Random thoughts – because, let’s face it, no one knows what’s going to happen and most economic predictions over the last few years have proven utterly mistaken.

To note: I’ve always been euro-sceptic.

Yes, that was deliberately hyphenated: I’ve never been entirely convinced of the benefits of a single currency for a group of economies as diverse as those of the EU – and this even before I’d heard the term “optimum currency area“.

That’s not to say that I don’t think that a single currency would be a good thing for Europe *eventually*. But my use of “eventually” when it comes to European integration is normally looking far longer-term than pretty much any politician ever does. I’d expect pretty much everyone capable of reading this to be dead before conditions in Europe are optimal. (And that’s being optimistic…)

Anyway, lest I digress – after reading various interesting, highly contradictory articles from various self-professed soothsayers from all over Europe (and beyond) over the last few days, here’s my ranking of the likelihood of the various “what nexts” I’ve seen mooted, in approximate order of likelihood:

1) Another Greek bailout
2) Greek default & risk of contagion
3) Greece leaves the eurozone
4) Germany leaves the eurozone
5) Dissolve the euro & start again
6) Full political integration
7) Give up and dissolve the EU
8) Britain joins the euro to boost confidence & stability (yes, this really has been suggested…)

Finally, a bit of random reading – I may well keep this updated as I come across more:

Just how serious is the Greek debt problem? – Deutsche Welle asks a bunch of economists what they reckon. Decidedly more restrained than much coverage, with varied viewpoints. A handy overview, and a good starting point for newcomers.

Beware Eurosceptics bearing gifts – one of the most sensible, restrained pieces I’ve seen. From, as ever, David Rennie of The Economist. Key quote: “Pretty much every option looks bad.”

Time for Plan B: How the Euro Became Europe’s Greatest Threat – the article everyone’s been talking about, from Der Spiegel. Worth a read – while also worth noting that it only mentions the word “exposure” twice in what is a *very* long article. The omissions are as important as the (sensible) key point that the way the euro was set up was based not on sound economics, but on political wishful thinking. People who only skim the section-headings (like “The Euro is a fair-weather construct“) are likely to miss the subtleties of the – decidedly German – argument. Fascinating piece, but to be read with a critical eye.

Imperial Germany – eager to bury the euro – a Greek response to that Spiegel article. A strong response – sample quote “Berlin has shown that it wants to distinguish itself through the implementation of a selfish nationalist policy that will break nations and states that are unable or unwilling to follow in its footsteps” – but worth reading.

Banks have £1.6 trillion exposure to ailing quartet of Greece, Ireland, Portugal and Spain – from the eurosceptic Telegraph, scary numbers putting Britain’s likely £1bn contribution to a second Greek bailout (via the IMF, not the EU) into some kind of context.

Greek Debt Crisis: how exposed is your bank? – handy chart showing likely impact (could do with additional ones for exposure to Irish / Portugese / Spanish debt too, in case there’s a domino effect…)

Eurozone debt crisis – to restructure or not? – from the Centre for European Reform, a normally decidedly pro-EU thinktank that’s turning decidedly hostile (justifiably so, some might say) in recent days. Key quote: “All this could poison European politics without resolving the economics”.

Hell, for that matter, *all* the Centre for European Reform’s recent publications on the euro crisis are well worth a read…

Can the Eurozone be saved? – From Foreign Affairs back in April, but still worth a read – especially for explaining in simple terms just why this current crisis is unique and utterly unpredictable: “In the eyes of markets and skeptical observers, the European Union is more than an intergovernmental organization but not yet a state. When the European Union bickers and dithers, the markets have no idea what may happen.”

Wednesday additions – catching up with the blogs:

The gloom of having no good options – Conor from The European Citizen sums up: “At the moment the best option seems to be to accept the bad austerity and bail-out deal and forge ahead with reforms in Greece with at least the thin cushion of EU/IMF loans rather than no loans at all and hope that either (a) the EU gets its act together; or (b) the painful austerity will help Greece just enough so that it can partially default in a more managed way in a year or two when the prospects are better for it and the EU. Neither option is an inspiring or very sellable one.”

Euro(w)s… Democracy versus Sovereignty – A Bit More Complicated… shows how, well, it’s a bit more complicated, giving some much needed historical/theoretical context: “The question is that old point of “no taxation without representation”. In a bailout situation between states, it is not only the taxpayers of Greece who have a legitimate interest in how Greece handles its debts but the taxpayers of the countries providing the help via the IMF and the Eurozone… welcome to the complicated world we live in.”

Greece’s unnecessary crisis – could more decisive action have prevented this situation? Yes, argues George Irvin at the Social Europe Journal blog: “the real lesson of the Greek debacle is not that that peripheral countries should exit the eurozone (although that is now a distinct possibility); rather, it is that the current situation results from the increasingly rightward drift of Europe and the short-sightedness of our political class.”

Delaying tactics are only increasing the costs of the eurozone crisis – the Open Europe blog (rarely somewhere to avoid giving the EU a kicking) seems to agree.

The road to “new European reunification” runs through Greece – The German Marshall Fund blog does a superb job of putting a complex situation into some kind of context, and is worth quoting at length:

“EU Commissioner for Economic and Monetary Affairs Olli Rehn rightly stressed in late May, “There is a certain aid fatigue in all of northern Europe [and] a certain reform fatigue in southern Europe.” Nearly a month later, nothing has changed. Yet both the United States and China have upped the ante by signaling that an uncontrolled debt spiral and string of defaults in Europe could be disastrous for their own economies. So what should the EU do? And, importantly, what will be the lasting legacies of any measures it takes?

