measures within a period of five years (Articles 63 and 67
TEC) and that it has not yet been moved to the co-decision procedure, as Article 67.2 TEC
suggests.
As the right of national veto survived the Tampere meeting of the JHA Ministers on 22
September 200628, it is quite likely that it also survives the December Summit.
The question is therefore whether the Member States, given their different historical
experiences with and their different needs for immigrants, will be ready to confer substantial
competence to the Community in the near future.
THE HISTORICAL EXPERIENCES WITH AND THE DIFFERENT NEED FOR IMMIGRANTS IN THE
27 MEMBER STATES
Member States have different experiences with immigration. They are facing different
economic situations, demographic challenges and social standards29.
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While some countries have been traditional immigration countries for a very long period,
others have had to face important immigration since only recently. While some EU economies
lack human labour resources, others are confronted with high unemployment rates. Some of
the wealthy central European states have had strong demands for skilled or unskilled labor in
the past; other new emerging economies have that need at present. While certain Member
States are in need of highly qualified manpower, the economy of others demands rather
unskilled workers, and some if not all EU Member State economies benefit also from illicit
work30. Also different demographic pressures engender different needs for economic
immigrants in national labor markets.
Distinct economic and/or geographic circumstances expose the Member States differently to
sudden inflows of migrants. Whereas the Mediterranean and East European EU countries are
especially exposed as EU border states, as well as because of the steep wealth gradient
between the EU- and their East European and Northern African neighboring states31, the
traditionally Central and Northern European countries will be very often the countries of final
destination of legal or illegal immigrants.
These differences become even more visible with the recent and future EU enlargements.
In the light of these differences, those objecting to an EU-level approach to immigration policy
argue strongly that, given the impossibility to find a common denominator, it will be
impossible to determine a common immigration policy for 27 countries, that immigration
should remain an issue to be handled by nation states as it classically has been32.
As immigration policy “is an overarching policy field, with large overlapping with foreign policy
outside and with social policy inside”33, it is argued that “all sovereign States have the right in
both natural and international law to control immigration, whether in the interests of
preserving the social cohesiveness of their population or maintaining their labour standards”34.
WHAT POLITICAL AND/OR LEGAL SOLUTIONS COULD OR SHOULD BE FOUND?
Given these divergences, the question might be justified whether a more coherent European
approach, implying more Community competence and initiatives, are needed at all.
Yet giving a positive answer to that question would disregard one of the crucial problems the
European Union is facing: Because of the four freedoms of the internal market, the EU citizen´s
rights to move and reside freely35 and, last but not least, the uncontrolled movement of
persons within the Schengen area, any measure taken by a Member State in the field of
immigration, asylum, visa and border control will affect the other Member States. Even if one
invokes the subsidiarity principle, the concept of the “externality”, which refers to the effects
that unilateral national action will have on other states, would still call into question the
legitimacy of such single-handed national actions.
Therefore other alternatives may come to seem plausible: While resistance to confering further
competence on the EU has been traditionally strong in certain fields -such as legal
immigration36, integration of immigrants37 and/or for the right to determine the number of
admission of economic migrants38- a much weaker opposition exists in other areas. As political
consensus among the Member States seems easier to achieve with regard to a genuine
common European asylum system, an efficient management of the EU external borders (at
least in principle), an effective EU return policy, a uniform visa code and a European solution for
the problems of illegal immigration, more Community competence and initiatives could be
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sought at least as regards to these fields. Could the solution therefore lie in a stronger
“communitarization” of certain areas and the simultaneous (re-) nationalization of others?
THE DILEMMA
Yet the particularity of the areas of immigration, asylum, visa and border controls lies in their
indivisibility: for example asylum policy refers to all persons who apply for asylum, irrespective
of whether they entered a country legally or illegally; asylum applicants whose claims have
been rejected may continue to reside illegally in a Member State; returns are enforced for illegal
immigrants and for rejected asylum seekers; status regularization concerns third country
nationals illegally residing in a Member State, aliens illegally crossing the EU border, rejected
asylum seekers and other tolerated third country nationals.
The dilemma is particularly visible when it comes to the distinction between legal and illegal
immigration: Those EU countries which are the principal opponents of integrated Community
“solutions” and which therefore also oppose bringing legal immigration policy within the ambit
of qualified majority voting, have nevertheless to face the consequences of single-handed
national actions by other Member States.
Those EU countries however, which are facing growing and sometimes sudden inflows of
migrants and which, according to national, European and international laws, are responsible for
controlling their borders, taking asylum seekers into custody, arresting illegal immigrants and
“tolerate” other third country nationals39, are traditionally calling for an “integrated
management of migration” based on the principles of solidarity, fair sharing of responsibility
including its financial implications40.
Yet in the absence of such “solidarity” initiatives, which would be part of the field of illegal
immigration with the Council stating by qualified majority, Member States can simply make
them a “problem” for the other Member States, and thus a “Community problem”, by legalising
the status of arrested illegal or clandestine immigrants and other tolerated third country
nationals (see the overview on this page), who can then move legally
or illegally within the uncontrolled the Schengen area.
As such moves fall partially under the category of legal immigration, which requires unanimity
in policy making, and partially under the category of Member states rights to determine the
number of admission of economic migrant admitted within their borders, political consensus
among all Member States in support Community “solutions” is extremely hard to achieve.
Added to this difficulty is regular irritation at single-handed national decisions and the fear that
a Member country’s unilateral granting of amnesty to undocumented foreigners will give
further incentives for illegal migrants, which in turn would make Community solutions even
more unlikely following such national legalization decisions.
This leads to the dilemma that those traditional immigration countries of the EU which object
to Community “solutions” because of their fear of having to cope with additional uncontrolled
inflows of immigrants, and which maintain their right of national veto in the area of legal
immigration and their national competence as regards determining the number of migrants
they will admit, deprive themselves of the possibility of hindering other Member States from
taking unilateral decisions which in practice lead inevitably to these uncontrolled inflows.
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CONCLUSIONS
At present, due to the division of competence between the Member States and the
Community, immigration policy within the EU seems to fail in every respect. Neither is it
capable of responding to different humanitarian crises or of developing standards for the
admission and integration of asylum seekers, refugees, illegal, or tolerated but illegal
immigrants; nor is it able effectively and sensibly to stem and control the inflow or migrants.
Since, as stated above, a stronger “communitarization” of certain areas and a “(re-)

nationalization” of others fail with the indivisibility of the immigration areas, only two solutions
appear logically tenable:
(1) the “communitarization” of, and the introduction of qualified majority voting for, all areas of
immigration;
(2) a (re-)nationalisation of these policies alongside the reintroduction of national border

controls.
Our discussion points to the fact that the first is unlikely to be achieved in the near future. And
since the second is, at least at the present stage, politically and economically unthinkable, the
EU and the Member States face a basic dilemma.
It might be an illusion that single Member States alone can control their immigration41. But
what are the alternatives as satisfying European solutions for the immigration problems are
currently not discernable?
NOTES:
1 Ferrucio Pastore in “Just another Dream?”, Rome, 15 November 2002

2 See e.g. the “Leaders of Europe’s” October debate at http://www.leadersofeurope.com
3 Laid down in the Protocol to the Accession Treaty concerning the conditions and
arrangements for admission of the Republic of Bulgaria and Romania to the European Union
and its respective annexes on transitional measure: All EU member states must inform the
European Commission by the end of this year whether they will impose labour barriers
against Bulgaria and Romania. The temporary limits can be applied for a maximum of seven
years.
4 The question will also be brought up, whether the areas of cooperation in criminal matters
(3rd Pillar) could be moved to the Community Pillar by using Article 42 TEU.
5 MEP Sophia in ‘t Veld in the October debate of „Leaders of Europe”
www.leadersofeurope.com
6 The Hague Programme, point 1.2.
7 Ferrucio Pastore in “Just another Dream?”, Rome, 15 November 2002: “Even when traditional
European immigration countries decided, in the early 70s to shut the door to new legal
entries for economic purposes, that crucial decision was taken by each country in a
uncoordinated, competitive way. National borders were closed without considering the
possible impact of such closure on the neighbouring countries, not to speak of the impact
on the countries of origin”.
8 In the frame of the debates about the meaning of the concept of “free movement of
persons”, some Member States felt that this should apply to EU citizens only, which would
involve keeping internal border checks in order to distinguish between citizens of the EU
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and non-EU nationals. Others argued in favour of free movement for everyone, which
would mean an end to internal border checks altogether. See Scadplus at
http://europa.eu/scadplus/leg/en/lvb/l330 20.htm
9 See Scadplus at http://europa.eu/scadplus/leg/en/lvb/l33020.htm
10 With Amsterdam, the Schengen Acquis was integrated into the EU framework and
Community competence was established for immigration, asylum, visa and border controls.
The Council acted unanimously on immigration matters and the European Parliament was
consulted. Based on Article 67 TEC, the areas of border controls, visa, asylum and illegal
immigration were gradually moved to the co-decision procedure. Only measures relating to
legal immigration (articles 63.3a and 63.4, for which the 5 years period of Article 67 does
not apply) remain subject to unanimity voting. Decisions are adopted in principle by 22
States:
According to the Protocol on the position of Denmark annexed to the Treaty of Amsterdam,
Denmark has no vote. Article 5 allows Denmark to decide whether it will implement into
national law decisions to build upon the Schengen acquis taken under the provisions of
Title IV of the TEC . It will then be bound by such decision according to international law.
According to the protocol on the position of the UK and Ireland, the United Kingdom and
Ireland also abstain from voting. An opt-in clause allows the UK and Ireland to participate,
on a case-by-case basis, in texts negotiated by the EU.
11 The European Council held a special meeting on 15 and 16 October 1999 in Tampere on the
creation of an area of freedom, security and justice in the European Union. Among others,
an overall approach to immigration and asylum was launched. 12 Ferrucio Pastore in “Just
another Dream?”, Rome, 15 November 2002
13 E.g.
- Directive 2001/55/EC of 20 July 2001 on minimum standards for giving temporary
protection in the event of a mass influx of displaced persons and on measures promoting
a balance of efforts between Member States in receiving such persons and bearing the
consequences thereof.
- Directive 2005/85/EC laying down minimum standards in the Member States for granting
or withdrawing refugee status.
- Regulation 343/2003/EC establishing the criteria and mechanism for determining the state
responsible for examining an asylum application lodged in one of the Member States.
- Directive 2003/9/EC laying down minimum standards for the reception of asylum seekers.
- Directive 2003/86/EC on the right to family reunification.
- Directive 2003/109/EC concerning the status of third country nationals who are long term
residents.
- Directive 2004/114 on the conditions of admission of third-country nationals for the
purposes of studies, pupil exchange, unremunerated training or voluntary service.
- Directive 2005/71for the facilitation of the admission of researchers into the EU.
14 Ferrucio Pastore in “Just another Dream?”, Rome, 15 November 2002; See also e.g.
EUobserver from 10.10 2006 as to the transposition of Directive 2005/85 EC.
15 Communication from the Commission to the Council and the European Parliament on a
Community immigration policy, 22.11.2000.
16 See also the proposal for a directive of 5 December 2001 on conditions for admission and
residence of third-country nationals for the purpose of paid employment or selfemployed
economic activity.
17 Communication of 3 December 2002 on integrating migration issues into the EU’s external
relations.
18 Communication of 4 June 2004 on legal immigration and illegal immigration; Annual report
on immigration, 16 July 2004.
19 See the 19 July 2006 package adopted by the Commission on Policy priorities in the fight
against illegal immigration of third-country nationals, a proposal for a Regulation
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establishing a Community Code on visas for short-stays and a proposal for a Regulation on
the powers and the financing of rapid reaction teams of border guards from Member
States who are seconded to another Member State in order to provide technical and
operational assistance:
http://europa.eu/rapid/pressReleasesAction.do?reference=IP/06/1026&format=HTML
& aged=0&language=EN&guiLanguage=en
However, similar proposals were basically already put forward in to the so-called Flynn-
paper of 1994, in which the then Commissioner Padraig Flynn defined three key objectives
of future EU policies in the field of asylum and immigration: countering migratory pressure;
ensuring effective control of immigration; and strengthening the position of legal
immigrants; see e.g.
http://www.gsoa.ch/zivil/kosov@/kosov@_ nato/199905/19990509.0.html
20 See also Commission legislative and work programme:
http://ec.europa.eu/atwork/programmes/d ocs/clwp2007_en.pdf
21 Although the right to determine the number of admission of economic migrant remains
with the Member States and although the EU does not have any explicit competence for
the integration of TCNs (given that the Constitution and thus its Article III-267.4 did not
enter into force), non-binding measures to promote their integration have been proposed
(e.g. though a European handbook on integration), while binding measures having an
indirect effect on the integration have already been adopted (e.g. through Directive
2003/109/EC concerning the status of third country nationals who are long term residents,
according top which long term residents enjoy preference over newly arriving migrants). In
its legislative and work programme for 2007, the Commission announces the proposal of a
binding Directive the specific objective of which shall be to promote better integration of
economic immigrants in the labour market and to establish fair and clear rules and rights
for them. - See also EUObserver of 27.10.2006: At a recent meeting of the so-called G6,
“French minister Nicolas Sarkozy emphasized the importance of a common EU-wide policy
on granting asylum and said Europe should negotiate as a bloc with African countries on
limiting routes used by illegal migrants”.
22 ECRE, Asylum applications and country of origin information in Europe and EU in 2005,
January 2006. OECD on 8 June 2006:
http://www.oecd.org/document/8/0,2340,en_2649_37415_36855048_1_1_1_37415,00.
html
23 A measure of the difference between those leaving a territory and those arriving.
24 See “Key figures on Europe, Statistical Pocket Book” 2006 at
http://epp.eurostat.ec.europa.eu/cache/ITY_OFFPUB/KS-EI-06-001/EN/KS-EI-06-001-
EN.PDF
25 Reliable statistics on the number of those illegally residing in the Member States are difficult
to draw up. See Commission staff working document SEC(2006) 1010
26 Euractiv:
http://www.euractiv.com/en/justice/comm ission-tries-get-grips-immigrationcrises/article-
156869
See also Commission staff working document SEC(2006) 1010
27 Christopher Hein in “Die Asylpolitik der EU am Beispiel Lampedusa, ai-Tagung, 2 December
2005: www.ai-academy.at
28 EUObserver from 22.09.2006
29 For more detailed information:“Key figures on Europe, the statistical pocket book” at
http://epp.eurostat.ec.europa.eu/cache/ITY_OFFPUB/KS-EI-06-001/EN/KS-EI-06-001- EN.PDF
See also the OECD country profiles for some of the EU Member states at
http://titania.sourceoecd.org/vl=1217546/c l=34/nw=1/rpsv/cgibin/jsearch_oecd_stats#
and the OECD main trends on international migration at
http://www.oecd.org/dataoecd/23/41/250 8596.pdf
297
30 Therefore the Commission´s legislative work programme announces a proposal on

