A constructive case for EU reform
This was published under the 2010 to 2015 Conservative and Liberal Democrat coalition government
Minister for Europe David Lidington spoke about reform of the European Union's structures and practices to make it more competitive and more effective.
Thank you to Open Europe and Teldersstichting for the invitation to speak here in The Hague.
I am particularly delighted to be here during the 200th anniversary of the establishment of the Kingdom of the Netherlands.
It’s an important anniversary for the Netherlands. But, marking as it does the [British] Royal Navy’s rowing ashore of King Willem I, it is also one of many landmarks in UK-Netherlands cooperation.
I’ll not make any mention of the country from which the Netherlands had just been liberated in 1813 – I don’t want to spark a right of reply from any French diplomats that may be in the audience…
2014 will be a major year for the European Union.
In May we have European Parliament elections, and later in the year, a new College of Commissioners.
There has been a lot of talk about the elections being between pro-and anti-Europeans. I am clear that the choice should not be between the status quo and extremism. Everyone knows that the EU is in need of reform. So this election should be about solutions.
Today I will consider four key aspects of this agenda:
- working at the right level
- addressing democratic legitimacy
- finding the correct role for the EU’s institutions
- and fairness for Eurozone ins and outs.
Reform is not anti-European. Trust in the EU is at a record low. The figures on public support for the EU show it to be what our Prime Minister has repeatedly called “wafer-thin”. In the Netherlands, Eurobarometer reports that 56% of people think the EU is going in the wrong direction.
We need to reform the EU if it is to regain the trust of its citizens.
We hear this echoed across Europe…
- Commission President Barroso has said that “We will not go back to the ‘old’ normal, we have to shape a ‘new’ normal”
- Your Foreign Minister, Frans Timmermans, has written that “Monnet’s Europe needs reform to fit the 21st century”
- European Parliament President Martin Schulz says “I’m an enthusiastic pro-European, but I think the EU is in a catastrophic situation”
- And in Italy Prime Minister Letta is clear that “we need to reshape the Union”.
The next year gives us a window of opportunity to shape a new Europe. Many in the UK and the Netherlands already share similar pragmatic beliefs in making the EU work better – on improving democratic legitimacy, heightening respect for subsidiarity, unlocking barriers to growth and having a more focused Commission.
Let me begin with “working at the right level”
The phrase which has reverberated the most with me this year has come from the Netherlands:
“European where necessary, national where possible”.
In Britain, ‘subsidiarity’ is not a word often reached for in political discourse, despite it being a remedy to a widely recognised problem. So this slogan helpfully translates the principle into words that resonate with the public.
Encouragingly, we have also seen increasing acknowledgement – at least on paper – that the EU should focus on where it can add most value.
The Presidents of both the European Council and the Commission have reiterated this; and to be fair there has been some progress.
In October, for example, the Commission launched REFIT, a programme designed to streamline legislation – an issue close to the hearts of national leaders in the UK, the Netherlands and beyond.
So it has been especially disappointing to see this principle undermined all too frequently by the Commission focussing on things which are best left to Member States. We all have our favourite examples; I’m not going to list them here. But each new example adds to the view – held by many in Britain – that the EU comes across as too meddlesome, bossy and interfering. This is a genuine problem.
The exam question is, therefore: How do we ensure that the principle of subsidiarity becomes part of the European mentality and reality?
First of all, I suggest, we must strive to work for the right balance.
The Dutch Subsidiarity Review has been especially helpful here, in raising the right questions at the right time. In our Balance of Competences review, too, we are undertaking a deep and balanced analysis of the impact of EU competences. We must ensure the ideas which spring from both these exercises are taken forward.
This is not about “cherry-picking”, “clawing back”, or any other of the phrases with which people have tried to undermine this approach.
The goal is rather to create a European Union which is more modest – and more effective.
Dutch PM Mark Rutte recently said in London that the EU is “a practical partnership…a means to increase prosperity, employment and security” – I think that hits the nail on the head. That means that Europe has to focus on where it can make the biggest difference.
This can work well in both directions: it acknowledges the adaptability that has been such a consistent strength of the EU.
As twenty-eight countries working together, we have quite a voice. We can harness that and we have done: on a trade deal with the US, patents, Iran, climate change; on the big issues where action at European level carries more clout than individual countries going solo.
Equally, the decision on reforming the common fisheries policy – approved by the European Parliament last week – proved that many things need not be done at a European level to be effective. One size does not fit all.
Ensuring that we have this balance right needs constant attention. Our Task Force on better regulation (and if you’re curious what I mean by “better”, “less” isn’t a bad place to start) is one strand.
Of course, regulation per se is not A Bad Thing. The days when twenty-eight European countries made twenty-eight different regulations on the same issue are over and thank goodness for that.
But we will not be in any way shy of making the case for upholding subsidiarity, avoiding competence creep, and making sure the growth we need isn’t stifled by unnecessary regulation.
My second point is that we need to address the democratic deficit.
I talked a few minutes ago about the gap between theory and practice in the workings of the European Union.
This was shown particularly starkly a few weeks ago, when the Commission brushed off the yellow card presented by eleven national parliaments, including those of the Netherlands and the UK, and pressed on with unreformed plans for a European Public Prosecutor’s Office.
For a start, this was based on an unacceptably narrow and inflexible interpretation of subsidiarity.
