Friday, 28 September 2012

The Bottom Line 20/9/2012

The BBC Radio 4 business programme, The Bottom Line, recently had a show where the 3 panelist business representatives were asked about Europe and the Euro, and if it really is in decline compared to the rest of the world. It's not long - only 10 minutes in the second third of the show - but if you're interested, you can listen to it here.

Thursday, 27 September 2012

The Confused Ideology of the EBacc

UK Education Secretary Michael Gove has announced that the GCSEs (the exams sat at the end of comulsory secondary education at 16) will be replaced by a new English Baccalaureate qualification:

"From the autumn of 2015, pupils will be taught for the new EBacc in English, maths and science. These will cover seven papers: English language, English literature, maths pure and applied (with an additional maths option), chemistry, physics and biology.

The new exam will be sat for the first time in these subjects in the summer of 2017. There will be no coursework in English and maths as modules are scrapped on the grounds that they encourage what Gove described as "bite-size learning and spoon-feeding". There will be some coursework in science to take account of the importance of laboratory work.

From 2016, pupils will be taught for the new EBacc in history, geography and languages. Pupils will sit the exams in the summer of 2018. There will be no coursework for history. Field trips will still count in geography and there will be flexibility on oral exams for languages."

The  aim is to restore credibility to the exam system by making exams harder and lessening or removing coursework altogether. I'm not sure what "flexibility on oral exams for languages" is supposed to mean, since surely speaking the language should be a central plank of learning it rather than an accommodation as an afterthought.

What's striking about the changes is the confused ideology behind them. Qualifications are meant to show how, well, qualified you are in a subject or a skillset, and the grading system is meant to separate people on the basis of ability. While it's a good idea to have a new name for a harder system to prevent unfair comparisons with the generation of students who did not have to face the tougher exams, the narrow focus on "tougher exams" misses the point on whether or not this system would equip students with the knowledge and skills needed in life and in the workplace.

It's a fact of life that in any education system students are going to be taught to pass the exams, so does this approach to examination and achieving qualifications help students get the skills they need? Probably not. If the module system is done away with, then the focus switches to memory skills as students have to reguriatate everything they know on a subject in 2 hours. This encourages cramming for exams, rather than the wider use of skills to research a topic and deal with in depth that coursework can provide the opportunity for. And rather than simply "spoon feeding", coursework is an opportunity for students to learn how to use the resources around them and apply them to the task at hand - after all, employers don't expect their employees to sit at their desk struggling to remember things that they crammed for a few years ago when information is so freely available.

It's hard to escape the sense that Gove just fetishises the toughness of exams. Why not make coursework more challenging if that's the problem? Learning as you go through the GCSE - or EBacc - years helps to bed down skills and knowledge and is more likely to be useful in the workplace rather than depending on a one-off retelling of what has been learnt over the year. I know I found continuous assessment more challenging than a pure examination system, since more work was required throughout the year (plus I've probably got a personality that benefits more from exams).

It's ironic that the Tory party that has distained the idea that 50% of the population should go to university should be working to make the secondary education system as narrowly and traditionally academic as possible.

Appealing the Indeterminate Sentencing Ruling

The European Court of Human Rights in Strasbourg has ruled, rightly, that indeterminate sentencing in the UK without the means for prisoners to demonstrate that they have reformed is contrary to their human rights:

"Indeterminate sentences were introduced on the understanding that rehabilitative treatment would be made available to those prisoners concerned.

But the ruling published on Tuesday said the court found the "considerable delays in the applicants making any progress in their sentences had been the result of lack of resources, planning and realistic consideration of the impact of the sentencing scheme introduced in 2005".

The European judges note that the problems with IPP prisoners were the subject of "universal criticism" in the British courts. The ruling said the three inmates had been left in privately run local prisons for two and half years, where there had been few, if any, rehabilitation programmes.

"The stark consequence of the failure to make available the necessary resources was that the applicants had no realistic chance of making objective progress towards a real reduction or elimination of the risk they posed by the time their tariff periods expired," says the ruling.

"Moreover, once the applicants' tariff had expired, their detention had been justified solely on the grounds of the risk they had posed to the public and the need for access to rehabilitative treatment at that stage became all the more pressing"."

The  UK coalition government seems to have agreed with this assessment before the Court made its ruling, since it has announced the end to indeterminate sentencing. However:

"The new justice secretary, Chris Grayling, told MPs he was disappointed by the judgment, and intended to appeal against it. He said: "It is not an area where I welcome the court seeking to make rulings.""

I'd like to hear what areas he thinks a human rights court should be making rulings, if not in the area of the right to liberty. It's also striking that the government is planning to appeal a ruling against a policy with which it no longer agrees - perhaps Conservative ministers enjoy the feeling that they could bring in sentences that effectively lock people up for longer than their sentencing without any hope of release!

In any case ensuring that the criminal justice system is fair and transparent - in other words, that it complies with the rule of law - is a basic part of human rights law, and it's exactly in these types of circumstances that the court should be intervening against the arbitrary actions of the state.

Wednesday, 26 September 2012

The History of English

It's the European Day of Languages, so I thought I'd share this short video on the history of English:

EMU fatally undermined by the Koenigstedt Declaration

Has all the progress over the last 6 months been undone? The painfully slow summitry of the European Council has proven to be an inadequate firefighter, but there had been some movement towards a banking union and a working economic union. The biggest criticism was that European leaders were putting in the safeguards against the next crisis rather than trying to deal with the crisis we're currently in, but in last June's Euro Area Statement, the European Council finally seemed to have got it (PDF):

"We affirm that it is imperative to break the vicious circle between banks and sovereigns.