minimum sanctions for employers of illegally staying third-country nationals, in order to
reduce both illegal immigration and the exploitation of such workers:
http://ec.europa.eu/atwork/programmes/d ocs/clwp2007_en.pdf
31 In this context it also seems worth to remind that not few politicians blame the EU fishery
agreements with the North African states and the thereby caused impoverishments in
these areas, thus further enhancing the readiness to immigrate to Europe. See e.g. MEP
Nigel Farage in the October debate of ‘Leaders of Europe’ at
http://www.leadersofeurope.com
32 See e.g. MEP Nigel Farage in the “Leaders of Europe”´s October debate at
http://www.leadersofeurope.com
33 Ferrucio Pastore in “Just another Dream?”, Rome, 15 November 2002.
34 Anthony Coughlan, personal communication, 22 October 2006.
35 The European Council in Tampere stated that the legal status of third-country nationals
should be approximated to that of Member States’ nationals and that a person who has
resided legally in a Member State for a period of time to be determined and who holds a
long-term residence permit should be granted in that Member State a set of uniform rights
which are as near as possible to those enjoyed by citizens of the European Union. Directive
2003/109/EC concretises these rights for long-term residents.
36 The area of legal immigration is still subject of unanimity voting in the Council with the EP
being merely consulted
37 In the present TEC, a clear legal base for the adoption of integration measures lack. The
proposed Constitution would have provided such competence in its Article II-267.4.
38 The competence to determine the number of admission of economic migrants would have
remained with the Member States even according to the proposed EU Constitution -
Article III-267.5.
39 It is a frequent problem that asylum seekers whose demands have been rejected or illegal
immigrants who have been arrested cannot be deported because they have no passports
or because their countries of origin are stroke by (civil) wars, refuse their readmission or are
simply unknown. In addition, according to Article 2(a) of Directive 2001/55/EC, temporary
protection to displaced persons is to be granted “in the event of a mass influx or imminent
mass influx of displaced persons from third countries who are unable to return to their
country of origin, immediate and temporary protection to such persons, in particular if
there is also a risk that the asylum system will be unable to process this influx without
adverse effects for its efficient operation, in the interests of the persons concerned and
other persons requesting protection".
40 On 20 September 2006, Spain appealed to the European Union for rapid action to help it
and other Mediterranean members of the EU to stem the flow of illegal migrants from
Africa.
http://www.townhall.com/News/NewsArtic le.aspx?ContentGuid=1ec9be50-3a81-
498d- 9347-66d0df3fa765
41 MEP Chris Davis in the October debate of Leaders of Europe” at www.leadersofeurope.com
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Chapter 9
Energy
Andris Piebalgs, EUWatch, July 2007:
The European Commission has put forward a comprehensive European

Energy Policy – the most far-reaching reform of Europe’s energy policy ever
attempted.
If Europe could agree upon clearly identified energy goals and priorities and
pursue them rigorously with a single voice, it could lead the new global energy
agenda, instead of following it.
Nigel Farage, EUWatch, July 2007:
I feel very strongly, that each member state will only have security of supply if
it controls its own power generation.
I am hugely sceptical about the long term viability of wind farming, and
suspect that future answers may be found in tidal power sources or in solar
energy.
299
THE NEW EU ENERGY POLICY
An interview with Energy Commissioner Andris Piebalgs

(July 2007)
ON 10 JANUARY 2007, THE EUROPEAN COMMISSION PROPOSED A PACKAGE OF MEASURES TO

ESTABLISH A NEW EU ENERGY POLICY. THIS PACKAGE WAS ENDORSED BY THE EUROPEAN
COUNCIL ON 9 MARCH 2007. THE MOST SIGNIFICANT TARGETS TO BE REACHED BY 2020
CONSIST IN THE REDUCTION OF EU GREENHOUSE GAS EMISSIONS BY 20%, IN 20% OF THE EU
ENERGY CONSUMPTION COMING FROM RENEWABLE ENERGY SOURCES AND IN A 20% CUT OF
THE EU TOTAL PRIMARY ENERGY CONSUMPTION (PREDICTED FOR 2020). THE EUROPEAN
COUNCIL ADOPTED A EUROPEAN ENERGY ACTION PLAN FOR THE PERIOD 2007-2009 TO PUT
THIS NEW POLICY IN PLACE.
EUWatch: What are the next concrete steps the EU and the Member States have to take?
What are the main features of the action plan 2007- 2009?
Andris Piebalgs: The Commission has prepared an ambitious action plan with seven steps.
First by creating an efficient and competitive EU energy market: a more efficient and
competitive energy market will result in more reliable supply at a lower cost to consumers. To
achieve this, Europe must unbundle networks from services, harmonise energy regulation and
create a body that has the power to adopt binding decisions on cross border issues.
Secondly, by ensuring security of supply for oil, gas and electricity and by promoting solidarity
between Member States: this means promoting diversity of energy source, supplier, transport
route and transport method, as well as putting in place effective mechanisms to ensure
solidarity between Member States in the event of an energy crisis. Promoting energy efficiency
will be our third pillar: to achieve a 20% improvement in energy efficiency by 2020, including a
13% reduction in energy consumption – meaning a reduction of 780 million tonnes in annual
CO2 emissions and annual savings of €100 billion.
From the supply side we will first and foremost support renewable energy: without a
substantial shift towards renewable energy over the coming years, Europe will not be able to
reduce greenhouse gas emissions by 20%. Although increased energy efficiency, nuclear
energy and carbon capture and storage can all contribute to achieving the 20% target, none of
these measures will have a major impact before 2020. The Commission therefore proposes to
raise the share of renewable energy in the EU’s energy mix to 20%.
We also need to back research: Europe is lagging behind on research into the next generation
of low carbon and renewable technologies. The European Commission will work to stimulate
the construction and operation by 2015 of up to 12 large scale fossil fuel plants to demonstrate
CO2 capture and storage technology, and will provide a clear indication of when coal- and gas-
fired plants will need to install the technology.
In the field of nuclear energy we need to build a coherent approach: whilst not all European
nations will opt for nuclear energy, it nonetheless accounts for 30% of electricity generated in
the EU and is the largest – and one of the cheapest – sources of low-carbon energy available.
The EU should create an advanced framework for nuclear energy, including nuclear waste
management and decommissioning.
300
Finally we should develop a common External EU Energy Policy: global warming and energy
security are global challenges. The EU can set the pace on these issues, but it needs to bring the
US, China, India, Japan and its other partners on board. To do so, and to protect its own
interests, Europe must speak with one voice and act as one. EU energy policy can also help
developing countries. Like Europe, many of these countries depend on energy imports, and
surges in oil prices can effectively cancel out development aid.
European energy policy was only generally approved at the informal meeting of the
European Council on 27 October 2005. The March 2006 Summit – which in terms of
establishing an EU energy policy was considered as a failure – stressed its commitment to
“fully respect Member States’ sovereignty over primary energy sources and choice of energy
mix”. That shows that Member States have been extremely reluctant in giving up their
sovereignty over energy. What were the reasons that it suddenly became possible to reunite
all Member States behind the Commission proposal?
I think that Member States have realised that energy and the environment are not only the
greatest challenges for Europe in the 21st century, but they also represent an enormous
opportunity.
By accelerating low-carbon growth and dramatically increasing the amount of low-emission

energy produced and used, Europe can become the leader in renewable energy and low-
carbon technologies, and make its economy much more robust in the process. In short, Europe
has the opportunity to usher in a new industrial revolution in energy. But we can only do that if
we do it together.
This is why, recognising the seriousness of the challenge, as well as the inherent opportunity,
the European Commission has put forward a comprehensive European Energy Policy – the
most far-reaching reform of Europe’s energy policy ever attempted. The policy aims to
transform Europe’s energy economy into one that is sustainable and competitive and enjoys
security of supply.
According to the present treaties, the EU does not have any relevant competence in the area
of energy. Moreover, the proposed Treaty establishing a Constitution for Europe still
confirms the Member States’ rights to determine the conditions for the exploitation of their
energy resources, their choices between different energy sources and the general structure
of their energy supply. The March 2007 Summit reaffirmed its full respect “of the Member
States’ choice of energy mix and sovereignty over primary energy sources”. How does the
European Commission intend to proceed in order to set up a new European energy policy
while respecting these national sovereignties?
This energy challenge requires a global response: a new energy system based on effective
collaboration between producers and consumers, greater efforts to increase energy efficiency
worldwide and a quantum leap in the production of renewable and low carbon energy. The EU
is in a unique position to lead this response – it heads the world in terms of efforts to produce
competitive renewables and energy efficiency, and has established effective energy dialogues
with both producers and consumers. However, European energy policy has so far been
fragmented and less focussed than it could be, which has certainly reduced its impact on the
global scene. If Europe could agree upon clearly identified energy goals and priorities, and
pursue them rigorously with a single voice, it could lead the new global energy agenda instead
of following it. This is the fundamental reason why Europe needs a common energy policy.
Therefore, it should be underlined that a European Energy Policy needs to take an integrated
301
approach, involving all the aspects of the Commission’s and the European Union’s work. This
goes for example for tax policy, agriculture, trade and environment, to name but a few.
Member States in the recent European Council have put forward a basis for such a Common EU
Energy Policy. It is based on the idea that our energy policy should have three core objectives:
sustainable development, competitiveness and security of supply. These are not mutually
exclusive goals. Indeed they are complimentary: each aspect of our energy policy needs to
contribute to all three goals, and taken together, represent a coherent package to achieve
them.
The EU set itself the goals to reduce CO2 emission by 20% and to increase the ratio of the
renewable energy sources by 20%. However, the energy-producing and even energy-
consuming technologies are well established and the last technological breakthrough
occurred some 60-70 years ago (nuclear energy based on fission), whereas the development
of fusion energy is lingering in the far future. That means that all the developments we are
experiencing today are evolutionary, not revolutionary, increasing the efficiency of the
energy-producing (and energy-consuming) equipments only by a few percentage points.
Are the proposals to reduce CO2 emissions by 20% realistic, when, at the same time, the ratio
of renewable energies is to be increased and without nuclear energy being considerably
promoted? Is this approach compatible with, e.g. the UK’s or France’s preferences for nuclear
energy?
It is an ambitious target, but it is also realistic. The 20% target is the driver for the new European
energy policy, but the policy is not just about climate change. It also aims to improve Europe’s
energy security and competitiveness. Achieving the 20% target can limit the EU’s growing
exposure to volatility in the price of oil and gas, create a more competitive EU energy market,
and stimulate innovation and job creation. Even without global warming, Europe should be
taking this bold step forward.
All Member States agree that Renewable Sources of Energy are going to play a key role to reach
this objective and therefore they have agreed on the ambitious binding objective of 20%
energy consumption by 2020 coming from renewable energy sources. This common
agreement does not exist in the field of nuclear energy and therefore it is for each Member
State to decide whether or not to rely on nuclear power for the generation of electricity.
Irrespective of the energy policy choices made by Member States, consistent action is essential
regarding nuclear safety, decommissioning, radioactive waste management and non-
proliferation.
EUWatch: Energy is increasingly imported from outside the EU. The EU’s oil and gas imports
amount to approximately 80-90% of consumption. Sudden price increases or supply
shortages can seriously hit the economies of the Member States. What are the main features
of the energy package in this regard for the following?
- decreasing the EU’s dependency on eternal energy sources,

