Joint Committee on European Union Affairs debate -
Thursday, 20 Jun 2013

Democratic Legitimacy and Accountability in the EU: Discussion (Resumed) with CES

Chairman

The first item on our agenda is democratic legitimacy and accountability in the European Union. On behalf of the joint committee, I am delighted to welcome Mr. Roland Freudenstein, deputy director and head of research at the Centre for European Studies. Mr. Freudenstein has travelled from Brussels to be with us today, for which we are very grateful. This is a continuation of the meetings we are holding on the future of the European Union. The Centre for European Studies, CES, is a leading Brussels based think tank with links with the European People's Party, EPP, to which many of the members present are affiliated. The centre was established in 2007 and promotes Christian Democrat conservative and like-minded political values which flow into EPP policy.

In recent months the committee has debated widely how to secure democratic legitimacy and accountability in the European Union. Mr. Francis Jacobs was here on Tuesday afternoon, 18 June, to give us his views and those of the European Parliament Information Office on how this could be done. The CES has recently done some work in this area and prepared a report which contains several recommendations for the upcoming European elections which will be held at the end of May next year. One of the suggestions is for transnational lists of candidates for the European Parliament and that the biggest political parties should declare their candidate for Commission President before the upcoming elections. Other bodies are suggesting this, too.

Before we begin, I remind members of the long-standing parliamentary practice to the effect that they should not comment on, criticise or make charges against a person outside the Houses or an official either by name or in such a way as to make him or her identifiable. By virtue of section 17(2)(l) of the Defamation Act 2009, witnesses are protected by absolute privilege in respect of their evidence to the committee. However, if they are directed by the committee to cease giving evidence on a particular matter and continue to do so, they are entitled thereafter only to qualified privilege in respect of their evidence. They are directed that only evidence connected with the subject matter of these proceedings is to be given and asked to respect the parliamentary practice that, where possible, they should not criticise or make charges against a person, persons or an entity by name or in such a way as to make him, her or it identifiable.

Mr. Roland Freudenstein

It is not only an honour but also a pleasure to be here. I thank the joint committee for inviting me to talk about the future of the European Union and will be brief. That is usually a vague promise, but I will try to be serious about it today.

I understand that when talking about the euro crisis as a point of departure here, there is a prize for all foreigners who do not start by quoting W. B. Yeats's line, "Things fall apart," to describe the situation. We have made some good progress in the past few couple of years and are on our way collectively in the European Union to working our way out of it.

I will present the key theses of the policy brief of the Centre for European Studies which begins by addressing the necessary steps in Economic and Monetary Union and derives from it a couple of proposals on political union, especially in addressing the question of democratic legitimacy. If we assume that what we want to achieve in the long run is economic convergence and the reduction of economic imbalances between the eurozone economies and if we want to achieve debt sustainability and a more sustainable banking system, we need not only better policy co-ordination but also the power to overrule national decisions in some cases by the European institutions and probably the Commission. However, there are several possibilities which include not just overruling in the sense of making legislation or budgets impossible but possibly also financial sanctions through the mechanisms of financial solidarity. One needs an orderly default mechanism and, probably in the long run, some debt mutualisation. I know that is a dangerous notion for some member states, including my home country, Germany. In the long run in what we propose this is probably unavoidable in a currency union. Of course, we need the completion of the Single Market and further moves towards greater competitiveness, but I am not going to talk about that issue.

What we will have is a more politicised and, therefore, more politically legitimate European Union. We have behind us 60 years of a widening and deepening European integration process. In a functionalist logic that means taking small steps incrementally, increasing the scope and depth of the integration process and a system of governance according to the Rome treaties which created the system with a Commission, a European Council of Ministers and the Parliament, a system of government which is unique, sui generis. If we want to come to a political union with more democratic legitimacy, we will have to tackle the very system that was created in the treaties of Rome. In other words, we will have to address the treaties of Rome and their basic ideas and that would be the most fundamental change in the set-up of European integration since the 1950s. We want to increase citizens' ownership of decisions taken at European level. That means giving the right of legal initiative to the European Parliament also, not only to the Commission as is the case now. The European Parliament, in turn, would have a role in the formulation of economic policy which is now only the Council's prerogative. We would have to increase the turnout at European elections, which has been decreasing steadily since 1979, when it was 62% for the first direct elections to the European Parliament, down to 43% in the last European elections in 2009. We need to reverse this trend if we want to increase citizens' ownership.

The role of the Commission as an independent body that represents some kind of abstract community interest, vis-à-vis the member states and political forces, will probably have to change. In other words, the Commission will have to be politicised. There will be more party political play within the European Commission. The Council President will also have to have his or her democratic legitimacy increased, possibly through direct election, and national parliaments will have to be better involved in European politics.

In the short term our idea is what we call the strategy of the three Ps. The first is to politicise, in the sense of political parties, the European Parliament. It is not as party political as national parliaments. The second is to polarise, in other words, to have much clearer policy alternatives in the European Parliament. The third is personalise, that is, to put human faces to the different political options. To politicise in our sense means to give a stronger role to the European parties.

I will discuss the four concrete proposals we have. One was mentioned by the Chairman, namely, transnational lists of candidates for the European elections. The report by Andrew Duff in the European Parliament last year proposed for the 2014 elections a modest number of 25 Members of the European Parliament to be elected on a Europe wide list. Very simply, that would give more power to European parties. Unfortunately, it was not accepted and will not happen in the 2014 elections. We may have it at a later date.

Roll call voting would increase the coherence of the political groups in the European Parliament and highlight political differences rather than having the permanent grand coalition we have had over the past number of decades between the two large blocs. We propose that there be some form of direct election of the Commission President.

The Council proposes after the European elections that the treaty for the European Union stipulates that the Council's proposal must take into account the result of the European elections, in other words, the relative balance of power in the European Parliament after the elections. What exactly that means is debatable. So far the expectation has been that the strongest group in the European Parliament - an absolute majority is very improbable - gets the right to propose the Commission President from its ranks. That is how things were handled in 2004 and 2009.

