Quo vadis European Union?

1. Quo vadis European Union? Michael Emerson Senior Research Fellow, CEPS, Brussels Confederation of Icelandic Employers Reykjavik, 31 January 2008

2. What values for Europe? The Ten Commandments of the European Union • Thou shalt be truly democratic and respectful of human rights and the rule of law. • Thou shalt guarantee the four freedoms of movement (goods, services, capital, labour). • Thou shalt provide for social cohesion between people, regions and states. • Thou shalt ensure sustainable economic development for the benefit of future generations. • Thou shalt reject nationalism and favour the multiple identity of citizens. • Thou shalt assure federative multi-tier governance. • Thou shalt assure secular governance and favour multi-cultural pluralism in society. • Thou shalt promote multilateral order in international affairs. • Thou shalt abstain from threatening or using force against others without just cause. • Thou shalt be open, inclusive and integrative towards neighbours that adhere to the above.

3. Lisbon Treaty (1) = Constitution, more or less in substance, but sadly lacking in textual transparency 2 years wasted because of Chirac’s poor political tactics. France is not trained to use referenda like Switzerland. People voted for many unrelated reasons Only advantage, allowed UK to escape having a referendum

4. Lisbon Treaty (2) Institutions – basic steps • new EU President, 2 ½ years, renewable once • High Representative chairs foreign ministers council + vice-president of Commission • Commissioners limited to 2/3rd number of member states • European parliament limited to 751 members

5. Lisbon Treaty (3) Council • Summits chaired by permanent President • Foreign ministers chaired by High Rep • Eurozone finance ministers, 2 year president ad personam • Other Councils of Ministers (agriculture, transport, energy etc) retain six-monthly rotating presidency • Thus major erosion of rotating presidency, but messy situation for coordination. NB COREPER (EU ambassadors) remains presided by rotation.

6. Lisbon Treaty (4) Will new Council Presidency rival and dominate the Commission President; or, will he ally with him and rely on him? Outcome open, may depend on personalities

7. Lisbon Treaty (5) High Representative, double-hatted • Potentially hugely powerful position, but will need deputies • Should produce more joined-up foreign policy • Will entail diplomatic service, with Commission Delegations becoming EU delegations

8. Lisbon Treaty (6) Legislative procedures New Qualified Majority Vote (QMV) rules: 55% of member states 65% of population blocking minority needs 4 member states Dominant factor likely to be the 65% population This lowers the threshold for majority decisions (i.e. makes achieving majorities easier)

9. Lisbon Treaty (7) Legislative procedures (cont.) • Also field for QMV expanded to include 21 new legal areas and 23 existing legal areas currently under unanimity • Especially important for Freedom, Security and Justice area, with old 3rd pillar merged with 1st pillar • Co-decision procedures put European Parliament and Council on equal footing in legislative process; i.e. enhanced powers for Parliament

10. ‘Lisbon process’ Experiment at comprehensive economic reform at EU + member state level, with elaborate benchmarking = one of the factors eroding the original EEA concept ‘Lisbon process’ not brilliantly successful, but at least it moves discourse and policy planning processes in a coherent direction

11. Eurozone and the macroeconomic crisis Thank God for euro, since a 27-country European monetary system would have been chaotic Credit/banking crisis highlights major issues for bank supervision, regulation and ‘lender of last resort’ issues ECB’s massive intervention in recent weeks = automatic ‘lender of first resort’ on huge scale Debate gets underway, led by Padoa Schioppa

12. Schengen, migration, asylum nexus Initially a ‘freedom of movement within’ policy Now becomes a multiple, integrated set of policies, with accent on external security threats & complex set of legislative and operational (Frontex agency) actions, & linkages to broad foreign and security policy, & and to domestic societal issues regarding Mulsim minorities

13. Energy – climate change nexus Currently no 1 priority for Barroso Commission. Huge challenges to dominate policy debate for years: • Domestic competition policy on unbundling, fierce fight between liberal and state champions (F, D) • Russian tsunami of pipeline & network linkages (North and now South Stream) • Domestic C02 emission &renewables targets: intra-member state bargaining • International negotiations over post-Kyoto regime Commission won’t get all it wants, but the agenda will be deep

