Verhelst, S. (2014) “Τhe Sense and Nonsense of Eurozone Level Democracy“, Egmont Paper 70, Royal Institute for International Relations, Οκτώβριος.
The democratic functioning of the EU is frequently called into question. Increasingly, the focus of this criticism is the perceived lack of legitimacy in eurozone policy-making. The eurozone has gained a firmer grip on national policy-making in recent years, but has not adapted its democratic structure to reflect this. To tackle this problem, European and national policy-makers have committed to improving the eurozone’s legitimacy and accountability. One of the rare concrete proposals by policy-makers is the institution of parliamentary control that deals specifically with eurozone matters.
This Egmont Paper examines whether it would be beneficial to have eurozone level democracy. This is defined as parliamentary scrutiny of, by and for the eurozone. It would deal with issues that solely concern the eurozone, and decisions would be made solely by parliamentarians from the eurozone.
At present, eurozone level democracy does not exist. The European Parliament is responsible for European-level democratic control of the eurozone, yet there is no differentiation in any way between Members of the European Parliament (MEPs) elected in eurozone countries and non-eurozone MEPs. As a result, non-eurozone MEPs have the same powers over eurozone-specific decisions as MEPs from the eurozone itself.
Proponents argue that eurozone level democracy makes sense because its current absence hampers the eurozone’s legitimacy. This paper identifies three major arguments in favour of eurozone level democracy:
- More parliamentary scrutiny of the eurozone is needed to counterbalance the loss of power for national parliaments. This parliamentary control might be more acceptable at the eurozone level than at the EU-28 level. This would be especially true if a eurozone budget were created, as it could make eurozone level democracy unavoidable.
- Policy-makers insist that the level at which decisions are made should be aligned with the level at which parliamentary control is exercised. Yet this principle is not applied with regard to eurozone matters. Many decisions about the eurozone are taken by eurozone countries only, while parliamentary control is organized at the EU-28 level.
- The eurozone does not fully meet the requirements for representative democracy (in which the ‘governed’ elect those who govern them). As citizens from, for example, Denmark and the United Kingdom are in no way governed by rules that are specific to the eurozone, it is illogical from the point of view of representative democracy that their MEPs have a full say on eurozone matters.
Eurozone level democracy also has negative aspects. Indeed, there are many grounds for dismissing it as nonsensical:
- A harmful divide could develop between the eurozone and the other Member-States. The cohesion of the EU could suffer as a consequence.
- Under the present Treaty framework, a eurozone level parliamentary body cannot decide on EU legislation, as this is a competence of the European Parliament as a whole. Eurozone level democracy would thus most likely be limited to on-binding issues, significantly reducing its relevance.
- Eurozone matters are not the only policy domain in which decisions taken by the European Parliament as a whole apply to only a subset of Member States. If eurozone-level parliamentary scrutiny were put in place, the same set-up would arguably be needed for the Banking Union, the Schengen Area, etc. This could lead to a dysfunctional à la carte parliamentary system.
- Almost all non-eurozone Member States have an obligation to join the Eurozone in the future. As a result, the current problems with eurozone decision-making are likely to fade away in the long run.
How could eurozone level democracy be organized in practice? Three possibilities exist:
- A separate eurozone parliament, whose members would be elected specifically for this parliament. While appealing at first sight, a new eurozone parliament risks having insufficient legitimacy and/or creating excessive complexity for voters.
- A eurozone body inside the European Parliament, with voting rights granted only to eurozone MEPs. This approach limits complexity and ensures a link with non-eurozone countries. At the same time, it would put pressure on the unity of the European Parliament.
- An inter-parliamentary assembly whose membership mostly consists of national Members of Parliament (MPs). This design would better involve national parliaments in eurozone affairs, but might lack consideration for the European perspective.
This paper argues that the European Parliament option is probably the best choice, because it reduces the impact of some of the drawbacks associated with Eurozone level democracy. A careful design can furthermore reduce the risk of a damaging split between eurozone and non-eurozone MEPs– even though that risk cannot be removed completely.
Before any discussion on the precise structure, the key question is whether we actually want eurozone level democracy or not. The jury is still out, but the legitimacy of the eurozone is too important to brush the concept of eurozone level democracy aside without carefully considering its sense and nonsense.
- Müller, L. (2014) “The impact of the mass media on the quality of democracy within a state remains a much overlooked area of study“, LSE EUROPP, 05 Δεκεμβρίου.
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- Tierney, S. (2014) “Europe is entering the ‘age of the referendum’, but there is nothing to fear for European democracy if referendums are properly regulated“, LSE EUROPP, 02 Σεπτεμβρίου.