In future, parties will propose the top candidate for the European elections who will become their nominees for the European Commission President. It is putting a human face on political options. We have never had a European election campaign with persons impersonating political options. We will have this in the next election. The socialists and EPP have already pledged to do so. The Greens have done so and other political families will follow. The two big political families are what are really important, namely, the centre-right and the left.

The potential of the Lisbon treaty in regard to an improved dialogue between the European Parliament and national parliaments is something we still have to fully exploit. The conditions are in place to intensify that process but we have to use the potential of the treaty.

In the long term we will need a truly bicameral system of legislation at a European level. The European Parliament will become the lower chamber which is directly elected by the citizens and the upper chamber will represent member states and will be what the Council of Ministers is today. The Heads of Government which will meet at regular intervals will be a part of the executive together with the Commission. The Commission and European Council will be two parts of the executive whereas the legislative will be the Council of Ministers and European Parliament.

The European Parliament needs the right to legal initiative. One might think of merging the Commission and Council Presidents. That is a debated notion because, as I said, the executive and legislative would be merged which is problematic in terms of democratic theory. It is idea which is being discussed and we should explore it further.

That completes our proposal for completing democratic legitimacy in the European Union. I am happy to discuss it with the committee, and answer questions about the role of the United Kingdom and the German perspective on it.

Chairman

I thank Mr. Freudenstein. I call on Deputy Eric Byrne, followed by Deputy Paschal Donohoe.

Deputy Eric Byrne

The Chairman has caught me on the hop. I thought I would have been last on the list but I will jump in the deep end.

I thank Mr. Freudenstein for his contribution. I must confirm I am a relatively new member of the committee and have been doing a lot of catching up. I read Mr. Freudenstein's documentation which has helped me to clarify a number of issues which have been knocking about in the background. As a parliamentarian I must confess I did not know no roll call vote was called in the European Parliament. It is something which is shocking to have to admit. I do know how the voting system is recorded but one of the basic functions of a parliament is that we should be able to see how people vote.

I do not know whether Yeats or Lenin said that things fall apart when the centre cannot hold. Mr. Freudenstein said it was Yeats but I thought it was Lenin, hence the term "democratic centralism."

Chairman

We all know about that.

Deputy Eric Byrne

Some of us do from our backgrounds.

It is a fascinatingly challenging proposition to determine how we read ourselves into where Europe is going, in particular in light of some of the comments made. I refer to the comments on England. Mr. Freudenstein spoke of having supernational authority which can overrule national decisions when it comes to economic affairs raising yet another important question. The United Kingdom is currently asking that very question. It claims it wants to withdraw elements of authority from the centre back to the national. Can Mr. Freudenstein comment on where it is going in this regard?

On the democratic role of the European Parliament, the Tánaiste, our Deputy Prime Minister, has completed very intensive talks with the Parliament on its budgetary decisions. The British claim managing to reduce the budget is a good decision and claim it as a victory, but others would claim otherwise. It now appears that the Parliament has the democratic right to veto or seek changes to the budget as proposed. Can Mr. Freudenstein elaborate on how the process will be carried out?

Some parliamentarians are independent and others are affiliated to parties in their own countries. Do national parliaments in countries like Germany, Ireland or France lobby their MEPs to support or reject proposals? What dialogue exists, given the importance of the budget and the European Parliament making a decision? Does pressure come from national parliaments on those who are established political representatives of political parties?

We are essentially talking about the democratisation of the process. We know France has Cabinet members which represent its diaspora. There are members who vote in its embassies in every election.

There is a form of democracy. By contrast, we do not even allow the diaspora to vote in presidential elections. The Iranian ambassador informs me that his embassy was open last Friday to receive the votes of Iranians living in Ireland. I understand even Albania and perhaps Bulgaria and Romania open wide their embassies to receive their citizens to allow them to participate in the democratic process. I agree, however, that there are major challenges. As Irish public representatives, we must recognise that this country is way behind in the democratic participative process by not allowing the diaspora to vote in various elections, let alone asking MEPs to toe the line of the party. It is a fascinating debate and I look forward to hearing the views of other contributors.

Deputy Paschal Donohoe

I welcome Mr. Freudenstein and thank him for the brevity of his contribution, which means that we have more time for questions and discussion. I have three questions for him, two of which are based on his contribution.

Mr. Freudenstein acknowledges the need for a greater role for national parliaments with respect to future developments in budgetary policy. I ask him to outline how he thinks the role of national parliaments could change. The most likely mechanism for the European Union in developing political legitimacy would be to give national parliaments, instead of the European Parliament, a role in dealing with budgetary as opposed to non-budgetary issues. What could be the future role of national parliaments in dealing with the concerns expressed about political legitimacy?

My second question follows from a point made by Mr. Freudenstein about how the Commission might become politicised. Ireland would see the role of the Commission as being the neutral mechanism in the middle and not open to control by large countries, for example. That is why Ireland has always been very supportive of the communautaire system of policy-making. How does Mr. Freudenstein see that role of the Commission being maintained in the context of the politicisation of the Commission or can it be maintained in the context of what he is proposing?

My third question is a general one about the development of the eurozone. Mr. Freudenstein's submission touches on some of the ways by which that could happen such as a banking union, mutualisation of debt, and so on. Will there be different speeds of integration within the eurozone? I find it difficult to imagine every country agreeing to the kind of integration that the eurozone will need in the future not only for it to survive but also to prosper.

