EU reform: What we need to do

Next year’s 50th anniversary of the EU’s founding Rome treaty should be celebrated with pride, for it marks an historic achievement: half a century of re-uniting a divided continent thanks to the democratic vision of founding fathers like Jean Monnet, Robert Schuman, Paul-Henri Spaak, Alcide de Gasperi and Konrad Adenauer. But there is also cause for concern because the European project is in crisis; it may not be a clear cut crisis, but it is a profound one.

The forces driving the Union’s political momentum have run out of steam, and Europe’s citizens are either doubtful or indifferent to its aims and lack any real collective hope for the future. Some people, notably in France, think this sort of disenchantment is quite natural, but I disagree. In my view, the whole question of European integration is capable of once again inspiring popular enthusiasm; I believe that the “political Europe” I have always had faith in can still be attained.

Europe is today at a critical juncture. Italy, Hungary and the Czech Republic have recently had elections, and over the next 10 months there will be elections in 11 other member states, including of course France, and elections to the European Parliament are due in mid-2009. So the time to consider how best to reconcile European voters with the ideals of EU integration is now. We also need to use these elections to try and meet citizens’ aspirations for a Europe that is more accessible and understandable.

These are challenges that demand that we ensure the EU runs more efficiently and openly, and that people can clearly see that it serves their interests in policy areas where EU-wide programmes are demonstrably more effective than national ones. In short, Europe must operate where it is needed and as much as it is needed, but no more than that.

Four key questions must be addressed if the EU is to win back its popular support. First, how can Europe overcome the institutional crisis caused by the French and the Dutch “No” votes to the draft European constitution? Second, where should we draw the Union’s definitive frontiers, and what relations should we have with neighbours beyond its frontiers? Third, how do we modernise the EU’s finances? And finally, how can we re-engage our fellow citizens in the political life of Europe?

Turning, then, to the constitutional treaty, there never was a “Plan B”. Whether we like it or not, the referendum results in France and the Netherlands were unequivocal and binding. The treaty can only enter into force if ratified by all member states, and we now know that this will never happen.

Yet the need for EU constitutional reform remains as strong today as for many years past. We still have to agree a new text that will take us beyond the technical provisions of the Amsterdam and Nice treaties. Whatever this new text is called – a constitution, a treaty or something else – it needs to spell out the fundamental political dimensions of the European project, preserving the hard-won conceptual advances achieved through negotiation within the European Convention and after that at the inter-governmental conference (IGC). This new reference text will have to define Europe’s geopolitical boundaries, establish the Union’s long-term political aims, correlate EU policies with EU projects and set out the means to move forward.

An ambitious agenda of this sort calls for a large-scale democratic debate, not just another round of diplomatic talks among EU experts and insiders. It may mean a new pan-European convention, with delegates designated after extensive discussions in national parliaments. If the convention were to meet after the mid-2009 polling for the European Parliament, the election campaign could become an opportunity for genuine, in-depth discussion on the future of the Union, and thus ensure that MEPs have a clear mandate for the task of reform that lies ahead.

But all this takes time, and time is something we do not have because the EU must act quickly if it is to re-establish its ability to respond to such urgent issues as security and illegal immigration.

But I believe there is a way out of this impasse, and it is a way that will satisfy peoples’ demand for an EU that functions more efficiently. We have to distinguish between two different sets of priorities; one that demands immediate institutional reform so that EU decision-making will once again be effective, and the other which involves the much longer time frames needed to establish consensus. The vexed issue of the Commission’s size and composition under an EU-27 would, for example, fall within this second category.

I would suggest that the most urgent priorities for institutional reform could all be covered in a mini-treaty that would modify the treaties of Nice and Amsterdam, and – like its predecessors – would be subject to ratification by national parliaments. This mini-treaty could be negotiated rapidly without re-igniting past political debates because basically it would cover provisions that were set out by the Convention and the IGC. We should aim to draft this mini-treaty under the German Presidency of the EU in the first half of 2007 and to ratify during the French Presidency in 2008 in time for the elections to the European Parliament in 2009.

What should the priorities be for this mini-treaty? First, it should extend the scope of qualified majority voting in the Council and co-decision with the European Parliament, especially when judicial and penal matters are concerned. It should also include agreed terms over the method for implementing new voting procedures, in particular the double majority rule which, under the rejected constitutional treaty required support from Council members representing at least 55% of EU states and 65% of EU citizens. The mini-treaty should also cover legislative power-sharing between the Parliament and Council, and would empower the European Parliament as the body that would elect the President of the European Commission, thus bringing to an end the system of nomination by member states.

