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The Constitutional Treaty is Dead: Whats Next

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Professor of International Economics, Graduate Institute of International ... ERGO, EU leaders can fix this one too. Case for prosecution (i.e. it's dead) ... – PowerPoint PPT presentation

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Title: The Constitutional Treaty is Dead: Whats Next


1
The Constitutional Treaty is DeadWhats Next?
  • Richard E. Baldwin Professor of International
    Economics, Graduate Institute of International
    Studies, Geneva
  • BI, CME, Oslo 1 November 2005

2
(No Transcript)
3
The Headlines
  • French Dutch voted no this summer.
  • EU leaders agreed to suspend the ratification
    process,
  • deadline of November 2006 erased, so no deadline.

4
Is the CT Dead?
  • Case for defence (i.e. no its not dead)
  • Danish said no to Maastricht Irish said no to
    Nice
  • ERGO, EU leaders can fix this one too.

5
Case for prosecution (i.e. its dead)
  • French Dutch nos very different to Danish and
    Irish nos.
  • 29 million French voters cast ballots with 15.5
    million saying no.
  • Netherlands, the 61.5 no-vote meant 4.7 million
    Dutch rejected the Treaty.
  • Irish no on the Nice Treaty
  • Very low turnout (35) Only 529,4768 said no.
  • No votes minus yes votes 76,017 votes.
  • Identifiable swing voters were known
    Reassurances on neutrality.
  • Danish no to Maastricht
  • High turnout (83) Outcome VERY close, 50.7
    said no.
  • No votes minus yes votes 46,269 votes.
  • Again easily identifiable swing voters opt out
    of euro.

6
Case for prosecution (i.e. its dead)
  • 20 million Dutch and French voted no
  • Healthy turnouts
  • Very energetic campaigning for yes
  • Causes of the no extremely diffuse
    ill-defined
  • Seemed to be a general reaction rather than a
    specific objections.
  • Not easy to identify swing voters who could be
    assuaged.
  • Attempts to cajole voters could backfire.
  • Current and likely future French governments will
    not want another fight with the voters.
  • Wont risk adopting the Treaty despite the
    plebiscites.
  • Trust me, its dead.

7
How did we get here?
  • Since 1994, Eastern enlargement of EU was
    inevitable so EU institutional reform required.
  • Ten years of failed reform efforts.
  • History of this critical to understanding whats
    next.

8
Amsterdam Nice Failures
  • 1996 IGC was supposed to reform EU institutions
    in preparation for Eastern enlargement.
  • Amsterdam Treaty failed ? Amsterdam leftovers
  • 1. Council voting (QMV), 2. Commission
    composition, 3.Extension of QMV to more areas.
  • 2000 IGC was supposed to finish the leftovers.
  • Nice Treaty failed ? Nice leftovers.
  • Nice Treaty Council voting system will not work,
    Commission not settled, little extension of QMV.

9
Nice leftovers
  • Nice Treaty includes Declaration on the future
    of the Union. highlighted four themes
  • defining a more precise division of powers
    between the EU and its members
  • clarifying the status of the Charter of
    Fundamental Rights proclaimed in Nice
  • making the Treaties easier to understand without
    changing their meaning
  • defining the role of national parliaments in the
    European institutions.
  • NB no mention of a Constitution.

10
Laeken Declaration
  • 1 yr after Nice, Declaration on the Future of
    the European Union. Laeken Declaration
  • Established the Convention on Future of Europe
  • 56 questions for the Convention grouped into the
    main themes of the Nice Declaration.
  • Two crucial novelties.
  • 1. Implicitly admits Nice Treaty failure.
  • Reform the Nice reforms, even before they were
    tried.

11
Laeken Declaration
  • 2. The C-word appears for first time
  • BUT, it did not instruct the Convention to write
    a constitution,
  • includes a section entitled Towards a
    Constitution for European citizens.

12
EU reform history
  • Giscard dEstaing turned a vague mandate into a
    Constitutional Treaty.
  • Wildly undemocratic procedure Consensus with
    Giscard as sole arbitrator.
  • George Tsebelis (UCLA political scientist)
  • Giscard expanded the authority of the
    Convention, and shaped the document that it
    produced. By eliminating votes, he enabled the
    presidium and the secretariat (which means
    himself) to summarize the debates. By stretching
    the concept of agenda in order to place issues in
    the debate, by using time limits in as a way of
    limiting possible opponents from making
    proposals, by selecting the staff members
    himself, and taking them away from every possible
    source of opposition he was able to shape the
    document in a very efficient way. This is one
    of the reasons that the process is encountering
    significant problems for ratification. (Tsebelis
    2005).

13
Summary of CT
  • Key point Legal logic implies no real
    constitution was possible.
  • Maintain all at primary level.

14
Summary of CT
  • Euro-sceptics wanted to ensure European
    integration would not proceed unless unanimous
    support.
  • Blairs redlines Right to leave the EU.
  • Very awkward balance, but on the whole the CT at
    least keeps the door open to deeper integration.
  • Federalist wanted to make it conceivable that EU
    would continue to deepen
  • Passerelle flexibility clauses (Treaty revision
    without a new Treaty)
  • Removal of the 3-pillar structure.
  • Inclusion of the Social Charter in the
    Constitution Fundamental rights
  • Name could be important to the Court in future.
  • Pillar removal Fundamental rights thin edge
    of the social policy wedge.