…the fear of a financial and economic chain reaction has accelerated the EU’s integration by pushing institutions and member states to quickly decide on issues of governance, accountability, and leadership; essentially to agree on the politics of European economic policy. Through this process, all involved are framing the limits of their powers and responsibilities. This week, European leaders will set the new terms of Europe’s economic union. In a year’s time, they have been asked to agree on strategic decisions they have postponed for decades. Beyond the Greek sovereign debt crisis lies the more profound issue of European political integration; Europe needs a “new reunification,” this time of the North and South. Yet with the economic and social struggles ahead, and in the face of a slow recovery, Europe also needs strong political leadership to look beyond special interests. Only tough political choices today will make the sound policies of tomorrow.

“…It is not just about the economics. Today’s struggles have a lot to do with regulating economic policy and affirming institutional power. In this sense, the “invisible Brussels” might not easily restore public trust in the EU, but profound changes are underway. Hasn’t the ECB already emerged as a central actor to any economic decision? Hasn’t the Eurogroup become the true hub of European economics? Hasn’t the European Parliament used the opportunity of reforming economic governance to promote further Commission oversight of national economies? Whatever one calls it, the EU is in a period of adjustment or transition or adaptation to a new paradigm — there will be a new equilibrium calling for new policies. Europe will be stronger because it will be different.

“…The European debt crisis and its repercussions might be this generation’s tragedy, but it might also be its opportunity to deepen the EU’s integration. It could be its New Deal, its Marshall Plan, its Reunification. European leaders owe their people a political stance — the time has come for a new Declaration, not just another Statement. EU “founding father” Jean Monnet believed that “we only have the choice between changes we are forced to make and those we wanted and were able to achieve.” This week, paradoxically, Europe will be forced to make the changes it always wanted but never dared to achieve.”

Worth reading in full, that one. One of the most interesting pieces I’ve seen on this whole mess.

I’m on the other side of the world at the moment, with limited web/computer access (writing this on a combination of a mobile phone and a computer with a Japanese keyboard and operating system, so likely to be more typo-ridden and less coherent than I’d like), hence even less from me than usual. But this deserves to be noted:

“Europe is at a crossroads,” Merkel declared to the German parliament in Berlin today. “This is about no more and no less than the future of Europe and about Germany’s future in Europe.”

…In return for leading the rescue attempt, Germany is demanding new rules and penalties for the 16 countries taking part in the single currency.

The 16 could not keep muddling along turning a blind eye to the fudges and fiddling of fiscal miscreants, she argued. Instead, persistent breakers of the euro rules could be “suspended” from the single currency, fiscal sinners would have to forfeit their voting rights in EU councils, and would lose EU subsidies.

If there was no alternative, a country using the euro should be allowed to go insolvent, meaning hundreds of billions in losses for international banks and other creditors. This was seen as a warning to the markets betting on a country’s sovereign debt default, while confident that investors would recoup their money from European and German bailouts.

As a last resort, Wolfgang Schaeuble, the German finance minister, is proposing that a persistent rule-breaker be expelled from the eurozone, though not from the EU. Olli Rehn, the European commissioner for monetary affairs, is to unveil proposals next week for new rules that would give Brussels the power to scrutinise national budgets, withhold EU funds, and impose penalties in the eurozone.

The Germans support and oppose some of Rehn’s measures, but are against vesting the powers in the European Commission. Merkel’s proposals are radical and would require renegotiating the Lisbon Treaty defining how the EU works.

Many have argued that European monetary union was never going to work without far tighter centralised controls. They may now be about to be proved right.

For advocates of the euro (and I remain unconvinced one way or the other, seeing it as nice in theory but problematic in practice, as well as relatively convinced that it was a) introduced too soon, and b) too lax on entry criteria), this is a depressing time, with little space for optimism.

For advocates of the EU, it is almost as tricky to see anything positive here. Yes, this crisis may finally underscore something I’ve been saying for years – not all EU member states are equal, so it’s about time we stopped pretending that they are and start considering how to make a multi-tier EU function effectively. But after the decade-long squabbles that led to the final ratification of the Lisbon Treaty six months ago, I can’t see anyone in Europe being keen to start a fresh round of EU reform talks.

At the same time, we are likely to start to see some big shifts in the attitudes of two of the EU’s most important member states, Britain and Germany.

Britain, because of today’s general election, which may see the eurosceptic Conservative party gain power (and, more to the point, the strongly anti-EU William Hague become UK Foreign Secretary), with a number of explicit promises to scale back Britain’s already unenthusiastic involvement in EU affairs.

Germany, because of the understandable resentment from German taxpayers at having to bail out the rest of the EU combining with frustration at being the single biggest contributor to the EU project while at the same time having the smallest amount of influence (in proportion to both economic might and population).

Plus – an important point, this, as so much of Germany’s foreign policy over the last 60 years has been due to residual feelings of guilt and shame over World War 2 – we are entering the decade in which the last WWII veterans are going to start dying off. There is only so long that Europe’s largest economy was going to allow itself to be bossed around based on a geopolitical version of the sins of the father.