Deputy Seán Kyne

I welcome Mr. Freudenstein and thank him for his contribution. We had similar discussions at previous meetings and with Francis Jacobs from European Parliament Ireland. Mr. Freudenstein is trying to improve democracy and accountability at a time of increasing unpopularity of the concept of the European Union and polarisation within many member states owing to the economic crisis. This time last year Ireland passed the stability treaty in a democratic referendum, which was a positive action. Will the issue of a directly elected EU President become bound up with the nationality of a candidate? Will this cause division between north and south or perhaps the eastern bloc versus the old West, smaller countries and larger countries, rather than be a choice between the parties and policies represented by the candidates? I refer to the animosity between a number of countries. In Mr. Freudenstein's paper on the subject of democracy and legitimacy in the European Union he refers to the European Central Bank which is never able to fix an optimum interest rate. This has been suggested as a reason for the boom experienced in Ireland, Spain and Portugal because interest rates were kept low to suit Mr. Freudenstein's country and France. He states in his paper that until such time as there is convergence of the economies of Europe, this issue will not be fixed. I ask him to expand on that point.

Mr. Roland Freudenstein

I will begin with Deputy Eric Byrne's questions. On the matter of the roll-call vote and the practices of the European Parliament, two factors have been at play which do not apply to that extent in national parliaments. One is that national differences in the European Parliament overlap and sometimes run contrary to political families, so to speak. This happens also in member states in the case of regions but certainly not as strongly as in the European Parliament where it is not only political allegiance to one political family that counts but sometimes also very much nationality. This tends to influence the decisions and weaken the hold of political groups over their members. In the European Parliament there is usually a grand coalition in place to deal with many of the questions that are considered painful, that is, all of the really important questions on labour law, the working time directive, consumer protection, the use of chemicals and the services guidelines. There is a fear that a voting result of 51%-49% in the European Parliament will make the losing side turn anti-European. This fear has increased with the rise of populists in European politics. It is probably an unhealthy, vicious circle. The rise of populists reinforces the grand coalition mentality in Brussels which, in turn, reinforces the rhetoric of the populists that the Brussels elite is remote from citizens, that the members of this elite are all in cahoots. The view is that they agree on all the decisive questions and that there are no real political alternatives. That cycle has to be broken by making an effort to highlight the political alternatives. One of the means of doing this would be by having stronger factional discipline in the European Parliament which in our view would be promoted by the roll-call vote system.

On the role of the United Kingdom, the development in the past few months has been staggering. No one on the Continent or here expected such a quick erosion of a constructive attitude to the European Union. I am not referring solely to the Conservative Party but also to the media and public opinion. I am even talking about the lobby group of entrepreneurs and the big business community which we continentals considered to be our lobby in Great Britain. For a couple of years there was a group called Business for a New Europe which was pro-European and europhile. That group still exists and is advocating its policies, but suddenly the group called Business for Britain has appeared which is much more vocal and radical in the sense of being anti-European. This group has become more prominent than the group Business for a New Europe. This is an example of how things have accelerated in a direction which we really cannot comprehend.

As to where this will end up, the answer is that we will either have a marginal status for Great Britain within the framework of the European Union or else a so-called brexit. Germany is one of the countries that absolutely does not want the latter to happen. The two countries have common ground on a range of policy issues. In recent months, to take just one example, the British Prime Minister, Mr. Cameron, and the German Chancellor, Ms Merkel, have more or less closed ranks on the question of the future of the European budget. Another aspect is that nobody on the Continent imagines that a Common Foreign and Security Policy which did not include Great Britain would be taken seriously anywhere in the world. It is impossible to say what the consequences of a decision by the British people to exit the European Union would be, but attempts will certainly be made both in Britain and among its partners in the Union to patch up the situation somehow and find a modus vivendi. Mr. Cameron has spoken about repatriating substantial powers from the European institutions to the British Government, but that will not happen. It would be bad enough to see Britain leaving the European Union, but it would be even worse to see the Union falling apart in a situation in which different countries were seeking to renegotiate their statuses. In that situation we would have not just two tiers but also a fringe comprising countries that did not want to join the core in the long term, all with different statuses.

The link between national parliaments and the European Parliament and its respective political groups is an issue that must be addressed. I cannot deliver a perfect solution in this regard and can only say that the sway held by, for example, the leadership of the German Christian Democratic Union Party and its national caucus over their people in the European Parliament is not absolute, at least during the first four years of a five-year parliamentary term. The last year is critical, of course, because that is when the discussion on the candidate lists for the next election begins, a matter that is in the control of national party chairmen. As long as that remains the case we will see, in the last phase of a parliamentary term, increased power for national party leaderships over their people in the Parliament. That is why the European Parliament party groupings - not just the European People's Party but others too - are advocating to change the system to give the power of nomination to themselves and not the national party leaderships. The reality, however, is that the latter will retain that power for as long as they wish. It should be noted too that there are a couple of disadvantages in transferring that right to the European parties. Generally speaking, there is a huge difference in perspective as between people in Brussels and their respective national parties, especially in the case of Germany. The Berlin perspective on the euro crisis, for instance, and therefore on the institutional future of the European Union, differs substantially from that of Brussels, in that it is much less federalist.

I cannot answer the point regarding votes for diasporas. I assume that the considerable size of the Irish diaspora is a factor in the differences the Deputy described.

Deputy Paschal Donohoe spoke about a greater role for national parliaments. I agree it is important for the purposes of legitimacy, but the question is how to achieve it. In the context of what is now in place by way of the Lisbon treaty, it is very difficult to say. There is a view in certain quarters that the second chamber of the proposed bicameral system should be comprised not of representatives of member states or of the Council but rather of delegates from national parliaments. The idea would be to pool the most active and dynamic members of national parliaments, those with a real interest in European affairs, and have perhaps four sessions per year in Brussels or Strasbourg. Those representatives would make up a type of senate.

Chairman

Would such a chamber be similar to the German Bundesrat, which takes members from the different länder?

Mr. Roland Freudenstein

The Bundesrat consists of members of the Länder governments, not members of the legislatures. I am not aware of any national example - although there may be such a case - in which members of regional legislatures make up the second chamber of a bicameral national parliamentary system. That is what is proposed under this particular model.

