Jose Manuel Barroso EC President, Sean Barrett, Irish Parliament Speaker, Martin Schulz, EP President, Herman van Rompuy, President of the European Council, Anni Podimata, EP Vice-President, Maros Sefcovic, EC Vice-President (from left). Conclusions of the European Parliamentary week on the European Semester for Economic Policy Coordination. (EP photo library, 30/01/2013)
Yesterday at the European Parliament in Brussels, during the closing session of the Parliamentary week devoted to the European Semester (EU economic governance – fiscal treaty), a joint group of EU parliamentarians and members of national parliaments concluded, that the under construction closer economic and monetary union calls for more democratic control.
The MEPs and MPs stressed that the EU’s parliaments need to develop much deeper collaboration mechanisms to keep control of the Europeanisation of the decision-making on the economy and ensure that the EU and the national government budgets are used more effectively.
The European Parliamentarians and the members of the national parliaments also noted they are worried about the fact, that under the procedure called the “European Semester”, national government budgets have to get first the green light from the Commission. Only then member state budgets will be introduced to national assemblies for approval.
The problem is what the Parliamentarians actually did yesterday to stop this vicious cycle of less and less democracy? Unfortunately it seems that from this discussion in the European Parliament, about the lack of democratic legitimisation of the “European Semester”, nothing concrete came out. The centralisation of the EU decision-making came out intact. Words cannot arrest the vicious cycle of more and more authoritative rules in the functioning of EU.
Not to forget that in our European democratic system, state budget approval by parliament is the most important instrument in the hands of the legislative to hold the executive (government) accountable. Even on national level, the slightest procedural impediment on the legislative’s control over the government’s budget is undermining the democratic structure of the republic and corrupts the accountability of the executive to peoples’ representatives.
Widening democratic deficit
However the Europeanisation of the decision-making in the economy does not threaten only the democratic procedure of approving national budgets in parliaments. The existing democratic deficit is now taking even larger dimensions engulfing also the control and supervision of the financial sector.
In short the other major component of the centralisation of economic decision-making in the European Union and more so in Eurozone, is the new supervision structure for the banking system. It is the well-known Single Supervisory Mechanism (SSM).
The Commission and the European Council of Ministers of Finance (Ecofin) have now as first priority the creation of this new supervision mechanism for the banking industry the soonest possible. They will continue working hard towards the creation of this mechanism during the coming weeks or months. In any case for as long as it is needed to make the SSM operational the soonest possible, probably some-time this summer.
As of its very constitution this SSM will be under the jurisdiction of the European Central Bank, a totally independent institution. The problem is not this though. In reality this SSM organisation will be under the direction of the management of ECB, that is people without any democratic legitimisation and accountability. Only the governor of ECB has to appear before the European Parliament. Not to forget that today the supervision of the banking sector is realised at national level by national authorities, which are accountable to governments and to national parliaments.
Only centralised supervision
After the SSM is in place, national authorities would be sidestepped. At the beginning, the 200 “systemic” Eurozone commercial banks will be under the supervision of this mechanism, with no accountability whatsoever to any democratically elected authority. Gradually the entire banking system of the 27 EU member states is supposed to come under the SSM. At that point the entire financial sector of the EU will be under the control of some committee, gathering in a back room, without any obligation to democratically legitimise its decisions.
Unfortunately, the European and national parliamentarians who gathered yesterday in Brussels didn’t make the slightest reference to the SSM and its complete obscure legitimisation. Probably they are not informed, that apart the “European Semester” it’s also the SSM that also lacks any kind of democratic control.
The European Sting though has warned about both those new brave and dangerous for the people bureaucratic structures that are born in Brussels these days. In an article entitled, “The new European Union of banks is ready”, the competent Sting writer commented: “Once the member states concede the first approval of their government budgets to the European Commission and the oversight of their banking industry to the European Central Bank, their national sovereignty would be irrevocably restricted”.
But it’s not only the loss of national sovereignty. Even more important is the fact that the two new mechanisms, the Semester and the SSM, will be a new kind of bureaucratic creatures that do not like the democratic day light. Not to say anything about the democratic deficit of the Commission and the ECB themselves, who will be overlooking them. In view of this the Sting writer continued as follows.
“The problem is that those two super-mechanisms, the European Commission and the European Central Bank, haven’t got full democratic accountability. Unfortunately very few people seem to be worried about that, not including two influential EU leaders as Manuel Barroso and Herman Van Rompuy, both absorbed by their bureaucratic role and have forgotten their political past”.
It seems then that as far as the SSM’s legitimisation is concerned the European Parliament also is not worrying at all.
Integration EU style is tight with regards to national sovereignty. Can see Caribbean countries with their CARICOM get near this in decades.