When an effective single supervisory mechanism is established, involving the ECB, for banks in the euro area the ESM could, following a regular decision, have the possibility to recapitalize banks directly."

Finally! Banking union and economic union are based on this logic: that the financial markets are too big for the Eurozone Member States to deal with on their own, and that there needs to be a common regulatory policy, and the means to deal with problems posed by the banks. The statement even signalled support for breaking the link between sovereigns and existing banking debt as a way of  lessening the debt burden for crisis-hit states (especially Ireland and Spain, who stuck to the Stability and Growth Pact criteria):

"The Eurogroup will examine the situation of the Irish financial sector with the view of further improving the sustainability of the well-performing adjustment programme. Similar cases will be treated equally."

However Germany, Finland and the Netherlands have not only set out to turn back the clock on this progress, but to fatally undermine the rationale behind banking union as a concept. In Koenigstedt the three countries declared not only that there will be no deal on existing banking debts that have been taken on by European sovereigns, but that national sovereigns will have to take on banking debt until they have reached their capacity before the ESM should step in to fund the banks directly:

"We agreed that the implementation of the European Semester, including budgetary discipline and targets, in all countries remains key to ensuring financial stability; the ESM and the other crisis mechanisms can only play a supplementary role to these policies that are decided at the national level.


 Regarding longer term issues, we discussed basic principles for enabling direct ESM bank recapitalisation, which can only take place once the single supervisory mechanism is established and its effectiveness has been determined. Principles that should be incorporated in design of the instrument for direct recapitalization include: 1) direct recapitalisation decisions need to be taken by a regular decision of the ESM to be accompanied with a MoU; 2) the ESM can take direct responsibility of problems that occur under the new supervision, but legacy assets should be under the responsibility of national authorities; 3) the recapitalisation should always occur using estimated real economic values; 4) direct bank recapitalisation by the ESM should take place based on an approach that adheres to the basic order of first using private capital, then national public capital and only as a last resort the ESM.

[Emphasis mine]"

 Far from breaking the link between banking debts and the sovereign, this reinforces it. It states that the order of debt responsibility in the Eurozone is: private, national sovereigns, then the ESM, creating an order for future crises that follows our current debt and banking crisis. Far from pointing towards a sustainable solution for the crisis and a workable Eurozone, this wilfully ignores the lessons of the past 4 years and tries to cement the current Eurozone order.

Why then should we have a banking union at all? The idea behind the banking union is that the financial sector is truly European (and global), and that it needs to be regulated and controlled in common - national authorities are too small and weak to deal with the sector own their own anymore. If it is to be a national responsibility for now and all time - the Konigstedt direction - then why bother with European regulation and oversight? Where is the added value or common purpose to this?

Why this step? Is it because of the ECB's open commitment to bond-buying, and the (current) creditor states want to seize back as much control and initiative as possible? Whatever the reason, it's hard to see this unilateral redirection of the Eurozone as any help for any sense of common purpose at European summits. What's the point of Ireland, Italy, Portugal and Spain waiting for summit time to try and shift the consensus constructively if other Member States start undermining the process of common negotiation? At this rate, they should start holding summits and economic seminars of their own to promote their alternative vision of economic union and crisis resolution - after all, Germany et al have shown their contempt for common decision-making.

It's truly mind-boggling to think how self-absorbed the ministers at this Koenigstedt meeting must be. Not content with vague signals and behind-the-scenes work, they've simply decided to wreck all agreement up 'til now. Diplomacy is not the word.

Tuesday, 25 September 2012

Reports of US breaching EU PNR Agreement

The transfer of Passenger Name Record Data - the information you hand over to airlines when you book a flight - from EU airlines to the US government has been a controversial issue in Brussels, with the transfers taking place for a decade on one basis or another without a satisfactory agreement in place to regulate it.

Earlier this year the European Parliament ratified an agreement with the US to regulate - and make legal in the EU - the transfer of this personal data to the US government for anti-terrorism and crime fighting purposes. I was against this agreement because it is spectacularly disproportionate and infringed privacy rights: data can be held for far too long (over a decade) for practically any purpose whatsoever. Sadly Sophie In't Veld's report advising rejection of the agreement was voted down in Committee and the Parliament ratified the agreement in plenary.

However it seems that the US hasn't been satisfied with even this gift of a treaty, with reports that the US government has been collecting data on people on flights that do not take off or land in the US, in contravention of the agreement. The S&D Group in the European Parliament has called on the Justice Commissioner Malmstrom to account for this before the LIBE Committee in Parliament:

"S&D spokesperson on civil liberties, justice and home affairs, Claude Moraes MEP, said:
"The media reports show that the US may be requesting data which falls outside the scope of the EU-US PNR agreement. We signed up to the agreement on strict conditions and we need clear answers if EU citizens' data is being collected contrary to spirit of the agreement.
"If our citizens' data is being collected for flights simply going through US airspace, then this could be against EU data protection laws. We are taking this matter very seriously and that is why the S&Ds have requested that Commissioner Malmström comes to the civil liberties committee to give MEPs a full picture of the situation regarding US collection of EU citizens' PNR data.""