The decision of some parts of the Greek press to explicitly bring up the Nazi occupation of that country as a reason why Germany effectively owed them a bailout has only further underlined a feeling that has understandably been rising in Germany for some time now – “the Second World War had nothing to do with me – I wasn’t even born then, so why the hell should I be punished for what my grandparents’ generation did?”

To (only slightly) oversimplify, for the first 50 years of its existence, the EU has been shaped primarily by France and French intersts (note that it was a former French president, not a former German chancellor, who drew up the EU Constitutionh note that the Treaty of Rome contains many France-only clausesh note that France still receives a disproportionate amount of Common Agricultural Policy funds). Germany has tended to stand dutifully in the background, mostly nodding in (sometimes reluctant) agreement, due to a combination of war guilt and genuine enthusiasm for the ideas of European integration.

Germany has invested more in the EU – both financially and philosophically – than any other member state, yet has hed comparatively little say in how the project has evolved.

With the Greek crisis, this could all be about to change. Germany has long had a moral right to have a greater say in EU affairs – this may be the moment when she starts to assert that right.

I, for one, am hopeful that this could prove very positive indeed. Not in the short-term, perhaps – but in the medium-term this may, with any luck, see the EU reconstituted on more sensible grounds, where weak economies are no longer able to drag down the strong, and where rather than progressing at the pace of the weakest or most reluctant member state, those that are stronger or more enthusiastic for further integration can finally be allowed to truly flourish.

Update: The Centre for European Reform seems to be thinking on similar lines about the Germany-EU relationship… Key quote:

It is hard to see how the EU could make progress on anything – whether it is services market liberalisation or a common energy policy – with a reluctant, grumpy and inward-looking Germany at its heart.

It is time for some damage limitation.

A guest post from that rare beast, an openly pro-EU Tory – in this case Thomas Byrne of the blog Byrne Tofferings, who is keen to sound out the thoughts of a more international audience to his suggestion for the first High Representative of the Union for Foreign Affairs and Security Policy, the successor to the High Representative for the Common Foreign and Security Policy (currently Javier Solana):

Chris Patten has signalled his interest in the High Representative for the Common Foreign and Security Policy position, something I’m going to give my support to.

If you want to look at important conflicts that Britain has been involved with since the EU’s foundation – Falklands, Kosovo, Gulf War, Iraq, Afghanistan, etc. the EU has actively or passively opposed every one, Chris Patten would be the perfect man for turning EU Foreign Policy into a force to be reckoned with.

Chris Patten was the first Governor who actually cared about trying to bring democracy to Hong Kong. Unlike most of his predecessor(s) who were ‘sinologists,’ which meant they just kowtowed to Peking, he actually stood up for Hong Kong.

Patten’s experience would be useful in the Balkans – Bosnia, Serbia, Croatia, Macedonia, Albania, Kosovo, Moldova – and Turkey, all of which are pushing for EU membership to a greater or lesser extent. Not to mention some of the Caucasian and Central Asian countries that are members of the Council of Europe, and could down the line become candidate countries – or the elephant in the European room that is Belarus, the last dictatorship on the continent.

In Chris Patten’s book (Not Quite The Diplomat) he suggests the Tories have saddled themselves with a Eurosceptic ideology for no good reason, something that I’d agree with, his Europhile sentiment and his experience within the commission make him the perfect man to slide into this role. Firstly ,because of his experience of EU institutions and dealings with each of the member states, but also when the Tories come into government they’ll be dealing with someone they can relate to, lending a plaster to the Eurosceptic position of some MEP’s like Daniel Hannan, and the grassroots and lead the Conservative party into a position within Europe that would silence those that claim the party are on the fringe.

The proposed President of the European Council is very far from being “President of Europe” – either in terms of profile or power.

Whoever lands the job (and it’s highly unlikely to be Tony Blair) will have practically zero influence on anything, acting instead as little more than a moderator between the governments of the member states as they continue to run the EU show. And will be in office for just two and a half years – which is no time at all in EU terms (hell, it’s just taken more than a decade to get agreement on a treaty which doesn’t solve half the problems it was meant to…)

Meanwhile the rotating EU Presidency – the Presidency of the Council of the European Union – will continue as usual (currently Sweden, with Spain taking over on January 1st), ensuring that the President of the European Council can constantly be outshone by whoever holds the more established rotating presidency. Because the rotating presidency still has the ability to influence the EU’s focus for the six months that each member state holds it – whereas the President of the European Council will have *no* formal powers whatsoever, and remains hugely ill-defined.

And that’s before you note that the President of the European Council’s role, as vaguely as it has been described, also overlaps with that of the far better-established Presidency of the European Commission (currently Jose Manuel Barroso) and the EU High Representative (currently Javier Solana). A brand new two and a half year office versus two existing five-year offices? I know which ones I’m betting on to have the real power here.

In other words, it really doesn’t matter who gets the gig. It’s not important in the slightest. It’s a meaningless position.

I do get that it’s confusing to have a (proposed) President of the European Council AND a President of the Council of the European Union (not to mention the Council of Europe), but come on – the significance of this is being blown out of all proportion.

