Plan B for the EU constitution

Richard Baldwin, 3 June 2005

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The resounding ‘non’ and ‘nee’ will have important effects on French and Dutch domestic politics. It may also change the way EU leaders deal with future treaties. But I do not believe that it will be the ‘political tsunami’ for the EU that many observers have predicted. Two reasons buttress this belief. First, the EU was headed for tough times regardless of the Constitution’s fate. Even if it became law by the end of this year, the botched Nice Treaty voting rules would be in place until November 2009.[1] This means that the many important and difficult decisions the enlarged EU must make in the coming years would be extremely difficult in any case. Of course, some EU leaders will construe these difficulties as proof that the French and Dutch voters should have followed their advice, but informed observers will know better. Second, I believe that there is a simple, viable ‘Plan B’, consisting of four steps, as follows:
 
Step 1. The world’s greatest political damage-control exercise.
Politicians will be trying to convince about 450 million citizens in 25 nations that the sky is not falling. The common theme will be “The French did not say ‘non’ to Europe”, but apart from that, national reactions will be a very public Rorschach blotch test.
 
Step 2. The ratification process will be stopped.
Continuing the process would involve almost no political gain and huge dollops of political pain – a virtual Chinese water torture for mainstream politicians that would give great joy and morale boosting to Europe’s extreme left and right. Since politicians get to make the decision, EU leaders will stop the process at their June summit. And they’ll have the perfect cover story. In a democracy, unanimity means that a ‘no’ from anybody is a ‘no’ for everybody.
 
Step 3. EU leaders will implement many of the positive elements of the Constitutional Treaty.
The articles in the Constitution fall into three groups: i) Non-changes: These codify existing practices (e.g. supremacy of EU law) or are renumbered articles from earlier treaties. These will continue to operate with or without the Constitution; ii) Non-laws: Many innovations in the Constitution are not legal changes, but rather political and administrative changes that do not require a Treaty change. These include the greater advisory role of national parliaments on subsidiarity, creation of the Council President and modifications of the rotating Presidency, creation of Mr Foreign Policy and reorganisation of EU foreign policy and the possibility of popular initiatives. The EU has long experience with making big changes outside the law when political consensus exists. For example, the Council of Europe guided European integration for 12 years before it was even mentioned in a treaty; iii) Major legal changes: The three major legal changes in the Constitution, in my opinion, are the new voting rules, the Social Charter, and the removal of the ‘pillar’ system that limits the influence of the EU Court and Commission to ‘first pillar issues’ (mainly Single Market issues).
 
Step 4. EU leaders will implement only one of the three major novelties in the Constitutional Treaty – the voting rules – and they’ll do this in the Accession Treaties of Bulgaria and Romania in 2007 or 2008.
The voting rules are essential – a point that everyone in Europe will appreciate after the string of decision-making crises that will be a hallmark of the EU during the next couple of years under the Nice Treaty rules. The first decision-making deadlock will probably concern the seven-year budget plan. Importantly, these deadlocks would occur with or without the Constitution since the new voting rules would not have taken effect until 2009 in any case. [2] These deadlocks will inevitably be construed as evidence of the consequences of the French ‘non’ and the need to agree new voting rules. The hard-fought consensus on the Constitution’s sensible voting rules will probably prevail, but it will probably be presented as a pragmatic solution to a pressing problem rather than family silver snatched from a burning house.
Every enlargement requires a Treaty and these treaties always change voting rules. Usually the changes are mechanical, but by 2007 all EU members will view reform of EU voting rules as an imperative. This is why it will be natural to put voting rule changes in the 2007 Accession Treaties.
 
The other two major legal changes are ‘optional extras’ – extras in the sense that there is no plain-as-the-light-of-day argument for these changes. The EU worked well for half a century without them. The left may say that enlargement makes it more necessary, but the right cites the same reason for them being even less appropriate. These elements will not be taken up since they require treaty changes to incorporate them into EU law. This will not now get done since federalists and leftists no longer have the leverage of the voting rules; the link among the three stemmed from the hocus pocus that Giscard created at the Convention. Magic and idealism will be the last thing on the minds of EU leaders after the salutary decision-making crises of 2005, 2006 and/or 2007.

What plan B does not do
The Constitutional Treaty was absolutely essential to maintaining progress towards an ever closer Europe. My Plan B does not accomplish this. Given the vast differences among the 25 EU members in terms of economics, history and politics, it will be extremely difficult to negotiate a new treaty that takes major steps towards deeper integration of any kind – social, economic or political. The Constitutional Treaty, however, left the door open to deeper integration by removing the pillar structure. As I mentioned with respect to the Social Charter, removing the pillars makes it possible – although not inevitable – that the ‘Community Method’ could drive integration forward even without Member State initiatives. 
Since this Treaty is dead, the EU faces a prolonged period without major new EU-wide integration initiatives. The way forward will be limited to "Enhanced Co-operations", deeper integration by "clubs within the club". For example, the Eurozone is a club of EU members dedicated to deeper integration. Although the Eurozone is not formally an "Enhanced Co-operation" arrangement, it demonstrates that a pioneer group of nations can create a snowball effect whereby most or all members eventually end up joining. After all, if the Eurozone had been an everybody-or-nobody proposition, it would not exist today. However, given that it exists, most outsiders will eventually be drawn into it.

[1] See Annex 3 of CIG 85/04 PRESID 27, and Protocol on the transitional provisions relating to the institutions and bodies of the union.

[2] Draft Council Decision relating to the implementation of Article I-24. See Baldwin and Widgren “The Impact of Turkey's Membership on EU Voting”, CEPR DP 4954 2005, and “Winners and Losers Under Various Dual Majority Rules for the EU Council of Ministers”, CEPR DP 4450, 2004, for more extensive analysis of the voting rule changes and failures of the Nice Treaty rules.

Topics: EU institutions
Tags: Constitutional Treaty, GDP, Plan B

Professor of International Economics, Graduate Institute, Geneva; Director of CEPR; VoxEU.org Editor-in-Chief

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