The mini-treaty should also respect the principle of subsidiarity, which means abiding by the simple rule that the Union is only empowered to act when its actions are more efficient and more appropriate than those of member states. To this end, the role of national parliaments must be strengthened through adopting the EU constitution’s proposed “early warning” system, enabling national legislators to challenge Commission proposals if they consider that Brussels has overstepped the boundaries of the EU’s competence.

I also believe that there can no longer be any dispute about the value of a stable presidency of the European Council; everybody now recognises that this would encourage long-term thinking and policymaking. The mini-treaty should also create the post of EU Minister of Foreign Affairs, combining the current duties of the High Representative for Common Foreign and Security Policy, the Commissioner for External Relations and the Chairman of the Foreign Affairs Committee.

During the debate over the constitutional treaty, there was consensus on two other questions that should be covered by the mini-treaty. The first concerned increased participatory democracy, especially new regulations to empower groups of a million citizens or more to request that the Commission make proposals in a specified area. The second concerns measures to facilitate enhanced cooperation between at least eight member states. Finally, if the mini-treaty were to confer a legal personality on the Union this would allow it to participate in some international organisations as a single political entity.

Further discussion will undoubtedly prove necessary for a number of other fundamental issues, including problems that the constitutional treaty in fact failed to address adequately. This is certainly the case for the reform of the Commission, which is one of the most important and intractable institutional questions the EU faces. In the short-term, the mini-treaty could defer a decision on the number of EU Commissioners there should be until 2014, allowing the Commission that will be nominated in 2009 to maintain the rule of one commissioner per country. But root-and-branch reforms nevertheless remain essential in the longer-term.

Neither the Nice treaty nor the constitutional treaty provided satisfactory answers to the questions about the Commission’s structure and make-up. Both treaties opted for a ceiling on the number of commissioners and the rotation of seats between member states in a fair and equal manner. But, this would be a system that fails to offer guarantees of either efficiency or legitimacy. Choosing EU Commissioners solely on the basis of their nationality prevents effective team-building. At the same time, though, the Commission is often a scapegoat for public opinion. So what would happen when it takes a major decision affecting, say, a large company from a country without its own commissioner to represent its national interest? We need somehow to strike a balance between the understandable desire of member states to have at least one Commissioner, and the need to ensure the Commission is coherent enough to operate effectively.

To break this stalemate, we need to make a bold conceptual leap and consider whether the President of the Commission should not be entrusted with the job of selecting fellow members. The Commission’s president would in any case enjoy the confidence of the European Council and the Parliament, and could be given the freedom to choose an effective team so long as approval by national governments and MEPs is eventually obtained. Of course, the president would have to consult over the selection process and respect the underlying political balances at the heart of the Union, notably between member states and party groupings. But ultimately the choice would be up to him or her. While this proposal may seem daring in European terms, it actually conforms to the accepted pattern for the formation of national governments. The composition of future Commissions would therefore not be resolved in advance in accordance with some abstract formula, but would reflect the balance of political power at the time.

Beyond Commission reform, I am convinced that Europe must change its rules on unanimous decision-making if it is to function effectively. How can we believe, or make others believe, that we can fight terror by bringing together a learned assembly of 50 justice ministers, giving each one the floor for two minutes and then demanding unanimity from them? While we cannot force decisions upon unwilling member states, it is equally unacceptable that one or two countries can block progress among the rest of the EU-25.

I have in recent months already suggested the idea of a “super-qualified” majority voting system which would require, for example, 70% or 80% support. This is a mechanism that could be applied to policy areas that are particularly sensitive for national governments, for example, taxation where it is unrealistic to expect them to accept standard qualified majority votes. It would allow progress in key policy areas and break deadlocks created by outdated demands for unanimity.

But I realise that modifying the decision-making rules is not in itself enough to re-start the European project. We also need a new motor to drive important decisions forward, with those countries that wish to advance taking the lead. I believe 'variable geometry' is one way to achieve differentiated integration, with those countries most concerned by a specific topic getting together to set out a plan of action for the Council as a whole. Such ad hoc groups could explore new possibilities for collective action, and new legal avenues to achieve their goals, while leaving the door open for other states to join later.

The Portuguese, Greeks, Spaniards, Italians and French, for example, could together work out ways to fight forest fires. The seven EU states contributing peace-keeping forces in Lebanon could also collectively support each other. The eurozone could be strengthened, and Mediterranean members could cooperate to decide upon effective measures to stem illegal immigration.

