British Balance of Competence Reviews, Part I: ‘Competences about right, so far’. EPIN Working Paper No. 35, October 2013

The first in a series for a CEPS-EPIN project entitled “The British Question and the Search for a Fresh European Narrative” this paper is pegged on an ambitious ongoing exercise by the British government to review all the competences of the European Union. The intention is that this should provide a basis for informed debate before the referendum on the UK remaining in the EU or not, which is scheduled for 2017. This paper summarises the first six reviews, each of which runs to around 80 pages, covering foreign policy, development policy, taxation, the single market, food safety, and public health. The present authors then add their own assessments of these materials. While understandably giving due place to British interests, they are of general European relevance. The substantive conclusions of this first set of reviews are that the competences of the EU are judged by respondents to be ‘about right’ on the whole, which came as a surprise to eurosceptic MPs and the tabloid media. Our own view is that the reviews are objective and impressively researched, and these populist complaints are illustrating the huge gap between the views of informed stakeholders and general public opinion, and therefore also the hazard of subjecting the ‘in or out’ choice for decision by referendum. If the referendum is to endorse the UK’s continuing membership there will have to emerge some fresh popular narratives about the EU. The paper therefore concludes with some thoughts along these lines, both for the UK and the EU as a whole.

British Balance of Competence Reviews, Part II: Again, a huge contradiction between the evidence and Eurosceptic populism. EPIN Paper No. 40, June 2014

This paper is the second in a series for a CEPS project entitled “The British Question and the Search for a Fresh European Narrative”. It is pegged on an ambitious exercise by the British government to review all the competences of the European Union on the basis of evidence submitted by independent stakeholders. In all, 32 sectoral policy reviews are being produced over the period 2013-2015, as input into public information and debate leading up to a referendum on whether the UK should remain in, or secede from, the EU, planned for 2017. This second set of reviews covers a broad range of EU policies (for the single market for goods, external trade, transport policy, environment, climate change, research, asylum, non-EU immigration, civil judicial cooperation, tourism, culture and sport). The findings confirm what emerged from the first set of reviews, namely that there is little or no case for repatriation of EU competences at the level they are defined in the treaties. This does not exclude that at a more detailed level there can be individual actions or laws that might be done better or not at all. However, that is the task of all the institutions to work at on a regular basis, and hardly a rationale for secession. For the UK in particular the EU has shown considerable flexibility in agreeing to special arrangements, such as in the case of the policies here reviewed of asylum, non-EU immigration and civil judicial cooperation. In other areas reviewed here, such as the single market for goods, external trade, transport, environment, climate change and research, there is a good fit between the EU’s policies and UK priorities, with the EU perceived by stakeholders as an ‘amplifier’ of British interests.

Ukraine: Can meaningful reform come out of conflict? Bruegel Policy Contribution 2014/08, August 2014

Apart from threats to its national security and territorial integrity, Ukraine faces serious economic challenges. These result from the slow pace of economic and institutional reform in the previous two decades, the populist policies of the Yanukovych era and the consequences of the conflict with Russia. The new Ukrainian authorities have made pro-reform declarations, but these do not seem to be supported sufficiently by concrete policy measures, especially in the critical areas of fiscal, balance-of-payment and structural adjustment. Also, the international financial aid package granted to Ukraine has not been accompanied by sufficiently strong policy conditionality. Ukraine urgently needs a complex programme of far-reaching economic and institutional reform, which will include both short-term fiscal and macroeconomic adjustment measures and medium- to long-term structural and institutional changes. Energy subsidies and the low retirement age are the two critical policy areas that require adjustment to avoid sovereign default and a balance-of-payments crisis.

The Dano case – Or time for the UK to digest realities about the balance of competences between the EU and national levels. CEPS Commentary, 14 November 2014

The European Court of Justice's new judgment on the Dano case should be reverberating around the UK. In Michael Emerson's view, it shows how national competences can be deftly used to control for 'benefit tourism' without challenging EU law, and that the Court is not acting as the agent of 'EU competence creep', as alleged in the Eurosceptic's stereotype.

British Balance of Competence Reviews, Part III: More reform than renegotiation or repatriation. EPIN [Working] Paper No. 42/December 2014. [see Abstract for I and II]