(Originally posted as a comment to this article over at the Guardian)

A comment I left over at The Devil’s Kitchen a couple of months back that I recently stumbled upon bears resuscitating as a quick post in its own right, as debates about the EU resurface ahead of the re-run Irish Lisbon Treaty referendum:

It’s impossible to do a cost/benefit analysis of *all* EU laws – that doesn’t mean you can’t do a cost/benefit analysis of individual new laws before passing them.

You can, after all, work out the likely impact of a law liberalising the market for product category x on related industries a, b, c, (etc.) and even make an educated guess about the overall impact that this law may have on the economy as a whole.

But when it comes to the economy you can never understand everything – if we’ve learned nothing else in the last 12 months, we’ve learned that. Hell, with something as complex as a continent-wide economic system, there are so many other factors at play, though it may be possible to make an educated guess about the impact of a piece of legislation (enough to judge if it’s going to be beneficial, at any rate), you’ll never be able to track *all* of its effects – countless other things will be affecting individual parts of the economy in countless different ways, from other bits of EU and national legislation (which still often overlap) through local levels of trades unionism, consumer spending patterns, passing fashions, local infrastructure, and so on and so on.

In other words, to be able to put an actual monetary figure on the costs/benefits of EU legislation *as a whole*, you’d first need to work out a system for tracking all the workings of the entire European economy (or, at the very least, the entire economy of the individual member state you want to study). Because without complete understanding how an economy works both at macro- and micro- levels, it is impossible to judge how introducing variable x might affect it – because who’s to say it’s not actually variable b, h or z instead if you haven’t also studied their influence?.

So *any* claims about the costs OR benefits of the EU must be nonsense. Because the only way we could actually tell is if a) we understood the economy of Europe inside-out (which we don’t), and b) we had a control sample of a Europe in which the EU never came into being to which we could compare our findings.

So although I feel that the EU has done more good than harm to both the British economy and the economy of Europe as a whole, there is no way that I can prove that. There’s also no way that anyone of a more eurosceptic bent can prove that the opposite is true. I could point to individual benefits, they could point to individual costs – we could add up more and more of each until we have a wealth of evidence and can start chucking around figures like 200 or 600 billion. But we’d still have only scratched the surface.

This is not a flaw in the way the EU works, it is just a consequence of the EU’s continent-spanning economy (which exists in a world that has become increasingly globalised, and so increasingly economically complex and volatile over the last fifty years) being an incredibly, vastly, inconceivably complicated system that no one can ever fully understand.

The Lisbon Treaty, of course, is not one single new bit of legislation (unlike its predecessor, the Constitution a sprawling mess of a document, but at least a relatively coherent one) – it is instead a vast number of often tiny, minor amendments to a whole array of earlier treaties and bits of legislation, affecting almost all areas in which the EU currently functions.

This makes doing a cost-benefit analysis of the Lisbon Treaty (both economic and social costs/benefits) just about as impossible as it is to do one of the EU as a whole. And as so much of what Lisbon does is kept in deliberately vague terms (it is a compromise document drawn up by 27 governments, after all), and as parts of it are arguably self-contradictory, the task is made even harder.

In other words, the proof of the pudding is in the eating. Lisbon’s effect on the EU and on individual EU member states will be determined by how it is interpreted by the Commission, Council, Parliament and member states after it comes into force far more than it will be by what it actually says. Unlike the Constitution, which attempted to lay down hard and fast rules, the Lisbon Treaty (foolishly, in my books) pretends to be laying down rules, but is actually more like a series of guidelines, to be solidified or modified over the coming years.

However, one major shift is the greater emphasis on the power of the European Parliament and of the parliaments of the member states to have a say in future EU legislation. Pass the Lisbon Treaty, and this ongoing process of interpretation and modification will have far more input from elected representatives than the alternative – which is not to make do and carry on, as some have suggested, but yet *another* round of negotiations for new EU frameworks. Another round of negotiations that will, once again, be dominated by input from the unelected bureaucrats, government officials and pressure-groups that have so dominated all previous such processes.

Is it undemocratic to force Ireland to vote again on a Treaty that they’ve already rejected? Well, yes. But through this bit of undemocratic second-chancing, the people of Europe as a whole may end up with far more ability to have a say in the inevitable future rounds of EU reform and, just perhaps, begin to shift the thing closer towards what they actually want.

So, is the Lisbon Treaty a bit rubbish? Yes. But it’s better than what we’ve got, and better than the likely alternative. Hard to be enthusiastic about, hard to actively support – but necessary if you want an EU that more closely matches the wishes of the people, even if it might come into force by forcing the people of Ireland to think again.

Another small hurdle for the much-beleaguered treaty to overcome:

the Act Extending and Strengthening the Rights of the Bundestag and the Bundesrat in European Union Matters (Gesetz über die Ausweitung und Stärkung der Rechte des Bundestages und des Bundesrates in Angelegenheiten der Europäischen Union) infringes Article 38.1 in conjunction with Article 23.1 of the Basic Law (Grundgesetz – GG) insofar as the Bundestag and the Bundesrat have not been accorded sufficient rights of participation in European lawmaking procedures and treaty amendment procedures. The Federal Republic of Germany’s instrument of ratification of the Treaty of Lisbon may not be deposited as long as the constitutionally required legal elaboration of the parliamentary rights of participation has not entered into force.

