Europe needs to take heed and reform in wake of Italy, Austria outcomes

The “no vote” victory rejecting Italy’s constitutional referendum is widely interpreted as a clear win for anti-globalization populist forces in Europe. Even the defeat of Austria’s anti-immigrant populist Norbert Hofer last Sunday in the presidential elections, with just a 53-47 percentage, is seen in the same vein, as the extreme-right candidate’s loss was slim. Forces from the political edges are gaining ground in the post-truth era and many pundits think the path of global integration has stalled. I see it differently. The schism of societies currently underway, even in the prosperous western democracies, is more of a globalization victory than a defeat.

Globalization has broken the nationalistic backbone of societies and we are only now experiencing the consequences. In other words, those who are working well with, or at least are willing to work with globalization, are clearly decoupling from the archaic part of their national ethos. Resentment among globalization’s losers on the one hand, and contempt among the winners on the other, dominate the current climate.

European integration, with both the single market and the common currency, has been at the forefront of this process, which is why the European dream is now so unpopular among European Union citizens, especially among the “left behinds.” In other words, the EU project works well for the “mobilized,” but free movement of goods, people, and capital leaves behind those who cannot follow. Readers familiar with economics 101 will notice that this process is almost inevitable. Free trade is not a zero-sum game, but it does leave behind losers. Now, progressives or social democrats would say that it is Europe’s responsibility to take care of the “forgotten men and women” by using a social safety net. But for this to be possible in an era of a “race-to-the-bottom” global capitalism, Europe needs major institutional changes. And that is, in my view, the primary message of Italian Prime Minister Matteo Renzi’s defeat.

Elevating “European democracy” and “European competencies” amidst rising populism is essential to preserving Europe’s democratic foundation.

Elevating “European democracy” and “European competencies” amidst rising populism is essential to preserving Europe’s democratic foundation. Communicating such changes to citizens in ways they can accept is vital in an era when as the dichotomy between national and supranational competencies seems to be widening. This is absolutely critical as Europe faces the “elections of the century” in 2017. In Germany, the most powerful politician of political liberalism remaining in Europe—and in the world perhaps—Chancellor Angela Merkel, will struggle to restrain rising populism amid massive migration flows. In the wake of Italy’s “no vote,” it is almost certain that Italy will face elections as well. Even more critical will be the May 2017 French elections, where far-right, anti-integration politician Marine Le Pen will attempt to disrupt the current status quo by challenging former Prime Minister Francois Fillon, a pro-business conservative centrist. This will be the mother of all battles, since a Le Pen victory will surely mean the beginning of the end of integrated Europe.

In this context, it is absolutely critical to contemplate not only a possible massive fiscal boost (something I proposed in a blog this past September in a blog post), but to consider reforms aimed at increasing the voice of European citizens. It may also be time to think of enforcing localism as a way of promoting democratic decentralization while avoiding a further weakening of the European unification project.

Two initiatives would fundamentally enhance European democracy*:

1. Allow citizens to vote for the European Parliament. Shift from current national election rules that allow closed lists and open up them up to allow voters to select individuals even if they belong to different parties, as is allowed in Ireland. A lower standard would be to have partially open lists, with voters allowed to choose among a list of candidates predetermined for each party. Setting such minimum standards constitutes an important transfer of power from the national to the European level, since current electoral rules remain a national prerogative. Keep in mind that article 1, section 4 of the U.S. Constitution has a similar provision. Essentially, it stipulates that the Congress can intervene in the formulation of the election rules as a safety valve in the case of abuses and developments that can undermine the right of the citizens of a state to vote. In that context, the recent 2013 change in the interpretation of the 1965 Voting Rights Act provides a relevant case study for Europe. Such a change could also be accompanied by an enhanced role of the Parliament in the decisionmaking process, and would be in line both with the ability of EU law to effectively override contradicting national laws.
2. Improve upon the nomination process for the president of the European Commission (EC). Currently, the commission president is nominated by the commission, then goes before the European Parliament for confirmation. An alternative would be to allow the direct popular election of the commission president, followed by his or her automatic nomination in the absence of an opposing majority from the European Council. Having been conferred such legitimacy, the president should have an increased say in the selection of commissioners. One way to achieve this could be to allow each member state to suggest a short list of two or three candidates, after which the president then selects one candidate to put forward for confirmation. Today the president simply selects the portfolios of each commissioner proposed by each member state, before submitting them to the European Parliament for confirmation.

The two above changes can materially increase the quality and power of the democratic mandates that the legislative bodies of European and European Commission receive. Through this increase, both in quality and in quantity, of the democratic mandates, one can attempt to move the existing border between national and supranational competencies as far as the precedence of laws and case law justify. In particular, after a member state is taken to the European Court of Justice and convicted of not properly harmonizing national legislation with EU law, European law could automatically take precedence over national law and bind national administrations.

*1 and 2 are from How to complete a Union that is built to last, a paper in process with M. Mitsopoulos.