Does the EU need a new treaty?

Richard Baldwin, Mika Widgrén, Wed, 06/07/2006

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The Constitutional Treaty is dead in the water, its ratification rejected by French and Dutch citizens. Some analysts suggest that the EU does not need a new treaty; the reforms in the Nice Treaty are enough. EU leaders such as Tony Blair, Jacques Chirac and Gerhard Schroeder said as much in December 2000 while they were still in office. The evidence, however, clearly contradicts this. The Nice Treaty was a ‘Nice Try’ but not good enough. This Policy Insight marshals evidence to supports the claim that a new treaty is needed since the Nice Treaty reforms failed in their task of allowing EU decision-making procedures to operate efficiently and legitimately after the Eastern enlargement.

Two strands of evidence are discussed. The first is based on data – the slow down in EU decision making since the May 2004 enlargement. The second is based on ‘revealed preference’ reasoning concerning the men and women who are most in touch with the realities of EU decision-making – the leaders of EU member states.

A recent publication by a team of French scholars documents the sharp drop in the flow of EU legislation pre- and post-enlargement. Data on the month-by-month adoption of EU laws shows a sharp drop when the enlargement occurred. Of course, any enlargement could be expected to lead to some slowing, and the 2004 enlargement was accompanied by the election of a new European Parliament and the instalment of a new European Commission. The data show, however, that the 2005 reduction in the flow of legislation was much larger than the drop witnessed in the year following the previous European Parliamentary elections and new Commission in 2000. While there has been some recover in the adoption of new laws, a number of signs indicate that the laws being passed are qualitatively different. Moreover, survey evidence from EU insiders suggest that the heighten difficulty of decision making is widely acknowledged.

The second line of evidence is quite different. We can presume that the EU leaders know the true state of affairs. Of course, one cannot simply accept their statements that reform is needed. These leaders typically have an interest in strategically manipulating unverifiable statements. But economists frequently get around such private information situations by relying on what is known as ‘revealed preference’ reasoning, namely studying the choices they make in difficult situations. The second line of evidence comes from the way in which EU leaders have repeatedly revealed that they unanimously believe that enlargement requires a reform of EU decision making procedures.

EU leaders have debated enlargement-linked institutional reform since the early 1990s. Hard bargaining has pared down the agenda to the bare essentials – reform of the Council voting rules and reform of the Commission’s composition. None of the other institutional changes in the Constitution are essential to allow the EU to function effectively and legitimately – if they had been, then they would have been discussed the IGC96 or IGC2000. Every treaty has a number of ‘filler’ items – things that address the concern du jour, or help buy the political support of wavering governments. The Constitution’s removal of the three pillars, the Passerelle, and inclusion of the Social Charter were included in the Constitution to balance the trade-off between Federalists and Intergovernmentalist – not to address the urgent and obvious problems posed by enlargement. While some of these measures may be part of the next grand bargain but there may also be other ways of accomplishing the same balance.

Europe needs a new treaty. The new treaty may contain a variety of ‘filler’ items but it must reform of EU current decision making system. In short it must fix up the Nice Treaty’s foul up.

URL:  http://www.cepr.org/pubs/PolicyInsights/CEPR_Policy_Insight_003.asp

Topics:  EU institutions

Tags:  EU Treaty

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