It must be acknowledged that there is a trade-off between substantially increased involvement by national legislatures and the efficiency and speed of European legislation. If the slowness, inertia and complexity of decision-making at European level is already contributing to populist views on European institutions, the question then is whether a more substantial formal role for national parliaments on top of what we already have will see any improvement in that regard. That must be a huge factor in any decision. In seeking to provide enhanced legitimacy there is a danger that we will de facto reduce it in another respect by making the whole process more complicated. We already have the European semester process whereby national parliaments look onto each other's plates as far as budgetary policies are concerned. The extent to which that will evolve into real veto rights of one parliament over another is a question that remains to be answered. We already have a situation in which national parliaments can tell their colleagues in another country that this or that is not in accordance with the agreed policy principles of the European Union. We do not, however, have 100% watertight sanction mechanisms in place in case of violations.

On the politicisation of the Commission, I agree that the neutrality, in a party political sense, of the Commission is one of the cornerstones of the Rome treaties and indeed the whole system. I am saying that if we go the way the federalists in Brussels want to go, it will be the most fundamental reform of the system of European integration we have ever seen. If the Commission is to achieve greater legitimacy and to be seen by citizens as the executive which emanates from their own political choice in the ballot box, then we need to give political parties more of a role in the Commission. That goes against the grain of the Rome treaties and probably against the grain of what we now see as the Community method. It is unavoidable, however, if we want to go down that road. The alternative is to accept that we will not achieve the best possible degree of democratic legitimacy. In the context of the grand coalition mentality in the European Parliament to which I referred, as soon as we have political parties dominating the Commission in an open manner we will get not only more winners but also more losers. Parts of the constituency will inevitably feel excluded as a result of a particular democratic decision, the victory of majority over minority. For these reasons, we must think any changes through very carefully. If we want to increase democratic legitimacy, we must accept there will be side effects such as the one I have outlined. This is especially true for small countries. Many of the federalist proposals since the 1990s, for example, envisage a reduction in the number of Commissioners. Promises have been made in this regard.

When we turn the next corner with the next treaty reform, we will - regardless of the number of member states - finally reduce or at least freeze the number of Commissioners. We have never previously managed that and I can understand why. Small countries are of the view that if the Commission is something akin to an executive in Brussels, then they want to be represented on it. They want this even if the individual involved is legally committed to representing the Union's interests. They want a de facto presence.

Chairman

That point was widely debated in this country during the first referendum campaign relating to the Lisbon treaty. Commissioners are supposed to be independent of the countries from which they come.

Mr. Roland Freudenstein

Exactly.

Chairman

The reality is, however, that countries want to have their own Commissioners. That was one of the reasons the first referendum on the Lisbon treaty failed. It was not the main reason but it was certainly a contributory factor. The Lisbon treaty was easier to sell during the second referendum campaign because we obtained a guarantee that Ireland would retain its Commissioner.

Mr. Roland Freudenstein

I absolutely agree. I realise it will be extremely difficult. However, the boldest proposals for the reform of the Commission refer to 12 Commissioners. There are some proposals which refer to senior and junior Commissioners.

Chairman

In light of the way in which the Commission works at present, is the presence of 27 Commissioners making it more difficult to reach decisions? Is the current structure unwieldy? Does Mr. Freudenstein have any anecdotal evidence with regard to how it is functioning?

Mr. Roland Freudenstein

I do not have anecdotal evidence. However, I have observed how the Commissioners' cabinets operate and the amount of work they are obliged to devote to what they call "covering" the cabinets of the other Commissioners is growing exponentially. We are now at a point where the machine starts creating its own work and the energy that is necessary to keep it going. In terms of portfolios of actual policy fields to be addressed by the European Commission, it is completely nonsensical to have more than 20. Even 15 would probably be a high number. We do not need that many Commissioners. The Romanians and the Bulgarians joined the EU but having a Commissioner for Multilingualism is a bit of a joke. To be honest, this provides grist to the mill of the populists. If we consider the cost that is involved with having a Commissioner, a director general and so on, it really makes no sense. However, I understand that point that every country needs its representative in Brussels. I have no perfect solution for that conundrum. I am merely pointing it out. I see the reason for there being 27 - soon to be 28 - Commissioners but I do not think this is sustainable if we want to reach a more efficient and democratically legitimate system of European institutions.

On the different speeds, there are some member states - the capital of one of which is Paris - which have been dreaming about a two-tier Union for a long time, essentially since the mid-1990s. Having a core Europe was very much a French idea. It was, to a degree, the French reaction to the eastern enlargement of the European Union. The latter made France uncomfortable for a couple of reasons, many of which have to do with its eastern neighbour, Germany. To have a core Union would be to re-establish a system in which France could continue to play its role. Now that the Franco-German couple has actually transformed into something new - I am being careful and I am not saying it is over because the basis is very solid on a civil society level - and does not work as it used to work, all the front lines in the old European discourse are changing as well. The German ideal is that if it is necessary to have a two-tier Europe, then it will probably be the eurozone and the rest - that is, the EU 17 versus the EU 10, which will soon be 11 with the accession of Croatia. However, the core must be open to whomever wants and is able to join. That is a precondition. One does not hear that half sentence in Paris very much these days. The ideal is to have a much more permanent structure with a core and a loose periphery, which may, of course, contain Britain in some role.

Why is Germany insisting on having a two-tier system only temporarily and with as few institutional differences as possible? To put it very simply, Germany feels exactly the opposite to France. Many of its natural allies in the context of the philosophical approach to economics, solid finances, transatlantic relations, etc., are in the EU 10 rather than the EU 17. Germany is very much of the view that its natural allies are out there, which is why they should not be distanced from the core too much. There are national factors at play in this regard. In Brussels, in the EPP and in general among those who consider themselves federalist, a two-speed Europe that would be in place for a period is considered inevitable. Again, this will probably coagulate around the eurozone for the moment. Optimally, it would be temporary and as many countries as possible would be in the core. Perhaps one day there could be a situation where everyone would be on board again.

