All hail Angela Merkel – No 10 goes all out for the Chancellor

Painting in the Royal Gallery - the Duke of Wellington with Field Marshal Blucher at the Battle of Waterloo - harking back to an earlier age of Anglo-German cooperation.

Angela Merkel will visit London on 27th February, in what will be, no doubt, a much hyped affair. Though the details are yet to be confirmed, in addition to meeting David Cameron and the Queen, Merkel could also “be given the rare privilege” – as the Telegraph’s Chris Hope put it – of addressing both Houses of Parliament at the Royal Gallery, perhaps in an attempt to rekindle the spirit of the early 19th Century when Anglo-German cooperation was the norm (see painting).

 

The last head of government to address the Royal Gallery was apparently Nicolas Sarkozy – then French President – in 2008. We suspect that for Merkel this is more a case of “business as usual” rather than “privilege” but in any case, it’s significant.

There’s no doubt that the Tory leadership hopes for encouraging signs from the Chancellor, following Francois Hollande’s predictable comments last week that EU treaty change “is not a priority” (which nonetheless generated headlines). Far worse for Cameron et al was that the German Foreign Minister Frank-Walter Steinmeier proved such hard work when he was here on Monday – holding a rather awkward press conference alongside William Hague, which included some tempered language on Treaty change (which even came close to contradicting the German Coalition agreement).

As we’ve noted before, the German Grand Coalition isn’t a deal-breaker for Cameron’s plans but it does mean a lot more work. In contrast to the Steinmeier visit, which was barely publicised (most lobby journalists - the parliamentary correspondents who often set the agenda in UK press - were unaware of the meeting instead basing their write-ups on the news wires, which arguably triggered even worse headlines for Hague / Cameron), the Government will go all out for Merkel.

As we’ve argued since the start, Merkel holds the key to a new settlement in Europe, so No 10 is right to step it up. However, at the same time, it must be wary of not being seen as desperate – Merkel is by far the most important leader in Europe, and the big Europe questions are decided by the Kanzleramt and even the Finanzministerium, not the Auswärtiges Amt. Nevertheless, the strategy cannot entirely rest on Merkel, also keeping in mind that this is her last term, with her potentially getting weaker closer to the end.

Merkel’s visit will mark the start of a fresh attempt by No 10 to court EU leaders (read: explain to Europe what in the world Britain actually wants to achieve apart from creating emergency headlines to appease backbenchers). It won’t be a day too early. 

EU referendum: What will the Tory backbench motion actually achieve?

Unlikely to care if her speech is amended - but will anyone else?

Politicians do not as a rule like other politicians amending their speeches especially after they have been delivered. The Queen is not a politician and is usually spared this indignity - but not if one group of (mostly Conservative) MPs have their way. Although, strictly speaking, the MPs have not tried to amend the speech per se, they merely tabled a motion to "express regret" that it did not include legislation for an EU referendum.

This is unlikely to upset the Queen, she will not have had any personal commitment to the political mush written for her by Number 10 (in case any non-UK readers were confused). The amendment states that the House:

"respectfully regrets that an EU referendum bill was not included in the Queen's Speech".

This means that even if passed by a majority of MPs, it wouldn't actually force the Government to table a bill. So what's the point? John Baron, one of the MPs tabling the amendment, said the objective is to show that:

"there is a large body of opinion inside and outside this place that believes that legislation is right for a EU referendum."

This will no doubt make the 'ditch the EU' story run for another week, but the problem for those who genuinely want to legislate for a referendum in this parliament is that even the early referendum enthusiasts all want different things. Tory MPs who have put their names to it have several aims: legislation enshrining Cameron's 2017 referendum, a mandating referendum to enable re-negotiation, or most simply a straight in/out referendum now (though many oppose this on the basis that it would generate an In vote and thereby kill the issue - and any prospects for substantial reform - for a decade or more).

So this vote is unlikely to achieve much since it suffers from a lack of political  focus. It seeks to be all things to all people.