Now is the time, too, to face up honestly to the issue of Europe’s borders, and accept that the French and Dutch referendum results were partly provoked by a Europe “sans frontières”. Establishing a new geographic and political framework for EU enlargement is a pre-requisite of renewed popular support for the European project. And this framework must recognise that the Union’s capacity to absorb new members is finite. I want this capacity to be quantified, with enlargement monitored at each stage of the process. It will be too late to respond if we wait until the last potential member has joined. The decision to accept each new applicant should be taken in light of the EU’s internal objectives, its institutional limitations and the level of popular support. Such decisions should not be based upon foreign policy goals or a desire to encourage neighbours to reform.

So who is European and who is not? We can no longer leave this question unanswered. Clearly, some non-member countries are part of the European continent and have the right to full EU membership. This group includes Switzerland, Norway and – eventually - the Balkan states, as well as islands such as Iceland. Then there are other countries whose right to join the Union is debatable or who, although neighbours, are clearly non-European.

For this latter group in the Euro-Asian and Mediterranean areas we should avoid presenting them with overly stark choices: full membership or nothing at all. Our first step should be to establish preferential partnerships so we can work together while still observing our different interests and values.

Countries that want to participate in prosperous European markets should, in my view, adopt all the internal market regulations needed to protect our product quality and controls. But preferential partnerships can also go beyond trade, allowing non-member countries to participate in certain European policies so that the Union can encourage both their economic and social development. We could also enhance cooperation in research and education programmes, perhaps even securing one day new defence arrangements that would help to build our collective security.

Of all the countries with which the EU should have preferential relations there is Turkey, our neighbour and friend, sharing many of our security concerns and many of our values. These are good reasons for strengthening our ties with Turkey, without going so far as offering full membership.

However, no candidate for EU membership has the right to ignore the fact that the Union has 25 members, including Cyprus. Even though the customs union between Turkey and the EU is complete, Turkey continues to deny access to its ports and airports to boats and airplanes that have stopped in Cyprus. This is simply not acceptable. I say again and again that the EU must suspend any new accession negotiations with Turkey until Ankara has ratified and implemented, in good faith, its agreed trade protocols.

Turning to questions of EU finance, the agreement reached last year on the European budget for 2007-2013 contained a review clause in 2008-2009. We must seize this opportunity to undertake an ambitious reform of the European budget. Under the current system, national budgets support European expenses. This is illogical, unfair and intolerable for the net contributor countries and incomprehensible for citizens. European expenses must be financed by European resources, just as local taxes finance local expenses.

Financial reform will be an important issue for the coming French presidency of the EU. I believe that two principles should guide reforms in this matter. Firstly, the fiscal sovereignty of member states must be respected; they must retain the power to decide whether to create or modify a tax. Second, a task should not cost the taxpayer more just because it is transferred to the European level. On the contrary. Europe is subject to constant fiscal pressures, constant public expenditure and constant overhead costs. The European Court of Auditors and its national counterparts have the technical means to ensure this principle is respected.

EU finances also suffer from a lack of transparency. Indeed, they could be likened to an iceberg, with only the relatively small EU budget – the tip of the iceberg - visible to public scrutiny. Yet in many fields, the success of European policies depends as much, if not more, on the mobilisation of much larger national funds rather than on the EU budget itself. As leaders, elected representatives and citizens, we all need to know how much we are giving to fund common objectives, no matter what label is given to this money.

I therefore think it is necessary to create a financial chart every year in which each member state sets down the amount of national income it is willing to allocate to European projects. It would be a kind of “secondary budget”, exposing the hidden yet undoubtedly far larger part of the iceberg. This exercise would mark a first step towards a new approach to public finances in a multinational entity endowed with a common currency.Finally, I want to consider how to modernise political life in Europe. One has to admit that elections to the European Parliament have proved far from exemplary in terms of representing true collective choices. In each member state, the issues at stake in European election campaigns are still primarily national with little or no EU content.

My answer would be to allow European political groups to combine national lists of candidates and present a united programme during European parliamentary elections. This would create genuine Europe-wide campaigns on European political agendas. If affiliated groups also declared their preferred choice for Commission president as part of their campaigns, this would give European citizens a direct say over the direction of Europe for the coming five years. Such a system could be up and running in time for the 2009 elections, at least in those countries that want to participate.

The world has changed tremendously since the Treaty of Rome was signed in 1957, and perhaps we have now reached the end of the road for that model of European integration. The new Europe must recognise new realities and adapt to them, not try to impose artificial systems upon its decision-making. Here is a revolution for the Union, a rupture with the past. What we need now is for all of the EU’s member states to rediscover a desire to take Europe forward instead of being preoccupied with their national interests. Failing that, those nations which want to seize the initiative should be able to do so without being constrained by the reluctance of the others.

This article is based on the speech that Nicolas Sarkozy gave on September 8, 2006 at the Brussels think tank Friends of Europe (www.friendsofeurope.org) in association with the Fondation Robert Schuman (www.robert-schuman.org)