Reforming and Enlarging EU for 21st Century [PODCAST]

In this episode of the Liberal Europe Podcast, Leszek Jażdżewski (Fundacja Liberté!) welcomes Daniela Schwarzer, an expert in European and international affairs, whose most recent book Krisenzeit: Sicherheit, Wirtschaft, Zusammenhalt – Was Deutschland jetzt tun muss has just been published. They talk about the Group of Twelve report, the future of EU enlargement, and the necessary reforms at the European level.

Leszek Jażdżewski (LJ): What is the rationale behind the Group of Twelve report? What should we take from it?

Daniela Schwarzer

Daniela Schwarzer (DS): At the end of last year, the two Ministers of European Affairs of France and Germany had the idea that they wanted input into the question of how can the European Union (EU) be enlargement ready and what kind of institutional or decision-making reform does Europe need. They then chose six experts on each side and formed a working group, which was mandated by an official mission letter around the anniversary of the Élysée Treaty (the Franco-German friendship treaty), celebrated on January 22.

We started our work very independently. In fact, we even asked the ministers if they wanted a report which offers immediately usable propositions or instead we should propose things that will possibly not be adopted quickly, because they go too far in light of the current political situation as they might not necessarily meet the Franco-German interests. The latter was the case and we were asked to work independently.

At the beginning, we worked closely with the two ministers, trying to understand the political situation, establishing the timeframe, and figuring out how to present the report. However, once we clarified that, we developed our own approach. We put it in very simple terms.

In our view, the EU needs reforms anyway – not only because possibly six, eight, or even ten new members might join, but because even though we have seen that over the past years the EU system has been able to develop further in particular moments of crisis, there is a reason why we should look at the functioning of the system now (under new geopolitical circumstances and the political context within).

We came up with some reforms that should be adopted no matter what – regardless of whether enlargement will happen or not. We then focused on the principles for these reform proposals. We also looked at the European Union and its generous character and considered whether the reforms should be radical, a setup of a new system, or whether we should rather accept the way the EU was built and how it has evolved. We agreed to follow the latter approach.

We saw that the system has a good balance between representing European citizens and their interests in the European Parliament, having the European Commission as the guardian of the treaties. The European Council and the Council of Ministers, where the national interests are represented. We did not think that we were in a political situation where one could do away with that complex balance of interests. Therefore, we wanted to make proposals within that setup to make it work more effectively.

We followed three criteria. Every reform proposal was designed to help further at least one of these. The first one was to make the EU enlargement ready. The second was to strengthen democratic legitimacy and the rule of law. Finally, the third one was to enhance the EU’s capacity to act.

We did not work only among only the twelve of us. We had many conversations with representatives of governments, advisors, researchers, think tankers, and academics – both from the EU27 and the candidate countries. We met every other week for two hours on 8 a.m. Friday mornings and we also had three full-day meetings. On top of that, we had individual consultations with other input givers (from across the EU and the candidate countries), which provided us with extremely fruitful feedback. When we felt there is a certain expertise or a certain perspective we need, we posed a specific question. In other cases, we had a very open exchange about what they see as priorities for the European Union to reform.

We reached a stage of a one fundamental message: enlargement should happen and the European Union needs to get ready for it. It should set itself a date (it should be 2030) by which it should be enlargement ready. As of that date, it should be able to integrate new members. However, at the end of the day, it is up to the members whether they are ready. Nonetheless, the EU should show that commitment.

Secondly, we stated very clearly that enlargement needs to make the EU stronger to make sense. Bringing in new members is a geopolitical tool and an extremely important stabilizing factor for the continent. However, if through enlargement the EU becomes weaker, it would no longer be efficient or the rule of law was weakened, then it does not make sense. Therefore, we need to make sure that the European Union is not only enlargement ready, but also that it will be stronger because of it.

Thirdly, the rule of law is a non-negotiable principle. The EU has its own problems with it already in at least two member states. According to our report, this base needs to be strengthened before new countries can come in. Otherwise, there is a real risk that it will not be able to manage itself in a way that complies with this principle – which is non-negotiable to the functioning of the single market.

In a nutshell, this is how we worked. It resulted in over 40 pages of concrete proposals. Some of these can be implemented based on the Lisbon Treaty, whereas others need a treaty reform. However, we structured them in a way that there are quick wins and bigger issues to be tackled.

LJ: To what extent does the report suggest a shift in the power structure in the European Union?

DS: The rule of law was placed at the center of the report (it can be found in the very first chapter), because we realize that if that is not given, then the other reform proposals will only have limited value. Our purpose was to make the EU a stronger actor – not only internally, but also in the new geopolitical environment. Therefore, in terms of shifting power in the implementation of the rule of law, our proposals do make a difference.