And so the ratification of the Lisbon Treaty is to be yet further delayed while Germany rejigs a few bits and pieces of its own constitution to accommodate it. Which, depending on how long Germany takes to sort this out, could mean that the treaty is delayed long enough for there to be a Conservative government in the UK before Lisbon has been fully ratified, which would mean a UK referendum, which would mean Lisbon’s rejection by Britain and yet another crisis for the EU. Fun fun fun.

There’s lots more in this genuinely fascinating ruling that is pretty much guaranteed to be seized upon by those of an anti-EU persuasion – even though the real issue here is as much Germany’s strict constitution as any problems with the expansion of EU powers. The ruling also helps clarify a number of issues, as well as point to more issues of the EU’s structure and identity that really need to be clarified by the EU itself.

First up, the EU’s crisis of identity and purpose – as I’ve noted many times, the EU itself doesn’t know what it is for, so little wonder it’s got a rather confused structure:

The structural problem of the European Union is at the centre of the review of constitutionality. The extent of the Union’s freedom of action has steadily and considerably increased, not least by the Treaty of Lisbon, so that meanwhile in some fields of policy, the European Union has a shape that corresponds to that of a federal state, i.e. is analogous to that of a state. In contrast, the internal decision-making and appointment procedures remain predominantly committed to the pattern of an international organisation, i.e. are analogous to international law; as before, the structure of the European Union essentially follows the principle of the equality of states.

Note, dear eurosceptic friends, that “analogous to a state” does not mean “is a state” – and note also that “a shape that corresponds to that of a federal state” does also not mean “is a state” (and also that federal states can take many forms – their defining characteristic being the importance placed on devolved, state/regional levels of governance over that of a central authority).

Indeed, this ruling seems to utterly preclude the creation of a European superstate – at least, not without a fundamental change to the German constitution, ratified by referendum (that’s how I read this, anyway):

As long as, consequently, no uniform European people, as the subject of legitimisation, can express its majority will in a politically effective manner that takes due account of equality in the context of the foundation of a European federal state, the peoples of the European Union, which are constituted in their Member States, remain the decisive holders of public authority, including Union authority. In Germany, accession to a European federal state would require the creation of a new constitution, which would go along with the declared waiver of the sovereign statehood safeguarded by the Basic Law.

…The peoples of the Member States are the holders of the constituent power. The Basic Law does not permit the special bodies of the legislative, executive and judicial power to dispose of the essential elements of the constitution.

…The authorisation to transfer sovereign powers to the European Union pursuant to Article 23.1 GG is, however, granted under the condition that the sovereign statehood of a constitutional state is maintained on the basis of a responsible integration programme according to the principle of conferral and respecting the Member States’ constitutional identity, and that at the same time the Federal Republic of Germany does not lose its ability to politically and socially shape the living conditions on its own responsibility.

That, to me, pretty much categorically rules out any EU superstate – while allowing for further integration, up to an indeterminate level (yet to be defined, but before the stage at which Germany’s ability to “politically and socially shape the living conditions” of its people is lost) at which a popular vote and alteration of the German Constitution would become necessary. Later, the EU’s current nature is more clearly defined:

With the present status of integration, the European Union does, even upon the entry into force of the Treaty of Lisbon, not yet attain a shape that corresponds to the level of legitimisation of a democracy constituted as a state. It is not a federal state but remains an association of sovereign states to which the principle of conferral applies…

With the entry into force of the Treaty of Lisbon, the Federal Republic of Germany will remain a sovereign state. In particular, the substance of German state authority is protected.

There we have it – fairly categorical, that. And if anti-EU types are happy to use German politicians to claim that 84% of laws stem from the EU, I think it’s only fair for those of us of a less vehemently anti-EU persuasion be allowed to quote these German judges repeatedly when countering claims that the EU is becoming a superstate.

Moving on, the European Parliament also comes in for some stick, largely for still being ineffective, under-developed, and uninfluential – though this is seen as a good thing, as too powerful a European Parliament, runs the logic, could claim greater democratic legitimacy within the EU decision-making process than the governments of the member states working together behind the scenes via the Council and Commission, and thus reduce their freedom of action (the EU’s “democratic deficit”, in other words, is actually preserving the sovereignty of the member states…):

Neither as regards its composition nor its position in the European competence structure is the European Parliament sufficiently prepared to take representative and assignable majority decisions as uniform decisions on political direction. Measured against requirements placed on democracy in states, its election does not take due account of equality, and it is not competent to take authoritative decisions on political direction in the context of the supranational balancing of interest between the states. It therefore cannot support a parliamentary government and organise itself with regard to party politics in the system of government and opposition in such a way that a decision on political direction taken by the European electorate could have a politically decisive effect. Due to this structural democratic deficit, which cannot be resolved in a Staatenverbund, further steps of integration that go beyond the status quo may undermine neither the States’ political power of action nor the principle of conferral.

