Mark Foster / Jul 2022
Creating legislation for a single market of 450m citizens across 27 countries is not easy. It is laborious, complex, ever evolving. But recent evolutions in the EU’s policymaking processes have made matters more opaque and less democratic.
Take the recently adopted and published ‘complementary delegated act’ (CDA) regarding the EU’s landmark taxonomy regulation. The CDA, at its heart, contains some extremely important political issues of direct relevant to all citizens - essentially defining whether, and if so, under which conditions, gas and nuclear can be considered sustainable.
This question is not anodyne. Besides the direct environmental impact, it affects the pricing of sustainability projects by financial institutions and drives institutional investment decisions about long-term asset and capital allocation by pension funds, insurance companies and fund managers on behalf of their clients: ordinary citizens like you and me.
Such issues should not be for delegated acts (DA) at all. Rather, they should be clarified in primary legislation. It is a failing of the co-legislators themselves that such issues were deemed too difficult to solve in primary law and were therefore delegated down for officials work on.
Placing such responsibility in the hands of officials does not make the political choices any easier. Rather, this political buck-passing delays the entire process, reduces time for business to comply, and risks further antagonising those protagonists who dispute the process, content, or outcome.
I’ve written earlier this year (January and May) about the taxonomy DA process, correctly predicting that the procedural intricacies made it unlikely that the legislator would reject it. But the European Commission’s (EC) ultimate victory earlier this month seems likely to be short-lived.
The issues remain so divisive that some on the ‘losing’ side - a coalition of a minority of cross party MEPs, several Member States, including Austria, Finlandand Luxembourg, and a vast array of climate NGOs - are already speaking about legal challenges as soon as the provisions apply (1 January 2023).
The EC will undoubtedly counter that the process was rigorous, with input from a broad range of stakeholders via consultation, public hearings and private meetings of the ‘technical expert group’, liaison with Member States and MEPs, Commission college endorsement and finally, formal, political adoption by both the Council and EP.
This may all be procedurally true. But what the DA process merits in superficial comprehensiveness it lacks in genuine accountability. There was no serious attempt at an impact assessment on the CDA, a procedural criticism (amongst many) raised by Austria (see link above). Procedural semantics aside, EU politicians inflict self-harm, when they shirk the big questions at ‘level 1’ and thereafter are only able to approve or reject (but not amend) legal drafting in ‘level 2’ DAs. This damages the credibility of the EU’s democratic values by not reassuring EU citizens that their voices and concerns are being taken seriously on such totemic, transformational issues as climate change.
Even if MEPs failed to reach the threshold of a simple majority to reject the CDA, why is it that the threshold in the EP is lower than that in the Council, where a qualified majority is required to reject a DA? Officials from several Member States privately complained bitterly about this institutional unlevel playing field.
Clearly it should not be for legislators to draft thousands of pages of detailed legalese. Politicians should focus of providing a political framework, sufficiently detailed to clearly enable stakeholders to understand the aims, scope and obligations required in any given piece of legislation and engage in the process, should they wish.
More technical detail - level 2 – should be tasked to specialist officials. But the taxonomy experience has muddied the waters between what is political and what is technical in an unsatisfactory manner for many stakeholders. Whilst there is no formal quick fix - that would require treaty change - informal improvements are possible if the political will is there. Here are three suggestions:
- The EC needs to be bolder in asserting its position from the outset in its draft level 1 texts. If the co-legislators disagree, they can amend it. It is they who have the final say (the level 1 process is, to my mind, an inherently democratic process with important checks and balances).
- Those MEPs and Member States who now bemoan the outcome of the CDA would do well to reflect on whether they did everything in their power to make their case when the level 1 text was being negotiated. After all, the ‘trilogue’ agreed to leave the treatment of gas and nuclear to level 2. It was that shared responsibilitywhich bound the hands of the co-legislators at level 2, empowering the EC on both the substance and process of the CDA.
- All sides will need to learn the lessons from this painful process, improving the informal dialogue between institutions and with external stakeholders in a more equitable manner to smooth the passage of future DAs.
Whether it’s on the Green Deal, digital issues or any other policy area, the EC would do well to act now to avert criticism and future backlash against the DA process. The EC must ensure that what’s left to officials genuinely is the important (but often dry and detailed) technical drafting rather than the high political issues which impact citizens lives and for which politicians alone should be directly accountable. That way, there can be no more accusations of a level 2 democratic deficit.