Deputy Kyne inquired about a referendum. Every member state has its mechanisms of ratification. Some member states such as Germany do not even hold referenda. Ireland's position on grand treaty change is very careful and cautious. Such change would be a precondition for most of what I have outlined in my paper. That change would begin after the next European election and would probably commence with an intergovernmental conference in 2015. It will have to be put to a referendum. One can discuss whether all member states will be obliged to agree or whether a minimum threshold of, for example, 20 member states should be fixed. There are those who state that in the context of treaty change, a clause should be inserted to the effect that any change must be approved by at least 20 member states in order that it might enter into force. There would be a de facto opt out for some countries but with corresponding consequences.

In the context of the direct election of the presidents of the Commission or the Council, we are all aware that this would only be possible through treaty change. As I described and according to the Lisbon treaty, the current procedure is that the European Council makes a proposal based on the results of the European elections and then the European Parliament elects - de facto, it rubber stamps the proposal. Of course the Parliament can state beforehand that it is going to reject the person put forward and if this is deemed a credible threat, then the Council will probably put forward a different proposal. It will be very interesting to observe the next election. What I was proposing in the short-term - this would be possible without treaty change - would be an indirect election of the President by having top candidates for the campaigns of the big political families in the European Parliament elections. This election would involve those families saying, "If you vote for us, you will get that person for Commission President". This is already a big step towards more democratic legitimacy which would fall below the threshold of a treaty change that would, as I pointed out, unleash a series of problems.

The next matter that arises in this regard relates to what will be the divisions. Will they be north, south, east, west, large, small or whatever? The answer is that they will all come into play.

It is in a way an open process and it will be interesting to see what effect the sheer existence of top candidates for the political families will have. Will it reverse or at least halt the decrease in turnout? Will it contribute to a sense of European demos, an all-European constituency? Will it lead to those divisions that the Chairman pointed out? One could imagine saying that even the candidates will probably have to come from larger member states. Even if they come from one large member state, will they be acceptable in a different one? If the President were to come from a smaller state that might be an advantage because it would be more acceptable to all the big member states. It is a totally open question but we will all learn about the European Union, its future and what it will mean for ourselves in this run-up to the elections in May 2014.

Regarding the European Central Bank, there is a basic difference between a more Germany-centred philosophy of a totally independent European Central Bank and a more French-centred philosophy of making the ECB much more politically accountable to the powers that be, whether they be the national governments, the European institutions or a European government in the future. That is an open question and the role it could play to further economic convergence is contained within that question. I do not see the role of the ECB changing very much in any new set-up that I have described. For example, Germany would be extremely hesitant to change anything regardless of what other treaty changes we may have.

Chairman

Before I ask my colleagues to contribute, I want to make a few points on the European elections. The potential to give the right of nomination of candidates to Europe parties would be resisted at a national level. It is important that we retain the link that exists when individual party members choose their candidate, because it ensures a certain element of democratic legitimacy for that candidate. We would be loth to see the end of that. I want to ask Mr. Freudenstein about the elections next year. I met some PES colleagues from another member state yesterday and their view about next year's elections is very much like ours, namely, that they will represent a referendum on the government in power as opposed to a vote on a vision - from among differing visions - for Europe. We around this table represent the Government parties in Ireland but we are members of two European parties, the SDP and the EPP, which are represented here. The elections next year should be between EPP and SDP policies and proposals but in reality the fight is more likely to be about us as a Government versus the Opposition. I know there is at least one potential candidate for next year's European elections here, and I would like to hear from Ms Prendergast, MEP, who will speak shortly. How does Mr. Freudenstein think the election will pan out in terms of campaigning next year? Is it likely that individual candidates will be pushing a European message or are they still likely to go down the road of arguing for or against the government of the day? What change does he expect compared to the 2009 elections? I would be interested to hear his view on that.

Does Deputy Durkan want to speak?

Deputy Bernard J. Durkan

I welcome Mr. Freudenstein and thank him for his contribution. I find a few points he mentioned alarming - I am not an alarmist by nature, but sometimes I get alarmed. One point concerned the growing tendency among the larger European countries to dominate the debate and the politics of Europe. That is a dangerous development and it is not in line, as Mr. Freudenstein mentioned, with the original vision of Europe. It is a departure from that. For example, we had a discussion in our Houses of Parliament on comments by the Bundestag on budgetary projections and proposals. Those proposals were necessary and we accept that. We signed up to the memorandum of understanding following the economic collapse. We stuck to that without variation. The Government parties valiantly stuck to it and some of the Opposition parties grudgingly stuck to it. The people stayed with us on it, which was difficult for them to do, and huge sacrifices were made by them, about which many other people throughout Europe and in the European institutions know. However, just because there were no demonstrations on the streets, no protests, no baton charges and no water cannons, it does not mean we did this painlessly. Huge sacrifices were made, including by the trade unions, who constructively led their people, recognising what the options were.

That brings me to the issue of responsible politics. There has been a tendency in recent years throughout Europe to run before the populists and that is a dangerous route to go. We all have to explain to the electorate that the consequences of what they do in the ballot box will reflect afterwards outside. That is one thing for which we all have to take our share of responsibility. We all try do that individually here. We may not always succeed but at least we try. It is hugely important that the electorate, at either national or European level, recognise fully the consequences of what they do and relate it directly to what will happen afterwards by virtue of the way they vote. I will not quote Disraeli on that one but I will turn to Oscar Wilde for a suitable quotation in this context. He said that duty is what we expect of others but not necessarily of ourselves. That is very important to remember at this time. All of us at every level throughout Europe have a responsibility at this particular juncture.