- long-term bi-lateral agreements and other political ties with suppliers and transit
countries, and
- risk-sharing among Member States?
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The EU’s key objective for its external energy relations is for Europe to speak with one voice on
the international stage – this will help the EU to better protect its interests, tackle global
challenges and catalyse real change.
The EU will be at the forefront of international action to reduce the growth in energy demand,
improve energy efficiency, combat climate change, and accelerate the move to a low-carbon
economy. This includes promoting emissions trading, renewable energy – wind, solar, biomass,
hydro, geothermal – and clean hydrocarbons.
The EU also plans to be a key driver in the design of international agreements – including the
post- Kyoto Protocol climate regime, the extension of emissions trading to global partners and
the development of clean and renewable energy technologies.
The EU will also take on a more proactive role in developing the energy interconnections inside
and outside the bloc that are needed to diversify routes and sources of energy supplies. The EU
will provide political and financial support, and look to create an environment conducive to
mobilising private investment.
A pan-European energy market should be developed that provides transparency, predictability,

mutual confidence, security and prosperity to the EU and its neighbours. This entails deepening
the Energy Community Treaty between the EU and countries of Southeast Europe, and
gradually incorporating other neighbouring countries.
The admission of Moldova, Norway, Turkey and Ukraine as observers can be seen as a first step
in broadening the adoption of European energy market principles. Similar objectives will be
pursued through the Euro- Mediterranean energy cooperation.
The EU will continue to pursue bilateral and regional energy cooperation partnerships with its
main energy partners. This includes Russia, through the negotiation of a new Partnership and
Cooperation Agreement; Norway, through the Joint EC-Norway Energy Cooperation Group;
Algeria, through a new strategic energy partnership; and other energy producer/transit
countries like Ukraine, Azerbaijan and Kazakhstan.
The EU also needs to improve energy relations with the countries of the Caspian and Black Sea
regions. It should develop a real energy partnership with them and take the concrete measures
required to make independent gas supplies from this area to the EU a reality.
The EU needs to deepen its dialogue with OPEC (the Organization of the Petroleum Exporting
Countries) through joint projects, and further develop energy relations with the Gulf
Cooperation Council and with major consumers like the US, India and China.
A comprehensive Africa-Europe energy partnership should also be developed. Many African

countries are emerging energy producers and Europe risks getting left behind as a partner in
the sustainable development of these resources if it does not act to build closer energy ties.
Estimations predict increased needs for oil and gas until 2030. The resources however, will
gradually be depleted, as the development of new technologies is lagging behind. What will
happen after 2030? Are there any realistic visions for replacing natural gas and oil in the
long run?
303
It is very difficult to make a forecast in such a long term. But we have prepared a technology
plan in order to develop technologies also on the long run. It is clear that renewable sources of
energy will reduce their costs, and that biofuels, particularly second generation biofuels, will
play a key role in the transport sector. But we have to be open to new technologies such as
hydrogen or fusion power to address the energy challenges of the future.
One of the main instruments of the new energy package is the liberalization of the energy
market. Considerable positive impacts are expected from a well-functioning energy market.
Yet some institutions and experiences raise doubts as to the efficiency of liberalisation. The
European Trade Union Institute for instance, claims in one of its studies that most network
industries have, in the post-liberalisation phase, continued to produce the same results as
previously. An IEA (International Association for the Evaluation of Educational Achievement)
study claims that market liberalization increases the risks for investors and favours
investments with relatively low capital and high fuel costs at the expense of investments that
require more capital but lower running costs. The latest Eurostat data reveal – against the
commitments of the Kyoto Protocol – that the CO2 emissions in the EU have increased by 3%
between 1990 and 2004. Against these assessments do you think that the policy targeted by
the EU is sufficient to reach the abovementioned goals?
Our first step is to achieve a 20% reduction in the EU’s greenhouse gas emissions by 2020
versus 1990 levels. This unilateral target is just an initial goal. The hope is that other nations will
follow Europe’s lead. When such an international commitment exists, Europe will raise the
target to a 30% reduction by 2030 and a 60-80% reduction by 205g.
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COMMON ENERGY POLICY:

A HOUSE OF CARDS BUILT ON SHIFTING SANDS
By Nigel Farage (July 2007)
THE EUROPEAN COMMISSION IS BASING ITS PROPOSED COMMON ENERGY POLICY ON A

TOTALLY UNREALISTIC PREMISE OF SECURITY OF SUPPLY.
We have seen recently, in Venezuela, the state-owned oil company, PdVSD, taking control of oil
fields in that country’s Orinoco basin. This is effectively a forced nationalisation, with those
private companies that are being squeezed out reported to be in line for compensation of as
little as 25% of what their assets in the region may be worth1. President Hugo Chavez is seeking
to undermine the US economy2 by diverting supplies away from the US, by subsidising the
Latin American market, and by potentially causing an increase in fuel prices, which in the US
has historically had the effect of undermining the popularity of the government of the day.
Behind the scenes, however, we see Russian hands at play. Russia is arming Venezuela with
state of the art weapons systems, and it is unlikely that Chavez’s confrontational anti-American
speech at the UN in September 2005 would have happened had he not just received an
assurance of some $3 billion of arms supplies. This might be interpreted as an intention to
provoke a conflict in the region: This being standard Russian policy where energy resources are
concerned, consider the endless civil war in the Caucasus. This is less about fighting terrorism
or propping up particular regimes, than it is about deterring foreign investment. We see it in
Darfur, where it has just been reported that Russia has been supplying arms in defiance of a UN
embargo3. More than 200,000 people have been killed in a four year civil war, and the BBC is
reporting Russian attack helicopters on the tarmac at Nyala air base, and the involvement of
Russian military aircraft in bombing raids in Darfur. China is also fanning the flames, and is
known to have sent fighter aircraft to the region. Neighbouring Sudan is also oil-rich, with most
of the reserves in the south of the country. The fact that Southern Sudan is likely to declare
autonomy in four years time, taking the oil with it, might explain the Russian interference.
Just as we saw Moscow citing so called ‘environmental issues’ to threaten, and then take
control of the Sakhalin-2 oil and gas project, so we see the EU blundering ahead with plans to
give Russia a greater say in the environmental management of the Baltic. Is the Commission
totally oblivious to the fact that Putin might be somewhat more interested in the new gas
pipeline running through the Baltic than he is in the spawning grounds of fish?
The Commission acknowledges that there are issues arising from dealing with the Russian
state. Algeria has been cited as an alternative supplier, but in this the Commission seems to
completely overlook the fact there exists a ‘memorandum of understanding’ between Russia’s
Gazprom, and the Algerian state controlled gas firm Sonatrach. Indeed, during a dispute
between Georgia and Gazprom over price increases in January of this year, Moscow put
pressure on the Algerians not to supply gas to the Georgians. Some alternative supplier!
We are told that ‘The Market’ will guarantee security of supply. The major players I have
discussed so far are all state controlled, and will withhold or subsidise supplies in pursuit of
their political agenda. Russia itself has enacted legislation to freeze out foreign investment on
the one hand, and uses Gazprom et al to buy up western energy companies on the other. Some
market!
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ALTERNATIVE ENERGY SOURCES: TIME TO STOP TILTING AT WINDMILLS
My party, the UK Independence Party, has advocated nuclear power generation consistently,
and in this respect I raise my hat to the French, who went from a standing start in 1973, to a
point that they were actually exporting nuclear generated energy in just 15 years. Consider: a
gram of coal can generate 15 -35 kilojoules (kJ) of chemical energy.
A single gram of uranium can generate 10,000 - 1,000,000 times as much nuclear energy4.
But here, whilst I further acknowledge the Commission’s desire to increase nuclear generation
across the EU, I feel very strongly, that each member state will only have security of supply if it
controls its own power generation. I look at the CAP and the CFP, I consider the way in which
the Commission relates to Moscow, and I shudder to think of the UK being dependent upon
the people responsible for these debacles for our future power requirements.
There is much talk of renewable energy sources at present, and it is important that we explore
all the alternatives. I am hugely sceptical about the long term viability of wind farming, and
suspect that future answers may be found in tidal power sources or in solar energy. The oceans
are far more consistent and predictable than the wind, and the rate of arrival of solar energy on
the earth is a staggering 10,000 times greater than current world demand5. I am also interested
in the still largely theoretical potential for nuclear fusion provided by hydrogen in sea water.
Although this is still untried and untested, it shows us that there are far more imaginative
options for ensuring our future energy supplies than reliance on unstable regimes, and
windmills.
NOTES:
1 BBC News, online: http://news.bbc.co.uk/2/hi/business/6621927.stm

2 Venezuela supplies up to 15% of US oil requirements, however, oil minister Rafael Ramirez
stated recently that the country wishes to become less dependent on its trading relationship
with the US. Chavez is supplying subsidised oil to Argentina, Bolivia, Paraguay, Cuba, and
Uruguay, in an attempt to establish a Latin American bloc. Independent analyst Alberto
Garrido told the BBC that Chavez is also seeking to expand trade with China. Total
Venezuelan reserves are estimated at approximately 270 billion barrels of crude, the world’s
largest.
3 BBC News, online: http://news.bbc.co.uk/2/hi/africa/6632959.stm
4 Reddish, A. (2003). ‘Dynamic Earth: human impacts’ in Morris, D, Freeland, J, Hinchcliffe, S, and
Smith, S, (eds) Changing Environments, Chichester, Wiley.
5 As above.
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GREENSPIRIT - THE CAUSES OF CLIMATE CHANGE

An interview with Patrick Moore (July 2007)
EUWATCH INTERVIEWS PATRICK MOORE, FOUNDER OF GREENSPIRIT, A CONSULTANCY

FOCUSING ON ENVIRONMENTAL POLICY AND COMMUNICATIONS IN NATURAL RESOURCES,
BIODIVERSITY, ENERGY AND CLIMATE CHANGE.
EUWatch: There is clear evidence of global warming, but the reasons are debated. Some
climate scientists state that human activity has only an insignificant impact on global
greenhouse emission since much more emerges from natural sources. What is your view on
this? Could you give some statistical comparisons between greenhouse emissions of human
and natural (volcanoes, seas, swamps etc.) origin.
Patrick Moore: We do not know if we are a small or large part of the present global warming. It
is not possible through science to determine an exact answer to this question. Certainly the
natural factors, and there are many, that have acted to change the climate many times through
the history of the Earth, are still operating today. They have not gone away. But human
emissions of CO2 is a new (natural) factor. So it is very unlikely that we are the only factor
causing the present global warming but we may be one of the factors.
Some climatologists say that climate has been changing continuously and warmer periods
are followed by colder periods, and that the present warm cycle is not an exceptional one.
What is your view on this? Could you give some statistical data on the Earth’s temperature
changes over the millennia?
Here’s what we know. During the last billion years, there have been at least four occasions
when the entire planet was much warmer than it is today, and that at these times, when global
average temperature was approximately 22°C, there was no ice at either pole and the entire
planet was tropical or subtropical. Similarly, there have been times when the planet was cooler
than it is today – as cold as 12°C – and was covered in ice. We are still in an “ice age” called the
Pleistocene. It is relatively cool now compared with the warm ages that have occurred in the
past.
So the real question becomes: Why would we assume the natural systems no longer exist that
were at play during those significant swings in global temperature, long before humans had
evolved on Earth?
Something else we know is that we are currently in a warming trend. But we are coming out of
a long period of cool global temperature (Pleistocene), and the truth is we don’t know how
much of the present warming trend is due to our emissions. It could be that we’re not
contributing, that we are but only slightly, or that we’re a large part of it.
We also know that it suddenly turned colder between 1940 and 1980 – this is when many
scientists and members of the mass media were predicting a new Ice Age. Then it began to
warm again in 1980 and has been going up ever since (in fact, through to 1998, interestingly
the warmest year over the last several years, and still unsurpassed since).
Indeed, it has been gradually warming for the past 500 years since the peak of the “Little Ice
Age” which was preceded by the “Medieval Climate Optimum” 1000 years ago when grapes
grew in northern England and the Norse colonized Iceland, Greenland and Newfoundland, only
to be frozen out by the Little Ice Age.
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The climate is ever changing, within bounds that may be set by Gaia. CO2 emissions may well
form part of the cause, but other systems are at play.
What might be the impact of global warming, and what can we do about it?
It is likely that global warming will bring both positive and negative impacts in the future. For
example, some areas may see an increase in arable land while others may see a decrease.
Irrespective of these positive and negative effects, I believe it is prudent to maintain a personal
policy to reduce my fossil fuel consumption and to help other people do the same. There are
many good reasons to do so: air pollution, conservation for the future, saving fossil fuels for
higher uses such as durable goods and chemicals, and climate change potential.
In my view, there are three main ways to reduce fossil fuel consumption:
1. Adopt a mix of renewables plus nuclear power for electricity production
2. Install ground source heat pumps instead of burning gas in buildings
3. Promote the use of hybrids and more biofuel for transportation
If we were just to adopt these technologies more widely it would be easy for all countries to
comply with Kyoto.
What is your view on the use of the different energy sources (coal, oil, gas, nuclear, wind,
sun) in the long term?
The only way to reduce fossil fuel emissions from electrical production is through an aggressive
program of renewable energy sources (hydroelectric, geothermal heat pumps, wind, etc.) plus
nuclear. Wind and solar power have their place, but because they are intermittent and
unpredictable they simply can’t replace big baseload plants such as coal, nuclear and
hydroelectric. Natural gas, a fossil fuel, is too expensive already, and its price is too volatile to
risk building big baseload plants. Given that hydroelectric resources are built to capacity in
many regions of the world, nuclear is, by elimination, the only viable substitute for coal. It’s that
simple.
We know climate change is, at least to some degree, related to energy in the form of fossil fuels,
which account for about 85 percent of the world’s total energy consumption. Let’s examine the
largest global greenhouse gas emitter: coal. Although it provides cheap electricity, worldwide
coal burning creates approximately nine billion tons of CO2 each year, mostly from power
generation. Coal-fired plants cause acid rain, smog, respiratory illness, mercury contamination,
and are major contributors to greenhouse gas emissions.
On the other hand, 441 nuclear plants operating globally avoid the release of nearly 3 billion
tonnes of CO2 emissions annually – the equivalent of the exhaust from more than 428 million
cars. If we want to reduce our dependence on fossil fuels like coal, we must choose a cost-
effective solution that’s good for the environment and provides a safe, reliable baseload supply
of electricity. As stated above, in my estimation, the most practical approach is to adopt an
aggressive program of renewable energy plus nuclear. Baseload sources of electricity are
required for the grid and the only viable choices are hydroelectric, coal and nuclear.
NOTE:
For more information: Patrick Moore, Greenspirit Strategies Ltd., pmoore@greenspirit.com,

