15 July 2016

Brexentry: Finding Salvation outside the EU, but inside Europe

By Andreas Wesemann

The British people have voted to leave the European Union. This national expression of exasperation may be a good opportunity to initiate a reconfiguration of the institutional architecture of the EU which, it seems, is driving both the working classes in the North and the (landed) gentry in the South round the bend. If a revolutionary spirit is sweeping across the country, whether caused by the perils of globalisation or just the fact that we have not had a revolution for more than 300 years, then it is time to consider some revolutionary alternatives to the way the EU currently operates – abolishing it while at the same time creating an alternative Europe, not a union, but a community of partners nonetheless.

The first step in this endeavour should be the abolition of the European Commission, the executive body of the EU and bête noire of many, not just Brexiteers, who scratch their heads how national parliaments and governments (elected) can be subservient to a group of 28 appointees (not elected) that alone can propose legislation and has extensive, often quite unfettered executive powers.

The Commission’s function would be amended and transferred to the European Council. To break with the past it would be re-christened as the European Convention (a new name may have to be found for the European Convention on Human Rights). The Convention shall, like the Council today, consist of the heads of state or government of the member states who would meet annually to decide what legislative initiatives shall be pursued across Europe – now called the European Community in memoriam of an older, less ambitious, but perfectly sensible era of cooperation – during the next year. The decisions of the Convention would be taken on a one country – one vote basis, displacing the complex qualified majority voting system that has benefited Germany at the expense of smaller European nations (including the UK). A body of civil servants, European sherpas in diplomatic terminology, would prepare and support the Convention to ensure that it concludes with specific proposals that are then submitted to national parliaments for ratification. The difficulty of agreeing pan-European legislative initiatives that can also be ratified by national parliaments would limit what the Convention can do. Indeed this is one reason for such a limiting scheme of delegation.

In this world, national parliaments would be the final arbiters of the popular will. It will make the European Parliament unnecessary, an institution both unloved and unknown. Turnout in EU parliamentary elections has been woefully low for years (43% in 2014) and who really feels represented by it? Its abolition would go largely unnoticed. The European Parliament’s budgetary authority would transfer to national parliaments which may want to delegate administration of a common budget to a “Budget Office” of the European Convention, certainly in relation to any such expenditure categories that recur annually and are currently labelled “compulsory” (e.g. agricultural subsidies); each year national parliaments would then approve – or not, depending on their appetite – any additional, non-compulsory spending programs.

In one way, this simpler, decentralised framework for a new European Community would be in the spirit of the current arrangement by dramatically extending the principle of subsidiarity as set out in the Lisbon Treaty – all decisions would ultimately, directly or indirectly, be taken at national level. Each parliament, and hence each people, would have an equal say in all matters deliberated and proposed at and by the annual European Convention.

And yet, to reassure the sceptics, this European Community would be entirely compatible with maintenance of a single market – a, not the single market as the opportunity can be taken to review its ‘four freedoms’, the free movements of goods, services, capital and people, as well as the need or desirability for further reduction of trade barriers (important) and harmonisation of national product rules (less so). What will be harmonised, in effect, is the process of authorising national representatives at the Convention. Politics supercedes economics. This was the demand of the Brexiteers, and it should be satisfied. It will also be well received in other nations.

This proposal for a new European Community would require a new treaty (to replace the Lisbon Treaty of 2009), and in the UK an amendment of the 1972 European Communities Act to eliminate the supremacy of EU law. EU law would be replaced by national laws implementing proposals by the European Convention across all member states. While the final judicial authority over such “Community Laws” could remain the European Court of Justice, whose role would naturally become more circumscribed, parliamentary sovereignty would be supreme and co-exist with extensive, but clearly prescribed cooperation with other member states of the European Community.

It may appear like a utopian scheme, but would really be a manifestation of old-fashioned British pragmatism at a time when the currency of this useful national characteristic has been rather dramatically devalued.

Andreas Wesemann is a partner at Ashcombe Advisers, a corporate finance firm in London, and co-founder and chairman of the Hackney New School.