And, just to underline yet further how an EU superstate is not on the cards:

The European Union must comply with democratic principles as regards its nature and extent and also as regards its own organisational and procedural elaboration (Article 23.1, Article 20.1 and 20.2 in conjunction with Article 79.3 of the Basic Law). This means firstly that European integration may not result in the system of democratic rule in Germany being undermined. This does not mean that a number of sovereign powers which can be determined from the outset or specific types of sovereign powers must remain in the hands of the state. European unification on the basis of a union of sovereign states under the Treaties may, however, not be realised in such a way that the Member States do not retain sufficient room for the political formation of the economic, cultural and social circumstances of life. This applies in particular to areas which shape the citizens’ circumstances of life, in particular the private space of their own responsibility and of political and social security, which is protected by the fundamental rights, and to political decisions that particularly depend on previous understanding as regards culture, history and language and which unfold in discourses in the space of a political public that is organised by party politics and Parliament. To the extent
that in these areas, which are of particular importance for democracy, a transfer of sovereign powers is permitted at all, a narrow interpretation is required. This concerns in particular the administration of criminal law, the civil and the military monopoly on the use of force, fundamental fiscal decisions on revenue and expenditure, the shaping of the circumstances of life by social policy and important decisions on cultural issues such as the school and education system, the provisions governing the media, and dealing with religious communities.

Oh, and we’ve also got a categorical rejection of that myth that the Lisbon Treaty has the potential to become a self-amending enabling act – for this would be against German constitutional law:

The Basic Law does not grant the German state bodies powers to transfer sovereign powers in such a way that their exercise can independently establish other competences for the European Union. It prohibits the transfer of competence to decide on its own competence (Kompetenz-Kompetenz). The act approving a treaty amending a European Treaty and the national accompanying laws must therefore be such that European integration continues to take place according to the principle of conferral without the possibility for the European Union of taking possession of Kompetenz-Kompetenz or to violate the Member States’ constitutional identity.

There’s lots more of interest there – though precise interpretations of the significance of many of the details are a tad tricky for me to provide with my, *ahem*, less than perfect knowledge of German constitutional law. Nonetheless, it’s a bit of EU geek heaven – and, I’m sure you’ll agree, a lot of those definitions of what the EU’s competences are and should be (as well as the implicit restrictions made on certain aspects of future European integration) are likely to prove invaluable in the years to come as the EU continues to try and work out its purpose and direction.

Because, lest we forget, Lisbon actually is really little more than the tidying-up exercise that it has been claimed as. Yes, it introduces a few new aspects that some may see as worrying – but it still hasn’t solved the fundamental problems of EU governance and the relationships between the member states that have arisen since the expansion to 25 (now 27 – and soon likely to be 29). Almost as soon as Lisbon is ratified, work will have to begin on its successor – and these rulings by the German Constituional Court will, with any luck, provide useful guidelines for the next batch of EU reformers.

Prolific Euroblogger Julien Frisch – “a convinced European citizen and glad to be a citizen of the European Union” – is approaching his first anniversary of blogging. During that time, his coveraged has been both eclectic and entertaining, informative and interesting. (If you’ve not been reading him anyway, you really should be…)

But now, after a solid year of blogging about the EU from a pro-EU perspective, the sheer incompetence and bloody-mindedness of the political elites that oversee the frequently useless manner in which the EU functions has seemingly forced him to radically shift his opinions:

“I think I am becoming an absolute EU-sceptic…

When I look at all this, I more and more get the impression that the EU has failed to be the project of Europeans.

The EU is the project of power games, mostly between old, worn-out men who try to compare the length of their penises instead of caring for the interests of the continent. In one of these contests, an old Pole now has apparently won the EP presidency over an old Italian guy.

On the one side, the EU is a PR project of technocrats who have no interest in supporting a common European identity and a genuine European democracy, and on the other side, it is the ideal supranational playing field for nationalists who always fight for “the best” of their countries instead of promoting the best for Europe as a whole.

They all lack European ambition, they all lack spirit, and they all don’t have any idea where they want this Union to be in 10 years.

The more I watch them doing this, the less interested I am in what they do. The more I listen to their heartless speeches, their superficial declarations, their diplomatic compromises, the more I am convinced that nothing will change.

I know how he feels.

This is a vital, fundamental problem that the EU seems repeatedly unable to address – it is excruciatingly hard to be enthusiastic about the European Union. No matter how much you try, the more you look into it, the more you see its flaws. The more you look for sensible ideas for its future purpose and reform, the more you see the tsunami of inadequates that tend to gain positions of power in the damn thing rise up and threaten to swamp the whole project in a deluge of tedium, petty squabbles, meaningless jargon and total lack of vision.

This is precisely why I maintain that genuine europhiles are a very rare breed indeed: The EU is simply not loveable. It has the potential to turn into something truly great, and I still maintain that it is more good than bad, but it is deeply flawed – and that flaw stems from the people in charge of the damned thing: a never-ending rota of short-term losers, none of whom have anything personal to gain from looking to the EU’s long-term success, only from securing short-term advantages pursuit of positive PR (usually aimed at their national publics for national electoral reasons, rather than a European public for altruistic reasons).

As I’ve noted many times over the 6 years that I’ve been blogging about the damned thing, the fundamental question that remains unanswered is what is the EU for? The people who run the thing don’t know – nor do they seem to care. Little wonder, then, that those of us – like Julien, like me, like those British eurosceptics who want it to be just a trading bloc – with a clear vision of what we think that the EU should be about… Little wonder that, well, from time to time we all just get so damned pissed off with the whole thing.

The EU represents a good idea, executed with varying degrees of success. As with any hit and miss project, it’s largely a matter of perception whether you think the hits outweigh the misses. But when the people running the thing are so useless – and when it looks increasingly likely that Barroso is likely to return as Commission President despite having singularly failed in every important task with which he was faced during his term in office (passing the Constitution, passing the Lisbon Treaty, negotiating reform of the budget, starting to reform the CAP, etc. etc. etc.), well… Little wonder that what enthusiasm you do have starts to wane.