It would not be the first time the Parliament has been disappointed by poor results from bad treaties.

Friday, 21 September 2012

Justice Scorecards

Viviane Reding, the Justice Commissioner, has announced a Justice Scorecard. The concern over justice and the rule of law in Hungary and Romania lately prompted the move. Romania is subject to reports on the condition of its justice system.

On EUObserver:

""I am prepared to come once a year before this house to share with all of you the commission's assessment of the justice systems of the 27 member states," she told MEPs in Strasbourg.

The scoreboard would gauge the various strengths and weaknesses of each member state by benchmarking judicial "strength, efficiency and reliability.

People from Reding's department would probe the national set-ups and issue annual reports, paying particular attention to the independence of the judiciary.


Reding now wants to extend such annual reports [Romania is subject to annual reports] to the rest of Europe and claims to have the backing of several member state ministries, including Germany's foreign minister.

"We need such a new mechanism. Because our infringement procedures are too technical and too slow to react in situations of high risk to the rule of law," she said."

It's a good idea because the infringement procedures deal with the technical and narrow infringements of EU law, which is not set up to deal with broad rule of law and judiciary matters, but co-ordination in justice and home affairs between national justice systems. This means that the infringement proceedings don't actually address the core issue of the protection of the rule of law and fundamental rights, but national leaders can claim that their proposals and measures are compatible with European laws and values. I'd have preferred it if such reports were to be issued by the Fundamental Rights Agency to ensure more independence (and continuity - will these scorecards continue after Reding has left the department?), but this is a good start.

Thursday, 20 September 2012

A few questions for Relaunching Europe

The S&D Group have set up their Relaunching Europe initiative, asking for opinions and questions about Europe and their policies, so I thought I'd ask a few questions.

1. It's a good idea for Europarties and the groups in the European Parliament to reach out to citizens and include them in the European debate. Will there be many Relaunching Europe events outside of Brussels?

2. How should tax evasion and avoidance be tackled at the European level? Barroso mentioned saving tax agreements in his State of the Union speech: are these effective and would the S&D Group propose any other measures?

3. If there was a Social Compact inserted into the EU Treaties, what would it do? Would it oblige Member States to maintain a certain level of social protection or would it create an EU support mechanism for social protection?

4. You argue that Troikas undermine democracy, so it seems that the current rules for the Eurozone are unjust. If the S&D and PES win the next election, will you push for repealing or reforming the 6-Pack (and 2-Pack if it's passed) of legislation and propose changes if you win the next election (as your candidate would become Commission President)?

5. Hannes Swoboda has mentioned the creation of a class of working poor in Germany. Would the S&D push for a European Minimum Wage (or a band of minimum wages to take into account the different economies)? (Or what other measures would you propose?).

6. It's great that the PES has committed itself to proposing a candidate for the Commission Presidency at the next election. Do you think the Commission should reflect the European Parliament better - ie. reflect the make up of any coalition or majority after the European elections?

7. There seem to be problems with finding projects for the regional funds to fund in crisis-hit Member States. Should the regional funds be reformed to also support national social spending in crisis situations to help the country reform?

8. Hannes Swoboda also said that we need an adequate EU budget to promote growth. How much should the EU budget be increased by, and what should the money be spent on?

Relaunching Europe

The Socialists and Democrats Group in the European Parliament have launched their Relaunching Europe website. The initiative is about creating an alternative to the current policies and direction of Europe, and it invites people to submits ideas and questions. Hannes Swoboda, the leader of the S&D group, was in Hamburg recently for a talk that produced this video for the launch of the site:

There will be a debate in Brussels for people to debate the direction of Europe on the 3rd of October, but hopefully there will be events outside of Brussels to increase accessability.

S&D Ideas

It's a listening and communication exercise - which suggests that there won't be many new announcments at the PES Congress this month - but the group is outlining some ideas on the website that add a bit more detail to Swoboda's idea of a Social Compact that he called for during the State of the Union speech last week. Here's a list of some of the ideas:

  • The current Troikas should be expanded to include advise from the International Labour Organisation and similar organisations so that expertise and concern for employment and growth is reflected in policy.
  •  They demand a commitment on social cohesion in the Van Rompuy report and a pact for social cohesion within the treaties.
  • The financial markets must be better regulated and the rating agencies must do their job in a more transparent manner. We have to control high-frequency trading.
  • We have to ensure that tax evasion and avoidance are tackled.
  • We need stronger private and public investment to create employment. But Europe is seeing a reduction in public investment, as opposed to the policies in the US and Japan. And there is money for investment. Tax evasion costs €1 trillion a year in Europe. Just one quarter of this money could boost public investment by 40%.
  • We need a financial transaction tax.
  • Europe must launch an efficient union for banking supervision that reaches beyond the eurozone, accompanied by comprehensive banking reform across Europe.
  • We need an adequate European budget that stimulates growth.
These ideas need to be further fleshed out: what would a Social Compact contain? The idea of a Social Compact to balance out the Fiscal one is a nice idea, but I'm not sure what it would mean in practice: should Member States commit to a certain level of social protection (and how would this fit in with the Fiscal Compact - would European solidarity bridge some social spending gaps while there's fiscal reforms, or would it just moderate the timescale and austerity of the current Troika system)? More details on the better regulation of banks and financial markets would be welcome: what changes to the recent legislation are necessary?

