The time to reform the European treaties

There was a time when the European Union reviewed its treaties every few years. The trend began in 1986, with the Single European Act, when the Member States realized that the supposed single market was a farce, full of obstacles to the free movement of goods, services and people. Bold steps were then taken, extending qualified majority voting in the Council for many issues and giving Parliament more weight. Since then, every five or six years the fundamental texts have been reformed. Thus, in 1992, in full European fury, it was signed in Maastricht the Treaty of the European Union (only founding treaty, properly speaking, along with the Treaty of Rome, later called the Treaty on the Functioning of the EU). The EU dared to create a monetary union and advance other elements of political union (citizenship, foreign relations), reinforcing Parliament again and adopting new forms of intergovernmental cooperation. In 1997, the Amsterdam Treaty focused on treaty consolidation and more frequent use of the ordinary legislative procedure. The one in Nice in 2001 dealt with preparing the structures for an enlargement to 25, with changes in the composition of the Commission and in the voting system in the Council.

The first big scare occurred in 2004, with the Treaty establishing a Constitution for Europe, which was never approved because France and Netherlands –after separate referendums– they refused to ratify it, which caused a European institutional crisis. They were complex times: China it had just joined the WTO, anti-globalization movements were beginning to have an important specific weight and trade and integration were no longer seen as a guarantee of progress.

Even something as relevant as the Next Generation EU – including its debt issuance – is still a temporary intergovernmental instrument, not bound in legislation. A spectacular patch, but a patch

Since then, integration has progressed, but slowly. The crisis of the European Constitution was resolved in December 2007 with the Treaty of Lisbon, which increased the powers of the European Parliament, changed the voting procedure in the Council, made the post of President of the European Council permanent, created the new post of High Representative for Foreign Affairs and a new European diplomatic servicein addition to clarifying the distribution of powers between the EU and member states and approving an EU Charter of Fundamental Rights (from which the United Kingdom, of course, shunned).

After this Treaty, which took two years to ratify, the revision of the fundamental legislation of the European Union became anathema. The successive crises, such as that of the euro, which were largely due to problems arising from partial integration (such as a single currency with national fiscal policies) have been solved with regulations (such as the Stability and Growth Pact) or with intergovernmental agreements such as those that established the European Stability Mechanism, the European Fiscal Pact (Fiscal Compact, which includes a set of binding rules in the EU for budgetary balance) or the Single Bank Resolution Mechanism. Of these, only the MEDE was subsequently ratified as an amendment to one of the founding treaties.

Even something as relevant as the Next Generation EU –including its debt issuance– does not stop being a temporary intergovernmental instrument, not consolidated in the legislation. A spectacular patch, but a patch. And, if you push me, the ECB’s Instrument for the Protection of the Transmission of Monetary Policy (TPI) to combat excessive increases in risk premiums is still another patch that the CJEU may one day judge excessive.

It is assumed that measures as absurd as the “magic” rules of 3% deficit or 60% debt cannot be modified because “the treaties would have to be changed”

If you pay attention, that something as serious as the common fiscal policy is managed with legislative fixes, and not with comprehensive modifications of the founding treaties, it shows the difficulty or the fear of advancing in European integration. For example, throughout 2023 the fiscal rules will be reformed, and it is assumed that measures as absurd as the “magic” rules of 3% deficit or 60% debt cannot be modified because “the treaties would have to be changed”. Of course, the modification of the 1/20 reduction rule is proposed because it is secondary legislation.

In summary, that both the Commission and the Member States put on the bandage before the wound and renounce a priori to reform treaties (not so, the European Parliament, which in June 2022 approved a resolution calling on the European Council for a necessary revision of the founding texts of the EU). And they do it, simply, for fear of failing, because the crisis of the European Constitution is not repeated. Because it’s hard.

However, samuelson attributed to keynes the idea that changing your mind is the logical thing to do when circumstances change. The question then is, if in the midst of a war in Europe, in the midst of a deep crisis of multilateralism, a review of the world order, deglobalization and neo-protectionism, in the midst of the energy, climate and digital transition, we do not consider reforming the treaties, when will we do so? ? What crisis should we wait for to propose courageous legislative decisions at the European level?

That in order to create a true European fiscal capacity, it is necessary to renounce part of fiscal sovereignty? be done That the issuance of European debt can only be compatible with supranational controls of national budgets? negotiate. What does this imply to thoroughly review the role of the Commission, Council and Parliament, with new majorities, a better system of balances and counterweights between institutions and greater citizen involvement? plant yourself That advancing in the political union is very complicated and some countries will not want to? We already know.

There is nothing that guarantees immobility more than the fear of change. What we cannot is delude ourselves and think that 27 fiscal policies (with 27 corporate taxes), 27 industrial policies, 27 energy policies or 27 asylum policies, to give an example, can successfully face an increasingly polarized and aggressive, to clash between usa and china, to the Russian threat, to the race for industrial policy subsidies or to climate change. Let’s keep waiting, and what we will soon find will be radical or sovereignist governments in more member states, proposing national “solutions” to problems that the EU is incapable of solving. And remember a golden rule from history in politics: when playing for nationalism or protectionism, the radicals always end up displacing the moderates.