Mr. Freudenstein mentioned taking ownership. How often have we talked about taking ownership of the European project here? The fact is that certain European countries are opting out and are taking ownership of what suits them as opposed to what suits the entire European Union. Certain countries opted out originally from the EMU or from the euro, for whatever reason. Some were not able initially to aspire to it and others decided to opt out of it for tactical purposes. We have discussed that here and not everybody agrees with me on it. I am not an expert in this area but I strongly believe that a single currency right across the European Union is the only answer and that any deviations from that will ultimately, and could only ever, lead to a division within the Union - a two-tier Europe, a two-speed Europe, or both. I think we are heading in that direction. There is an onus on the larger countries to address that situation because they have more influence. It worries the small countries when we read comments in the international media from some of our neighbours which appear to be directed at ourselves. We have always believed that we have been good Europeans. We have taken and continue to take ownership of the European project. I will give an example in this respect. We always believed that the European Central Bank, and fiscal policy throughout the eurozone in particular, was the means of bringing the European economies together. That would have meant that the central bank in each eurozone country fed into the ECB, and the ECB, in turn, would have had a position of oversight on fiscal policy in the individual member states of eurozone, but what happened? They seemed to detach themselves from it entirely and everything went crazy. The degree of accountability that should have been in place did not exist. Some people knew what was going to happen. Some people pointed all of these things out, but we were all led and misled by expert opinion, and it was wrong.

I also have strong reservations about the politicisation of the Commission. It is a step in the wrong direction and it will be hugely divisive, particularly for the smaller member states of the Union. We should consider what is happening. The power of the European Parliament has increased and, under the Lisbon treaty, the power of the national parliaments has also increased.

There is an inherent conflict and I do not see how it can work because unless the national parliaments take ownership of the European project to a greater extent than they have done - that includes our next door neighbour and all other countries within the European Union and the eurozone - then it cannot work because there is a blockage. There is no seamless movement between the two.

The other point of note about membership of the European Parliament is that initially members of national parliaments were appointed and then they were directly elected to the European Parliament so we had a continuous influence in the European Parliament from the national parliaments. It was not a distinct separation as we have now. I am not sure whether Herman de Croo is still a member of a national parliament or a regional parliament-----

Chairman

He is. He will be here on Monday.

Deputy Bernard J. Durkan

Will he be here on Monday again? Good for him.

Chairman

He is speaking at COSAC.

Deputy Bernard J. Durkan

He is 48 or 49 years in the business, which is even longer than I am. He was a classic example. The experts told us that one could not exist at national level and European level and remain sane but he proves the reverse to be the case because he has been able to bring his national parliamentary views directly into the European Parliament and has circulated in those circles for many years very successfully. I do not say everyone could do that.

I am most suspicious of list systems, as you well know, Chairman. I am a great believer in directly elected democratic representatives and no other system. I do not believe in variation from that. People have tried over the years to improve democracy but the truest form of democracy is without doubt directly elected people to national parliaments or the European Parliament. We recognise that a situation arises that is different in respect of Europe. If we have the politicisation of the European Parliament – we are also going to have the politicisation of the European Commission – that will not bode well for us small countries. I have deep reservations in that regard.

Chairman

I thank Deputy Durkan. He referred to Herman de Croo from Belgium who has kindly agreed to step in to take the place of Jacques Delors on Monday. Mr. Delors had to pull out for personal reasons.

Deputy Bernard J. Durkan

Very good. I look forward to meeting him again.

Chairman

He will be leading the debate on the future of Europe. All three Deputies who are present will be at the meeting on Monday and they will have a chance to engage with Mr. de Croo then.

Ms Phil Prendergast

I regret that I cannot be here on Monday as I will be in Brussels. I agree with the points made by Deputy Donohoe and Deputy Durkan on the politicisation of the Commission.

I wish to clarify for my colleague, Deputy Byrne, that we sign into all of our committee meetings and group meetings and at plenary there are roll-call votes for everything so there is a different interpretation of what that means. At any time a Member can ask for a check and get a roll-call vote taken on any piece of legislation. The roll-call vote record is a crude tool on which to measure one’s attendance because it does not equate with one’s actual presence. It is a little confusing how things work.

One of the areas of frustration in terms of people who criticise Europe is the fact that the majority of Parliament has voted consistently to have a single seat in Brussels but because of the treaty in France there must be 12 sittings a year in Strasbourg. The difficulty is that the cost is significant, including financially, for transporting all that goes with the travelling circus to go to Strasbourg each month and sometimes it is every couple of weeks, as it is currently. Does Mr. Freudenstein have a view on that?

With future accessions and proposals for further enlargement the difficulty is that we will suffer the loss of an MEP. If Turkey joins we will probably be further reduced because there is a cap on the number of MEPs that can be in Parliament and we will have a very much reduced representation in Europe as well. That makes people nervous because on one hand it depends on the spin but it is very populist to talk about a travelling circus if one is an opponent of what Europe and being European means. People have commented on the fact that we have had a couple of referenda because we did not like the first response of the people. People felt very much put-upon because the belief is that we did not understand the first time because we were stupid. However, it was not stupidity, it was a means of communicating a position that could be interpreted and bringing in all sorts of unrelated issues into the debate, including abortion. The former Chairman of the committee well knows the situation.

Mr. Roland Freudenstein

Thank you, Chairman. I will start with the right of nomination for the European elections. I accept the point. I think we are going to stick to the system we have, which is that every party and every country decides for itself. I do not see a concrete possibility of the eurozone parties formally getting that right because they would have to get it from their member parties and the member parties are not going to give it to them. What I am giving to the committee is the Brussels debate but I am completely in agreement that to have the presidents of the eurozone parties assign the national candidate lists for the European Parliament will not happen any time soon. I know that.