We believe there is a way to implement the rule of law ‘without touching’ the EU treaties. The recent conditionality introduced in the NextGenerationEU fund served as an example here. We thus proposed rule-of-law conditionality mechanisms, which should be used to sanction rule-of-law breaches as well as the breaches of Article 2 – which lays down the fundamental values of the European Union through the multi-annual financial framework.

This is not a side budget, like the NextGenerationEU fund, but actually lies at the core of the EU budget. This does shift the power, because if that happens (and there is a good process for monitoring and implementing it), what has happened with the Article 7 will not happen, because there you have a necessity to have unanimity among all member states (except for the one that did the breach) for the mechanism to kick in.

Therefore, with a design of the new budget, there is a legitimate question to be asked (in particular, by those who give the most money to the budget), whether the expenditure side of the budget is happening according to EU law principles. If the answer is ‘no’, then the money cannot be spent. This approach shifts the balance because right now there are two countries in violation of the Article 2, hence under the Article 7 procedure can protect the other.

Clearly, there is a shift, which makes the debate more political because when it is about money, then national populations care more – not only in those countries that are sanctioned, but also those who actually pay into EU budget. If we do not work on the shared value base that everyone subscribed to, you may end up asking yourself a question ‘Why are we doing it?’. To what extent do we need to protect our own principles to make a legitimate for all to work together. If you are in a club that is as close as the EU, then you need to have joint rules – and they need to be protected.

LJ: How did you come to the conclusions in terms of the proposed institutional shifts? How should the proposed solutions work in practice? Will the member states understand that these steps should be introduced straight away?

DS: We do not suggest a fundamental change in the balance between European institutions, simply because the system has been built in a way that balances citizens participation through European elections – which, as we regret, still happen within a very national legal framework.

Secondly, participatory mechanisms should be strengthened. We do not invent new ones, but rather just need to make the existing ones relevant to institutional decision making. Then we have the representation of national interests – in the European Council and the Council of Ministers. Then, there is the European Commission, which is supposed to be there do defend European interests and make sure that the European treaties are implemented. However, the European Commission is also a place where member states send their representatives – and that is how this body is very often seen.

The Lisbon Treaty actually already offers options to reduce the number of commissioners. When we were discussing that scenario, but we did not think that it would ever happen. Some candidate countries are negotiating their accession right now and say that they will not need a commissioner of their own, but once they are in, they will likely realize that they will want one.

Therefore, we did not say that it is our only recommendation – to just implement the Lisbon Treaty and reduce the number of commissioners, meaning that as a country you would not have a commissioner either for the whole term of five years, or two and a half years if you switch halfway through. We do not think that this is going to happen. As a consequence, we came up with a model according to which there could be ‘leading commissioners’, who play a bigger role, and they would work with a team of other commissioners. This can be organized based on the Lisbon Treaty as well. However, if one wants to go only as far as giving the lead commissioners a vote in the European Commission, then we would need a treaty change.

If the system was organized in a more hierarchic way than it has been so far in the European Commission, then this would serve efficiency. Right now, more and more portfolios are being invented to satisfy the need to give each commissioner something to do. We, however, believe that they could work in a more powerful way if they form a team and have clear subjects that they push and which every commissioner could take home and talk to the national public. This would increase efficiency in the European Commission in itself and allow for not losing the aspect of having a commissioner that goes to Brussels and that can be the link with the home country, where they can talk about the European affairs.

On the other hand, the European Council presidency was an interesting topic for us. We do think that it is important – not only for managing the Council meetings, but also for the message that is being taken home. We also looked at the Troika and said that it would be good if they coordinated for one and a half years, but no bigger priorities are actually ever done in one and a half years. Usually, the process takes much longer.

Therefore, we suggest that we should look at the five-year term for the European Parliament and for the European Commission, and two-and-a-half-year terms for presidencies. Why not propose two teams – one for the first and another one for the second half of the term. Five countries would coordinate their programming )instead of three). This would also correspond with the work program of the European Commission and the EU’s research for new legislature. This way, there would be no need for a treaty change and it can be implemented once the member states decide to do so.

We were also thinking about the strategic capacity to act for the European Union and considered aligning the budget with those five years. Then we would have the work program, a team of ten national presidencies which work in two groups, and the European Commission that would be organized much more efficiently – or we would have a joint work program that can be implemented through a budget that also runs for the period of those five years.

LJ: What about the principle of majority voting on most of the European issues (including foreign and defense policies)? Your report suggest moving toward the qualified majority voting (QMV), which seems logical – especially with the perspective of more countries joining the EU. At the same time, you offer concrete solutions for securing the interests of small and medium member states.