15
Summary of CT
  • The articles in the Constitution fall into three
    groups
  • i) Non-changes
  • ii) Non-laws greater advisory role of national
    parliaments on subsidiarity, creation of the
    Council President and modifications of the
    rotating Presidency, creation of Mr Foreign
    Policy and reorganisation of EU foreign policy
    and the possibility of popular initiatives
  • iii) Major legal changes
  • the new voting rules,
  • Commission size allocation
  • the Charter of Fundamental Rights,
  • removal of the pillar system
  • New ways to modify the Treaty bypassing national
    ratification. (Passerelle clauses)

16
Summary of CT
  • Many changes possible without Treaty revision
  • EU has long experience with this.
  • Not possible
  • Social Charter
  • Removal of pillars
  • Passerelle
  • Voting
  • Commission

17
Key points
  • 1. EU leaders never asked for a Constitution
  • 2. The Council voting rules from Nice were so bad
    that EU leaders agreed to reform them even before
    they had been tried.
  • Treaty of Nice voting rules are still in place
    (but they would have been in place until 2009 in
    any case).
  • 3. Giscard created an extremely ad hoc coalition
    behind the CT
  • Hard to explain what it was about.
  • Not easy to reassemble the coalition.
  • CEECs were second class citizens at the
    Convention not involved in setting the Agenda
    (Laeken Decl.)

18
IMHO
  • No way to renegotiate the CT.
  • EU leaders will not allow another Giscard to
    control the agenda.
  • Much wider differences among EU25 than EU15.

19
What must be done?
  • Voting rules still need to be fixed.
  • Need big detour to explain why

20
Nice Treaty Voting Rules
  • 3 main changes for Council of Ministers
  • Maintained weighted voting in place since 1958
  • Majority threshold raised
  • Votes reweighted, favouring large members
  • Added 2 new majority criteria
  • Population (62) and members (50)

21
Efficiency
  • A quantitative measure of decision-making
    efficiency, or ability to act
  • Passage probability
  • Look at all possible coalitions of yes no
    (134 million in EU27)
  • Calculate the share of these that wins given
    specific rules and distribution of voting weights.

22
Nice Voting Rules Wont Work
23
Examples
EU27-population threshold
(millions of citizens)
Council-votes
threshold
Number-of-Members
threshold
24
Political difficulties power measures
  • Formal power measures
  • Power probability of making or breaking a
    winning coalition

25
Political difficulties Winners Losers
Poland Spain Italy France UK Germany
26
Political difficulties Winners Losers
Germany
Poland Spain
27
Whats next?
  • Need to fix voting rules need a new Treaty to
    do that.
  • No new CT likely.
  • Could do it in the Accession Treaties (RO BG ?)
  • Could be part of a Grand Bargain with new
    Member States.
  • My guess
  • Years of decision-making deadlock before voting
    reform.
  • Most likely in context of the long-term budget
    talks in 2012.

28
Provocative part of the talk
  • New members competition for budget
  • EU budget 80 on farms and poor regions
  • New members have lots of farmers and poor regions
  • 1/3 as rich as EU15 average
  • 3 times more agrian
  • Newcomers have much power in Council, What will
    they do with it?
  • They will probably push for more SF and less CAP
    (at least in post 2013 budgets)

29
Solutions
  • More quick fix reforms?
  • Radical re-think
  • EU does 2 types of things
  • Positive sum e.g. Integration, coordination
  • All members can win
  • Zero sum e.g. Budget
  • One members gain is anothers loss.

30
Concentrate on the positive
  • Decision-making on positive sum issues is much
    easier
  • Why not eliminate zero-sum decisions?

31
My proposal
  • Nationalise Common Agricultural Policy (CAP)
  • Turn Structural Spending into project funding

32
Nationalise the CAP
  • CAP spending not solidarity based
  • 0.6 of EU citizens receive 40 of EU budget
  • Direct information in UK, Belgium, Denmark
  • Could reduce CAP spending in France by 50
    without touching the receipts of 95 of the
    farmers.
  • Rich, northern farmers get most of the money

33
Nationalise the CAP
  • Agriculture is not common
  • Arctic tundra to Carnary Islands to Agean Sea
  • Nations have right to transfer income among
    society groups.
  • Why channel this through EU budget when this
    causes conflict?
  • Switzerland and Norway provide HIGHER support to
    their farmers, without the CAP

34
Nationalise the CAP
  • De-link production and subsidies
  • Apply appropriately modified Single Market rules.
  • Let national preferences decide

35
Structural spending as Project financing
  • Structural spending is not solidarity based
  • What is idea of structural spending?
  • Charity? or Venture Capital?
  • If Charity should be income tested
  • If Venture Capital should have project evaluation

36
Structural spending as Project financing
  • Charity is not the way forward
  • too many poor entrants donor fatigue
  • Project financing, World Bank-style
  • Automatically limits spending
  • 1 or 2 of GDP is typical
  • Greatly reduces political conflict in EU
  • Money more efficiency spent
  • Bigger impact on real convergence

37
My proposal
  • Reduce EU budget by 50 to 80
  • Reduce national contributions by same
  • Nationalise CAP
  • Structural Spending as Project Funding

38
Further out on the limb
  • EU institutions budget will be reformed to
    deal with new members (poor, agrian populous)
  • Whatever these are, theyll make further
    enlargement easier.
  • SO, the EU will continue to enlarge.
  • Bulgaria, Romania, Croatia, Turkey, Serbia
  • Become the Single Market Clubs within the
    Club
  • Maybe even Switzerland and Norway could join at
    that point?

39
End
Thank you for listening Many of my essays on
these topics on www.hei.unige.ch/baldwin/
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