But it was also symptomatic of the disconnection between the EU and its people.
Let us remember: the yellow card was introduced in the Lisbon Treaty so that national parliaments could play a greater role in EU decision-making.
Remember, also, that leaders across Europe agree that national parliaments are a main source for democratic legitimacy and accountability. Well, I am afraid that on November 27 democratic parliaments were given a bit of a slap in the face.
All of us can agree that if a football player is issued a yellow card but fails to heed the words of the ref, a red card surely follows. So that’s one solution, as outlined recently by Foreign Minister Timmermans.
But let’s not stop there. The Dutch Tweede Kamer report said that national parliaments should have more time to scrutinise Commission proposals and to opine on issues beyond subsidiarity and that it should take fewer reasoned opinions to trigger a yellow card. The so-called “strengthened yellow card” is a proposal we fully support.
One thing, however, is crucial. Giving national parliaments more say in decision-making works both ways…
So if people are talking about red cards and yellow cards, why not complete the traffic light and also think about a green card?
This would allow parliaments to propose new initiatives to the European Commission. This has been thought about in Denmark as well as in the Netherlands, and it is certainly something we would support.
So there are some solutions here. As with the recent free movement of people discussion, the Commission needs to show through the card system that it is engaging with the genuine and legitimate concerns of national parliaments. Over the next few months I will look to discuss further with my European counterparts how we can take this agenda forward.
Let me turn now to finding the correct role for the European institutions.
Institutions matter. They, and the people who set their agendas, underpin what the EU does and also how it does it.
We must therefore ensure that we have the balance between the institutions right.
These are clearly set out in the Treaties – but, in practice, some EU institutions are more adept than others in exploiting the grey areas…
The European Parliament’s power has increased significantly following successive Treaty changes. Some EP members believe that the candidate of the dominant political party should automatically be selected as President of the Commission.
We, however, do not see the inevitability of this linkage and expect the European Council to assess the merits of all candidates including, but not limited to, those endorsed by the European political parties.
The Council must ensure that the Treaties are upheld and that the institutions maintain the roles accorded by the Treaties, including in the appointment of Commission President. We regard this as vital to maintaining the independence of the Commission, and its accountability to both co-legislators.
We also believe that the European Council should be more active in setting out the strategic direction for the Commission. It is not enough to set out goals and conclusions. You also need to monitor them to ensure that the priorities European leaders have agreed are actually implemented. The General Affairs Council is well placed to monitor progress and ensure that the objectives agreed by EU Heads of State are actually delivered.
I read Frans Timmermans’ article setting out the idea of a more focussed Commission with interest. We agree there are areas where the Commission just doesn’t need to get involved. And we will explore precisely how the Commission’s structure can change to make it sharper and more effective. Certainly, a European Governance Manifesto is an approach we welcome.
My final point is that we must protect the integrity of the Single Market, as well as the “rights” of Eurozone-outs as the Eurozone integrates.
Wherever I go, I get a lot of sympathy for our reform agenda. But it’s fair to say I also hear voices clearly wishing this would all go away.
I’m pretty blunt with them. It wasn’t the UK that changed this game. The fact that we seek a fair set of structures is due in no small part to developments in the Eurozone and what that has meant for the EU. It is clear to me that the Eurozone needs to have the right governance and structures in place to address its current challenges. We are merely seeking pragmatic solutions to problems.
This is a hugely complicated issue and I can’t pretend we have all the answers. One thing which is clear is that we can’t tell you what to do.
However, I won’t lie about our own interests, and those of other Eurozone-outs.
We need any new arrangements to work fairly - for those outside the Eurozone as well as for those within it. This means working closely with partners inside and outside the Eurozone to find solutions which work.
We achieved this in the first element of banking union through the double majority voting system and negotiations are ongoing as we speak on the second element. We will continue to work creatively with all EU partners to ensure the interests of the EU-28 are upheld.
We see our case for reform as a positive one. The measures I have outlined - working at the right level, addressing democratic legitimacy, finding the correct role for the EU’s institutions, and making sure that the system is fair for all 28 Member States – will, I believe, help shape the better Europe we all need.
Although in the UK and the Netherlands we are working closely on reform, we are not lone crusaders. Leading figures across Member States, the Commission and the European Parliament are suggesting pragmatic approaches to finding solutions. For us in the UK, with David Cameron’s commitment to a referendum in 2017, – as for the whole of Europe – now is the time for the EU to demonstrate that it is determined to work for and with the will of its citizens.
I will finish with a word on Treaty change. I know that there are many (in the political classes at least) who are worried about the prospect of Treaty change. To them I say two things.
First, that what we are primarily interested in is results. Many of the reforms that we are proposing can be achieved without Treaty change. At the same time the needed changes to the Institutions should rightly be embedded in the Treaties and we are merely reflecting the reality of the scale of changes underway in the Eurozone – look for instance at the debate around banking union over the past couple of weeks.
Second, I think fears about Treaty change are really fears about referenda. I understand those fears. But in the UK it is clear that support for EU membership is so wafer thin that it will only be resolved through that kind of public decision. So while having the debate may be scary for some, it is the responsible thing to do. I would be far more worried about the consequences of ignoring the reality than I am about facing up to it.
Next year, as I said, we have a window of opportunity to get the right structures in place for the European Union. We must not miss such a chance.
We are not apologetic about trying to make the EU work better.