The Progressive Post

Parliaments and the EMU: a crossroads for Europe?


Parliaments clearly have a significant role to play in the reformed governance of the European Monetary Union (EMU). However, that involvement is not without its dilemmas.

The reformed governance of EMU has brought with it difficulties for parliaments that are ‘vertical’ and ‘horizontal’ in nature. The vertical challenge is that budgetary, fiscal and economic policies will all remain within the national competence – with EMU limited to a coordinating functioning. However, at the same time, EU institutions such as the Commission, European Court of Justice and European Parliament were given major roles in the creation and application of the new governance roles – and will intervene significantly in EMU-Member States policymaking. Faced with this, national parliaments cannot carry on as before – as they will have to vote on draft legislation that originated in Brussels – and the European Parliament cannot take their place.

The medium-term prospects for Euro governance from this vertical view are two-fold. Firstly, intergovernmental decision-making for EMU looks set to continue, with a restricted Euro group forming part of a larger Union. Secondly, the extension of the Euro to the whole of the EU appears illusory. As a result, the task ahead is not to design an Economic and Monetary Community, but to find ways of improving parliamentary collaboration for an inter-governmental EMU. It will be a challenging, if not to say thankless, task.

Rights of the European Parliament

A key point to be made about Euro governance is the need to intervene in two areas: the creation and implementation of new norms, and the involvement of two actors, national parliaments and the European Parliament. The new legislation issue has been resolved, with the European Parliament having full co-decision rights on the new secondary law and national parliaments ratifying the TSCG fiscal pact. However, there is still work to be done in implementation.

The ‘horizontal’ dilemma is two-fold too; that not all Member States belong to the Eurozone – and yet the EU’s institutions make decisions about Euro matters with all of its members as a matter of principle. The first statement begs the question whether EMU within the 28 Member States can hold together on major policy issues. The second raises the question whether the Commission and Parliament’s participation can still be justified, given the ever-deeper interference in matters of national competence in only a limited number of Member States.

By way of response, I would propose:

  • on the one hand to preserve the Treaty structures of EMU, and to reject a framework of enhanced cooperation;
  • but on the other hand, to adapt treaty praxis more to treaty reality and find, inside the EP, a durable and credible procedure which concedes voting right on operational Euro group affairs only to MEPs of this group.

Voting rights on Euro issues

However, returning to the earlier question of the vertical dilemma, what kind of measures should the European Parliament have the power to exert? The short answer is fixing the annual economic and budgetary parameters for the EMU Member States to follow, such as the Annual Growth Reviews and the Autumn Forecasts. Initially, these could be decided in full plenary session. However, if the European Parliament gained a degree of co-decision about executive measures that concerned just the Euro group, then a restriction of the vote to Euro group MEPs would appear in order. By contrast, any national declarations of intent or political decisions, such as national reform programs, or stability and convergence programs, need to be excluded from the European Parliament and remain the preserve of national parliaments.

My recommendation is that the EP does not receive any new competences of co-deliberation or co-decision – at least until the relevant policy fields and budgets are transferred to Community competence. Such an eventuality is possible; that EMU governance becomes even more Community-led and the EP has a more significant role to play as a result. However, as the likes of the German Constitutional Court and the Institut Schuman in Paris have regularly highlighted, the European Parliament needs to be more representative if it is to have greater legitimacy vis-à-vis European citizens – especially as decisions taken at EMU level increasingly affect their daily lives. This report predicts only small, short-term advances for the EP, notably towards more parliamentary intervention into an executive-dominated intergovernmental process. Progress may have to be achieved by individual inter-institutional arrangements rather than by a generalized attribution of competence.

Disappointment in Vilnius

This report takes note of research on the national parliaments‘ re-empowerment regarding the massive intrusions of the reformed EMU governance. Of particular interest here is the aspect which links the national parliaments directly to the EP, i.e. the much-discussed Interparliamentary Conference introduced by the TSCG Art.13. Despite the high expectations, the conference’s inaugural session in Vilnius in October was a considerable disappointment. However, the divergence of interest and declared positions between the European Parliament and certain national parliaments had been clear since the spring of 2013. The EP was supported by the large majority of national parliaments in only seeking a very modest role for the IPC, while a few national parliaments, especially the French Assembly, advocated a strong IPC, especially on the sensitive issues of stability policies. The result was a let-down for the French-led initiative, and the session reached neither a consensus on the mission, composition or organisation of this new assembly. And it now begs the question – ‘where do we go from here’?

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