There are also some more broader views and principles:

"We must not only solve the economic and social crises but also the democratic one. In several countries, notably Germany, parliamentary participation and national sovereignty are at the heart of the debate. But what is overlooked is that it is not the EU that threatens sovereignty, but the financial markets and the rating agencies which dictate interest rates and spreads.
But we are also seeing increasing de-democratisation. The European Council is increasingly taking more and more decisions, including on the EU budget. But who are the Council and the President of the Council accountable to? Neither the national parliaments nor the European Parliament. The Troikas too act in a democratic vacuum with no accountability.
[T]his means strengthening parliamentary participation and the European Parliament and the national parliaments must co-operate closely.
 Referendums can strengthen democracy in Europe if they are held at European, not just national level. We must have the courage to speak out clearly against growing nationalism. We have to organise referendums in a way that does not allow the outcomes in individual countries to dominate the others and undermine the European project."
I like the connection with the working poor in Germany; the S&D Group (and PES) need to have a broad message of social justice and how it can be delivered through the EU for all citizens, rather than  a simplistci dicotomy of strong versus weak Member States. The commitment to better parliamentary democracy and cooperation and to European referendums is very interesting, but really should be fleashed out.

How far are these ideas just Swoboda's and not those of the group or the PES Europarty? It all depends on if the PES come up with a good manifesto with clear policy commitments come the 2014 election - that will be the real test. But Swoboda took pains to refer to the agreement in his group for these ideas during the State of the Union speech. What difference this initiative will make depends on what use people make by contributing and what use the S&D make of them.

They invite people to ask questions on Facebook or via Twitter.

Wednesday, 19 September 2012

Co-decision, European democracy and speed

European legislation is not famed for its speed. The EU's institutional triangle of the Commission, Member States in the Council, and the European Parliament means that agreement has to be made both within and between these institutions before draft laws can be passed (where the Parliament is a co-legislator with the Council).

In the "turf war" over the banking union, reported here by EUObserver, an EU diplomat said:

"The debate will be tense. It is not because Council defends its turf, but because MEPs take so long. We simply cannot lose another year."

The banking union will centre on two pieces of legislation: one empowering the ECB as a banking regulator, and the other redefining the role of the London-based European Banking Authority. While the European Parliament has a say over the EBA, the ECB legislation is dealt with by a unanimous Council vote with the Parliament only consulted.

I think the Parliament's right to treat the two drafts as part of the same package. The banking regulation recently put in place fell under areas where the Parliament had a right of co-decision, and the Parliament should get some say over how the new regime will operate before it gives its go ahead to the EBA being changed to fit in with the new rules. It's also about how democracy is valued within the EU system: the European Council gets to set the pace of political debate, and, as we've seen in the past year with the Fiscal Compact, it's not adverse to re-hashing existing law in new, extra-EU treaties for its own political ends. The banking and Eurozone legislation is complex and controversial; we've seen this with the debate over the Fiscal Compact (a treaty that got both the causes and solutions to the crisis wrong), and the place and power of the ECB is an important issue.

This deserves democratic debate and scrutiny. The idea of the Parliament simply being a roadblock to crisis management is just plain wrong. The Council does not have the monopoly over economic or institutional wisdom (let's face it, 3 years of European Council summitry have done little to solve our current predicament), and opening debate up from diplomatic discussions and deal-making enhances the quality of decision-making by opening up the problems and solutions to scrutiny. The idea that the European Council can deliver down commandments and expect to have the Parliament either follow them or be easily ignored is insulting. As we can see from the Council opportunistically changing the legal basis of the Schengen area to exclude the Parliament, the Council is often more about protecting itself and its own interests than about creating common solutions.

And if the ECB is to be both independent as a central bank and have the power of banking regulator, there should be some democratic control and scrutiny. The Parliament may not have a strict legal right to this piece of legislation, but it has some say over financial regulation and should not be expected to stay silent while regulatory responsibility is passed to another, independent, institution.

While speed is important, having an open and more democratic debate is an important core value that shouldn't be overlooked, and which will help us come to better decisions.

Thursday, 13 September 2012

Dutch Elections: "The Political Centre is Back!"

The centre is back is the news out of The Netherlands today - from De Volkskrant:

"De PvdA en de VVD boeken vandaag allebei een enorme verkiezingsoverwinning. Samen met het CDA en D66 behalen de middenpartijen maar liefst 106 zetels. Het politieke midden is terug. En Europa is de grote winnaar van de avond.

[Own translation: 'Today Labour and the Party of Freedom and Democracy (right-wing liberals) have had a enormous election win . Together with the Christian Democrats and Social Liberals, the parties of the centre hold up to 106 seats. The political centre is back. And Europe is the biggest winner this evening.]"

At the time of writing with constituencies still to be declared, the results are (Europarty/seat change in brackets):

VVD (ELDR): 41 (+10). [This is the party of the outgoing Prime Minister Mark Rutte].
PvdA (PES): 39 (+9).
SP (GUE-NGL): 15 (0).
PVV (None): 15 (-9).
CDA (EPP): 13 (-8).
D66 (ELDR): 12 (+2).
GroenLinks (European Greens): 3 (-7).
Christen Unie (ECR): 5 (0).
SGP (EFD): 3 (+1).
PvdD (None): 2 (0).
50Plus (None): 2 (+2).