This paper, the third in a series for a CEPS project on the ‘The British Question’, is pegged on an ambitious exercise by the British government to review all the competences of the European Union on the basis of evidence submitted by independent stakeholders. The reviews considered in this paper cover the following EU policies: the single market for services, financial markets, the free movement of people, cohesion, energy, agriculture, fisheries, competition, social and employment policies, and fundamental rights. The declared objective of Prime Minister Cameron is to secure a ‘new settlement’ between the UK and the EU. From political speeches in the UK one can identify three different types of possible demand: reform of EU policies, renegotiation of the UK’s specific terms of membership, and repatriation of competences from the EU back to the member states. As most of the reviews are now complete, three points are becoming increasingly clear: i) The reform agenda – past, present or future - concerns virtually every branch of EU policy, including several cases reviewed here that are central to stated UK economic interests. The argument that the EU is ‘unreformable’ is shown to be a myth. ii) The highly sensitive cases of immigration from the EU and social policies may translate into requests for renegotiation of specific conditions for the UK, but further large-scale opt-outs, as in the case of the euro and justice and home affairs, are implausible. iii) While demands for repatriation of EU competences are voiced in general terms in public debate in the UK, no specific proposals emerge from the evidence as regards competences at the level at which they are identified in the treaties, and there is no chance of achieving consensus for such ideas among member states. Michael Emerson and Steven Blockmans, “British Balance of Competence Reviews, Part I: ‘Competences about right, so far’”, CEPS/EPIN Working Paper No. 35, October 2013 (www.ceps.eu/book/british-balance-competence-reviews-part-i-%E2%80%98competences-about-right-so-far%E2%80%99)(http://aei.pitt.edu/45599/); Michael Emerson, Steven Blockmans, Steve Peers and Michael Wriglesworth, “British Balance of Competence Reviews, Part II: Again, a huge contradiction between the evidence and Eurosceptic populism”, CEPS/EPIN Working Paper No. 40, June 2014 (www.ceps.eu/book/british-balance-competence-reviews-part-ii-again-huge-contradiction-between-evidence-and-eurosc)(http://aei.pitt.edu/52452/).

A new balance of power in the Council? Yes, but not yet… CEPS Commentary, 19 December 2014

On the 1st of November, the double majority system established by the Lisbon Treaty for qualified majority voting (QMV) in the Council entered into force. The shift in the balance of power, however, will not be effective before April 2017, given the possibility for member states to invoke the Nice rules until that date. While acknowledging that the new voting system in the Council promises to do away with the difficult negotiations of the past among member states to reallocate voting weights, this commentary finds that it is questionable whether it will achieve its ultimate aim to substantially improve democratic legitimacy and efficiency.

The Eurozone crisis and the erosion of democratic legitimacy: Lessons from the gold standard. ACES Cases No. 2013.3

This paper makes four propositions. First, it argues that the euro’s institutional design makes it function like the interwar gold exchange standard during periods of stress. Just like the gold exchange standard during the 1930s, the euro created a ‘core’ of surplus countries and a ‘periphery’ of deficit countries. The latter have to sacrifice their internal domestic economic equilibrium in order to restore their external equilibrium, and therefore have no choice but to respond to balance of payments crises by a series of deflationary spending, price and wage cuts. The paper’s second claim is that the euro’s institutional design and the EU’s response to its ‘sovereign debt crisis’ during 2010-13 deepened the recession in the Eurozone periphery, as EMU leaders focused almost exclusively on austerity measures and structural reforms and paid only lip service to the need to rebalance growth between North and South. As Barry Eichengreen argued in Golden Fetters, the rigidity of the gold standard contributed to the length and depth of the Great Depression during the 1930s, but also underscored the incompatibility of the system with legitimate national democratic government in places like Italy, Germany, and Spain, which is the basis for the paper’s third proposition: the euro crisis instigated a crisis of democratic government in Southern Europe underlining that democratic legitimacy still mainly resides within the borders of nation states. By adopting the euro, EMU member states gave up their ability to control major economic policy decisions, thereby damaging their domestic political legitimacy, which in turn dogged attempts to enact structural reforms. Evidence of the erosion of national democracy in the Eurozone periphery can be seen in the rise of anti-establishment parties, and the inability of traditional center-left and center-right parties to form stable governments and implement reforms. The paper’s fourth proposition is that the euro’s original design and the Eurozone sovereign debt crisis further widened the existing democratic deficit in the European Union, as manifested in rising anti-EU and anti-euro sentiment, as well as openly Eurosceptic political movements, not just in the euro periphery, but also increasingly in the euro core.

Hegemony Without Stability: The fiscal and political vulnerabilities of monetary union. ACES Cases No. 2011.2

The crisis has forced the Euro area to establish an emergency fund that supports member states experiencing a sovereign debt crisis. The difficulties of coming up with such a fund for Greece and other Euro area members stands in marked contrast to the balance of payments support that non-Euro members like Hungary received, swiftly and quietly. In order to solve this puzzle, we first establish the difference between EU interventions and IMF programs and, second, trace the evolution of crisis management with France and Germany in the lead. The lens of hegemonic stability theory suggests that the Franco-German leadership is too weak to provide stability and the extensive use of conditionality is one symptom of this weakness. Providing incentives for cooperation "after hegemony" (Keohane) is the unresolved issues troubling the monetary union. Its dominant powers must acknowledge that markets perceive monetary union to be already politically more integrated than its lack of fiscal integration suggests.