As to whether the next election will be a referendum on the governments in power, yes, it will be more so than ever. That is thanks to the euro crisis. The euro crisis has, strategically speaking, a totally paradoxical effect. On the one hand it has highlighted the differences between member states. The Greek-German relationship is tarnished - to put it mildly - for many years to come. When a Greek and a German talk in Brussels, there is an elephant in the room. One can choose to address it or not but it is still there. There is one effect, that not only the populist parties but public media in the member states are suddenly highlighting national differences. At the same time, not only will the next European election become much more of a referendum on the ways national governments and European institutions have dealt with the euro crisis, but even national elections are becoming European elections. Let us look at the last ten national parliamentary elections. They all had, to varying degrees, very strong European components, for example, Italy and France. In that sense, the European Peoples Party, EPP, still holds a plurality of member state governments. It used to be a majority. At the highest point something like 17 out of 27 governments were controlled by the EPP political family but now it is down to 12. Counting those governments where national EPP member party is part of a coalition, it is still by far the biggest political force in the European Council.

The elections will be a referendum on the combination of reform and fiscal consolidation that has been the strategy for the past couple of years. I do not believe that this is a lost cause per se. It cannot be explained to voters that one cannot print money; that one can only spend money either that one has or where one is able to say how and when one will pay it back. These are the simple things at play. The fact is that we have to reform and promote innovation. There are member states in which it is easier to explain that to voters and there are some in which it is harder. Generally speaking, it is probably harder in the south. I am afraid that is the mission of the EPP political family in these elections.

As to the extent to which campaigning will change or still reflect national debates in the European elections, that depends very much on which member state one is talking about.

In general, as I just said, we will see a "Europeanisation" of the next European Parliament election campaign. Ultimately, the strategies are made by the member parties. The member parties in the different member states determine their election campaign strategy for the European election. There will be varying degrees of national elements in that and punishing, or not punishing, the government in power for what they did in the euro crisis, but the euro crisis will be a very important factor in that.

On Deputy Durkan's question on large and small countries, and several other members addressed this question, I fully understand the concerns of small member states. It has been part and parcel of the European integration process that there is a systemic over-representation of small countries, whether we talk about the voting shares in the European Council or the numbers of MEPs different countries delegate to Brussels and Strasbourg. I also know that in many member states, and the German Bundesrat was mentioned earlier, there is a very strong over-representation of the small Länders vis-à-vis the big ones, yet in the pronouncement of the German constitutional court some years ago, the legitimacy of the European Parliament was relativised because it is far from one man, one person, one vote. All I am saying is that it has to be taken into account. In any future European democracy we will have an element of over-representation of the small constituents but we should be aware that, to an extent, that is at the cost of democratic legitimacy, at least in the eyes of the citizens and political forces in the big member states. We need to balance this out, one against the other, sit down and rationally discuss it.

Are the sacrifices of the countries undergoing the harshest reform programmes and consolidation processes not seen in the countries that are doing comparatively well? How could they? Unless we bring 82 million Germans here to the island, which is something I do not wish for the members, how could they possibly experience the hardships through which this country is going? I agree they can try to explain that. In Chancellor Merkel's speeches in recent years there is an element, when she talks to her German constituents, that solidarity is not just a Kumbaya thing. It is in our self-interest that the eurozone survives and, therefore, the European Union survives. Germans cannot pretend they are just footing the bill for everyone else because that is not the case. It is not that simple. She is saying that, and she may not be a master communicator, especially when it comes to television or huge gatherings, but she has made that try. Certainly, there are improvements to be made to that communications strategy, both within Germany and outside Germany. I will come to that later.

Do the political parties have a tendency to run before the populists? I am not so sure. In many cases centre or centre right parties have completely shied away from even addressing certain questions. I am talking especially about immigration and integration in the Netherlands, for example. Part of the huge crisis the Christian Democratic Appeal, CDA, party is going through in the Netherlands is that for several decades it had completely lost touch. Even addressing the question of integration of large Muslim populations in city centres was considered too "Geert Wilders", and that is not the case. That only increases the voting share of the dangerous populist.

My answer to that, and this refers to the euro crisis also, is that the issues that bother the people must be addressed. The solutions proposed must be different, but in terms of not mentioning a subject or not addressing fears that objectively exist among the voters for fear of seeming to be running with the populists, I am not sure that is the right strategy. As is the case in the countries undergoing painful processes, the political parties must understand and reflect the pain of their electorates vis-à-vis the other member states and the Brussels institutions. The same is true for the other member states where people have the impression that they are signing cheques all the time, which is not the case but at least the issue has to be addressed by the leading politicians.

On the national interest versus the EU interest, I tried to address that. There is a complex relationship. Let us call things by their names. Is Germany nationalistic? Is Germany egoistic? It is a good question. Germany is finding itself in a role for which it is utterly unprepared. To be the dominant power of Europe not only economically but politically is something no one in Germany would have dreamed of or had nightmares about five years ago. Germany has been thrown into cold water, so to speak. There is no open, down to earth national discourse on what is our interest in Germany. Consequently, there is too little of what other Europeans now expect from Germany in terms of leadership. The Polish foreign minister, Radek Sikorski, in probably one of the most remarkable speeches of the past 12 years, in Berlin stated that he is less afraid of German power than he is of German passivity. That stung people in Berlin, but we still have not developed an answer to that.

There is no-----

Chairman

Is that debate likely between now and the election or has it been kicked to one side until after the election?

Mr. Roland Freudenstein

No. This is ever-present. There is a debate about the lack of debate.

Chairman

Is it the case that it is not part of the election campaign? It is in the background and will remain there.

Mr. Roland Freudenstein

It does not play a huge role in the election campaign. This is for the think-tanks, the foreign affairs committees of parliament and the media. I do not believe it plays a big role in the election campaign, but that might be a bad thing. Perhaps it should be discussed more among the competing political options in Germany. There is no definition of national interest, no leadership, no notion of soft power in the sense of Joseph Nye or the instruments, as soon as they have made up their mind, with which they want to bring this across to the others and, as part of this, no communication strategy for explaining why the federal government is proposing this or that. They are not explaining to their own people or to their partners in the European Union.