De Volkskrant is predicting a coalition of the centre and notes that the old coalition of VVD-CDA with support from Geert Wilders' anti-Islam and anti-Europe PVV  would not have enough seats to form a majority (now around 69 seats) and that governments of the left and right blocks are only "theoretically possible". Clearly despite the big gains for the centre right and left the Dutch political system is still quite fragmented. If a grand coalition is formed it will be interesting to see if the return to the political centre will continue, or if the extremes will grow in opposition. The head-to-head race between the VVD and PvdA with different outlooks on key policy areas has probably been a big factor in attracting voters to the political centre, and now compromises need to be made to form a government. 76 seats are needed for a majority.

The election confirms the centre-right liberals (VVD) as the dominant party of the right in The Netherlands, with the formerly dominant Christian Democrats (CDA) continuing to decline. On the left, Labour (PvdA) has not only retained its position, but the far-left Socialist Party has failed to make the inroads widely expected at the start of the campaign. The SP had been doing well in the polls, but a poor performance in the leaders' debates (which were widely seen to have been won by Labour's Diederik Samsom) meant that they couldn't keep up their electoral momentum.

The result is a big boost for the pro-European parties. Geert Wilders, who pulled the plug on the last government, wanted to make the election into a referendum on Europe (and against austerity and EU membership) and the SP were also Eurosceptic on the left (against further bail-outs).

The next challenge will be for the VVD and PvdA to form a coalition government.

Wednesday, 12 September 2012

Barroso's State of the European Union Speech 2012

Today was the third State of the Union speech by Barroso this parliament, and it fits the description better than the previous speeches, which focused more on the legislative programme for the upcoming year. This makes it harder to mark in comparison to past years because what works for a good legislative programme speech (good rhetoric + great substance) is different to what is needed for a good state of the union speech (great rhetoric + a few key aspirations/details to meet).

First I'd like to quote the President of the European Parliament, Martin Schulz, who made a short defence of European parliamentary democracy before Barroso took the floor:

"Today the world is looking at Europe not least the Karlsruhe Constitutional Court, we have reached a decisive moment. Recent developments in the European Union have been of great concern. We have seen a deparliamentarisation of Europe. Those who think that parliamentary democracy is too slow or raises too many obstacles are arguing in the wrong direction. No decisions in Europe can be reached without the involvement of the European Parliament. The European Parliament is the Parliament for the whole of the European Union. More Europe with less parliamentary democracy is impossible."
 I agree. So I'll also look at the responses of the leaders of the political groups.

Barroso's Speech

(Picture from the Commission's Facebook page).

The speech turned out to be a strange hybrid: while the focus was on the future of the EU economically and politically, the structure and style of the traditional legislative programme speech was painfully evident in places. The economic leg of the speech had more policy and was quite legislative, while the political leg was more rhetorical.

On the Eurozone crisis, Barroso complained that the disunity of the Member States after European Council summits, with leaders calling for further measures afterwards, fed doubt into the markets and public and is undermining the efforts made so far to overcome the crisis (as if people aren't capable of making that judgment for themselves). He called for the strong Member States to commit to helping the weaker ones and for the weaker ones to make the necessary reforms.

On the economy, Barroso announced that the Commission would introduce a Single Market Act II to help open up the single market and improve competitiveness (in fact I think "competitiveness" was mentioned much more than democracy in this speech). The first Single Market Act hasn't been fully passed or implemented yet, so I don't know what the second one will do (or if it's simply a repackaging of the first one). There was also talk of a new industrial policy, with Barroso calling for coordination on an attractive tax environment for industry. That there was no mention of common taxes or tax bases indicates that Barroso's thinking of softer cooperation between Member States. Barroso also said that the Commission would pursue a more active trade policy and that the Commission wanted a mandate to negotiate saving tax agreements with third countries to reduce the impact of tax havens.

Banking and fiscal union was a big issue. Barroso made the case for European and coordinated supervision (with national regulators) for all banks, and committed the Commission to pursuing a financial transaction tax through enhanced cooperation (so that it will only apply to willing Member States). Fiscal union will mean greater coordination of national fiscal policies, but Barroso did not spell out any vision for how this might work or how far it would need to go for the Eurozone to work. He also strongly rejected the creation of new institutions alongside the Commission, Council and Parliament or separating out parts of these institutions for Eurozone purposes.

The Commission will present a blueprint for deepening economic union - including treaty changes - this autumn. Barroso also urged MEPs and Member States to back the next EU budget, which he called a growth budget.

On political union and reform, Barroso said that Europe cannot "use the political tools of the past to tackle the problems of the future". The European Parliament should have a strong role, and the Commission will introduce a new statute for the Europarties to strengthen them so they can better offer alternatives in the elections. Barroso also called for Europarties to present candidates for the President of the European Commission at the European elections in 2014. Greater cooperation between the European and national parliaments was also called for, but what this would mean wasn't elaborated on. Barroso defended the independence of the ECB and urged others to respect and defend it.

Barroso called for an intergovernmental conference to decide on treaty change, and a "federation of nation states". This choice of words was picked up on by some MEPs as a way of saying "federation" but meaning continuing on with more of the same.

Foreign policy got some time as well - mostly that Europe needs to act more together in order for the Member States to be heard in a world with the US and China at the helm.

