Andrew Duff / Sep 2024
Photo: Shutterstock
In her second term as Commission President, Ursula von der Leyen will have to turn her attention to the EU’s constitution. Here are five reasons why.
First, Viktor Orbán and his fellow travellers from the populist right are defying the rule of EU law. The instruments available to the EU to sanction an errant member state are inadequate. The resurgence of nationalism as a potent political force is now evident in every national and European election. Rejection of ‘rule by Brussels’ is a common trope of the anti-imperialist left as well as the sovereigntist right. Europe’s leaders must address this democratic disillusionment with EU governance. Institutional reforms are surely needed to make the way the Union is run more effective, discernible and accountable.
Second, thanks to Vladimir Putin, security and defence has become a main driver of European integration. The Treaty of Lisbon (2007) provides mechanisms for systemic cooperation in defence policy among militarily capable and politically willing member states. But present EU structures do not allow for the development of integrated, interoperable armed forces under centralised command and control, in conjunction with NATO. Even the imposition of internal market disciplines on the armaments industries for the purpose of common procurement requires treaty revision.
Third, the EU is now firmly committed to expanding its membership to Ukraine, Moldova and the six states of the Western Balkans. Such an enlargement is seen to be in the strategic interest of the EU, but it will add to heterogeneity and complexity. Reform is unavoidable if the candidates are not to join a dysfunctional Union. A staggered enlargement by way of partial membership (with voting rights) is a plausible novelty — and may also prompt the EFTA countries to upgrade their own association agreements. Von der Leyen has already triggered a series of ‘pre-enlargement’ reviews of common policies and decision-making processes for publication early in 2025. She may get more than she bargained for.
Fourth, both defence and enlargement will cost a lot of money. Essentially unreformed since 1988, the Union’s financial system is no longer fit for purpose. Its revenue is mainly controlled by national finance ministries that want to get as much as possible out of the EU while putting as little as possible in. Correctly, the financial markets doubt that economic and monetary union without a common fiscal policy is viable over the long term. Instead, an EU treasury should be enabled to raise its own taxes, issue federal eurobonds and determine investment decisions in European public goods. The EU budget, now only 1 percent of EU GDP, needs at least to double its size after 2027.
Lastly, the EU should be required to refresh its compact with member states. Where power lies must be reflected in updated statute. The steady accretion of executive authority by the Commission and its numerous agencies and regulatory authorities needs to be recognised. The European Court of Justice has settled caselaw ready to be codified that advances the values of the EU and the concept of EU citizenship. Meanwhile, features of the Lisbon treaty (notably the passerelle clauses) that allow for incremental modernisation of the EU’s institutions have proven unworkable. Enhanced cooperation by a core group of integration minded states has seldom been deployed. Banking and capital market union are unfinished business. The threat of the national veto impedes the deepening of the single market, cripples the EU budget and stymies its common foreign policy.
For reasons, therefore, of size, resources, efficiency, durability and legitimacy, the Union needs a bout of determined constitutional reform. None of its institutions should be untouched. The European Parliament faces internal as well as electoral reform. As von der Leyen is discovering, a college of Commissioners of one per member state is sub-optimal. The European Council needs to take a grip over the Council of ministers. The Court of Justice deserves the powers of a federal supreme court. The European Central Bank must become the eurozone’s bank of last resort.
Parliament has already proposed a general revision of the EU treaties by way of a Convention. Mario Draghi’s imminent report goes in the same direction. Von der Leyen would do well to ask an independent expert group to prepare options for treaty change. The Union’s future solidarity depends on the development of a robust constitutional framework and the emergence of a viable federal government.
The British, with their legendary aversion to federalism, should pay close attention.
