December 1, 2015
European Constitutional Group
Open Letter to the President of the European Council
Dear Mr. Tusk,
The European Constitutional Group has discussed the report of the Five Presidents of the EU institutions and the suggestions of other European leaders such as President Hollande and Finance Minister Schäuble. We have also taken into account the areas recently identified by Prime Minister Cameron and looked at the UK demands in terms of their broader conformity with the interests of the EU as a whole. We have developed the ideas first set out in our "Proposal for a Constitution of Europe" (1993) and applied them to the current situation. Our main purpose was to discuss how the EU can best respond to the divisions that now undermine a Union whose basic purpose is to heal division.
We are especially concerned about the divisions that stand in the way of cooperative solutions to the challenges facing the Union today. Some divisions of course are of long standing. Others have been provoked by recent actions of the Union itself. In particular, policies to overcome the sovereign debt crisis have raised doubts about the rule of law. Further divisions will be stimulated by some of the proposals being circulated for reform. Proposals to share risks, to introduce a common tax or to increase tax harmonization are all made in the name of solidarity. In our view they risk having the opposite effect.
First, current proposals for reform, especially in the eurozone, shift the emphasis from public goods to risk sharing. Insurance has benefits but it also has costs, notably in terms of moral hazard. The costs may easily exceed the benefits. If negligence is to be avoided, subsidiarity must prevail.
Second, past policies to overcome the sovereign debt crisis have raised doubts about the extent to which the rule of law is still respected by the European institutions. We believe that the Court of Justice has to be reformed and that the citizens and the national parliaments have to be given more say. The ultimate protection against a breakdown of the rule of law is the right to withdraw. There ought to be more room for opt-outs.
Resulting from this discussion, we have developed two groups of recommendations that are attached to this letter. First, those addressing the alarming gap that has opened up between the Union and its citizens. Our recommendations are aimed at reducing the distance between the EU and its citizens by making possible enhanced direct citizen participation, by giving greater powers to national parliaments and by placing the agenda-setting role in the hands of the Member States themselves. Respect for the rule of law will be enhanced by judicial procedures less prone to political bias.
The second group of proposals aims to improve the long term economic growth prospects of the Union. In this area our proposals aim to improve opportunities for the young, to reduce inter-generational friction, to reduce the burden on future generations, to lower costs of doing business in the EU, and to reduce strains on welfare budgets.
We fully recognize that the two agendas – the political and the economic – are linked in practice. It would be a mistake to see hardening political attitudes, growing intolerance and polarization in the EU as just linked to the financial crisis and poor economic prospects in the EU. It also is linked to remote, elitist political structures.
We also recognize that, while some of our recommendations are about better observance of the existing rules of the EU, and others are about the interpretation of existing Treaty provisions, there remains a need for fundamental Treaty change, including a review of the role of the European Court of Justice itself. In our view the Council of Ministers should appoint an expert group, with a membership entirely independent of the EU institutions, under your Presidency, to draw up a list of necessary changes including alternatives. Such a body could report by end 2016.
In our view the recommendations we attach are vital to heal the divisions within the EU, to restore fair play and to nourish the reciprocity between Member States that is essential for the Union to flourish.
- Peter Bernholz, Prof. em., Universität Basel (Chairman)
- Gunnar Beck, Dr., Reader in European Law, SOAS, University of London
- Charles Beat Blankart, Prof. em., Humboldt Universität Berlin
- Francisco Cabrillo, Prof., Universidad Complutense Madrid
- Elena Leontjeva, Chairwoman, Lithuanian Free Market Institute, Vilnius
- Angelo Petroni, Prof., University of Rome La Sapienza
- Pascal Salin, Prof. em., Université Paris-IX-Dauphine
- Friedrich Schneider, Prof., Johannes Kepler Universität Linz
- Jiri Schwarz, Prof., University of Economics, Prague
- Peter Stein, CEO, Stein Brothers AB, Stockholm
- Roland Vaubel, Prof., Universität Mannheim
- Frank Vibert, Senior Visiting Fellow, London School of Economics
Attachment: ECG Recommendations
A. MEASURES TO REDUCE THE DISTANCE BETWEEN EUROPE AND ITS CITIZENS.
1. A qualified minority of national parliaments should be able to block any new proposed EU measure (issue a red card) on any grounds including excessive cost or uncertainty of impact. Their decision shall not be subject to review by the ECJ.
2. The role of the Commission should be redefined in accordance with a separation of powers. To this end its quasi-judicial powers (in competition and trade policy) and its oversight role in relation to fiscal policy should be assigned to independent bodies; its right of legislative initiative should be re-assigned to the Council of Ministers and the European Parliament.
3. Disputes involving the principles of subsidiarity and proportionality shall be decided by a Court of Review whose members are delegated for a limited period from the highest courts of the Member States. They will be chosen by lot from those members of the highest court who have had judicial experience outside the court.
4. In the event of disputes between members and non-members of the eurozone, any Member State should be able to bring action against the EU, its institutions and agencies including any disputes related to the location of service providers. Any such action shall be arbitrated by a special tribunal whose ruling will be accepted by the parties as final. The tribunal shall be composed, on a case by case basis, of a member of a constitutional body of the member state bringing the action, a member of the ECJ and a chairperson from a constitutional court of a jurisdiction outside the EU.
5. A qualified group of citizens in a qualified minority of member states (one percent of the voters in at least 5 member states) or a qualified minority of the national parliaments should be enabled to trigger an EU-wide referendum to oppose any EU measure – including budgetary measures. The referendum shall be supervised by an independent body that shall determine procedures, qualifying majorities and the wording of the question. The costs of shall be borne from the EU budget. The need for greater flexibility in the way that the Union respects the preferences of its citizens should be recognized in its common provisions (TEU Art.1).
B. MEASURES TO RESTORE GROWTH AND EMPLOYMENT PROSPECTS.
1. In order to reduce the costs of doing business in the EU, a qualified minority of national parliaments of the Member States should be able to propose the revocation of any existing EU directive or regulation. The proposal should require only a simple majority for approval in the Council of Ministers. The decision of the Council should not be subject to review by either the European Parliament or the ECJ.
2. The breach in the Treaty of the no bail-out provisions (TFEU. Art. 125) must be repaired. Members of the Eurozone that persistently violate the provisions of the Treaty against excessive deficit financing (TFEU Art.126) should automatically cease to be members of the Eurozone without losing their membership in the Union. Member states that are not members of the Eurozone should be under no obligation to provide financial support for the zone.
3. The debt reduction necessary for some member states should involve an orderly resolution process where only obligations owed to the Bretton Woods institutions are accorded preferred status.
4. The ECB should stop buying government bonds. It should not finance government budget deficits.
5. The Union should give equal recognition (under TEU Art. 4) to currencies of member states other than the Euro.
6. The Union should not introduce a tax of its own or intensify tax harmonization as this would aggravate the burden of taxation.
7. In order to speed up the negotiations on TTIP the EU should (under Art.218) look to the consent of the European Parliament on a ‘fast track’ basis involving only the principle of consent or non consent to the agreement as a whole.
8. In recognition of the strain on budgets of increased flows of people within the EU and between the EU and the outside world, any member state should be able to institute a ‘step –back’ provision to limit flows from whatever source. A step-back procedure would preserve the principles of the Schengen area, the free movement of people and non-discrimination on the grounds of nationality, but allow for derogation at the discretion of the Member State concerned.