See: www.greenspirit.com and www.greenspiritstrategies.com
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THE BALTIC GAS PIPELINE

POWER POLITICS WITH CONFLICTING INTERESTS
By Henrik Dahlsson (July 2007)
ONE OF THE LARGEST INFRASTRUCTURAL PROJECTS EVER IN EUROPE IS ON ITS WAY. THE
LARGE SUPPLIES OF NATURAL GAS IN SIBERIA, RUSSIA, ARE TO BE MADE AVAILABLE TO
CONSUMERS IN WESTERN EUROPE. SUPPLY AND DEMAND, SIMPLE LOGIC – NO PROBLEMS?
THE JOINT RUSSIAN-GERMAN COMPANY, THE NORTH EUROPEAN GAS PIPELINE (NEGP), IN
WHICH LEADING POLITICIANS AND BUSINESSMEN ARE INVOLVED, WANTS THE PROJECT TO BE
REGARDED JUST AS SIMPLE MARKET LOGIC. BUT THE CONSTRUCTION OF THE 1200-KILOMETRE
PIPELINE ON THE SEABED OF THE BALTIC SEA – FROM VYBORG IN RUSSIA TO GREIFSWALD IN
GERMANY – IS FAR FORM SIMPLE.
In this article I make a broad overview of the implications of the project, especially from a
Swedish perspective. The implications relate not only to energy policy, but to foreign policy.
The EU needs more energy for its high-consuming societies. Also it needs good relations with
Russia, which has become more and more unpredictable in her international relations. Energy
policy is also foreign policy. The search for secure energy supplies, from Russia as well as from
Central Asia, has a direct effect on the EU’s foreign and security policies. Here new tensions can
arise and create new and unforeseen problems for the EU.
The pipeline affects other policy areas as well, for example the EU’s environmental policy. After
the collapse of the Grand Constitutional Project, the EU tries to strengthen its “green image” in
order to reconnect to its citizens. How well does the gas pipeline suit this new image? Aspects
of the relevant decision-making process, and how the project may affect the cooperational
climate in the EU, need also to be discussed. What influence on the project does a Member
State have in relation to the EU? Has the EU already given “green light” to the project, as the
former German Chancellor Gerhard Schroder claims, without Member States being fully aware
of it?
The aim of creating a common energy policy for the EU has been high on the agenda of the
German Presidency. The European countries are in need of energy, and gas is becoming one of
the most used energy resources in Western Europe. Today the EU countries import 26 percent
of their gas from Russia. This percentage is likely to increase in future. Therefore, Germany sees
the 1200 kilometre-long gas pipeline from Viborg in Russia to Greifswald in Germany as vital for
Europe’s economic interests. In this case as in other cases Germany’s interests are assumed to
coincide with the EU’s interests.
There are a number of environmental concerns arising from the project. About 100,000 mines
and 300,000 tons of chemical weapons have been dumped in the Baltic Sea. The knowledge of
where these weapons and mines have been dumped is very limited. The sea bed is naturally
very sensitive. Therefore the sediment on the sea bed should not be stirred or mixed, according
to environmental experts. From this point of view the construction of the pipeline is a great
threat to the marine life of the Baltic Sea. Also the construction of the pipeline is itself
hazardous, with the risk of spreading different metals and phosphates. Add to this the risk of
exploding mines or the spreading of toxic substances, and the threat to man and nature
becomes immense.
309
The entire Baltic Sea is classified as a “particularly sensitive sea area”, according to the
International Maritime Organization, a United Nations body. East and South of the Swedish
island of Gotland there are very important fishing areas which will be affected by the pipeline.
These are considered to be of national interest to Sweden. The birdlife on the Hoburg Bank,
North Germany, might also be negatively affected. The Hoburg Bank is classified as a Natura
2000-area, according to the EU’s habitat and birdlife directive. The question may be asked: is
the construction of the pipeline in breach of the EU’s own environmental rules?
Many Baltic Sea states are questioning Russia’s strategic motives for this project. It is worth
noting that Russian military forces have offered their help to guarantee the “security” of the
pipeline. A pipeline with a “compressor tower” located just Northeast of Gotland and reaching
70 meters above sea level, also provides excellent opportunities to gather information from
different countries, and first and foremost from Sweden. The Swedish military forces have
already warned about this.
Russia’s strategic motives should also be seen in a wider geographical context. The country has
just strengthened its control over the natural gas resources of Central Asia through new
agreements with Kazakhstan and Turkmenistan, the largest producers of natural gas in the
region. A pipeline will be built, starting during the second half of 2008, from the Caspian Sea to
transport natural gas directly to Russia. This means that both China and the EU are sidelined in
the struggle for control of vital natural resources.
As a result, the EU becomes more dependent on good relations with Russia to secure its energy
supply. The joint Russian-German pipeline can be seen as a way to counter Moscow’s
dominance and secure some kind of “European” interest. This is at least the view of the
European Commission, which has been actively supporting the project since it was initiated
several years ago. But other countries see their interests threatened. Poland benefits, through
transit fees, from the present pipeline from Ukraine. This strategic position will be lost when the
new gas pipeline is built. There is also plenty of anxiety in the Baltic States, based on past
experience, regarding big powers like Germany and Russia making deals behind their backs.
Finally, the way the decision was taken causes some anxiety. The EU Council has at two
occasions, the last time in July 2006, discussed the Baltic gas pipeline as part of one of several
Trans-European Networks. But the question is whether a formal decision was taken to give the
“green light” to the project. There are different views on the matter. Gerhard Schroder has
claimed that the Council did agree. The former Swedish government, which participated in the
Council meetings, says that agreements only were made to make the necessary preliminary
assessments. There was no actual agreement on the pipeline itself. The present Swedish
centreright government supports this view in principle. However Minister of Foreign Affairs Carl
Bildt points out that Sweden has committed itself not to complicate the realisation of the
project. Whether his views are influenced by his former large holdings of stocks and options in
Vostok Nafta, the principal shareholder in Gazprom, is of course hard to tell.
The gas pipeline is a project affecting many conflicting interests, different countries and
political priorities. Sweden for example raises the environmental aspects.
It is formally possible for Sweden to stop the construction of the compression tower near
Gotland, which will make the project hard to complete. In a situation like that, Russia could
appeal the decision in the framework of the United Nation’s Convention on the Law of the Sea.
The European Commission could also challenge Sweden in the EU Court, a case which could
take up to two years.
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There is so much power, prestige and money invested in the gas pipeline project already.
Already in the autumn of 2005 the Russians started to build the pipeline from Siberia. Germany,
which is deeply involved in the project economically and politically, also has strong backing
from the EU Commission. In a situation like this, it is not realistic that Sweden – or any other
country around the Baltic – would challenge the EU and its larger members, as well as a
powerful neighbouring state, Russia. When big powers decide, concerns about the
environment and the self-determination of small countries become secondary. Power decides
politics. This is the case with regard to the Baltic gas pipeline.
FACTS ABOUT THE NORTH EUROPEAN GAS PIPELINE (NEGP)
In September 2005, Russia’s Gazprom and the German firms EON and Basf formed the joint
company, NEGP, and signed an agreement to build the gas pipeline between the two
countries. The former German Chancellor Gerhard Schroder is chairman of NEGP. Its vice-
chairman is Alexander Medvedev, vice- prime minister of Russia. Gazprom is a majority
stockholder in NEGP with 51 percent. The two German firms have 24.5 percent each.
The gas pipeline will be 1200 kilometres and go from Vyborg in Russia to Greifswald in
Northern Germany. The construction of the pipeline, which stretches from Siberia to Vyborg,
started in the autumn of 2005. The construction of the undersea section will start in 2008 and
be completed in 2010.
In November 2006, the project plan with an assessment of environmental effects was sent to
the countries around the Baltic Sea to enable make their own assessments. This consultation
process is made according to the Espoo Convention on Enviromental Impact Assessment from
1991. The United Nations Convention on the Law of the Sea can be used to solve legal disputes,
as a result of the assessment tests.
The Swedish Environmental Protection Agency was responsible for gathering views from
different authorities, organizations and the Swedish public. The agency recommends in its
report, presented in February 2007, that alternative routes should be found in order to protect
sensitive maritime areas.
In autumn 2007, the NEGP will have completed its environmental impact assessment. Then it is
up to the governments of Finland, Estonia, Latvia, Lithuania, Sweden, Denmark, Poland and
Germany to decide on how far the assessments correspond to national laws.
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Chapter 10
Europe in numbers
By Karoly Lorant (May 2009)
Each EUWatch edition devoted one chapter to display some characteristic feature of the
European Union. We spoke about the impact of enlargement, the possible growth in the
western and eastern parts of the union, the demographic challenge, the impact of energy use
on the environment and we also gave some interesting data about the military capability of
NATO. Here we reproduce some of these statistics supplemented with some new information
about health care, education, social inequalities, and the pressing current account problems in
some of the new member states as well as in some of the euro-zone countries.
General characteristics of the European union (Table 1)

With the most recent enlargements in 2004 and 2007 the population of the Union has grown to
491 million, which is some 60 per cent more than that of the United States. However the new
member states (EU12) are poorer than the older ones (EU15). The GDP/capita in these countries
is about half (at ‘purchasing power parity’ – PPP) of that of the EU15. Thus, their contribution to
the GDP of the union is much more modest than their contribution to the EU population.
Against this, the EU27 GDP somewhat exceeds the GDP of the United States and thus it can be
said that the European Union is the most powerful economic unit in the World. China's
economy is about half and India's is about one-fifth of that of the European Union.
Demographic challenges the union has to face (Table 2)

With the latest enlargement the EU27 population has grown up to 491 millions (estimation for
July 2009), however its natural increase tends to reach zero. Between 2001 and 2005 there was
only a 407,000-increase in the yearly average which means a 0,1 per cent population growth
through natural change. The bulk of the population increase comes from immigration. During
the same period, the average was around 1,75 million immigrants a year, more than four times
higher than the natural increase. The slow population growth is correlated with low total
fertility rate (the number of children a woman gives birth to throughout her life), which is
hovering at around 1,5 for the whole union. Keeping the population at the current level needs
a total fertility rate of 2,1 but no country in the union reaches this level. The lowest rates are for
the new member states, where the average total fertility rate is 1,28, but this also includes Italy,
Spain, Greece and Austria from the old member states. With the current trends the EU27
population will decrease and by around 2050 it will be 20 million less than today. In
comparison, the total fertility rate in the United States is 2,1 which means that its population
will remain unchanged. The populations of the current EU27 countries amounted to some 13%
of the world population in 1960. Today, this ratio is only 8 per cent and by 2050 it will decrease
to 5 per cent. Low total fertility rates yield an older society, but if the demographical situation
does not improve, the indigenous European population may be close to extinction within two
centuries.
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Economic growth (Chart 1 and 2)

