The fine art of procrastination

High unemployment, brain drain, low productivity, and few innovative industries were an issue of concern for European Governments ten years ago. In order to reverse the trend, European leaders adopted a strategy to reverse this trend by adopting structural reforms in a coordinated way.

The Lisbon Strategy failed to meet its economic, social and environmental targets. Today Europe is still growing at a low pace. Employment has grown slightly, but at the cost of a increasing number of ‘working poors’, especially among youth and migrants. And the promised ‘green revolution’ of the production system is still a dream.

What went wrong?

The entrenched structure of the European economy required a common effort to improve the economic, social and environmental situation of the continent’s population. The Lisbon Strategy foresaw reforms in policy areas with significant social implications, such as labour and welfare regulation, education as well as income and corporate taxation. The delegation of these competences to the community level would be very problematic. On the one hand, the ‘technocratic system’ that characterises the EU institutions struggles in finding a democratic legitimacy. On the other hand, the very different economic, social and cultural structures of EU Member States are not ideal to implement common policies in an efficient way.

An innovative governance approach called the Open Method of Coordination (OMC) was expected to coordinate national policies in a consistent way without replacing national democratic sovereignty with supranational technocracy. In comparison to the traditional ‘community method’, the ‘open method’ replaces binding commitments with good intentions. The idea behind this approach is that a flexible ‘soft law’ mechanism may allow a coordination of national policies without involving controversial European ‘hard law’. The implementation of the strategy shall be ensured by the pressure on heads of state and of governments by their peers. The Dutch Prime Minister would be sanctioned by his voters for the shortcomings of his Finnish colleague (just to make an example). Governments would thus be only responsible to the citizens of their respective countries and avoid the perceived democratic deficit of being responsible towards unelected European ‘technocrats’.

However, since the method does not involve binding EU law, the OMC excludes two crucial institutions in charge of supervising the common interests of European citizens: the European Parliament, which has only a consultative role in this strategy, and the European Court of Justice, which is completely excluded, as it can only make decisions on the basis of binding EU law. Indeed, the ‘open method’ does not solve the problem of the democratic deficit and reduces the rights of European citizens.

The Europe 2020 strategy proposes of streamlining the budget, the economic policies in the framework of the Single Market and external action to achieve the objectives in order to create more economic incentives and use community powers to implement the strategy. Unfortunately, the proposed measures are a drop on a hot stone. The most significant flaw of the Lisbon Strategy, an open method of coordination relying exclusively on non-binding convergence programmes evaluated through a peer-pressure method by the European Council is enhanced in the new strategy.

How to break the deadlock?

Between the proto-federal ‘community method’ and a strictly inter-governmental ‘open method of coordination’ there is a third option that could be more democratic and more dynamic in the same time. Apart of participating in a non-binding OMC strategy, Member States could have the option of joining an enhanced cooperation with more binding commitments and guarantees if they fulfil selected structural criteria. In order to promote such a voluntary agreement between Member States, the European Council could agree on the fact that if a binding treaty is not ratified by at least half of the Member States representing at least half of the population within five years, the Commission will be charged with drafting binding policies according to the ‘community method’ for all Member States.

At European level, this pattern was followed in order to implement the Single Market, the Economic and Monetary Union and the Freedom, Security and Justice Area (Schengen Area). This governance scheme proved also to be quite efficient in order to harmonise education and social policies in European countries with a cooperative federalist system such as Switzerland or Germany. According to the principle of subsidiarity these competences are handled at state level. In order to maximise efficiency state governments are committed to coordinate and streamline their policies in respect of binding agreements. Entities that are not able or not willing to fulfil the requirements can simply opt out from the policy and opt in at a later point.

Some observers see enhanced cooperations as a threat to the unity of the European Union or as an abdication of federal principles. These claims should be rejected: enhanced cooperations between Member States are not a threat for the acquis communautaire. On the opposite, the possibility of opting into specific policy allows to create common goods in a progressive way and to have truly democratic debates at national level where European debates would be completely prematurated today. European integration started as an enhanced cooperation between six countries in mining policies and is progressively evolving towards a fully-fledged political union.

The EU2020 is so far a repackaged version of the Lisbon Strategy with no significant improvement on its major flaw. Without a serious review of the proposed institutional setting, the most efficient way to implement it is to throw it directly into the recycling bin.