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Tough Times for the EU
By Sven C.
Oehme, President & CEO, European-American Business Organization and American
Business Forum on Europe. Presented on June 21,
2005.
This week has been filled with unfortunate news for the European Union (EU)
and some of its member states. The undeniable rejection of the proposed Treaty
Establishing a Constitution for Europe by French voters in the referendum on May
29 was a clear signal sent to French politicians and administrators of the EU in
Brussels. This referendum was not a typical vote on EU issues, where the
majority of people stay at home. On the contrary, voter turnout was high at
approximately 70 percent. 55 percent of the voters said “Non” to the
constitutional treaty. This devastating result made a similar outcome in the
Netherlands on June 1 even more likely than polls had already indicated. And
the pollsters were not disappointed. 61.2% of Dutch voters said “Nee.” In
addition to these EU-internal issues, bad news also came from this side of the
Atlantic when the US decided to take the EU to the WTO review panel to discuss
the issue of subsidies received by Airbus in order to build new planes. In the
typical game plan for these trade duels, the EU made a retaliatory effort and is
submitting the issue of alleged subsidies received by Boeing to the WTO.
Whether both sides will be able to find some common ground, or whether this is
going to become a major battle in a trade war that may also affect other trade
areas remains to be seen. It has been a memorable few days for Europe, however
uncertainty remains as to where the European Union is headed now. Short-term
implications indicate that it may mean less beach time for EU politicians and
Commission officials this summer.
Today, the focus is on the “quo vadis” of the EU constitution treaty.
Just one year ago, it was hailed as a document that would bring the countries of
the European Union closer together, facilitate decision-making, streamline the
political process by establishing a permanent, elected president, and for the
first time, a foreign minister. When the document was signed in Rome in 2004, it
appeared that the only country that had reservations adopting the constitution
was the United Kingdom. At that time, some suggested that if the UK would not
ratify the constitutional treaty, it should voluntarily, or with encouragement,
relinquish its membership in the EU. Ironically, despite France having rejected
the constitution unexpectedly, the prospect of it leaving the EU has not been
introduced or supported. However, although France is enjoying a secured
membership in the EU, as it was one of its six founding states, French influence
has been drastically weakened.
What is “The Treaty Establishing a Constitution
for Europe”? It cannot be really compared to the US Constitution, consisting of
only seven articles and 27 amendments added over the years. It is a document of
about 328 pages not easily read or understood and much too detailed for review
by the individual citizen. While countries representing approximately half of
the EU population have already adopted the constitution through referenda, or
through their respective parliaments, the other half has yet to do the same. The
current count in countries already having ratified the constitution by
parliamentary vote includes Austria, Belgium, Germany, Greece, Hungary, Italy,
Lithuania, Slovakia, and Slovenia. By vote and referendum: Spain.)
The EU Commission envisions going ahead with
this ratification process and may suggest having another referendum in those
countries that did not adopt the constitution during the first go around. This
would not be the first time that such measures are taken. The Maastricht Treaty
(Treaty on European Union) had a second go around in Denmark in 1993 before it
was approved. Similarly, the adoption of the Nice Treaty, which the EU will
have to revert to if the constitution is not adopted by all member states, also
had to be taken to the polls in Ireland twice before it was approved in October
2002.
Why did French and Dutch voters reject it? Aside
from various domestic issues, the main reasons are as follows:
·
It was not made clear why the
treaty is needed,
·
The benefits of the EU have not
been explained sufficiently to its citizens,
·
National governments favor
promoting their own domestic issues,
·
The EU economy is in dire straits.
Two digit unemployment rates in France and Germany cloud peoples’ outlook of
their future,
·
People are wary of the Treaty
opening more doors for people to come to the EU from current or future member
states and other neighbors,
·
The possible membership of Turkey
raises fears among citizens of more jobs being outsourced and even more people
coming to western Europe.
However, any delay in ratifying the new
constitution will slow down the further integration process of the EU. It may
also have a delaying effect on the accession talks with Turkey expected to start
on October 3. Furthermore, other prospective candidates for membership in the EU,
for example, Croatia, may be forced to endure an even lengthier period of time
before they will be considered as candidate countries to the EU. This cause for
delay is due to a review of the decision making process, policies and a more
inward looking EU. Romania and Bulgaria, scheduled to join by 2007, may face a
delay of a year or two. With France’s weight in the EU having been somewhat
reduced, the other usual strong man of Europe, Germany, is facing political
upheaval this summer in the form of early elections.
The elections in Germany, which are tentatively
scheduled for September of this year, will certainly keep German politicians
preoccupied with national issues and less focused on discussions at the EU
level. However, due to the importance of Germany to the EU, decisions at the EU
level are likely to be delayed until after the elections. This is assuming, of
course, that German constitutional issues do not impede the elections.
Legal scholars and experts are making the
argument that the manner in which Chancellor Schröder will attempt to dissolve
Parliament and force elections on the country is a violation of the German
Constitution. The Chancellor cannot call for new elections outright and the
German President may dissolve Parliament under limited and strict rules.
Chancellor Schröder is attempting to create a situation that will allow him to
call for a motion of non-confidence in Parliament. According to his script, his
supporters will then deny him the vote of confidence in Parliament, thus leading
to new elections in which he will run as his party’s candidate for Chancellor
selected by some of the same people who voted against him. At this time,
according to polls he is likely to lose the national election.
Center right wing representatives of the
probable new government, including the candidate for the office of Chancellor,
have already opposed full membership of Turkey in the European Union. Other
party officials have suggested delaying the accession of Bulgaria and Romania to
the European Union for some years.
If elections are ordered to be halted by the
German Constitutional Court, this would leave the current government, headed by
Chancellor Schröder a lame duck administration and would impede European
decision-making. However, if the elections proceed as planned, discussions in
regards to the future of European expansion will undoubtedly be increasingly
difficult.
The European heads of state are faced with the
task of solving the crisis of the EU at the Summit in Brussels taking place in
mid June. It remains to be seen whether officials will be able to rise to the
challenge of how to proceed by that time. Perhaps it would be beneficial to
analyze and determine the difficulties faced within recent years including why
the benefits of the European Union were not effectively communicated to the
citizens and why the citizens are opposed to various aspects of the EU.
Undoubtedly, the EU Commission has been presented with a major task ahead in
promoting the EU. National interests of politicians who are concerned more with
promoting their own achievements, rather than emphasizing and working towards
collective EU advancements and achievements present themselves as a hindrance to
this effort. Consequently, it may be argued that the EU has reached a
crossroads. It must be decided whether the EU will remain a trade block with
integrated economies and a single currency, or whether political determination
will succeed, as well as the will among citizens to further integrate and
establish a European entity that does not sacrifice national, regional and local
identities, but rather embraces them under the umbrella of a united Europe.
This summer will prove to be, not only
challenging and exciting, but also the start of a new chapter in the history of
the EU and its member states. For Americans, the discussions will not appear
relevant initially, however, on a long-term basis, variables such as whether the
EU is focused towards greater integration and more common policies, or a more
fragmented environment held together by trade benefits for its members, will
affect not only the U.S., but also the world. The EU is not going to break-up,
however it cannot be overlooked that recent events have imposed a significant
blow to its efforts and in turn, further emphasized the political savvy and
perseverance that is required to ensure its progress.
ã
June 2005
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The
European-American Business Organization, Inc.