It was a much better state of the union speech than last year for vision, but it had a lot of problems as a speech. Barroso's stronger points where when he could reference legislation because he could tie ideas closer to a sense of direction. That's not to say that vision speeches have to be dotted with legislative proposals, but the speech needed to do a better job of making the case for a certain type of union rather than the more generalised pro-European rhetoric that we got. The debate over what a "federation of nation states" and what that means will probably dominate any comment on the speech because it's so qualified and vague in practice, and in fact that there is little else to grasp on to. Barroso was far more passionate and convincing in his reply to the MEPs' questions and debate - he should have brought that Barroso to the speech.

Political Group Leaders

Daul (European People's Party):

Daul gave a rambling speech, which he admitted wasn't prepared but it would have been better if he had. It was generally supportive of Barroso (who was the EPP candidate for the Commission presidency in 2009), but was the worst speech from a group leader. One thing I got from this was that the EPP supports the ECB buying of bonds (this may contrast with the ECR if you're on the right and distrust central banks taking that kind of action).

In the end I did much better with my Buzzword Bingo for Daul's speech than Barroso's - not a good sign!

Swoboda (Socialists and Democrats Group):

Swoboda said that his group would only support the next EU budget if it was serious about delivering growth, and heavily criticised the EU Troika for their policies in the bailed-out countries for contributing to the recession. He signalled that the S&D Group would be willing to support the saving tax agreements, but there needed to be much more focus on investment. Swoboda pointed out that the US, China and Japan are all putting more into investment at a time when Europe is following austerity.

Swoboda called for a social compact to combat the erosion of solidarity in Europe. Hopefully we'll get to hear more on what this means - Swoboda said his group was agreed on it, so we should get to see the S&D (or the Europarty PES that sits as part of the group) proposing some detail. Maybe something for the PES Congress at the end of the month?

Verhofstadt (Alliance of Liberals and Democrats for Europe):

Verhofstadt focused on Barroso's "federation of nation states" remark, and said it represents the same approach rather than something new. He criticised Barroso for not taking more initiative without Council approval, particularly since the Commission tends to act more on Council ideas than those from the Parliament. Verhofstadt called for a federation of the citizens, and said that federal solutions are necessary - and that the ECB's bond-buying policy will only buy 5-6 months. He said that there needs to be resolution for the banks, a debt redemption fund and a European treasury.

Interestingly, Verhofstadt said that the independence of the ECB meant less democracy and seemed to argue for greater parliamentary control (if I understood his argument correctly).

Cohn-Bendit (European Greens/European Free Alliance):

Cohn-Bendit pointed out that the environment wasn't mentioned in Barroso's speech, but focused on social welfare. Cohn-Bendit said that the US federal budget had expanded to protect social welfare, and that the EU budget would need to expand to at least 5% of GDP in order for it to have the fiscal firepower to do anything to support social welfare across Europe. He argued that there should be more own resources rather than Member State contributions to the budget in order to achieve this, and that there would be financial support for Greece and its social system in the form of a social fund, with more time given to it to reform and pay back the debt.

Callanan (European Conservatives and Reformists):

Callanan opened by borrowing a line from Mitt Romney, saying that he wished that Barroso succeeded (as the ECR supported his election as Commission President), but that he had gone too far down the road of knee-jerk calls for more Europe, instead of focusing on reducing regulation (which he said Barroso had had some success in, but not enough). (He seems to be a big fan of Romney). For the Eurozone, Callanan said that the only way for it to work was for there to be transfers from the stronger countries, which was impossible, or for some countries to leave the Euro, and he advocated Greece leaving the Euro. (I wonder if Cameron supports this line).

He criticised the ECB's bond-buying policy, and said that there needed to be an economic solution to the crisis through less regulation. In response to a question he said that he didn't support quotas to bring about more gender equality in the boardroom.

Callanan also referred to our Buzzword Bingo and the chat on Twitter in his second speech, making him the first MEP to reference it in the chamber!

Farage (Europe of Freedom and Democracy):

Farage started by remarking it is the 20th anniversary of Britain leaving the European Exchange Rate Mechanism. He said that he was wrong in his speech last year that Greece would leave the Euro within a year, but that was because he underestimated how fanatical Barroso and European leaders would be to save it.

Zimmer (United Left Alliance/Nordic Green-Left):

Zimmer attacked the crisis policies for not solving the problem and for weakening European democracy.

Verhofstadt, Cohn-Bendit and Callanan were the strongest performers, taking the opportunity to get their visions and ideological points across. Swoboda was good too, and it's interesting that he kept referring to things that his group had agreed on, but without any detail it lost impact - hopefully there are a few interesting ideas being saved for the PES Congress at the end of the month. Daul, Farage and Zimmer were the dullest. Farage normally manages to inject some personality into his speeches, but it just fell a bit flat, whereas Daul was unfocused and rambling and Zimmer was, well, just dull and didn't make any impact.

Tuesday, 11 September 2012

Barroso Buzzword Bingo: 2012 Edition

For the last two years has run a buzzword bingo for Barroso's State of the Union speech to the European Parliament, so I thought I'd continue it for tomorrow's speech.

To play the game, you pick 10 words or phrases that you think will pop up in the speech, and once you've got them all - bingo! You can watch the speech live here, and comment on Twitter (and the official State of the Union Twitter account) using the #SOTEU hashtag. Let's hope an MEP playing along will shout out bingo in plenary.