Economic growth also depends on the level of economic development. The long-termsecular
growth in most of the developed countries has been around 2 per cent. However less
developed countries can develop at a much faster rate by acquiring the most advanced
technology from the developed nations. For this reason, the rate of economic growth has a
decreasing tendency when the level of economic development is increasing (Chart 1). This is
one reason for the deteriorating trend in the rate of economic growth in the European Union
which was around 5 per cent in the 1950s and 1960s, but slowed down to some 2 per cent after
the oil crisis in the 1970s (Chart 2). In the long run, as Chart 1 shows, the 2-3 per cent growth
may be realistic for the more developed part of the Union. Theoretically, the less developed
eastern part, where the GDP/capita is only half the EU15 average, can develop at a much faster
rate – around 4 per cent, as Chart 1 shows. In this case – which is a real, but optimistic approach
– the caching up process of the new member states might last three to four decades.
However, in the coming decade these long-termtrends might be effected by global and local
economic crises. The current global financial crisis slowed down the economic growth on both
sides of the European Union, but besides this crisis, which might reach an end in a couple of
years, there is a much more serious problem: the current account imbalances between member
states.
Deteriorating current account balance in some member states (Chart 3-6, Table 3)
The deteriorating current account balance in some of the new member states can be seen in
Charts 4 and 5. In these countries, since 2000, there has been a growing negative balance in the
current account which, in more recent years in the case of Latvia and Bulgaria, reached from
one-fifth to one-quarter of GDP. But it was also very high in other countries, at 10-15% of GDP,.
Table 3 can shed some light on the origin of these imbalances. In most of the countries the
reason behind the deteriorating current account can be found in the growing negative balance
in foreign trade. This comes from the liberalisation of their markets, as a consequence of which
the more powerful multinational corporations destroyed the local (national) industries. In some
countries, like Hungary, there is no problem with foreign trade because multinationals produce
more export than import, but they repatriate their income as well, and by this way they
contribute to the negative balance of the current account in a substantial measure.
Problems are arising also within the eurozone. As Chart 3 shows, Mediterranean member states
are experiencing a sharply worsening current account balance which comes from the
deteriorating foreign trade (Table 3). This means that by using the common currency they are
unable to balance their foreign trade (as it was foreseen by economists, like Milton Friedman)
and they have no possibility to devaluate.
The labour cost differences between the old and new member states (Table 4)
With the enlargement of the European Union the differences between member states –
especially as regards labour costs – increased considerably. From Table 3 it can be seen that
there is sometimes a twenty-folddifference in the average hourly labour costs (for instance
when one compares Denmark and Bulgaria), but the average difference between the "old" and
new member states amounts to five times. This disparity is a strong incentive for relocating
labour-intensive industries from the West to the East. But although the relocation be very
profitable for an individual company, its effectiveness at the Union level questionable. For
instance, unemployment caused by relocation in the developed part of the union is financed by
public money, while the relocation itself will not increase the GDP of the union. Thus, ultimately
relocation is nothing else than the relocation of public money into private hands at the
expense of the taxpayers.
314
Inequalities in income (Table 5)

The lowest ten per cent income cohort of the union's population has almost ten times less
income than those in the highest 10 per cent cohort (see Table 5). There are rather big
differences among member states. As can be expected, the Scandinavian societies are the most
balanced.Here, the income difference between the highest and lowest 10 per cent of the
population is only around six per cent, while in the case of the United Kingdom this indicator is
more than double (around 14). In this field the are no great differences between the "old" and
the new member states since the ratio between the lowest and highest cohorts is almost the
same. But the two-fold difference between the even and uneven societies is big enough to
substantiate the fact that within the European Union we have rather different types of societies.
Financing education and health care (Table 6 and 7)

The European Union spends an average 5500 euro per pupil or student in education (data refer
to 2000 and the calculations are based on Purchasing Parity Standard – PPS). There is almost
two-fold difference between the "old" and new member states which is actually in line with the
ratio of the GDP/capita between the two parts of the union. Almost ninety per cent of
education expenses are financed by the public and only one-tenth from private sources. It is
interesting to note that the role of private money is higher in the earlier socialist countries than
in the western part of the union.
As regards health care expenditures there are considerble differences between member states
of the western and eastern part of the union (Table 7). In the West (EU15) the average health
care expenditure per capita is around 2600 euro a year, but it varies from 1400 (Portugal) to
4900 (Luxembourg). In the new member states the per capita health care expenditure is more
than five times lower, around 440 euro per capita. Even in this case there is five-folddifference
between the highest amount (1000 euro/capita in Cyprus) and the lowest one (190 euro/capita
in Romania). In both parts of the union, three-quarters of the expenses are financed from public
money by the governments. In the case of the remaining one-quarter the private insurance
companies play a much bigger role in the EU15 countries, where they cover almost half of the
private financing, while in the new member states the private insurance companies have a
minimum role and financing comes mainly from the taxpaying households.
Financing the R&D (Table 8)

The European Union (EU27) spends some 1,8% of its GDP for research and development (R&D)
in which the business sector's share is 1,18 per cent point, the government's share is 0,26 and
the share of higher educational institutions is 0,4 per cent point (Table 8). The overall 1,8 per
cent for R&D is much lower than in the United States where 2,6 per cent of the GDP is spent, or
in Japan, where the rate is 3%.
There are big differences between member states. For instance Finland and Sweden spend 3,5-
3,8 per cent of their GDP on R&D while Portugal spends only 0,7 per cent, while the new
member states, on average, are also on the level of the latter (0,7%).
Because R&D is the basis for economic growth, there has been a lot of speculation why the US
spends much more for this purpose than the European Union. Table 8 gives some answer for
this question. From the table it can be seen that the main difference between the research
activities of the US and the EU can be found in the business enterprise sector. In the United
States the business sector spends some 70 per cent more on R&D than its European
counterpart.
315
Table 1
General characteristics of the European Union
Area total GDP US$ GDP/cap

Arable Population
Countries 1000 sq billion PPP US$ PPP
land, % July 2009
km 2007 2007
Austria 83,9 16,6 8,2 319,9 39.500
Belgium 30,5 27,4 10,4 385,5 37.100
Denmark 43,1 52,6 5,5 206,2 37.700
Finland 338,1 6,5 5,3 192,1 36.700
France 643,4 33,5 64,1 2.083,0 33.300
Germany 357,0 33,1 82,3 2.816,0 34.900
Greece 131,9 20,5 10,7 334,2 31.200
Ireland 70,3 16,8 4,2 195,3 47.500
Italy 301,2 26,4 58,1 1.834,0 31.500
Luxembourg 2,6 27,4 0,5 39,2 81.600
Netherlands 41,5 22,0 16,7 658,4 39.700
Portugal 92,4 17,3 10,7 236,8 22.300
Spain 504,8 27,2 40,5 1.360,0 34.300
Sweden 450,0 5,9 9,1 346,2 38.300
UK 244,8 23,2 61,1 2.215,0 36.500
EU15 3.335,6 23,0 387,4 13.221,8 34.567
Bulgaria 110,9 29,9 7,2 88,5 12.100
Cyprus 9,3 10,8 0,8 21,9 27.800
Czech Republic 78,9 38,8 10,2 257,3 25.200
Estonia 45,2 12,1 1,3 28,7 21.800
Hungary 93,0 49,6 9,9 208,9 19.700
Latvia 64,6 28,2 2,2 40,9 18.100
Lithuania 65,3 44,8 3,6 61,3 17.100
Malta 0,3 31,3 0,4 9,7 24.100
Poland 312,7 40,3 38,5 636,9 16.500
Romania 237,5 39,5 22,2 252,1 11.300
Slovakia 48,8 29,2 5,5 112,3 20.600
Slovenia 20,3 8,5 2,0 56,7 28.200
EU12 1.086,8 36,8 103,8 1.775,2 16.922
EU27 4.422,4 26,3 491,2 14.996,9 30.840
Potential
members* 1.518,3 37,7 134,4 1.369,6 10.307
United States 9.826,6 18,0 307,2 14.110,0 46.800
Japan 377,8 11,6 127,1 4.365,0 34.300
China 9.597,0 14,9 1.338,6 7.104,0 5.500
Russia 17.075,0 7,2 140,0 2.146,0 15.200
Brasil 8.512,0 6,9 198,7 1.892,0 9.800
India 3.287,6 48,8 1.166,1 3.065,0 2.700
WORLD 148.940,0 10,6 6.790,1 67.200,0 10.200
*Croatia, Serbia, Turkey, Ukraine Source: CIA World Fact Book 2008
316
Table 2
Demographical features of the European union
Natural
Net Population projection
population Total fertility rate
migration (million)
Country change
Yearly average 2001-
1990 2005 Increase 2005 2050 Increase
2005 (thousands)
Austria 46,9 2,1 1,50 1,40 -0,10 8,1 8,2 0,1
Belgium 39,6 9,9 1,60 1,70 0,10 10,4 10,9 0,5
Denmark 8,1 7,6 1,70 1,80 0,10 5,4 5,4 0,0
Finland 6,6 8,3 1,80 1,80 0,00 5,2 5,2 0,0
France 148,5 259,7 1,80 1,94 0,14 60,2 65,7 5,5
Germany 159,9 -124,1 1,50 1,34 -0,16 82,6 74,6 -8,0
Greece 38,5 0,4 1,40 1,33 -0,07 11,1 10,6 -0,5
Ireland 43,4 31,8 2,10 1,86 -0,24 4,1 5,5 1,4
Italy 377,5 -19,3 1,30 1,31 0,01 58,2 52,7 -5,5
Luxembourg 4,4 1,7 1,70 0,5 0,6 0,1
Netherlands 11,6 57,9 1,60 1,71 0,11 16,3 17,4 1,1
Portugal 56,8 5,7 1,40 1,40 0,00 10,5 10,0 -0,5
Spain 593,3 63,0 1,30 1,35 0,05 42,9 42,8 -0,1
Sweden 28,0 4,9 2,10 1,77 -0,33 9,0 10,2 1,2
UK 181,3 97,3 1,80 1,78 -0,02 59,9 64,3 4,4
EU15 1744,4 406,8 1,57 1,56 -0,01 384,4 384,1 -0,3
Bulgaria -42,7 -43,5 1,80 1,31 -0,49 7,7 5,1 -2,6
Cyprus 10,8 3,0 1,40 0,7 1,0 0,3
Czech Rep. 10,0 -13,1 1,90 1,28 -0,62 10,2 8,9 -1,3
Estonia 0,1 -4,6 2,00 1,50 -0,50 1,3 1,1 -0,2
Hungary 12,8 -37,6 1,80 1,31 -0,49 10,1 8,9 -1,2
Latvia -1,9 -12,0 2,00 1,31 -0,69 2,3 1,9 -0,4
Lithuania -5,8 -10,9 2,00 1,27 -0,73 3,4 2,9 -0,5
Malta 1,8 0,9 0,4 0,5 0,1
Poland -14,1 -5,2 2,00 1,24 -0,76 38,1 33,7 -4,4
Romania -116,8 -47,2 1,80 1,32 -0,48 21,7 17,1 -4,6
Slovakia 1,9 0,2 2,10 1,25 -0,85 5,4 4,7 -0,7
Slovenia 3,8 -1,1 1,50 1,26 -0,24 2,0 1,9 -0,1
EU12 -140,1 -171,3 1,89 1,28 -0,61 103,3 87,7 -15,6
EU27 1604,4 235,5 1,64 1,50 -0,14 487,7 471,8 -15,9
USA 2,10 2,10 0,00
Japan 1,50 1,30 -0,20
Turkey 0 925,2 3,00 2,20 -0,80
Ukraine 1,80 1,20 -0,60
Source: Eurostat Yearbook 2008
317
Chart 1
Connection between the initial leve l of deve lopment and the

economic (GDP) growth rate 1960-1997
12,0
GDP growth rate between 1960 and 1997
10,0 China
Singapur
8,0
Malaysia
6,0
Australia
4,0
USA
Italy
2,0
0,0
0 2000 4000 6000 8000 10000 12000 14000 16000
Initial (1960) level of development in 1997 US$
Source: World Bank database

Chart 2
GDP growth rate in the EEC and the European Union
10,0
8,0
6,0
4,0
2,0
0,0
-2,0
-4,0
-6,0
-8,0
-10,0
1950
1955
1960
1965
1970
1975
1980
1985
1990
1995
2000
2005
2010
EU9/EU15 New member states

