A common sense guide to EU reform

It is hard to find a politician in any EU country these days who doesn’t call for ‘reform’. But as to what those reforms should be, opinions differ widely. And while the anti-system parties, wanting either to leave or destroy the Union are the loudest, it will be the mainstream parties and governments that will have to deliver.

Reform in the European context is an ongoing process, not a one-off event to be initiated, negotiated and completed within a self-proclaimed deadline. Rather, the whole point of the EU is to be a non-stop negotiating forum, year in year out, on all the subjects where our interdependence makes it necessary to work together as neighbours. Nowadays, these negotiations tend to be more about amending, updating, improving or repealing existing policies and legislation, rather than embarking on new fields of co-operation (with the caveat that more might be needed within the eurozone for countries sharing the common currency).

Anyway, the European Union now broadly has the field of competence that most member states agree on. So the likelihood of European countries deciding to transfer new fields of responsibility up to the European level, or to remove them is actually quite small, given that treaty change would require unanimous agreement and parliamentary ratification. The real arguments are more about how the EU should exercise the competences it has, and the policy choices it should make within its existing remit.

This won’t be easy. Perceptions differ over the lessons to be learned on a whole range of issues. Those from one of the eurozone countries struggling to reduce their deficit may say reform is needed to ‘go easy on austerity’, whereas those from a creditor country will be under pressure not to grant further loans or allow a laxer interpretation of the agreed deficit rules. Some might want to restrict the free circulation of citizens in the EU, but central and eastern European countries will not be enthusiastic. Some may want a bonfire of red tape, while others will say that the single market needs rules to protect consumers, workers and the environment. Some will say the EU must focus exclusively on the single market, while others will value it as a framework for neighbouring countries to work together on subjects that range from research programmes to police co-operation or student exchanges. All call for faster economic growth, but differ on how to achieve it.

One bugbear is the supposedly excessive level of EU regulation and red tape. But blaming Brussels is facile. For a start, when we get regulation right, Europe-wide rules are an exercise in cutting red tape, replacing 28 divergent and conflicting national rules with a common set of rules for the common market. And many aspects of the single market need a single rulebook to ensure fair competition and to protect consumers, workers and the environment.

At the moment, the level of support required to make any laws at European level is very high; it’s worth recalling that EU legislation cannot be adopted without the approval of an overwhelming majority – 74% of votes for a qualified majority in the Council – of national ministers with a supporting majority in the European Parliament. As is the case at national level, those adopting it can get it wrong or legislation can become outdated. There is therefore a constant need for review and updating.

This is precisely what has been happening, most recently through the European Commission’s “REFIT” simplification programme, which is designed to streamline EU legislation to make it more understandable and user-friendly for citizens. The programme’s simplification initiatives have been developed by drawing on input from businesses, NGOs, national authorities and individual stakeholders.

A silly idea though, is the “one-in-one-out” proposal – that no EU law should be approved without repealing another one. Of course we should always seek to make only necessary laws and avoid unnecessary ones, but whether a law is valuable or not depends solely on its own merits. So whether this results in more or less legislation should depend on whether each law is justified or not, rather than on a formula of very simple arithmetic.

Despite the lengthy recession gripping much of Europe, the richest 1% in our society has grown richer. This is a misallocation of resources that is economically damaging, and a situation which is creating great resentment at a time when unemployment is still high and poverty is growing. This is especially true when some governments’ response to the need to cut deficits is not to tax the rich or fight tax evasion, but to cut benefits to the poorest in our societies.

So, fairness and economic recovery go together, and there are many examples of his. Recovering the revenues lost to tax evasion and avoidance across Europe would in itself eliminate government deficits. Deepening the EU as the world’s largest single market would be a driver of economic growth. Investing in improved energy efficiency would cuts costs to households, as well as making us less vulnerable to outside suppliers, not to mention cutting climate-changing emissions.

A proper review of EU spending is certainly needed, but this should not result in automatic across the board cuts. We could even increase it in those areas where spending at EU level can save money at national level, either through economies of scale or by avoiding duplication, for instance in research and development for new technologies and industries.

Some argue that the eurozone needs deeper integration. This may be so, but much has already been done in this respect. If the eurozone needs a pooling of powers among countries that use the euro, and thus does not constitute a transfer of powers from non-eurozone nations to the European Union, then they should do so to the extent they deem necessary, while leaving it open as much possible to non-eurozone participation.

And if the Eurogroup of eurozone finance ministers needs a full-time chairman who is not of their number, they shouldn’t create yet another president complete with cabinet and secretariat in an EU system that already has a confusing number of presidents. Instead, why not ask the EU’s Commissioner for economic affairs to do the same double-hatted job as the High Representative for the Union, to be both Vice President of the European Commission and to chair the Foreign Affairs Council? This would also minimise eurozone-EU divergence by avoiding a separate eurozone secretariat.

Rules must be fair, and be seen to be fair, by public opinion. If there are cases of so-called welfare tourism, or of abuse of migrant workers, this should be dealt with openly. But many of the more outrageous allegations turn out to be unfounded; there is no case for ending the treaty-based right to free circulation.

It is important to pay attention to perceptions, for perceptions are political realities. To quote from Herman Van Rompuy’s Charlemagne Prize speech: “We need to get the balance right. It is urgent for the Union not to be seen as only benefiting businesses, but also employees; not only the ‘movers’, but also the ‘stayers’; not only those with diplomas and language skills, but all citizens; and people not only as consumers, who like cheap products and a wide choice, but also as workers, who can see in others competitors for their jobs.”