Here's my list:

1. Solidarity.
2. Robust action.
3. Economic crisis.
4. Fiscal discipline.
5. Security.
6. Competitiveness.
7. European Added Value.
8. Helping SMEs.
9. Innovative.
10. Economic government.

Will Barroso set out his vision for the Eurozone?

Tomorrow Barroso will give his third State of the Union speech of the parliament. The last two have been focused on the legislative programme for the upcoming year, so they have been more of the traditional speech from the throne that are held in constitutional monarchies rather than the more fundamental state of the union speeches that the title implies. This year the expectation seems to be that Barroso will focus on the integration needed for economic union - what will be the balance between legislation for the upcoming year and integration rhetoric?

Commissarial Speech 2011

But what about the progress since his last speech? Barroso focused mainly on the economy and foreign affairs. He declared his support for the Financial Transaction Tax, where the Commission has published an impact assessment but there's little prospect of it being implemented. The Single Market Act is slowly being put into action and legislation in this area (e.g. on public procurement and professional qualifications) has been introduced and/or passed. Project bonds are now in a pilot stage. On foreign affairs, the EU is clearly not any more important globally than it was before.

So there's been some progress on the main goals set out and plenty of ongoing work to do.

The six-pack of legislation on rules for the Eurozone were also passed and the draft two-pack was introduced and is currently under debate in the Parliament.

Commissarial Speech 2012

The Commission is entering the last 2 years of its mandate, so the focus will start to shift to finishing its legislative priorities and plans (such as the two-pack, market regulation and the new general data protection laws) rather than introducing new draft legislation that the Commission might not have time to bring through the legislative process. That treaty change is on the political agenda (with Van Rompuy putting together some proposals), this is Barroso's (and the Commission's) chance to make a big political pitch for the type of EU he wants to see. It's also hard to see any legislative rabbits being pulled out of the hat at this point or many new investment or growth policies, particularly given Barroso's agreement with the general line on austerity and the crystallisation of Member State positions on the EU budget. So we should see a speech on the direction of the EU and European integration.That said, vision and ambition aren't the words that spring to mind when it comes to Barroso.

Apart from the economic crisis and discussion on European integration, the Union's justice and home affairs policy really needs attention. The area got scant attention last year and problems have built up, with the bust-up between the Council and the Parliament over Schengen (leading to the Parliament suspending talks on several important pieces of legislation) being the key event in the last 6 months. Will Barroso try to woo the Parliament back into working in this area, and can he present a coherent vision for the EU's security strategy? It's a delicate issue since he won't want to risk offending his audience by pushing Parliament too hard to give in to the Council and there is little Barroso can offer the Parliament here, but the lack of a political narrative and political leadership for justice and home affairs apart from a shopping list from the Member States is a major weakness.

The speech will be on at 9:00 CET on September 12th in the European Parliament.

Monday, 10 September 2012

Trichet's Political Union

Former ECB President Jean Claude Trichet has written a bit about the kind of political and economic union he'd like to see:

"[After considering the Fiscal Stability Treaty and moves towards banking union:]

But none of this is enough. Instead of imposing fines on countries that transgress rules and ignore recommendations, as the SGP was supposed to do, the European Commission, the European Council, and – this is essential – the European Parliament should decide directly on measures to be immediately implemented in the country concerned. Fiscal and certain other economic policies should be subject to activation of a eurozone “federation by exception.”

The idea that sharing a single currency also means accepting limitations on fiscal sovereignty is not new. A “federation by exception” merely draws the logical consequences from the ineffectiveness of the fines envisaged by the SGP, and is fully consistent with the concept of subsidiarity that has been applied since the SGP’s introduction: as long as national economic policy complies with the framework, there are no sanctions.

Perhaps the most important element of the “federation by exception” would be its strong democratic anchor. Its activation would be subject to a fully democratic decision-making process, with clear political accountability. More precisely, decisions to implement measures proposed by the Commission and already approved by the Council would require a majority vote by the European Parliament – that is, those representatives elected from the EU’s eurozone members.

In such exceptional circumstances, the parliament of the country concerned should have the opportunity to explain to the European Parliament why it could not implement the recommendations proposed, while the European Parliament could explain why the eurozone’s stability and prosperity are at stake. But the final word would belong to the European Parliament.

In the past, I have suggested establishing a eurozone finance ministry, which would be responsible for activating economic and fiscal federation when and where necessary, and for managing new crisis-management tools like the European Stability Mechanism. It would also be responsible for overseeing the banking union, and it would represent the eurozone in all international financial institutions and informal groupings.

But, most important, “federation by exception” would ultimately cease to be an exception. The finance minister would be a member of the EU’s future executive branch, together with the other ministers responsible for other federal departments."

This turns the idea of the democratic deficit on its head. The problem of the EU has been that it needs to be made more democratic and accountable to citizens, and that national electoral mandates have not provided that democratic legitimacy. There may be a need for a proper economic union to create a sustainable Eurozone, but if there needs to be some common policies, they should be, well, common policies rather than a selective intrusion into Member States. The kind of political union proposed by Trichet would bring a democratic deficit into Member States: those elected on a European mandate should make decisions on common European policy and not on national policy.

