One of the things I like most about my role as the Commissioner responsible (among other things) for relations with national parliaments is the opportunity this gives me to visit the Member States and get a real taste of what issues are of concern to parliamentarians – and the citizens they represent.
The Lisbon Treaty gave a much more important role to national parliaments in the European legislative process, in particular with regard to the issue of subsidiarity – whether legislation should be European, national, regional or local, to give a rough definition.
As you might expect, national parliaments do not take this issue lightly – after all, the perception is that if more and more legislation is agreed in ‘Europe’, the role of national parliaments is inevitably diminished. So, national parliaments are naturally quick to point out any potential breaches of the principle of subsidiarity in Commission proposals, and to defend their own right to sovereignty over national issues, as they have done many times – as this website shows.
This is a particular concern for many national parliaments at the moment, with the wider discussions over economic and financial reforms, and in particular reforms relating to the budget procedure.
This particular subject dominated the discussion during my recent visit to the COSAC meeting in Copenhagen of the chairs of the European affairs committees of the different national parliaments and MEPs.
What, they wanted to know, was Europe doing sticking its nose into their national business? Was ‘Brussels’ intending now to have the power to endorse or reject their country’s budget proposals, all in the name of economic governance?
I was, of course, happy to put the record straight.
As I explained in my speech to COSAC members, Europe has had to react quickly and decisively to combat the effects of the financial and economic crisis. Putting it bluntly, the euro – the heart of the EU project – was under threat, and without drastic action, we faced nothing more or less than its collapse.
Thankfully, of course, that hasn’t happened, and while the situation is far from ideal, we now have the structures in place, I believe, to tackle the problems head on. Chief among those measures is the so-called ’six pack’ of proposals, which give the EU a much stronger framework for preventing the economic mistakes of the past.
One of the innovations brought in with the ’six pack’ is budgetary oversight – the Commission will be able to scrutinise Member States’ public finances, in particular the level of debt and expenditure, much more thoroughly than before and, crucially, at a far earlier stage in the budget development process. National budgets will also have to be designed and presented in compliance with minimum international quality standards, so that budget-making is more transparent both for citizens and for policy-makers.
As I said in my speech to COSAC – and as I’ve repeated subsequently at meetings with representatives from the Irish, Latvian and Dutch Parliaments – we have learned important lessons by looking at the root causes of the current sovereign debt crisis, and the spotlight will therefore be tightly focused on countries whose budget policies put their own and Europe’s stability, growth and employment levels at risk.
Why is this important? Well, if there is one thing this crisis has shown, it’s this: if we want to share prosperity, we have to also share responsibility. One Member State’s economic difficulties have an inevitable knock-on effect on all the others. That’s why the EU leaders decided that we have to improve the rules on collective responsibility and collective vigilance over national financial matters.
A budgetary imbalance has serious repercussions, of course. Countries with large public debts are obliged to issue bonds to raise cash; they pay interest on those bonds – money that could be better spent, in my opinion, on schools or hospitals, in investing in research and improving competitiveness, in creating jobs and developing training, where there is a tangible return on investment.
A lack of investment in jobs can have a particularly devastating effect. We live in a Europe without barriers, where the job market has become increasingly cross-border, and where, therefore, fewer jobs in one country not only impact workers from that country but also, potentially, from many others as well.
But to come back to the issue of budgetary oversight. The real innovation here is that Member States will have to follow the same norms when drawing up their budgets (making them more transparent) and to share their draft budgets not only with the Commission but with each other. It is envisaged that budgets would be submitted each October, studied by the Commission for their sustainability and whether they will help the Member State meet its targets for structural reforms and increasing competitiveness (as set out each spring in the National Reform Programme).
The Commission’s findings will be sent to the European Parliament, while discussions with Member States will take place in Council, most likely among economic and finance ministers. However, responsibility for the final approbation and adoption of that budget remains firmly with national parliaments – Commission, Council and Parliament can help improve it, perhaps, but they cannot veto or block it.
Making this process more transparent and keeping partners informed about national budget developments should lead to healthier public finances at both national and EU levels, without in any way infringing national sovereignty in this area.
The high level of interdependence among the European economies means that a higher level of European scrutiny of budget decisions is necessary, since a bad decision taken by one legislator will have repercussions throughout the union.
There is nothing wrong, of course, with greater transparency: budgets are not commercially sensitive information, like the accounts of a company. Member States are not competing with each other to see which can spend (or save) the most. So making the process in each country clearer and more obvious to the others makes sense, as it allows the 27 Member States (who after all share the vast majority of the goals to be funded by their annual budget) to better synchronise their priorities and complement each other’s work.
At no point in this process are the rights and privileges of national parliaments undermined or called into question. In fact, the process ultimately gives them greater oversight the entire budget process, as it is more transparent and open.
There is often talk of the need for ‘more Europe’ to help us out of the crisis, to boost competitiveness, to create jobs – but it is just as often not clear what ‘more Europe’ actually means. For me, this new form of European-level democracy – where ‘all national parliaments have become, in a way, European institutions’, as European Council President Herman Van Rompuy put it recently, is precisely what ‘more Europe’ is all about.
Thankfully, I’m not alone in thinking this. As the conclusions of the recent Spring European Council clearly show, there is a real desire among national governments to use European policies and priorities to get out of the crisis; some Heads of State and Government even called on their peers to take them to task for failing to complete the Single Market!
It is a pity that we have had to suffer the impact of the crisis to bring us to this point – a crisis that, it could be argued, has been aggravated by countries acting in isolation rather than together – but with this new approach to joined-up policy making now in place, I’m hopeful that we’ll continue to benefit from ‘more Europe’.
Tags: National Parliaments