[Article first published on Policy Network’s website on 13 February 2015 and co-authored by Daniel Innerarity, professor of political philosophy and Ikerbasque researcher at the University of the Basque Country]
The EU’s legitimacy stems from the ability to intervene in national democracies when they have a negative impact on ‘outsiders’ and future generations. This principle should guide thinking over the future of European integration
During his recent tour of European capitals, Yanis Varoufakis gave a joint press conference with Wolfgang Schäuble. The Greek finance minister referred to the commitments that the new Greek government had made to its electorate. His German counterpart then reminded him that he also had commitments with his electorate and that, in any case, it makes no sense to make commitments at the expense of others.
This episode underlines the current difficulty that Europeans have seeing themselves as a subject beyond national boundaries. It sheds particularly crude light on the deeper predicament in which the European project finds itself. Both Varoufakis and Schäuble spoke from a perspective of self-determination that excluded others. This is a problem that we can only resolve if we are able to reconstruct the idea of democratic self-determination in a context of complexity and interdependence, as we know it in the EU.
Sovereignty and democracy in a broader context
Traditional notions of sovereignty and self-government presupposed a homogeneous concept of the people and the idea of a closed political space. But these concepts must be challenged when the extraterritorial effects of state policies jeopardise other countries’ ability to self-govern. Let us think about the case of the German and British governments that did not implement certain environmental protection measures during the 1970s, causing a high mortality rate in Scandinavian fishing. Swedish fishermen could not participate in the shaping of political will in the UK or Germany. This is only one of many possible examples of externalisations that constitute true injustices. We could add that they involve a democratic deficit even if they are fully respectful of domestic electorates.
The states have to move from a contractual responsibility regarding their citizens to a sovereignty that commits them toward the external world when certain common goods are in play. Today’s democratic disturbances are linked to the question of the fair distribution of growth and the management of its side effects. Under conditions of interdependence, there is no national justice without some type of transnational justice, nor democracy without a certain inclusiveness of non-voters. The republican non-domination principle can only be respected if it also refers to those who, while not forming part of the national demos, are affected by our decisions.
Yet modern democracies barely have the right instruments to ensure that ‘outsiders’ (so, non-nationals, or future generations) are taken into account. The legitimacy of transnational institutions such as the EU stems precisely from the attempt to mitigate these deficiencies. This constitutes a correction to the nation state, to overcome short-sightedness and include the recognition of ‘outsiders’ as part of its own political structures.
The future of democracy in the EU
If we want to put the principle of democratic self-government into effect, we have no choice but bringing closer, in a post-territorial manner, the authors of decisions and the parties who will be affected. Self-determination today means accepting the effects that the decisions of other nation states have on us to the extent that we have the opportunity to make our interests heard in ‘their’ decision-making process.
Current debates about the future of the EU should be considered in this light. The EU is called upon to carry out an essential role in the management of risks implied by the interactions between diverse territories, allowing a degree of collective control over externalities. To some extent, the union’s democratic deficit consists of not being able to surpass the framework of national democracies. In an interdependent world, the idea of ‘democracy in a single country’ makes no sense.
This principle of ‘transnational self-determination’ cannot be effective without great institutional innovation. This is usually branded as impossible by those who keep seeing the national framework as the only normative reference, whether out of self-interest or mere conceptual conservatism. Yet, this is very much what the EU is, or should be, about.
The idea of ‘transnational self-determination’ presents precisely a conceptual framework to think how we should make decisions when they reach beyond the state framework. An additional level of governance is necessary to give a structural pathway for those who are affected by the decisions of others or, inversely, to internalise the external effects of their own decisions. This is the ‘mutual opening up of democracies’, as Kalypso Nicolaïdis put it, we need at this particular moment of European history.
Three options for the EU/eurozone
How can interdependence be further internalised into national policymaking in today’s Europe, so that national democracies do not take each other hostage?
A minimalist option is to argue that the EU already has the right institutions and processes to allow for transnational self-determination. The European council and the council of ministers are precisely the places where national leaders meet and put on their ‘European hat’. This does not mean that they take their ‘national hat’ off, but they are bound to strike deals that make their life and the life of their neighbours possible.
This thesis might be given some credit if the current Greek stand-off ends in another of these late-night compromises the EU is familiar with. However, the odds are high that the compromise will not be satisfactory. The Greek government might be forced to back down on its electoral promises. This would be no solution for the long term, especially if the social situation does not improve in Greece and if the perception of entrenched unfairness remains.
Precisely to avoid power politics in the European council, old ‘maximalist’ (federalist) ideas have struck back since the beginning of the European debt crises. Leading German and French experts in the Glienicke Gruppe and the Groupe Eiffel have advocated the extended role or the creation of genuinely European institutions and instruments, such as a euro area treasury and an EU unemployment insurance scheme. By ensuring a minimum level of fiscal transfers between European nations, one would tackle (current account and social) imbalances more effectively and prevent negative cross-border spillovers. These institutions would be scrutinised by a stronger European parliament.
Yet this vision is politically far-fetched. There is no widespread desire to transfer more powers to Brussels. Fiscal transfers are already contested at national level in several member states. Transfers look possible today only on a limited timescale, with strict conditions attached and when directly controlled by member states.
A more realistic, halfway route is to make sure that national institutions take the European dimension systematically into account. Here are three examples of how this can be achieved.
First, through constitutional reform. The 2012 fiscal treaty led 25 EU member states to enshrine a ‘debt brake’ into their constitutions, or into legislation of constitutional value. This has been rightly criticised on the left for excessively constraining member states’ welfare spending and future investment. A leftwing response to this reform could be to guarantee a ‘minimum investment threshold’ that would cater for today’s and future growth (in the spirit of a recent suggestion made in the Pisani-Ferry-Enderlein report).
Second, ‘multilateral surveillance’ (the EU jargon for peer review and monitoring) should not only rely on fiscal and competitiveness indicators. EU treaties include ambitious social objectives in terms of ‘full employment’, ‘social progress’ and ‘solidarity between generations’. To the extent that deteriorated social situations in one country generate negative side effects for the whole EU – in terms of lower growth, reduced fiscal sustainability, migration– this should be a matter of common concern. Therefore country-specific recommendations should at the very least undergo a ‘social impact assessment’, or, better, be based more clearly on the Europe 2020 objectives.
A third and final idea is to give reciprocity and mutual commitments a formal shape. The debate on ‘reform contracts’ stalled in 2013 when Angela Merkel met unanimous opposition in the European council. Certainly, the German legalistic and punitive approach – in particular the idea that a member state could be taken to court by another one – did not help. Nevertheless, this proposals best reflects the type of transnational arrangements that would be welcome today. ‘Balanced’ contracts would be underpinned by substantial financial incentives and leave national democratic institutions sufficient space to define their own reform path (away from troika-like top-down approaches). Mutual learning and assistance to reform should also feature highly in such a programme as we have learned in recent years that administrative capabilities are not equally distributed in Europe.
To come back to the general argument of this article, making self-government more democratic requires inclusion of the interests of distant places and times that are affected by our actions. Self-determination continues to be a basic principle and without it democracy would be inconceivable. National electorates might be the primary instance of democratic accountability, but our human duties dictate that we bear a broader responsibility to take into account the impact of national decisions on others.