However, this is not to say that from a Tory point of view, there aren't any benefits from such a 'stunt vote' on a referendum of some sort (we've looked at the different options here). It could demonstrate that David Cameron can be trusted to keep his word - no good making a popular promise if people don't believe you. The second attraction for the Conservatives is that in the 2015 general election, they could use the vote both to target specific Liberal Democrat and Labour MPs who vote against, and also as a shield when faced with a buoyant UKIP threat.

But again, the amendment tabled today won't achieve any of that.

There are, however, more clever routes. For the stunt to work, it probably will have to be included in draft legislation that is going somewhere - and with sharper wording. There are two ways. First, a Private Members ballot: this is basically a giant raffle where MPs put in requests for all kinds of stuff. If this is successful, an MP could chose to put forward a referendum, possibly just cutting-and-pasting the draft legislation that the Conservative leadership has promised to publish before the election (but not put to the vote). Absent a successful ballot MP-led legislation has virtually zero chance to succeed. The other way they could achieve a vote is to table an amendment to another EU-related Bill. Here, MPs could be exceptionally creative. There's one coming up:

European Union (Approvals) Bill: will provide Parliamentary approval under the European Union Act 2011 for ministers to vote in favour of various proposals in Brussels: Pericles (anti-euro counterfeiting); Europe for Citizens (EU civic integration); and EU Archives (formalising the depositing of EU documents in an archive).

If the draft legislation is thought to be general enough, it's conceivable that the clerks (who will ultimately decide whether the amendment is allowed) could allow an MP to add an amendment calling for a referendum. There could also be other legislation, such as on the EU budget.

Given that even if passed next week's amendment is non-binding, and that its vagueness allows people to vote in favour for a variety of reasons, we are not sure how much this initiative will actually achieve.

A vote on whether to leave the euro? What's next in Cyprus?

This will be another eurozone nail-biter. 

The deal agreed by eurozone finance minister on Friday to tax Cypriot depositors (and some other conditions) in return for a €10bn bailout still needs to get passed some hurdles. As ever, there's one huge "hurdle": democracy.

The Cypriot parliament needs to approve the deal before it can become reality. The parliament was due to begin debating the issue today, but his meeting has now apparently been postponed. As things stand at the moment, the Parliament is due to hold a vote at some point before Monday night (although we imagine they will be under some pressure to get it done sooner rather than later. Monday is a bank holiday in Cyprus, but markets will be watching).

Here are some key questions about the next steps:

Could the Cypriot Parliament vote the package down?

A statement from the Cypriot President Nicos Anastasiades last night made it clear that he considers a No an effective vote to leave the euro. As in so many of these "desperately needed bailout meets parliament  scenarios, Cypriot MPs will probably be too frightened of the consequences to vote the package down. After all Cyprus is a very small country, having its own free floating currency is probably not a sustainable long term option, especially since leaving the euro would likely see a complete collapse of its banking sector and a very large default – very few people would have much trust in any new currency.

But a No is still not out of the question. As Kathimerini points out, the Democratic Rally (DISY) and the Democratic Party (DIKO), the parties which supported President Anastasiades in his recent election, do not have a majority – only 28 out of 56 MPs. AKEL the main left opposition party (which has 19 MPs) has said it will vote against the package, while DIKO has recently seen at least one MP who does not support Anastasiades split off.

The package may also get support from the European Party (2 MPs), but the Movement for Social Democracy and the Ecological and Environment Movement (5 and 1 MP respectively) have suggested they could vote against the deal.

So, currently the vote could be 30 in favour and 26 against. However, one of the reasons for postponing the vote seems to be to give the government more time to rally support, so it's still a very fluid situation.

What happens if the Parliament rejects this deal?

Unclear. But it could be down to two options: either Germany and other creditor countries soften up the conditions, most likely on depositors, or Cyprus may be forced into default, which most likely means leaving the euro.

Political and popular support may align against the euro

And regardless, much of the population and at least half the political establishment do not seem to support this deal and although there may be few other options on the table in the immediate future, that could seriously undermine the country’s political stability or its long term membership of the Eurozone.

Pushing Cyprus closer to Russia?