14. Enlargement (1) EU 25 and now 27 has adapted and continued to function without feared gridlock New member states fit in reasonably well, and Polish maverick case disciplined democratically (i.e. ‘difficult’ government thrown out) However there are concerns over relapse of political discipline with the loss of the leverage over new member states once in (e.g. over anti-corruption policies)

15. Enlargement (2) + Croatia 2010 ? + Macedonia, Albania, Bosnia, Serbia, Montenegro, Kosovo. Commitments repeated, but long way off, and a big crisis threatens over Kosovo (see next) + Turkey ? Negotiations continue under cloud of ambiguity. Commission tries to progress, with considerable support; France & Austria most strong opponents + Ukraine, Moldova, Georgia ?? Aspirations get no encourgament from institutions, but Ukraine has supporters + Micro states raise questions – San Marino, Andorra = EU of around 35 by 2030???

16. Enlargement (3) Bad news: Kosovo already a major threat to European order … Both within Balkans with very bad scenarios evident: Presidential election this weekend between Tadic and Nikolic; leading then to Kosovo declaring independence, with EU countries recognising this in stages; contagion risks, Mitrovitsa, Macedonia, Bosnia And between EU/US and Russia: with Russia aggressively stirring up trouble in EU space, under hypocritical pretext of upholding the rule of law

17. Enlargement (4) Good news: Sarkozy about to change the blockage put into the French constitution by Chirac Chirac’s amendment was to make every future enlargement after Croatia subject to referendum Sarkozy will make this subject to ratification by either parliament or referendum, with the President to choose which

18. Quid EEA? Very pertinent analysis of EEA Joint Parliamentary Committee of November 2007 Stresses structural changes in EU since EEA agreement of 1992: • Enlargement 12 to 27; Euro & financial system; foreign and security policy; neighbourhood policy extending the single market; integration of justice and home affairs; increased role of European Parliament • Extended internal market activity, increasing grey areas of questionable applicability under EEA agreement, including big environment/climate change policies, and increasing ‘soft law’ with action plans that are not legally binding and benchmarked coordination under Lisbon process Makes EEA look increasingly obsolete; less (and increasingly uncertain) coverage of EU affairs; less institutional scope; increasing cost of financial contributions.

19. European Neighbourhood Policy (1) Originally for new Eastern neighbours (Ukraine, Moldova, Belarus) Rapidly extended to the Caucasus and Mediterranean A policy that tries to be ‘Europeanisation light’, following the model of accession negotiations, but without the incentive of full membership or the obligations

20. European Neighbourhood Policy (2) But Ukraine especially insists on membership ambitions; which is supported by some (Sw, Pl, UK), but opposed by others (F) Germany wanted in 2007 a stronger ‘Ostpolitik’ And now Sarkozy wants a (so-far misconceived and divisive) ‘Union of the Mediterranean’ So this area of policy is under tension

21. Russia Mounting and serious tensions 2006-7 = years of significant and multiple irritations: Estonian monument, Lithuania oil supplies, Polish meat, Ukr gas war, rejection of Energy Charter transit Protocol, Georgian and Moldovan wine blockades, Litvinenko murder. Resulting blockage of opening of negotiations for Strategic Partnership Treaty at Samara in June 2007 2008 = now prospect for major confrontation over vital interests, namely Kosovo affair where Russia has primed Serbia into a wrecking position (last time Russia supported Serbia it led to WWI) What to do? Containment alliance with new US administration??

22. Norms for multi-polar system? World affairs now a 5 or 6 player game (EU, US, Rus, China, India, Brazil) EU instinctively wants a rule based international system But what becomes the system with crude realpolitik Russia, and big unknowns from China (first experiences in Africa not promising)

23. Overall EU recovered from the constitution/referendum crisis much better than many feared Decision-making processes reasonably well advanced to handle complex policy challenges EU has survived huge enlargement to 27 without gridlock Next big challenges; • Short-term: survive the Kosovo crisis • Medium/long-term: • Beef up foreign and security policy for the multi-polar world • Get results on the energy security/climate fronts