Pandora’s (ballot) box

Richard Baldwin, Mika Widgrén, 16 June 2007

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The German Presidency wants to shut down discussion of Council of Minister voting rules in the negotiations over a new treaty to replace the rejected Constitution. The Constitution voting rules were agreed during the 2004 Irish Presidency in a crisis atmosphere. They were adopted with little public discussion. What little analysis was done was based on pure speculation since they were adopted without any real-world experience with decision-making in an EU of 25+ members. The EU now has two years of experience, so it is only natural to revisit the issue.

Getting the voting rules right is a matter of the utmost importance, and the status quo voting rules – which will remain in effect until a new treaty takes effect – do need to be changed. The EU will face many important decision-making challenges in the coming decades. It is critical that the decision-making process is well thought though and widely accepted as legitimate. Shutting down discussion and analysis is not the way to achieve this.

Europe should take the time to do it right. Europe does need a new treaty and that treaty does need to reform the status quo Council of Ministers voting rules. But voting rules are not easy to evaluate. The piecemeal changes that so often come out of political negotiations are likely to have unexpected affects on the distribution of power among members and institutions.

CEPR Policy Insight No. 5 presents the status-quo voting rules (from the Nice Treaty), the rules in the rejected Constitution, and some alternatives. Its also presents a way to organise thinking about the impact of Council voting reforms on the legitimacy and efficacy of the Council of Ministers’ voting rules as well as the impact on distribution of power among EU members and institutions. Lastly, it suggests a way that the status quo rules could be repaired without greatly altering the distribution of power among members.

Option #1 on Council voting rules is to stay with the Constitution’s double majority rules where passing a law requires at least X% of the member states that represent at least Y% of the EU population (in the Constitution, X=55, Y=65). Negotiators may want to tinker with X (membership threshold) and Y (population threshold); for example, in the 2003 draft Constitution X was 50% and Y was 60%. Option #2 is to stay with the Nice Treaty rules but to repair them. Poland is pushing an allocation according to the square-root of members’ population, but there are others.

The first thing to note is that both options would allow the EU to function effectively and legitimately with a greatly expanded membership. The second thing to note is that each option could be modified slightly to fit political necessities. On Option #1, the main room for tinkering is on the two majority thresholds. It can be shown that raising the membership threshold shifts power away from big nations, especially Germany; raising the population threshold shifts power towards them. However, if the two thresholds are raised to about 70%, the voting rules won’t allow the enlarged EU to maintain its ability to act.

Option #2 stays with the EU’s classic solution of weighted voting (which is how the Nice Treaty rules function de facto), but suggests a change in the weights and/or the majority threshold. It can be shown that relatively simple changes to the Nice Treaty system – specifically, lowering of the majority thresholds – would allow the EU to maintain its ability to act without altering the status quo distribution of power. Not a bad outcome; the EU functions and Poland keeps its power. Poland is pushing for a more radical revision of the Nice Treaty rules, arguing for voting weights that rise with the square-root of the nation’s population. This so-called Penrose rule has a sanctified place in voting game theory because it tends to give equal power per person.1 This is a mainstream proposal; Sweden pushed it during the negotiations that led to the Nice Treaty. If the majority threshold is set low enough, it would allow the enlarged EU to act effectively.

The balance of power between the Council and the Parliament is affected by changes in the Council’s voting rules. The Policy Insight explains how making Council voting rules more efficient reduces the Council’s influence relative to that of the Parliament on a randomly selected issue. The impact of great Council decision-making efficiency on the Commission’s power is less clear due to the amendment possibilities, but the general trend is obvious. Anything that makes it easier to get a proposal passed by the Council-Parliament pair give the Commission more leeway in crafting new legislation. Note, however, that influence need not be a zero sum game. Raising Council efficiency increase the flow of legislation passed and so increases the influence of all three bodies involved.

A straightforward implication of this logic is that making it easier for the Council to say ‘yes’ makes it more important that the Commission is representative of all the members. This point is not well recognised in the debate. It means that one should not consider Council voting reform in isolation from the question of Commission composition – as was unfortunately that case in the Constitution. (The European Convention had no Working Group on institutional reform.) The Irish Presidency did negotiated changes in both the voting rules and the Commission composition, but this was done in a crisis atmosphere without the aid of systematic, public discussion and analysis.

When EU heads of state and government negotiated over the draft constitution in 2003 and 2004, there was fierce debate surrounding reform of the Commission reform proposals. Almost everyone realised that a Commission with too many members would be ineffective, but who should sacrifice the right to have a Commissioner? Small members – who view the Commission as a key protector of their rights – felt a Commissioner was critical. Given the skewed size distribution of EU members, large members felt it essential that there be a Commission from each of the six big members who together account for three-quarters of the Union’s population.

The compromise in the Constitution was to stick with the Nice Treaty’s one-per-member up to 2014, after which the number is capped at two thirds the number of EU members, with Commissioners rotating equally among Member States. The rotation system is not specified and it might never occur, even if the Constitution did come into effect. By 2014, the Commission would have had almost a decade of working with 25-plus members. Critically, the Constitution grants the European Council the power to change the number of Commissioners with a unanimous vote (i.e. without a new Treaty), so the Council might well decide to stick with the one-per-member rule.

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

Topics:  EU institutions

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