As we have noted before, the geopolitics of the situation here are very delicate. Most other small European countries have few alternatives in terms of support structure, however, Cyprus has Russia. Russian support could begin to look increasingly attractive due to fewer overt conditions (although the more covert conditions are likely to be onerous). Comments by certain European leaders over the weekend have suggested the situation in Syria could escalate. As we have pointed out before, Russia has previously sought to move its only naval base in the Mediterranean from Tartus, Syria to Cyprus – an escalation could renew this desire while financial support could provide an avenue to make it happen.

This is of course a distant prospect, but the point is that, the political fallout of this move could be very significant not just within Cyprus but for the EU as a whole. This needs to be handled with utmost care...

Campaign to devolve EU regional policy gathers momentum

Last Friday, the Parliamentary Select Committee for Communities and Local Government's inquiry into the European Regional Development Fund, to which Open Europe submitted both written and oral evidence, published its final report. Among others, the report recommended that:

“We support the principle of repatriating regional policy funding, provided funding could be protected and ring-fenced over the long-term to ensure that the poorest English regions continued to receive the same level of support they would have received under the current system.” 

 In our recent report on the subject, Open Europe recommended that:

"Limiting EU regional spending to poorer countries [GDP below 90% of the EU average] would be a win-win situation for both Britain and Europe. It would channel more cash to the newest member states and allow the UK to spend exactly the same amount on its regions as it does now, with the option of adding the several billion that it would save from streamlining the structural funds. It would also eliminate a range of additional costs and allow the Government to radically improve the targeting of funds towards poorer areas and to viable projects.” 

We are therefore delighted that MPs accepted the central tenet of our recommendations, especially as Open Europe was the only organisation profoundly critical of the status quo to submit evidence. However, we consider that there is a realistic prospect of the government being able to secure this reform in 2014 – and that the government should be prepared to veto the next MFF, currently up for negotiation, in order to make this demand more credible – whereas the Committee sees this as an objective for 2020 and beyond.

Just to briefly recap the arguments why the reform would be a win-win for the UK and Europe:

• While it can generate added value in individual cases, involving all member states in EU regional spending, irrespective of their relative wealth, is economically irrational. In richer member states, the structural funds mostly serve to redistribute income within the same regions. As the Commission itself has admitted, this exercise creates “considerable administrative and opportunity costs”;
• Over the 2007-2013 EU budgetary period, the UK is contributing roughly £29.5bn to the funds, and getting back around £8.7bn. Of the 37 regions in Britain under the EU’s classification system, 35 are net contributors to the structural funds, with only West Wales and Cornwall net beneficiaries. Some relatively poor areas lose out substantially; for example, the West Midlands, which has the lowest disposable income per capita in the UK, pays £3.55 to the structural funds for every £1 it gets back;
• Limiting the structural funds to poorer countries would result in 23 out of 27 EU countries paying less into the EU budget than at present. - all new EU member states would be better off. The UK would save around £4bn net over seven years in addition to the £8.7bn it currently gets back through the structural funds. This option could therefore attract strong political support in many capitals, especially given the current need for governments to make savings;
• Domestically, it could enjoy cross-party support given that it was originally a policy championed by the previous Labour government, and areas represented by Labour MPs stand to be the biggest winners under this reform. 

All in all, the campaign to reform EU regional policy is gathering momentum...

MEPs: always pragmatic, sensible, and firmly in touch with the real world

MEPs on the "Policy Challenges Committee" have agreed on their proposals for the next multi-annual EU budget period, to run from 2014-2020. When it comes to EU budget negotiations, this is the big one - these talks will set the overall "envelope" for each annual budget within the period.

Crucially, every national government has a veto. With negotiations expected to last around 18 months, expect plenty of horse-trading among European capitals, in addition to the various demands of the European Commission and Parliament. The context, remember, is the UK, France, Germany and others' call last year for "restraint" and the EU budget to rise no faster than inflation between 2014 and 2020.

So these looming negotiations are where reform-minded EU politicans and governments have the chance to dig in and get something done - hopefully achieving a far better and prudent deal for taxpayers in these times of austerity.

But, in what has happened too often now to come as a surprise, MEPs seem intent on pushing as many 'hot buttons' as they can. Their proposal includes:

- a 5% increase in funding. This doesn't sound much like "restraint".