Nonetheless, I remain optimistic – precisely because of the ongoing stalemate, stagnation and incompetent management that has dogged the EU for the last decade. There’s only so much longer this can carry on before *everyone* gets thoroughly pissed off. And when that happens – finally – we may see some serious reform.

I’d give it another few years, though. Around about the time of the next budget negotiations in 2013, most likely – though possibly sooner if the Lisbon Treaty somehow ends up getting scrapped. (They used to say that a week is a long time in politics – when it comes to the EU, time works differently again, and a year is like a week in any other organisation. It takes a long time for these things to happen. A very long time. Patience… Patience…)

This little debate seems to be running on and on – and it’s a fun one, so let’s keep at it. Some very good discussion is still raging away in the comments to my Jean Monnet and EU superstate posts, and Ken’s come back with a new post at EU Realist, at which I’ve just left the following.

(Other eurosceptic types who see the EU as heading towards a superstate: I’d be genuinely intrigued to hear your take to my sincere question – in bold – in the final paragraph. I just don’t get it, and truly want to understand your reasoning on this one – it’s just about the only eurosceptic anti-EU argument that I’ve never understood, even when I was a eurosceptic myself…)

Anyway, on with the argument…

1) I’m not accusing you of being a nutty conspiracy theorist at all (though there are a few of those knocking around the anti-EU camp, you can’t deny it…) – I just genuinely don’t understand how you can think that the EU is still heading down the superstate route after the repeated failures of the last decade.

2) Just because a few hardcore europhiles like Verhofstadt seem to want a superstate, and just because a few people identify some of the recent treaties as being stepping-stones on that path, doesn’t mean that this is what is happening. I could also find a number of quotes from other sources arguing exactly the opposite (quite a few hardcore pro-EU types have referred to the Lisbon Treaty as a step backwards, with a number of europhile superstatists bemoaning the lack of progress and entrenchment of national power, among other complaints).

3) You [Ken] quote the preamble to the Lisbon Treaty as an example of how we’re heading to a superstate. You do realise that the Lisbon Treaty hasn’t come into force yet, right? And not just because of the Irish referendum result – there’s also the challenge in the German constitutional court. Lisbon itself is a prime example of the lack of progress of those EU types in favour of a superstate – it’s the (in my view) failed bodged compromise rehash of the failed and unpopular Constitution, which was itself necessary thanks to the failure of the bodged compromise that was the Treaty of Nice – Lisbon is still trying to fix the same problems that Nice was attempting to solve when its descussions kicked off in the late 1990s. That’s a good ten years or more of stalemate. Hardly the stuff of an advancing superstate, surely?

4) There’s also the question of interpretation of terminology. You seem to see “federal” as being the same as “superstate” (a common assumption among British eurosceptics in particular). “Federal”, however, can mean any number of things; key to the idea, however, is the *lack* of overwhelming central control – precisely the opposite of the superstate bogeyman. You also identify “integration” and “co-operation” with being steps on a path to such a superstate – as I’ve said, I accept that that is a possibility, but I see it as being highly unlikely. Even if Lisbon DOES come into force, national vetoes will remain in pretty much every substantive area – as long as less enthusiastic countries like Britain, Denmark, the Czech Republic (and increasing numbers of eastern European member states) remain part of the EU, their vetoes ensure that a superstate remains an impossibility, no matter how many europhile superstatists there may be in other member states.

So come on: rather than pick a few quotes from individuals with limited influence while (seemingly deliberately) misinterpreting what I’m actually arguing, please just answer me this one, simple question – how can you look at the failure of every attempted EU treaty since the late 1990s and say that we’re marching down the path towards a superstate? I simply don’t get it. There has been no significant progress in European integration (that I can see) since Maastricht – and that was 17 years ago.

The European Union emerged, as we all know, as a response to the Second World War. One of the earliest aims of the founding fathers was to prevent France and Germany from ever going to war again by integrating their economies so closely that to do so would become impossible.

As a result – as well as, arguably, thanks to prolonged feelings of guilt about what the country got up to during the 30s and 40s – Germany has long been at the forefront of European integration. Germany remains one of the most enthusiastic EU member states – despite also having the strongest economy in the EU, formerly having one of the strongest currencies, paying the most into the EU budget, getting the least back, and being by far the most under-represented (by population) in the European Parliament.

It’s long been the case – albeit usually unacknowledged – that if Germany got fed up with the EU the entire project would be in danger of tumbling down. The EU could survive largely unchanged if almost any other member state decided that enough was enough (hell, if France pulled out it would arguably be improved, as the vast chunk of Common Agricultural Policy money that gets syphoned off by Paris could be redirected to more needy countries – and many more enthusiastic europhiles argue that if Britain jumped ship then the brakes the UK keeps putting on closer integration would finally be lifted, and the EU could reach new heights). If Germany gives up on the EU, all kinds of problems would kick off – not least because the European Central Bank runs out of Frankfurt.

Well, Germany hasn’t yet got the hump, and doesn’t show any signs of doing so just yet – but it could still throw a spanner in the works. Because oddly for a country in which nationalism and national self-interest have been so deliberately, systematically repressed (unsurprisingly, considering…), its constitutional court could yet rule that the Lisbon Treaty – and, by extension, many of the principles of the way the EU currently works – is illegal for providing ways for the German national parliament to be overruled.