Source: World Bank database and Eurostat
318
Chart 3
Current account balance as per cent of the GDP
4,0
2,0
0,0
-2,0
Greece
-4,0 Ireland
-6,0 Italy
-8,0 Portugal
-10,0 Spain
-12,0
-14,0
-16,0
1995
1996
1997
1998
1999
2000
2001
2002
2003
2004
2005
2006
2007
2008
Source: Eurostat
Chart 4
2,0
0,0
-2,0
-4,0 New member states
-6,0 Hungary
-8,0 Poland
-10,0 Romania
-12,0
-14,0
-16,0
1995
1996
1997
1998
1999
2000
2001
2002
2003
2004
2005
2006
2007
2008
Source: Eurostat
319
Chart 5
10,0
5,0
0,0
Estonia
-5,0 Latvia
-10,0 Lithuania
-15,0 Bulgaria
Romania
-20,0
-25,0
-30,0
1995
1996
1997
1998
1999
2000
2001
2002
2003
2004
2005
2006
2007
Source: Eurostat 2008

Chart 6
12,0
10,0
8,0
EU15
6,0
Germany
4,0 Sweden
2,0 Finland
Denmark
0,0
-2,0
-4,0
1995
1996
1997
1998
1999
2000
2001
2002
2003
2004
2005
2006
2007
2008
Source: Eurostat
320
Table 3
Current account balance by components as % of GDP 2006
Current Current
Country Goods Services Income
account transfers
Austria 2,8 0,1 4,3 -1,2 -0,4
Belgium 2,7 0,8 1,6 1,9 -1,7
Denmark 2,6 1 2,4 0,9 -1,6
Finland 5,2 5,3 0,2 0,4 -0,8
France -1,3 -1,7 0,5 1,2 -1,2
Germany 5 6,8 -1,5 1 -1,2
Greece
Ireland -4,2 14,5 -4,2 -14,2 -0,3
Italy -2,6 -0,6 -0,1 0,9 -0,9
Luxembourg 10,3 -10,4 48,9 -24,4 -3,8
Netherlands 8,3 6,7 0,4 3 -1,9
Portugal -9,4 -10,7 3,2 -3,5 1,6
Spain -8,6 -8,2 2,3 -2,1 -0,6
Sweden 7,4 5,6 2,8 0,3 -1,2
UK -3,2 -6 2,2 1,4 -0,9
EU15 -0,3 -0,2 0,8 0,4 -1,0
Bulgaria -15,7 -22,2 3,9 0 2,6
Cyprus -5,9 -27,5 23,4 -2,8 1,1
Czech Rep. -3,3 1,9 1,1 -5,7 -0,6
Estonia -15,5 -17,7 6,1 -4,5 0,7
Hungary -6,6 -1 1,4 -7,4 0,4
Latvia -22,3 -25,4 3,3 -2,6 2,4
Lithuania -10,8 -14,1 3,6 -2,8 2,4
Malta -6,7 -18,9 15 -2,7 -0,1
Poland -3,2 -2 0,6 -4,2 2,4
Romania -10,4 -12,2 0 -3,2 4,9
Slovakia -8,3 -5,6 1,2 -3,8 -0,1
Slovenia -2,8 -3,8 2,8 -1,3 -0,6
EU12 -6,5 -5,7 1,6 -4,2 1,8
EU27 -0,8 -1,5 0,6 0,5 -0,5
Source: Eurostat
321
Table 4
Average hourly labour costs in

industries and services (EUR)
Country 1996 2005 Index, %
Austria 21,96 25,50 116,1
Belgium 30,73
Denmark 23,20 31,98 137,8
Finland 20,25 26,70 131,9
France 22,09 29,29 132,6
Germany 22,90 27,20 118,8
Greece 9,26 14,80 159,8
Ireland
Italy 17,59 22,20 126,2
Luxembourg 21,38 31,10 145,5
Netherlands 20,39 27,41 134,4
Portugal 7,18 10,60 147,6
Spain 14,43 15,22 105,5
Sweden 23,12 31,55 136,5
UK 14,22 24,47 172,1
EU15 18,58 24,34 131,0
Bulgaria 0,90 1,55 172,2
Cyprus 7,25 11,65 160,7
Czech
Republic 2,80 6,63 236,8
Estonia 1,85 4,67 252,4
Hungary 2,86 6,14 214,7
Latvia 1,48 2,77 187,2
Lithuania 1,32 3,56 269,7
Malta 8,35
Poland 2,95 5,55 188,1
Romania 2,33
Slovakia 2,16 4,80 222,2
Slovenia 7,35 10,76 146,4
EU12 2,12 4,73 223,1
EU27 15,10 20,10 133,1
Price index 100,0 117,9 117,9
Source: Eurostat
322
Table 5
Percentage share of income or consumption
Highest/ Highest/
Lowest Lowest Highest Highest
Country Year lowest lowest
10% 20% 20% 10%
10% 20%
Austria 2000 3,3 8,6 37,8 23 7,0 4,4
Belgium 2000 3,4 8,5 41,4 28,1 8,3 4,9
Denmark 1997 2,6 8,3 35,8 21,3 8,2 4,3
Finland 2000 4 9,6 36,7 22,6 5,7 3,8
France 1995 2,8 7,2 40,2 25,1 9,0 5,6
Germany 2000 3,2 8,5 36,9 22,1 6,9 4,3
Greece 2000 2,5 6,7 41,5 26 10,4 6,2
Ireland 2000 2,9 7,4 42 27,2 9,4 5,7
Italy 2000 2,3 6,5 42 26,8 11,7 6,5
Luxembourg
Netherlands 1999 2,5 7,6 38,7 22,9 9,2 5,1
Portugal 1997 2 5,8 45,9 29,8 14,9 7,9
Spain 2000 2,6 7 42 26,6 10,2 6,0
Sweden 2000 3,6 9,1 36,6 22,2 6,2 4,0
UK 1999 2,1 6,1 44 28,5 13,6 7,2
EU15 2,7 7,3 40,4 25,3 9,4 5,5
Bulgaria 2003 3,4 8,7 38,3 23,9 7,0 4,4
Cyprus
Czech
Republic 1996 4,3 10,3 35,9 22,4 5,2 3,5
Estonia 2003 2,5 6,7 42,8 27,6 11,0 6,4
Hungary 2002 4 9,5 36,5 22,2 5,6 3,8
Latvia 2003 2,5 6,6 44,7 29,1 11,6 6,8
2
Lithuania 003 2,7 6,8 43,2 27,7 10,3 6,4
Malta
Poland 2002 3,1 7,5 42,2 27 8,7 5,6
Romania 2003 3,3 8,1 39,2 24,4 7,4 4,8
Slovakia 1996 3,1 8,8 34,8 20,9 6,7 4,0
Slovenia 1998 3,6 9,1 35,7 21,4 5,9 3,9
EU12 3,4 8,3 39,2 24,6 7,2 4,7
EU27 2,7 7,5 40,3 25,2 9,3 5,4
Source: World Development Indicators 2008
323
Table 6
Expenditure on educational institutions as % of the GDP, 2004
Average/pupil-
Country Public Private
student euro (PPS)
Austria 5,0 0,4 7870
Belgium 5,7 0,3 6489
Denmark 6,9 0,3 7658
Finland 6,0 0,1 6255
France 5,6 0,5 6214
Germany 4,2 0,9 6207
Greece 4,1 0,2 4158
Ireland 4,2 0,3 5792
Italy 4,4 0,5 6007
Luxembourg 3,8
Netherlands 4,6 0,5 6567
Portugal 5,2 0,1 4292
Spain 4,1 0,6 5283
Sweden 6,5 0,2 7081
UK 5,0 1,0 6195
EU15 5,0 0,4 6148
Bulgaria 3,9 0,6 1821
Cyprus 5,9 1,2 6097
Czech Rep. 4,2 0,6 3736
Estonia 4,9
Hungary 5,1 0,5 3712
Latvia 4,7 0,8 2412
Lithuania 4,8 0,5 2403
Malta 5,0 0,5 4094
Poland 5,4 0,6 2747
Romania 3,2 0,2
Slovakia 4,0 0,8 2606
Slovenia 5,4 0,9 5552
EU12 4,7 0,7 3518
EU27 4,8 0,6 5535
USA 5,1 2,4 9960
Japan 3,5 1,2 6910
324
Table 7
Current health care expenditure by financing agent in euro per capita
Private
All Government: Private sector - Private sector
Government
Country financing social security sector private -households
total
agent funds total insurance expenditure
enterprises
Austria
Belgium 2782 1972 1850 789 148 621
Denmark 3362 2805 0 557 53 502
Finland
France 2949 2336 2187 613 380 210
Germany 2792 2160 1951 632 264 345
Greece
Ireland
Italy
Luxembourg 4893 4428 3545 465 88 327
Netherlands 2867 1858 1748 1004 557 220
Portugal 1370 986 11 384 58 318
Spain 1668 1185 78 483 111 360
Sweden
UK
EU15 2563 1947 1524 615 268 310
Bulgaria 215 128 72 87 1 84
Cyprus 1047 421 0 626 55 562
Czech Rep. 673 593 555 80 2 76
Estonia 415 318 276 96 1 85
Hungary 530 373 300 157 0 157
Latvia
Lithuania 347 232 207 115 1 114
Malta
Poland 375 257 230 117 2 104
Romania 190 142 117 46 8 37
Slovakia
Slovenia 1154 836 810 318 156 149
EU12 441 323 282 117 9 103
EU27 2206 1674 1316 531 224 275
USA 5055 2302 2753 1886 678
Japan 2316 1874 1507 442 7 416
Source: Eurostat: Health expenditure, 2003-2005 26/2008
325
Table 8
Gross domestic expenditure on R+D by sector (% of GDP), 2005
Business Higher
Government
Country enterprise education Total
sector
sector sector
Austria 1,6 0,12 0,63 2,35
Belgium 1,24 0,14 0,41 1,79
Denmark 1,67 0,18 0,58 2,43
Finland 2,46 0,33 0,66 3,45
France 1,32 0,37 0,42 2,11
Germany 1,76 0,34 0,42 2,52
Greece 0,18 0,13 0,3 0,61
Ireland 0,82 0,08 0,35 1,25
Italy 0,55 0,17 0,32 1,04
Luxembourg 1,34 0,19 0,02 1,55
Netherlands 1,02 0,24 0,51 1,77
Portugal 0,29 0,11 0,32 0,72
Spain 0,61 0,19 0,32 1,12
Sweden 2,92 0,12 0,8 3,84
UK* 1,21 0,23 0,38 1,82
EU15 1,21 0,25 0,41 1,87
Bulgaria 0,11 0,33 0,05 0,49
Cyprus 0,09 0,13 0,15 0,37
Czech Republic 0,92 0,27 0,23 1,42
Estonia 0,42 0,11 0,39 0,92
Hungary 0,41 0,26 0,24 0,91
Latvia 0,23 0,11 0,23 0,57
Lithuania 0,16 0,19 0,42 0,77
Malta 0,42 0,02 0,17 0,61
Poland 0,18 0,21 0,18 0,57
Romania* 0,26 0,07 0,04 0,37
Slovakia 0,25 0,15 0,1 0,5
Slovenia 0,87 0,23 0,12 1,22
EU12 0,35 0,20 0,17 0,72
EU27 1,18 0,26 0,4 1,84
Japan* 2,17 0,3 0,59 3,06
United States* 2,04 0,28 0,31 2,63
* The reference date is 2000
326
Energy consumption and production in the European Union
In the last ten years the gross inland consumption of energy (production + import-export) has
grown by 0,9 per cent in the EU27, but there was a significant difference between the eastern
and western parts of the union. In the new member states, as a result of the already continuing
restructuring of the industries, energy consumption did not grow, while in the "old" member
states the growth was around 1 per cent, which corresponds to a 0,43 elasticity to the GDP
growth rate (one per cent growth in GDP produces 0,43 per cent more demand for energy).
The rate of the total gross electricity generation has grown by 1,9 per cent in the EU27, and in
this case the elasticity was around 0,79. These improvements in energy use are in line with the
basic targets of the Commission. The baseline scenario for the union's long range energy
consumption calculates with a yearly 2 per cent GDP growth rate and a 0,5 per cent increase in
energy use in the same time.
Primary energy production will decrease in the EU27, with some 20% by 2030. This is primarily
due to the depletion of natural gas and oil resources (in the North Sea) and it will be replaced
by importation, which increases by some 60%. Thus, the share of imported resources in
consumption will grow from the present 50% up to 66%. Within this dynamic import growth
the natural gas import would be more than doubled, so the Union will be much more
dependent on external energy sources than it is today. This means that its energy security will
decrease in contrast with the goals of the Union’s energy policy (see Table 9).
The sources of energy supply would change considerably, especially as regards the generation
of electricity. The ratio of nuclear energy would decrease (first of all because – according to
current perceptions – the generation capacities in Germany, Belgium and Sweden will be
liquidated) and would be replaced by wind and thermal (natural gas and biomass-waste)
energy generation technologies. However this conception may change because the CO2
emission targets cannot be reached without the application of nuclear power plants.
The distribution of the electricity generation capacity in 2000 is shown on Table 10. There is a
significant difference in the sources of electricity generation between the western and eastern
parts of the Union. While in the new member states thermal power generation amounts to
three-quarters of the total, and mainly from solid primary energy sources, in the "old" member
states the ratio of the thermal generating capacities is only 60 percent, based mainly on gas
and oil.
Among the thermal capacities the biomass and waist-based plants amounts to some 3-4 per
cent, while the role of the geothermal energy source is very limited at only 0,2 per cent, coming
from Italian geothermal plants. The very different approach to the alternative "green" power-
generation (without CO2 emission) can be seen from the different practice regarding the use of
nuclear power plants and windmills. In France, nuclear plants amount to some 60 per cent, and
wind only 0,1 per cent, while, for instance, in Denmark there is no nuclear plant, however the
proportion coming from windmills reaches one-fifth of the total electricity-generation capacity.
With current conceptions related to power generation sources the CO2 emission targets can
hardly be reached. According to the Commission's base line scenario CO2 emissions will
increase by 10 per cent (Table 9). The latest data (Table 11) also shows that CO2 emissions have
increased in the last ten years, except in the new member states, where heavy industries fell
back as a consequence of the economic transition. However, in the "old" member states the
trends since the mid-1990s have deviated from the Kyoto targets (see Chart 7).
327
Table 9
Energy forecast for EU27 (baseline scenario)
Growth
Indicators 2000 2030 Index, %
rate, %
Population (million) 483,5 494,8 102,3 0,1
GDP (in 000MEuro 2000. year price) 9001 16315,6 181,3 2,0
Energy cons./capita (kgoe/cap) 3535 4027 113,9 0,4
Energy cons./GDP (kgoe/euro) 0,18 0,12 64,3 -1,5
Primary Production (Mtoe) 937,1 732,6 78,2 -0,8
– Solids 214,3 131,5 61,4 -1,6
– Oil 170,0 49,7 29,2 -4,0
– Natural gas 207,6 89,8 43,2 -2,8
– Nuclear 243,8 221,3 90,8 -0,3
– Renewable energy sources 101,4 240,4 237,1 2,9
= Hydro 30,5 36,4 119,4 0,6
= Biomass & Waste 65,3 155,4 238,1 2,9
= Wind 1,9 38,1 1993,3 10,5
= Solar and others 0,4 4,6 1108,2 8,3
= Geothermal 3,3 5,9 176,7 1,9
Net Imports (Mtoe) 817,6 1315,3 160,9 1,6
– Solids 98,5 184,7 187,5 2,1
– Oil 525,8 672,4 127,9 0,8
– Natural gas 191,6 456,5 238,2 2,9
– Electricity 1,7 1,7 103,3 0,1
Gross Inland Consumption (Mtoe) 1709,1 1992,3 116,6 0,5
– Solids 320,7 316,2 98,6 0,0
– Oil 649,0 666,4 102,7 0,1
– Natural gas 392,6 546,3 139,1 1,1
– Nuclear 243,8 221,3 90,8 -0,3
– Electricity 1,7 1,7 103,3 0,1
– Renewable energy forms 101,4 240,4 237,1 2,9
Electricity Generation (Twhe) 2993,4 4564,4 152,5 1,4
– Nuclear 944,8 857,8 90,8 -0,3
– Hydro & wind 376,7 875,4 232,4 2,9
– Thermal (incl. biomass) 1671,9 2831,2 169,3 1,8
Electricity Generation % distriibution 100,0 100,0 100,0 0,0
– Nuclear 31,6 18,8 59,5 -1,7
– Hydro & wind 12,6 19,2 152,4 1,4
– Thermal (incl. biomass) 55,9 62,0 111,1 0,4
C02 Emissions (Mt of C02) 3800,2 4180,4 110,0 0,3
– Power generation/District heating 1359,8 1514,5 111,4 0,4
– Transport 984,9 1148,2 116,6 0,5
C02 Emissions Index (1990=100) 94,8 104,3 110,0 0,3
Net Imports as % of the gross inland
47,8 66,0 138,0 1,1
consumption
Source: Euoropean Energy and Transport, Trends to 2030 – update 2005 European Commission,
directorate General for Energy and Transport (May 2006)
328
Table 10
Electricity generation capacity in Mw in the year 2000
Hydro
Country Total Nuclear (pumping Wind Solar Thermal
excluded)
Austria 18.995 0 10.867 77 7 8.044