- an end to all "rebates, exceptions and correction mechanisms". Yes, that would mean the UK's rebate, worth billions over a seven year period.

- a "system of real own resources". Also known as a new direct EU tax.

- no reform of the EU's wasteful farm subsidy regime nor the practice of recycling "cohesion" money amongst some of the richest countries on the world (also known as the structural funds).

Good to see everyone's starting on the same page then.

Waking up to 'Europe'

Parliament’s stance against the ruling by the European Court of Human Rights to give prisoners a vote has again inspired UK commentators to take a closer look at ‘Europe’.

The right of prisoners to vote is an ECHR issue – not an EU one (the ECHR is not an EU institution as we're always keen to point out). However, it’s right to consider the influence and mission creep of the ECHR in the same discussion as the influence of the EU itself - for a whole range of reasons. As we’ve argued before, on rights legislation the two are now linked and both suffer from an inherent tendency to expand their own powers into new areas. And in terms of the politics and perception of it all, for most people in Westminster and beyond, there’s little difference between the EU and the ECHR, making it extremely difficult to unbundle the issues in media and political discussions (and given that even senior judges have a difficult time unpicking the patchwork of human rights legislation that exists in Europe today, the blurring of the ECHR and the EU in public perception is more rational than what EU communication-types and others realise).

And there has been no shortage of hard-hitting commentary.

Here’s James Forsyth in the Mail on Sunday:

The Tories try to keep their newly hardened Euroscepticism under wraps when dealing with their Lib Dem colleagues, who remain committed to the European project. But even the Lib Dems have been shocked at how much influence Brussels has on decisions that should be taken at a national level. Nick Clegg was appalled when officials told him that the EU wouldn’t allow VAT to be set at a local level.

And here’s Fraser Nelson in a strong post on the Spectator’s coffee house blog:

Europe was easier to characterise as a fringe issue, not so now….Cameron thought he’d have to play along, even though it made him “physically sick”. But in perhaps the most useful thing the House of Commons has done for two decades, it decided otherwise last week in a free vote. And what are the judges of Strasbourg going to do? Invade?

A healthy precedent was established last week. Britain has rejected that old argument that we have no choice. We do. Parliament is sovereign. We can reject as many Euro laws as we like: from Brussels, Strasbourg or both.

Meanwhile, Tim Montgomerie takes a swipe at Ken Clarke on Conservative Home:

The fact is the Conservative Party is largely united on Europe. The vast majority of Tory MPs and activists, from the Prime Minister down, believe that unelected European judges and bureaucrats have too much power. Given the nature of the Coalition and the economic priorities, significant repatriation of powers may not be possible in this Parliament but we must prepare a manifesto for the next General Election that attempts to address that. So long as Ken Clarke is a significant player in the Conservative Party there is little chance of that happening. I sometimes wonder if he stays in government to prevent the party fulfilling its Eurosceptic instincts

Inevitably, there will be more court rulings from the ECHR and the ECJ (one coming up on pensions for example) - in addition to new Directives and Regulations from the Commission - which will be percieved as interfering in national areas where they don't belong. This isn't the last clash we'll see, but it's a signifcant one.

And hats off to Parliament. This time, MPs did their job.

Is the Miliband amendment a trap?

The EU Bill's referendum lock is today coming before Parliament, with its different parts debated and voted on between today and Wednesday (see here, here, here, here, here, here and here).

At the eleventh hour, Labour leader Ed Miliband has tabled an amendment that would effectively remove the opportunity for a judicial review of any decision taken by Ministers and Parliament, amid concerns that the power of Parliament might in future be weakened at the hands of judges.

We can certainly see the appeal of this amendment from MPs' point of view, as it appears to strengthen Parliament. However, the bigger risk is that it - for all practical purposes - simultaneously waters down the referendum lock. MPs should therefore think twice before supporting this amendment.

For what it's worth, here's our take:

- Ed Miliband’s amendments to the EU Bill centre on the creation of an “EU referendum committee”.