And so it is one of the few remaining areas of German law that looks to the German national interest could end up being the brake on the current mode of EU integration, which itself originally started to prevent Germans looking too much to their own national interest.* Whoops!

As much as the anti-Lisbon Treaty crowd have got a bad reputation in certain quarters of the Brussels beltway – not helped by the lunatic fringes to right and left (as so often) being the ones who have shouted the loudest, and the recent announcement of anti-Lisbon party Libertas’ proposed candidates for the EU elections (mostly hard-right and nationalists, making a mockery of the “broad coalition for democratic reform” claims) – the German politicians who have brought this case before the constitutional court do have a point.

After all, if a national parliament (especially one from a country with a population the size of Germany’s) – elected by the people based on long-standing principles of representative democracy – can be overruled by the EU, an organisation whose democratic legitimacy is disputed to say the least, then what place for democracy in Europe?

And so, where the last time German nationalism reared its head to threaten the peace of mind of European states it was in the form of fascist dictatorship, this time German nationalism could well be rising up in the name of democracy. Democracy based around the principle of the nation state (something I can’t profess to be overly happy with), but democracy nonetheless.

The very fact that such a case merits the constitutional court’s attention shows that the legitimacy of EU decisions and powers has not yet been universally – or even legally – acknowledged. The argument that the EU is a method of overruling democracy, meanwhile, will continue to be made as long as the European Parliament remains the weakest of the EU’s principle institutions. (Will the upcoming EU elections reverse the trend for successively declining turnouts and so strengthen the case for the EP to be given more powers? I very much doubt it. It’s a catch-22 – the EP is perceived as being weak, so people don’t bother voting, so its claims to be the people’s voice diminishes along with its ability to assert influence. Such is the joy of EU democracy.)

So I ask yet again – when is the EU going to go for the kind of radical, democratic reform that is so vital for it to maintain support, and stop tinkering about with unsatisfactory compromises like Lisbon and Nice? Without the people behind it, the EU is doomed to fail. If the people were behind it – and had a sufficiently large voice in its decisions – then cases like this German one could never be brought, and complaints about the EU’s democratic deficit would become the preserve of nutters alone.

So, hot on the heels of its success getting a “No” in the Irish Lisbon Treaty referendum, Libertas has today relaunched as a pan-European political party. Look – it’s got a shiny new website and Twitter, Facebook and Flickr accounts and everything!

“If people want a strong and healthy Europe that is democratic and answerable to them, they should vote for a Libertas candidate”

All very well and good. Democracy, eh? Yep – I could go for that. Strength? Health? All sounds good. Because they’re platitudinous truisms. The same rubbish could be spouted by any and all parties.

So, what about the details of the new party’s policies and attitudes? What sort of people will be standing as candidates?

“A detailed policy document will be published in the coming months, and candidates’ names will be unveiled over a similar time frame.”

Ah… So, erm… This is a party with no policies and no candidates. Now seems a good time to repeat my comments about Libertas to a wider audience:

1) We don’t yet know how many candidates (if any) Libertas will be running, or where
2) We don’t know what their campaign is going to focus on
3) We don’t know what impact (if any) the shift from Republican to Democrat will have on them considering the allegations of their close ties to the current US administration

A genuinely pan-European pro-reform (but not anti-EU) political party could be exactly what’s needed. But there remain far too many unknowns about both Ganley and his organisation to be able to make any sensible judgements about it just yet. What is known of Ganley and his business dealings hardly makes me overly optimistic that his motives are entirely altruistic.

Having said that, I’m keeping my fingers crossed that Libertas’ pro-democracy, pro-reform, pro-integration rhetoric is actually belief (the rumoured involvement of Jens-Peter Bonde is a promising sign, for example) – though I remain sceptical about the group’s motives, largely due to a combination of the secrecy that still surrounds its funding, the fact that its arguments against the Lisbon Treaty in the Irish referendum campaign largely consisted of nationalistic ones about Ireland losing influence, and thanks to most other “pro-reform” organisations in the past having turned out instead to be anti-EU. A reformist party I could get behind. Another anti-EU one in disguise? No thanks.

The clincher will be where Libertas decides to run. If it avoids putting candidates up against existing anti-EU/eurosceptic parties like UKIP or Denmark’s June Movement, that’ll be a good indication that the “reform” rhetoric is just fluff. If it DOES run against anti-EU parties, expect their share of the vote to go down. Which could, short-term, reduce the number of eurosceptics in the European Parliament – but which would, longer-term, simply lead to the current resentment continuing to grow, so that by the NEXT EP elections we might be ready for some serious changes.

I may be being unfair. The new party’s Facts page does, after all, tick most of my boxes:

“Libertas is not a Eurosceptic organisation… Our vision is of a united Europe, which recognises and respects the right of citizens and nations to choose their own destinies, but which encourages all Europeans to reach across the borders of nationality, language, and culture to participate in and invigorate a Union which equips us to meet the challenges of this next phase of European History.”

I hope I’m being unfair in doubting them. If Libertas is what it professes to be, it could be just the medicine that the EU needs to fix the ongoing stagnation and rot. But when it comes to EU reform organisations, far too many have turned out to be little more than anti-EU talking shops in disguise for me to accept this as face value just yet.