The EU's future lies in devolving powers, not centralising them

They say that pragmatism is a virtue in politics, and in today’s economic and political confusion muddling through seems a better policy than endorsing projects that though highly ambitious are hazardous. When we lack any compelling sense of direction, slowing down or even standing still can appear to make more sense than rushing headlong forward. In a Union of 28 diverse member states, bold reforms are contentious, so should the new EU leadership not call for another period of reflection before suggesting radical reforms?

The problem with this idea is that muddling through has been a policy practiced for many years by the EU, and has progressively alienated and infuriated citizens and companies alike. Two decades ago, for instance, we got a single European currency, but without a single European economic government. This seemed to work for a while, but as soon as Wall Street caught a cold after the fall of Lehmann Brothers, the euro developed pneumonia. A decade ago, the EU had been writing an ambitious European constitution, but what we got instead was the Lisbon treaty which made the EU’s institutions even less effective and more unaccountable. Today’s Europe is more divergent, conflicted and frustrated than at the end of the last century, and much of this can be laid at the doors of institutions who claim to strive for ever-closer union.

This should not be mistaken, however, for an argument supporting a euro-sceptics’ manifesto against integration. Companies in Europe do most of their business with other Europeans, and their trade and their investments need to be regulated and arbitrated at an EU level. Citizens can also be vulnerable to problems originating in different parts of Europe, whether in terms of migration, pollution, transport, food safety or communication.

Most critics of Europe’s track record on muddling through suggest a giant leap forward in the shape of a European federation. I would instead suggest a great “step forward to the rear” consisting of a Europe made up of functional networks. Rather than give more powers to the centre, we should do the reverse; we need to devolve power to Europe’s functional agencies by giving them greater autonomy and more resources.

There are two fundamental reasons why the EU is unsuited to a federalist structure. First, it is comprised of, and managed by, member states that within reason are happy to pull their resources for common endeavours, but are unwilling to commit political suicide. France’s President, Germany’s chancellor and Italy’s prime minister all understand that Europe can pack a bigger punch when united, but they don’t want to be out-voted in the European Council on matters they consider crucial. National parliaments, too, are unhappy to delegate their powers to the European Parliament, and the same goes for central banks and national judiciaries. The reluctance of gate-keepers to national sovereignty to surrender their powers explains why we have observed much more progress on common rule-making than on empowering the EU with the authority for central governance. And without those powers it is impossible to talk of a federation.

The lack of cross-border communal solidarity in Europe is another reason why the EU will not transform itself in a fully-fledged federation. It is hard to have a federation with citizens unwilling to share their financial assets along with debts and unable even to develop common threat perceptions. The EU has proved itself a skilful regulatory body, but you cannot forge a common European culture, perceptions and solidarity by decree. A federation that doesn’t have meaningful common taxation, redistribution and defence is a misnomer, and none of these are viable in the EU.

The EU may be unsuited to the creation of a federation, but it is perfectly suited to becoming a Europe of functional networks. There are currently more than 30 European agencies and bodies spread across the continent that deal with diverse issues like vocational training, food safety, border controls and judicial cooperation. Most of them perform regulatory tasks, but they also provide technical expertise and networking between national and European authorities. Some of their funds are from the EU, but they are independent bodies with their own legal personalities. The resources and prerogatives of these functional agencies could be significantly beefed up, and at the same time the EU’s central institutions could be down-graded. The European Commission could be transformed into a kind of mega-regulatory agency responsible for the single market. The European Council could concentrate on setting some basic standards of access, transparency and accountability for the various regulatory bodies. The European Parliament, possibly under a different name, could do what it does best through the auditing and monitoring of regulatory agencies, but abandoning all pretensions to act as a sovereign pan-European representative assembly.

Most friends of European integration would find this proposal defeatist, but they are unable to answer one fundamental question: if muddling through is unsustainable and federation is unrealistic, what is plan C? The EU envisioned a model of territorial integration, to be run by a single institutional centre but in charge of too many components and without adequate legitimacy and resources. That vision is now in tatters. It’s time to move forward by stepping back and embracing a more decentralised, flexible and pluralistic vision of European integration.