- This Committee of 19 members would be comprised of MPs and Lords (but not Ministers) who would make recommendations on whether to hold all referenda provided for in all the various sections of the Bill.

- The recommendations would be put to both Houses of Parliament for approval of the Committee’s decision on whether to hold a referendum or not.

- While the creation of an ‘independent panel of Parliamentarians’ to decide on referenda may sound appealing, the Committee’s recommendations would override the Bill’s clauses which would automatically provide for referenda on decisions identified in the Bill, which are the key safeguards against power being handed over from Westminster to Brussels. Only “significant transfers” as decided by the committee and voted on in Parliament would qualify.

- Therefore Labour’s amendments could well have the effect of raising the threshold for holding referenda on transferring powers to the EU.

- Should the government of the day hold the balance of power in the proposed “EU Referendum Committee”, there would be nothing stopping a new EU treaty or treaty change being pushed through Parliament by the government. This could see a repeat of what happened to the Lisbon Treaty, which, as we all remember, was pushed through Parliament, without a public vote, despite the three major parties pledging a referendum on the treaty.

Update on the EU Bill - the Government's response to JHA opt ins

Earlier today, the Government released a statement setting out what it intends to do on the Justice and Home Affairs 'opt-ins' and the crucial 2014 choice between more or less EU control (see here, here, here and here for more from us on this).

On the 'opt-ins' the Government seems determined not to include any language in the actual EU Bill that would require it to get Parliamentary approval before it can opt in to a new EU law in crime, policing and immigration. Instead, it says that this should be addressed separately with the details to be decided at a later stage. Crucially, only the proposals generating a "particularly strong" interest could, possibly, be put to Parliament. In the Government's words:

in circumstances where there is particularly strong Parliamentary interest in the Government’s decision on whether or not to opt in to such a measure, the Government expresses its willingness to set aside Government time for a debate in both Houses on the basis of a motion on the Government’s recommended approach on the opt-in.

From the looks of it, this is not a strong enough safeguard. The big question is who decides what counts as "particularly strong" interest. We remain convinced that in order to avoid situations where future EU proposals in Justice and Home Affairs are debated at the convenience of the Government (which is the case at the moment), all opt ins should be subject to Parliamentary approval (there are pragmatic ways to deal with minor proposals, without throwing the baby out with the bathwater).

On the crucial 2014 choice, the Government clearly commits to putting this to a vote in both Houses. This is encouraging, though again, they should put that into writing in the EU Bill, so that it would be beyond doubt. A political agreement/commitment can be altered, which we all know too well when it comes to EU matters. The statement reads:

Parliament should have the right to give its view on a decision of such importance. The Government therefore commits to a vote in both Houses of Parliament before it makes a formal decision on whether it wishes to opt-out. The Government will conduct further consultations on the arrangements for this vote, in particular with the European Scrutiny Committees, and the Commons and Lords Home Affairs and Justice Select Committees and a further announcement will be made in due course.

In other words, there's much to play for here. Are MPs paying attention?

How important is Clause 18?

Is Cameron facing defeat over the EU Bill tomorrow? Some have flagged up that prospect though we suspect the Bill will see it through tomorrow's debate in the Commons unscathed (backbench Tory MPs have differing priorities, Labour MPs are a bit all over the place and Lib Dems are not flip-flopping for a change - you work out the odds).

The so-called ‘sovereignty clause’ within the Government’s EU Bill is currently the subject of some criticism and debate, and this is the part that will come up for discussion in Parliament tomorrow (the rest of the Bill will be left for the following week or later).

Some important questions have been raised about the sovereignty clause but, arguably, they relate more to domestic concerns about the constitutional role of Parliament than the UK's relationship with the EU (though a link clearly exists). Irrespective of the merits of arguments on either side, the sovereignty clause should not be confused with the 'referendum lock' (which the vast majority of the Bill is concerned with) that seeks to identify areas where EU power can be extended and introduce some national controls on them.

These are two discussions that should have always remained separate.

The Government, and William Hague specifically, argues that Clause 18 of the Bill “confirms and affirms the position that EU law in this country is only recognised by virtue of the authority of acts of Parliament.” The Government says that it is attempting to “address concerns that the doctrine of Parliamentary sovereignty may in the future be eroded by decision of the courts”.