While economic union means that common policies are set, it is up to the Member States to decide for themselves on their economic policies. The aim of a common European economic policy is for the Eurozone to work as a currency area, not for the European institutions to set national policies in detail. So while by being part of the Eurozone Member States have to act in the common interest of the Euro so it isn't threatened or destabilised, it's up to the Member States to decide on their economic policies and how they will invest and pay down debt. Not only is Trichet's plan politically unacceptable, but it wouldn't work - if the national parliament is unable to meet the conditions of loans or of Eurozone membership, then it's because there isn't the political will within the Member State to take the necessary actions and drafting in another elected body to take those decisions won't be effective either, since it would lack democratic legitimacy and since the national administration is of course under the control of the national parliament and other state institions.

It takes a pretty strange concept of subsidiarity to propose the European Parliament standing in for the national parliament...

Friday, 7 September 2012

Europarty Congress Season and a Third Term for Barroso

There have been some comments in favour of Barroso winnning a third term as Commission President. It's interesting that the comments come from Reding, who was considered one of the front-runners for the race in 2014. However it's not an idea I'd warm to exactly - I'm not the biggest fan of Barroso - but it does raise an important question for the European conference season: how will the Europarties approach the next European elections and the election of the next Commission President?

The Commission President is nominated by the European Council (by Qualified Majority Voting), but it's the European Parliament that elects the Commission President, and later the President elect's nominated College of Commissioners. Since the Parliament elects the Commission, the European Council nominates a candidate from the same Europarty as the one that won the election. The European People's Party endorsed Barroso for the presidency in 2009, and the Party of European Socialists failed to make any nomination so the presidency wasn't an election issue. The centre-left PES governments of the UK, Spain and Portugal backed Barroso, preventing a common PES candidate, but the PES has committed itself to picking a candidate for the post in the future, and will hold primaries for deciding its candidate. The vote adopting these procedures will take place during its September Congress:

"The European Socialist Party is due to vote to change its party statute on 29 September. The plan is to have national parties put forward a candidate for commission president. The final socialist nominee is then expected to be unveiled in February 2014, just ahead of the June elections"

EUObserver reports that ELDR, the liberal Europarty, also intends to consider procedures for selecting a candidate:

""We will be making a recommendation to our party congress this autumn on what the procedure should be for the selection of a liberal candidate for the president of the commission. And we would see that process taking place in the autumn of next year," Graham Watson, leader of the European Liberals, told this website.

He said it is the first time the party has ever tried to set down rules for the procedure. Previously names "sort of emerged" from a "conclave of liberal leaders."

The European People's Party is likely to discuss the possibility of candidate selection as part of its election strategy at its conference.

Being able to vote for a policy platform and for candidates for the Commission presidency is essential if the EU is to become more democratic and open. This Congress season will be an important early test to gauge the commitment - and ability - of the Europarties to present alternatives when it comes to election time. It's not enough to blame the Commission and the Member States from the Parliament Chamber: Europarties have to be able to present and fight for alternatives if they're to pass themselves off as political parties.

The PES Congress will take place at the end of the month in Brussels, the EPP's will be held in October in Bucharest, and the ELDR Congress will be held in early November in Dublin.

ECB lending to buy time for... what?

The European Central Bank's announcement that it would buy Eurozone government bonds is a massive boost to the Eurozone, but a lot remains to be done before we can say that the Eurozone is starting on its path out of the crisis. The banking union legislation will be a key part of the agenda over the next months (the Commission should publish a draft law on banking union next week), and it is vital in separating the link between national banks, which have grown as part of an EU-wide financial system, from national governments, many of whom are simply too small to support such large financial sectors.

However like most initiatives banking union focuses on preventing similar problems next time - in order for it to have an appreciable effect on today's crisis there would need to be a deal on old banking debt that has been taken on by national governments, in particular Spain and Ireland. (The Fiscal Stability Treaty, the six pack and the yet-to-be-passed two pack share this weakness too). Could this be agreed? Would there be joint liability for debt already generated and taken on by national governments (that the ECB pressured the protection of banks to ensure the stability of the system means that there was also a European interest in these national financial systems from early on in the crisis too)? It's a highly political area and the Irish government - and no doubt Spain too - are eager to reduce their debt as far as they can while avoiding austerity.

But it's not just in Ireland and Spain's banking case that the debt question is posed (though they raise the spectre that rigid application of public debt rules bear little relation to the ability to weather economic crises), since debt and economic growth is a European question. So what is the ECB buying time for: for an agreement on economic union? How far should economic union be extended? If debt needs to be shared to ease the burden and to provide breathing room for reforms and recovery in the most crisis-hit countries what kind of institutions do we need, and how do we make them accountable?

Merkel has signalled that she wants a convention by the end of the year to decide on the future of the EU, and apparently France and Germany are moving closer together on political union. Barroso has also called for a EU Treaty "renewal". There's very little detail on what is meant by different people about economic or fiscal union, so it's hard to get a debate going it. It's likely that the only debate we'll get is on the results of a convention - hardly a good way to build such a union or to build support for it. In any case Barroso is supposed to put forward some ideas in his State of the Union speech on September 12th. If he does put some ideas on the table, it could be one of the few opportunities for civil society to study the up-coming integration debate.

Monday, 3 September 2012

Last Chance to Listen: "The F-Word: Federalism"

BBC Radio 4 has produced a programme on federalism, its history and how it relates to the Eurozone crisis (with a good comment on how it might relate to the UK internally as well). It's only up online for a few more hours (5 at the time of writing), and can be found here.

As it's radio, the programme is available to those outside the UK too.