Belgium 14.964 6.033 307 13 2 8.609
Denmark 11.417 0 10 2.300 2 9.106
Finland 15.403 2.760 3.059 38 3 9.543
France 114.308 66.919 21.273 66 11 26.039
Germany 122.463 23.667 3.455 6.113 90 89.137
Greece 11.485 0 3.061 189 1 8.234
Ireland 5.304 0 225 118 2 4.958
Italy 73.379 0 14.323 427 26 58.603
Luxembourg 304 0 157 10 2 135
Netherlands 20.648 535 37 446 12 19.618
Portugal 9.833 0 4.005 100 1 5.728
Spain 48.457 7.807 12.867 2.235 14 25.535
Sweden 32.268 9.824 15.777 231 3 6.433
UK 88.855 14.213 1.371 406 2 72.863
EU15 588.083 131.758 90.794 12.769 178 352.585
Bulgaria 12.723 3.760 1.998 0 0 6.965
Cyprus 1.005 0 0 0 0 1.005
Czech Rep. 12.670 1.760 1.147 7 0 9.757
Estonia 2.707 0 1 0 0 2.706
Hungary 8.320 1.760 48 1 0 6.511
Latvia 2.119 0 1.533 2 0 583
Lithunia 5.206 2.500 101 0 0 2.605
Malta 552 0 0 0 0 552
Poland 31.055 0 828 5 0 30.222
Romania 22.702 700 6.020 1 0 15.981
Slovakia 7.148 2.640 1.735 1 0 2.773
Slovenia 2.885 664 981 0 0 1.240
EU12 109.092 13.784 14.392 17 0 80.900
EU27 697.175 145.542 105.186 12.786 178 433.485
Source: European Energy and Transport, Trends to 2030 – update 2005 European
Commission, directorate General for Energy and Transport (May 2006)
329
Table 11
Carbon dioxide emission
Emission of carbon dioxide

Countries million tonnes tonnes/capita
1995 2005 Index 1995 2005 Index
EU15 3282,3 3482,4 106,1 8,8 9,0 101,9
EU12 883,0 786,7 89,1 8,3 7,6 91,5
EU27 4165,3 4269,1 102,5 8,7 8,7 99,9
Source: Eurostat yearbook, 2008
Chart 7
CO2 emission of the EU15 and the Kyoto target

(millions of tons)
3600
3500
3400
3300
3200
3100
3000
1990
1991
1992
1993
1994
1995
1996
1997
1998
1999
2000
2001
2002
2003
2004
2005
2006
2007
2008
2009
2010
EU15 emission Kyoto agreement

Source: Eurostat
330
SECURITY IN NUMBERS
The North Atlantic Treaty Organisation (NATO) was established against the threat of the Soviet
block after "an iron curtain had descended across the Continent". Since its inception in 1949,
NATO has adopted three distinct defence doctrines
With the fall of the Berlin Wall in 1989 and the end of the Cold War, NATO no longer faced a
common threat. NATO’s roles and responsibilities evolved during this period. Security concerns
extended beyond NATO’s boundaries and new strategic doctrines were developed by the allies
to deal with the emerging threats. The perceived challenges included managing crisis such as
civil wars, disputes over natural resources, natural disasters, peacekeeping missions, and
nuclear, biological, and chemical arms control. The allies began downsizing their forces to take
advantage of a peace dividend (i.e., from a smaller military budget).
These changes in the assessment of threats and doctrines are more or less mirrored in the
military spending and personnel of the NATO member states. Table 12 shows that between the
early 1980s and the present the defence expenditures of NATO as a whole decreased from 4.5
per cent of the members' GDP to 2.7%, however the major difference between the military
spending of the United States and that of the European members remained: while Europe
devotes 2 per cent of its GDP to military purpose, this ratio is 3.5% in the case of the United
States. In Europe, Turkey’s and Greece’s military budgets are much higher (some 4-5% of their
GDP) than the average, for understandable reasons (i.e., due to their long-lasting conflicts with
each other).
In absolute terms, there are only five countries who determine NATO's military spending: the
United States, France, the United Kingdom, Germany and Italy. Their expenditures amount to
some 90 percent of the total. In per capita military spending there is even a tenfold difference
between member states. While this expenditure was some 1170 euro/per capita in the United
States, it is only 90-140 euro in the new NATO member states like Poland or Hungary.
Parallel to the defence expenditures, military personnel also decreased form 5.9 million in the
early 1980s to 3.7 million in 2003. In Europe, Turkey has the largest army, with some half a
million military personnel, while those of Norway, Denmark, the Czech Republic, Hungary
account for only 20-25 thousands. As a matter of course these differences are not so high in
comparison to the population. On average, 0.5 per cent of the population of the NATO member
states is in military service and this number varies from 0.2% (Czech Republic) to 1.3% (Greece).
The United States maintains massive superiority of conventional military capabilities compared
to countries accused of supporting terrorism, like Iran, North Korea or Syria. Table 13
enumerates the size and equipment of various military forces around the world. As can be seen,
the U.S. is outstanding, especially with regards to strategic forces like aircraft and helicopters,
while NATO's forces as a whole amount to more than those of the rest of the world put
together. However, rough numbers on military equipment and personnel do not reveal
anything about the quality of the weapons.
331
Table 12
NATO expenditures
Per capita Military

Defence
Defence defence personnel of
expenditure Population
expenditures as % expen- the armed
s, current (million)
of GDP ditures, forces,
Country euro (billion)
euro (thousands)
Average
1980 - 2003 2003 2003 2003 1985 2006
1984
Belgium 3,2 1,3 3,5 10,4 333 107 39
Czech Rep. 2,2 1,7 10,2 162 25
Denmark 2,4 1,6 3 5,4 548 29 21
France 4 2,6 40,2 61,8 650 560 356
Germany 3,3 1,4 30,9 82,5 375 495 245
Greece 5,4 4,2 6,3 11 573 201 139
Hungary 1,9 1,4 10,1 138 21
Italy 2,1 1,9 24,4 57,3 426 504 309
Luxembourg 1 0,9 0,2 0,4 456 1,2 1,4
Netherlands 3 1,6 7,3 16,2 449 103 49
Norway 2,7 2 3,9 4,6 853 36 20
Poland 2 3,6 38,2 94 150
Portugal 2,9 2,1 2,8 10,4 268 102 39
Spain 2,3 1,2 8,8 41,7 210 314 127
Turkey 4 4,8 10,3 69,8 148 814 499
United
5,2 2,4 37,7 59,4 634 334 196
Kingdom
NATO -
3,5 2 185,9 489,5 380 3600 2236
Europe
Canada 2 1,2 8,9 31,5 282 83 64
United
5,6 3,5 339,2 290,8 1166 2244 1355
States
North
5,3 3,4 348,1 322,3 1080 2327 1419
America
NATO -
4,5 2,7 534 811,8 658 5927 3655
Total
Source: http://www.nato.int/docu/pr/2003/p03-146e.htm
332
Table 13
Strengths of the NATO and some other countries around 2000
Major
Active Amphi-
Reserve Armoured
Duty Heavy Air- Heli- War- bious,
Country Personnel Infantry
Personnel Tanks planes copters ships Mine, &
(000's) Vehicles
(000's) Support
Ships
U.S. 1.427 1.238 8.023 23.661 10.646 5.772 190 186
France 259 100 614 4.084 1.291 581 34 53
Germany 285 359 2.398 5.378 658 657 25 61
U.K. 213 273 543 4.753 953 647 49 51
Other
NATO 1.538 1.963 11.027 21.448 4.640 2.198 172 377
NATO
total 3.721 3.932 22.605 59.324 18.188 9.855 470 728
COUNTRIES WITH POOR U.S. RELATIONS
Cuba 46 39 900 700 198 90 – 7
Iran 540 350 1.655 1.420 532 264 6 39
Libya 76 40 1.840 1.945 706 165 2 14
North
Korea 1.082 4.700 3.500 2.500 1.151 306 29 40
Sudan 105 200 316 51 27 – –
Syria 319 354 4.500 3.800 616 181 2 12
Total 2.168 5.483 12.595 10.681 3.254 1.033 39 112
OTHER COUNTRIES
China 2.250 600 7.180 4.560 3.398 478 132 258
India 1.325 535 3.938 1.917 1.388 406 48 57
Israel 168 358 3.950 12.670 575 291 3 –
Pakistan 620 513 2.368 1.251 631 169 18 12
Russia 961 2.400 22.380 32.005 5.432 1.870 85 518
Total 5.323 4.406 39.816 52.403 11.424 3.214 286 845
Grand
total 11.212 13.821 75.016 122.408 32.866 14.102 795 1.685
Source: Marcus Corbin - Olga Levitsky: Vital Statistics: The U.S. Military, THE DEFENSE MONITOR
Center for Defense Information — Washington, D.C. Volume XXXII, Number 5 •
November/December 2003
333
334
List of Contributors
Endre Barcs is a Hungarian TV journalist. He earned qualification at

the Eötvös Lóránd University Budapest. He was an editor in chief of
the Hungarian state Radio (1970-1990) and the State Television
(1990-1998). Since 1998 he is a permanent Brussels correspondent of
various Hungarian TV channels (Duna TV, HÍR TV, Hungarian ATV).
Christophe Beaudouin, a French lawyer, works for the IND/DEM

group in the European Parliament as staff coordinator for the EP
Committee on Constitutional Affairs. He is also standing as a
candidate at the 2009 elections to the European Parliament.
Johannes Blokland, MEP, holds a higher degree in economics

