08.03.2013

Ein Beitrag zur Demokratiedebatte im Rahmen der Währungsunion

The role of National Parliaments and the European Parliament in a Deepened Economic and Monetary Union

Elmar Brok MEP

The need for more democratic accountability

The Financial Crisis and the political reactions thereto on EU level were dominated by governmental activities, politically led by the European Council. Far reaching decisions had to be taken within extremely short deadlines. Some of these primary reactions have in the meantime transferred into EU law, others, such as the TSCG, are still awaiting this transferral.

The EU and the Member states are now exploring possibilities to prevent similar crisis for the future by deepening the Economic and Monetary Union. A lesson from the crisis is that major political decisions as well as lack of necessary reforms affecting the competitiveness of one member states might have negative spill-over effects on others. This means that economic politics in the EMU are interdependent in a way that makes it inevitable that the EU and Member States cooperate on a broader scale, better and more efficient.

However, strengthening co-operation puts the question of democratic legitimacy and accountability. The Presidents-Paper, presented by the President of the European Council last November, as well as the Commission’s Blueprint, point out that both, on EU level and on Member states level, all political decisions must be underpinned by parliamentary decision making and oversight. This was confirmed by the December European Council conclusions.

Existing situation after the adoption of the Two-Pack

The existing situation overall, is not satisfying these requirements. True, the EP, as co- legislator, was fully involved in the adoption of a number of major legislative proposals to enhance fiscal stability and to promote economic growth. The latest part, the Two-Pack, will be adopted in co-decision by the EP in March 2013. National Parliaments control their government as part of the legislative and they can make use of the subsidiarity mechanism. Their participation solely depends on the national legal framework. And once it comes to the execution of these laws the role of Parliaments changes dramatically, as neither the EP nor National Parliaments are involved in the detailed decision making and implementation.

The current Treaty doesn’t foresee any parliamentary involvement in the surveillance of budgetary positions or in the co-ordination of economic policies. E.g. Annual Growth Survey: The Commission submits a recommendation to the Council, which then unilaterally modifies and adopts it. However, the EP used the different pieces of legislation to enhance parliamentary oversight so far as information and democratic accountability is concerned. It may invite representatives of the Council and of the Commission at various stages of the procedures to discuss a particular situation in front of the relevant committee(s). The Commission, the ECB and the IMF can be invited for Economic dialogues. The same applies to the governments.

Preparation of the June European Council meeting (Sherpa process)

The current Sherpa process, preparing the June European Council meeting, is focussing on the ex-ante coordination of economic policies and the possibility of contracts between Commission and Member States on the implementation of economic reforms. The fourth pillar of the Four- Presidents-Paper, endorsed by the December European Council, strengthening democratic

legitimacy and accountability, does not figure among the set of sixteen questions addressed to the Member States. The EP Sherpas, participating in the process, therefore re-introduced this issue in the debate at the first meeting on 1 March 2013.

Requirements for more democratic accountability

There is a consensus in the EU that both, national parliaments and the EP have to play important and complementary roles in a deepened Economic and Monetary Union. Both, National Parliaments and the EP, should not just concentrate on future long term initiatives requiring Treaty changes, but concrete ideas that can be implemented under the current legal framework.

National Parliaments play an important role through ensuring the legitimacy of Member States actions on the European Council and the Council, as well as in the conduct of national fiscal and economic policies. At the European level, democratic accountability and scrutiny is ensured by the European Parliament. National Parliaments have the decisive role with regard to the authorisation and the use of financial appropriations under the ESM. The EP is playing a role in scrutinizing e.g. the activities of the Troika, the Banking Supervisory System and the ESM administration. EP and National Parliaments have to secure that there is no activity without parliamentary scrutiny – in close cooperation, but each level within its competences.

In the framework of the preparation of the June European Council, the EP will promote the idea that the topics for ex-ante coordination should be submitted by Member States in agreement with their National Parliament and that possible contractual agreements on economic reforms will have to be ratified by the National Parliament concerned. This will create more ownership of European policy and will underline the responsibility of National Parliaments for the development and the implementation of national reform- and convergence programmes. It will underline that ex-ante coordination does not shift national competences towards the EU, but that coordination is a common task for both levels.

The EP and the National Parliaments need discussions on economic and fiscal policy, as foreseen in the TSCG (Fiscal Compact), to ensure that all parliaments are properly aware of the interdependencies of their decisions. However, the ad-hoc event to be put in place according to Article 13 TSCG cannot be considered as the foundation for an additional parliamentary structure, as this would not contribute neither to parliamentary participation nor parliamentary oversight. This is about the indispensable mutual information to tackle the responsibilities that are allocated by the Treaty and the national constitutions to the different levels. The EP is the partner in scrutinizing the corresponding level of administration. As the scope of the inter- parliamentary cooperation between National Parliaments and the EP must be broader than the narrowly focussed fiscal compact basis, the European Semester coordination seems the appropriate forum to exchange information, to analyse best practices and to enhance parliamentary oversight over the Commissions and governments activities.

The EU will benefit from an enhanced democratic accountability as citizens will fell better represented by their National Parliament and the EP, thus brining citizens and EU together. The EU and Member States will benefit from enhanced democratic scrutiny as political decisions will be taken on a broad and solid political basis thus enabling both levels to consolidate Member States fiscal and economic situation and to tackle the needed reform steps in order to bring the EU back on the track towards economic growth, employment and social policy.

Elmar Brok Brussels, 1 March 2013