DS: The QMV issue has been around for a very long time. The German EU presidency a few years ago tried to push it in some issues in foreign policy making – but it did not work. There was also discussion about the tax policy – an area where unanimity can hardly be met.

Interestingly, people who are very familiar with how the Brussels machine works say that even if the QMV is not used, while it is there, there fact that it is there is already beneficial. Because if all countries know that it may come to a QMV vote in the Council, then they will want to reach a compromise as neither those in the minority, nor those in the majority like bringing a controversial issue to a vote. We received interesting inputs from the people who observe Council negotiations and decision making very closely. They said that just having the QMV as a rule (without even applying it) would make a difference to the way negotiations are led.

Our proposal is, indeed, ambitious. We are aware that we will not reach the unanimity of all member states to bring all the remaining policy decisions in the European Union to the QMV. That would mean the ordinary legislation procedure would apply to all areas.

We also believe that national interests should be protected. This means that national representatives the Council (ministers) should be able to say that this is a decision which touches vital national interests. This would make it more difficult to prevent QMV than it is today to simply play the veto card on any decision – which happens quite often. We hope that this change would have a positive effect on reaching a consensus and, at the same time, help protect national interests.

If you really have to play the national card to protect what is really vital to your country, you still can. Moreover, you can transfer a given matter from the Council of Ministers to the European Council, where decisions would still be made in line with the unanimity rule. This, however, should rather be the exception because otherwise it would not be very effective.

Furthermore, we recommend rebalancing the voting shares in the QMV. Right now, we are looking at the relative weight of countries in the current QMV votes. We see that larger member states have a proportionally bigger weight. Therefore, we suggest adjusting the current system, in which a qualified majority needs 55 %of member states, representing 65% of the population, to make it 60/60. This would relatively strengthen the small and weaken the bigger states.

Clearly, we were not making proposals that are solely in France and Germany’s interest. This is why the governments did not particularly like it because it means giving up the big weight in qualified-majority decisions. Nonetheless, we hope that these proposals would make it possible to make decision-making more effective – in particular, to push governments to work more productively together.

At the moment, the veto possibility in single-policy issues is used quite often to block things for different reasons – sometimes not related to the actual policy question at stake. This is very bad for the European Union.

LJ: Is the fact that the report was a Franco-German-driven effort a positive factor? Does it have the potential to inspire the two countries to take up the leading role once again? What does success look like in the next few years? What obstacles might occur? What does the future of EU reforms look like?

DS: Frankly, I expected more pushback due to the fact that it is a Franco-German report. Interestingly, it was in our mandate that we should work with people from other countries to bring in as many perspectives as possible. We did that very consciously and spent a lot of time integrating views and balancing our proposals because we were driven by the wish that the report can make a difference. It needed to have something for many perspectives to make it interesting.

We established the link between enlarging the EU (which is strongly supported by a certain group of countries) and the need to reform parts of it (in which other countries have been very interested). This could help form a groups of member states that want to collectively tackle these topics together. They may not agree on everything but they would like to make this historical move to make it possible to enlarge the EU by eight or ten, or even more new members.

France and Germany have done a good job at taking on this initiative. The report has kicked off a very intense debate. Members of our team attended the meetings of the General Affairs Council twice – first, half-way through our work, in the summer of 2023. Back then, the debate was still slow and hesitant when it comes to institutional reforms, how does this relate to enlargement, and whether it is what needs to be done, or why enlargement is not going forward as quickly as it should. At that point, I realized that we were just at the beginning of building a joint reading of the current situation in Europe.

In September, when we were back with our report, the situation had changed completely. First of all, there was a very broad understanding that enlargement is really on the agenda and that there is a geopolitical imperative. However, it has to be workable. Some countries were clearly taking the position that if reforms are needed, they should be based on the Lisbon Treaty, whereas others acknowledged that we might need to touch the EU treaty.

Our report offers several options how to actually achieve a treaty reform. The lowest hanging fruit is using the accession treaties to actually bring some reform to the European Union. The debate has been happening already on a bigger shared base and was pretty pragmatic on some issues.

A real momentum is happening now. There are initiatives by other governments who have asked other think tanks or groups of researchers to deliver their own papers. There is another report that was spearheaded by a think tank in Lithuania, and another one in Sweden. Interestingly, we get invited by policy planners, governments, parliaments, and other think tanks around the EU to candidate countries to speak about the proposals. There was a Franco-German impulse, which was definitely crucial to kick this off, but right now it is really a trans-European debate. Positions now come from everywhere – and that is exactly what we need.

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This podcast is produced by the European Liberal Forum in collaboration with Movimento Liberal Social and Fundacja Liberté!, with the financial support of the European Parliament. Neither the European Parliament nor the European Liberal Forum are responsible for the content or for any use that be made of.

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