(1970) and a Doctorate in economics (1976). From 1987-2000 he was
Member of the Advisory Committee on Foreigners, Ministry of
Justice. He has been Member of the European Parliament since 1994,
Co-Chairman of the EDN Group (1997-1999), Co-Chairman of the
EDD Group (1999-2004) and is currently Vice-Chairman and
Treasurer of the IND/DEM group.
Jan Harm Boiten studied Science of Public Administration at the

University of Twente and Leiden. He has been political advisor of
MEP Hans Blokland since 2001. Since 2004 he mainly focussed on the
LIBE Committee in the European Parliament, especially in the field of
immigration and refugees.
Anthony Coughlan is Senior Lecturer Emeritus in Social Policy at

Trinity College, Dublin, and Secretary of The National Platform EU
Research and Information Centre, Ireland.
335
Henrik Dahlsson is a researcher at the Swedish June List and at the

IND/DEM group. He is a political scientist and journalist by
profession. Previously he worked as an editor and leading writer for a
number of regional newspapers in Sweden.
Paul De Grauwe is a full professor at the Faculty of Economics and

Applied Economics, Department of Economics, University of Leuven.
He has been Professor or Visiting Professor of a number of European
and American universities. He is a regular correspondent of the
Financial Times and was recently appointed member of the Group of
Economic Policy Analysis advising the European Commission
President Barroso.
Kevin Ellul-Bonici works with the Independence / Democracy

Group in the European Parliament. Until 2000 he headed the
economic crimes division in the Malta Police Force. He holds degrees
in criminology (Malta University) and criminal justice (Leicester
University).
Nigel Farage, MEP, has worked for British, French and American
companies operating in the commodity markets, especially the
London Metal Exchange (since 1982). He has been a Member of the
European Parliament since 1999, Vice-Chairman of the EDD Group
from 1999-2004, and Co-Chairman of the IND-DEM Group since
2004.
Bruno S. Frey is a professor of economics at the University of Zurich.

He received an honorary doctorate in economics from the University
of St. Gallen and the University of Goeteborg. He is the author of
numerous articles in professional journals and books.
336
Claude Gaucherand, Rear Admiral (2ème Section) and fighter pilot,

graduated from the “École Navale” in 1959, from the RNSC
(Greenwich) in 1977 and from the ESGN in 1978. He also served as a
naval attaché at the French Embassy in London.
Klaus Heeger, chief editor of EUWatch, is a Brussels based German

lawyer who has been a legal advisor and researcher for the IND/DEM
group since 2002.
Peter Henseler is an independent consultant and reader in public

economics, European economic policy and European law. Until 2002
he was Austrian delegate to the Budget Committee of the EU
Council. He holds degrees in law (Vienna University), economics (Linz
University and Vienna Institute for Advanced Studies), public finance
(Vienna Technical University) and European law (Saarbrücken
University).
Colin Hines, advisor to Green Party MEP Caroline Lucas, is Director of

Finance for the Future and a former head of Greenpeace
International’s Economics Unit.
Peter M. Huber is a professor of Public Law and Constitutional

Philosophy as well as Member of the Senate of the Ludwig-
Maximilians-Universität, Munich. He is Member of the State
Constitutional Court of the Free and Hanseatic City of Bremen and
chairing the Conference of German Law Faculties.
337
Jan Å Johansson, advisor to the Swedish delegation in the IND/DEM

group, is co-author of the book “Sweden in the EU 1994-1999” (with
Professor Sören Wibe), and the three volumes, “With split tongue”,
detailing how many Swedish EU parliamentarians say one thing in
Sweden but vote a different way in the European Parliament.
Bruno Kaufmann is a Swedish-Swiss broadcast journalist living in

Falun/Sweden. With a background in political science, Kaufmann is
president of Europe´s first think-tank on direct democracy, the
Initiative & Referendum Institute Europe and is Programme Director
for the 2008 World Conference on Direct Democracy.
Sarita Kaukaoja works as the permanent member of the COSAC

secretariat where she is in charge of coordinating the work of five
officials seconded from the ‘troika parliaments’ who form the COSAC
secretariat.
Frank Keoghan is an Irish trade unionist specialised on legal issues

and the EU Charter of Fundamental Rights. He is secretary of the
People’s Movement, Gluaiseacht an Phobail, Ireland.
Franz Leidenmuehler, Dr., is Staff Scientist and Lecturer at the

Institute of European Union Law and the Institute of International
Law and International Relations, Johannes Kepler University, Linz,
Austria.
Anne-Marie Le Pourhiet is Professor of public law at the University

of Rennes I. She is the author of many articles and contributions on
European integration and fundamental rights.
338
Karoly Lorant, chief editor of EUWatch, is an electrical engineer and

an economist. He has been working as an economic researcher for
the IND/DEM group of the European Parliament since 2003.
Mogens Ove Madsen is Associate Professor of the Department of

Economics, Politics and Public Administration of the Aalborg
University, Denmark. He focuses on research in public sector
economics, EMU and philosophy of science.
Patrick Moore, Dr., has been a leader in the international

environmental field for over 30 years. He is the founder of Greenspirit
and a founding member of Greenpeace, serving for nine years as
President of Greenpeace Canada and seven years as a Director of
Greenpeace International.
Markus Nyman is a researcher for the Swedish delegation in the

IND/DEM group in the European Parliament.
Tobias Pflüger, MEP, is Member of the Committee on Foreign Affairs,

Coordinator of the GUE/NGL in the Subcommittee on Security and
Defence, Vice-president of the Delegation for relations with the Gulf
States, including Yemen, Co-President of the Parliamentary
Intergroup on Peace Initiatives and Member of Board of the
"Information Center on Militarisation".
Andris Piebalgs is a Member of the European Commission

responsible for energy since November 2004. Before joining the
European Commission, Mr. Piebalgs was Ambassador of Latvia in
Estonia, Ambassador of Latvia to the European Union and
Undersecretary of State for EU affairs at the Ministry of Foreign Affairs
of Latvia. From 1990 to 1993 he was Minister of Education and from
1994 to 1996 Finance minister. Mr. Piebalgs holds a degree in Physics.
339
János Plenter, Ph.D., studied International Economic Relations at the

University of Economics, Budapest, where he graduated in1952.
János Plenter has served as Secretary General of the Hungarian
UNESCO Commission from 1955 to 1956 and as an advisor on
economic development from 1957 to 1964. From 1965-69 was
associated with the work of the Economic and Social Council of the
United Nations in various capacities.
Michel Rocard was a Member of the European Parliament from 1994-

2009. He was Chairman of the Committee on Development and
Cooperation (1997-1999), the Committee on Employment and Social
Affairs (1999-2002) and the Committee on Culture, Youth, Education,
the Media and Sport (2002-2004). Mr. Rocard was Minister for
Planning and Regional Planning (1981-1983), Minister for Agriculture
(1983-1985) and Prime Minister (1988-1991) of France.
Kurt W. Rothschild studied law at the University of Vienna (Dr. jur.)

and had to emigrate in 1938. He studied economics and political
philosophy at the University of Glasgow (M.A.) where he held the
position of Assistant Lecturer and Lecturer from 1940 to 1947. From
1947 until 1966 he was research staff member at the Austrian
Institute of Economic Research and from 1966 to 1985 founding
Professor and Professor of economics at the Johannes Kepler
University, Linz. Rothschild is considered as the 'Doyen' of Austrian
economics.
Martina Rozsívalová holds degrees in political science, international

relations and European studies at Masaryk University in Brno and
Charles University in Prague. She currently works for the Czech
delegation in the IND/DEM group in the European Parliament.
David Sehnálek, Ph.D., is a law graduate of Brno’s Masaryk University.

In 2007 he defended his thesis on international-law aspects of the
regulation of e-commerce and was awarded a research degree. He
has worked as an articled clerk in a Brno legal practice and he is
currently working as an assistant in the Department of International
and European Law within Masaryk University’s Faculty of Law,
specialising in the field of EU law.
340
Esko Seppänen, MEP, has a Masters Degree from the Helsinki School
of Economics and Business Administration. Before he embarked on
his political career, he worked for the Finnish Broadcasting Company
as a journalist specialised in economic affairs. In 1987, he was elected
to the Finnish Parliament, and was Chairman of the Environment
Committee. He also served as a Parliamentary Trustee in the Bank of
Finland. Currently his political interests focus on the relationship
between the "federalisation” and “militarisation” process of the
European Union and the nation states.
Gawain Towler is the Press Officer for the UK Independence Party in

the European Parliament (IND/DEM group). He is the prospective
Parliamentary Candidate for Dorset North in England. He was the
founding editor of The Sprout and has contributed to numerous
newspapers journals and think tanks.
Tomas Valasek is director of foreign policy and defence at the Centre

for European Reform. He has written extensively on transatlantic
relations, common European foreign and security policy and on
defence industrial issues. He is also a senior advisor to the Brussels
office of the World Security Institute. He is a holder of an M.A. in
International Affairs from the George Washington University in
Washington, DC, and a B.A. in journalism from the University of
Georgia in Athens, Georgia.
341

The EU from a Critical Perspective: A selection of articles questioning further political integration

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The EU from a

Chapter 1 - The Future of the European Union 1

Chapter 3 - Subsidiarity 139

The subsidiarity principle and the EU institutions (Markus Nyman) 158

Subsidiarity at the service of technocratic centralism

The primacy of the community law (David Sehnálek) 166

Is the Committee of the Regions promoting closeness and subsidiarity?

The white horse of bureaucracy (Martina Rozsívalová) 179

Chapter 4 - The Charter of Fundamental Rights 187

Chapter 5 - The Future of the Euro 201

Chapter 6 - The Financial Crisis 213

Chapter 7 - Defence 239

France, NATO and European Defence (Thomas Valasek) 255

Chapter 8 - Immigration 265

Chapter 9 - Energy 299

Chapter 10 - Europe in numbers 313

LIST OF CONTRIBUTORS 335

To select the 'best' from among a plethora of excellent contributions

We also express our gratitude to Prof. Kurt W. Rothschild, whose article

- The future of the European Union

Although the Independence/Democracy Group is known for its

Our aim, however, was to provide a much-lacking balance to the

The doctrine that a ‘strong and powerful Europe’ could only be

This book seeks to unravel this doctrine and provide rationales as to

Klaus Heeger and Karoly Lorant

The Future of the European Union

Paul Marie Coûteaux, février 2008 – Strasbourg :

Vladimír Železný, June 2008 – Strasbourg:

Georgios S. Georgiou, January 2009- Strasbourg:

Witold Tomczak, November 2007 – Strasbourg:

FROM ‘COOPERATION’ TO ‘CENTRALISATION’

By Kevin Ellul Bonici (June 2006)

The presupposition here is that Commission-inspired legislation would work better at

These are important questions, but there are others to explore.

FROM COOPERATION TO HARMONISATION

Let us take it step by step.

‘Harmonisation’ follows ‘cooperation’ in quick succession. Indeed, both processes act

FROM HARMONISATION TO FEDERAL LEGISLATION

Third Pillar: Police and Common position (non- Intergovernmental; unanimity

3. ECJ case Law

FROM FEDERAL LEGISLATION TO SUPRANATIONAL EXECUTION

There is no evidence to support the contention that supranational anti-terrorist measures

EUROPA QUO VADIS?

By Peter Henseler (June 2006)

WHAT CONSEQUENCES CAN WE OBSERVE TO BE DRAWN BY THE EUROPEAN

In contrast to the parliamentary views the Commission approach seems to be a more

POLITICAL INTEGRATION - THE ULTIMATE GOAL

By Anthony Coughlan (June 2006)

THE POLITICAL OBJECTIVE OF ESTABLISHING A SUPRANATIONAL EUROPEAN FEDERATION HAS

COMMENTING ON THE RESULTS OF THE REFLECTION PERIOD

By Klaus Heeger (July 2006)

"It is necessary to wait, but it is urgent to act”

THE COURSE OF EVENTS

Then, in February 2006, a new communication (White Paper) on a European Communication

Surveys on the future of Europe

The European Parliament comes in

THE EU LEADERS´ VISIONS (TO BE MOULDED INTO A FUTURE TREATY OR

Saving the present draft?

Supplementing the present draft?

Renaming it constitutional treaty or simply treaty?

Leave the treaties?

Could the summit agree on anything at all?