There are three or four factors involved in that. One is the weight of history but sometimes that is just a pretext for laziness. Frankly speaking, most Germans, and this is corroborated in opinion polls, still want to be a big Switzerland. They would prefer to be rich, neutral and not disliked anywhere. They would not aspire to a leadership role, and certainly not in a military sense. That is another can of worms. What all this means is that Germany is unprepared. It will take Germany a long time to grow into that role of leading on the one hand but, on the other hand, trying to build coalitions and lead with others, listening to smaller partners in the European Union and trying to convince them that what Germany is proposing at this moment is in their interest too. That is leadership, and I have to admit it is not happening sufficiently at the moment.

As to whether the European Central Bank, ECB, is more detached today from fiscal policy in the EU member states than before, I do not think the ECB ever had or even should have a role in determining fiscal policies in the member states. That is for the democratically legitimate institutions of the European Union and not for the ECB. In my personal opinion or down my alley, the role of the ECB is monetary stability. As I stated, in France and other countries of the European Union, there are completely different ideas about the role of the ECB but-----

Chairman

Will Mr. Freudenstein allow a brief intervention?

Deputy Bernard J. Durkan

If one follows that line of thinking in so far as fiscal and economic policy throughout the eurozone and the European Union is concerned and if the ECB opts out, what then is its function? What is the function of the ECB if the national central banks of the member states are the dominant bodies? Surely the member states' national central banks must feed into the European Central Bank in order to have the overall strategy and policy of all European countries moving generally, albeit not necessarily to the same extent, in the same direction.

Mr. Roland Freudenstein

Moving in the same direction in what sense? The national banks do not determine the budgetary policy of the respective governments. I understood the Deputy in such a way that the ECB should take care of national fiscal policies. Perhaps it is simply a different understanding of terms but while national banks have a role to play, as far as the euro, the interest rate and so on are concerned, monetary stability is the prerogative of the ECB. However, in my view that does not cover a brief in which the ECB would interfere in the question of national budgets and so on. That is done by the Commission, the Council and by the peer group of other national parliaments in the European semester and so on but there, the ECB does not play the decisive role. That is all I am saying and I do not believe we are very far apart on this question. As to what economists think, probably a lot of economists are convinced the ECB should play a more political role in general but a lot of economists are convinced that the ECB should stick to its guns and I think in this crisis in general, there are just a lot of economists.

Deputy Bernard J. Durkan

Casualties as well.

Mr. Roland Freudenstein

As for Commission size, I understand the concerns. My realistic prediction is we will not have a substantial change in this regard over the next couple of years. However, members should consider that it is not simply a question of how many Commissioners and how many black Mercedes cars or Peugeots or whatever they drive in Brussels. In addition, the collegiate principle of the Commission means each Commissioner has a vote when the Commission discusses, decides and votes. There is also a voting mechanism within the European Commission and as this greatly complicates the decision-making process, members should take that into consideration.

As to whether someone can survive and remain sane while being in a national parliament and involved in the European Parliament, yes of course. In fact, I believe we should have more back and forth between national parliaments and the European Parliament. Some member states are doing this very well, while others are terrible at it. Germany is terrible at this. There are very few cases of successful national parliamentarians going to Brussels and Strasbourg and even fewer cases of people coming back. There is one single case I know of in which a CDU ex-MEP became a national member of parliament, namely, Friedrich Merz. I think the Greens now also have one but it is a total exception and it should happen more, as there should be more exchange in this regard.

This brings me to the question on a single seat for the European Parliament asked by Ms Phil Prendergast, who was obliged to leave the meeting. There was a mean April fools' day joke this year in the European bubble. After the European Council meeting of late March, which ended on a Friday afternoon, a colleague of mine wrote a column - it is on the Carnegie Foundation's website - in which he referred to the ignominy of the Brussels decision to create a third seat for the European Parliament. What he did was to give a fictitious story of how, late on a Friday afternoon when all the press had already left, there was some horse-trading about the multi-annual financial framework and as part of this, Dresden was given the third seat. While I just loved this joke, at least I recognised it as such. However, the joke is that many people did not recognise this as a joke and reacted furiously on Facebook, writing things like this was another example of Brussels folly.

Chairman

Of course, we should add that Dresden is a very nice city.

Mr. Roland Freudenstein

Absolutely, it is a nice city and my humorous response to this of course was to ask what people had against this decision. I called them classical Carolingian western Europeans, who do not trust the Ossis or the new member states and how this would have been such a beautiful gesture and so on. However, the significant part of that story is that people actually thought it to be credible and this should make us sad. The French actually have no problem with a single seat, as long as it is Strasbourg. I do not see any change in the near future but I acknowledge having the two-seat policy again is water on the mills of the populace and I understand it is a total waste. There have been petitions and attempts to change this but there is no way to do so.

Moreover, the more troublesome is the position of France domestically, economically and vis-à-vis its partners in the European Union, the more the French will dig in on this question. There is no way the present French Government will change the two-seat policy. The more troublesome is the position of France from an economic perspective, the more symbolic politics plays a huge role. For example, members should consider the audiovisual exemption, the exception culturelle now being raised in respect of the question of the mandate for the coming trade talks between the European Union and the United States. As experts tell me in Brussels, from an economic perspective there is very little to this at all and the Americans or Hollywood never insisted on having the audiovisual sector included. However, France made a huge point of insisting on an exemption for the audiovisual sector for purely symbolic reasons. This tells me the Strasbourg-Brussels question is not going to change in the near future.

Chairman

I thank Mr. Freudenstein for those comments. The joint committee has spent an interesting hour and a half in its meeting today. It is good to hear about what is going on and about Mr. Freudenstein's organisation's views on these issues. I believe we all have learned something from the discussions. I again thank him for a very informative meeting today.

The joint committee went into private session at 12.38 p.m. and adjourned at 12.41 p.m. until 2 p.m. on Tuesday, 2 July 2013.