But some backbench Tory MPs have noted that the Government’s assertion, in the explanatory notes, that the Bill reinforces the “common law principle that EU law takes effect in the UK through the will of Parliament and by virtue of an Act of Parliament” contradicts this very aim. As Bernard Jenkin MP argued yesterday, “The common law is judge-made law. The judges are its authors and its guardians. They may change it whenever they see fit.”

The argument goes like this: by legally rooting Parliamentary sovereignty in common law, the Government would in fact be inviting judges to become more involved, leading to the logical extension that, if Parliament is sovereign because of a decision of the courts, the courts can just as easily change their minds. As Jenkin notes, Parliament is sovereign because Parliament is sovereign. This is the principle of the UK’s constitutional settlement.

A valid question is also whether Clause 18 was necessary at all? Did anyone really dispute whether Parliament could choose to repeal the 1972 European Communities Act at any point in time should it want to? (the Commons EU Scrutiny Committee's report and evidence on the topic is pretty interesting if anyone should have the appetite to trawl through it).

It is no accident that it is the EU that has sparked this debate. The lack of a formal written constitution leaves the UK hugely exposed to the EU’s centralising instincts.

But confusing this discussion with the other, in our view, more important aspect of the Bill, the referendum lock (we wouldn't rule out that the Government may have done this intentionally) runs the risk that MPs do not focus enough of their energies on closing the loopholes in the Bill that deal with transfers of power to the EU. We have identified several relating to justice and home affairs but there are also other areas where the Bill needs tightening up, and Tory MPs have done a good job in tabling sensible amendments. These amendments would strengthen Parliament's de facto powers the second the Bill came into force. That would be a step forward for parliamentary democracy, and a very practical one at that.

Constitutional debates about the role of Parliament are of course important but they will also no doubt roll on. However, this may be the only chance to get the practical measures within the Bill right and in our view they should therefore be the primary focus for MPs.

That's an argument in favour, not against Mr. Foreign Secretary

Tuesday night saw the Coalition government's EU Bill sailing through a second reading in Parliament, without a vote. In truth, it wasn't all plain sailing as several MPs - from across the aisle - fired at the Bill with various degrees of ferociousness. "Legislative PR", "flawed", "smoke and mirrors" and "missing the point" were some of the comments.

Valid points were raised - though as we've argued before, the referendum lock is a meaningful measure that will make it more difficult for ministers to transfer power to Brussels in future (true, it doesn't deal with the mission creep of the ECJ, or with cases when EU law is blatantly broken i.e. the eurozone bail-out, or with the existing balance of power between the UK and the EU, which many feel is unacceptable).

The Foreign Secretary did disappoint on one point, however. Conservative MP James Clappison asked whether the Foreign Secretary would give "serious consideration" to the question of requiring a vote in Parliament before the Government opts in to new EU laws in the Justice and Home Affairs area - which Open Europe has argued strongly in favour of, as it would in effect roll back some of the powers given away to EU judges and MEPs under the Lisbon Treaty.

However, the Foreign Secretary answered that the decision to opt-in belongs to a "different category" and argued that

given the strict time limits which apply to the UK's decision to exercise an opt-in - which is within three months of the receipt of a proposal - and the fact that there are 30 to 40 proposals per annum, it is not possible to place a primary legislative lock or parliamentary resolution requirement on the exercise of the opt in.

This isn't a strong justification at all for leaving out such a provision. William Hague seems to argue that ‘there is so much being agreed in the EU and as a government we need time to consider it all’. But this isn't an argument against giving Parliament ex ante control over this area - on the contrary, it's a strong argument in favour of it! Precisely because that is the case, we need more democratic control.

Also, a resolution of approval is not a time-consuming measure in Parliament. Motions can be agreed after a relatively short, single debate. In fact, the Irish Parliament must pass a resolution before its Government can opt in to anything, so it seems strange that this wouldn't be possible in the UK.

What puzzles us is why not more MPs aren't passionately pushing this line?

Commons weighs in on deposit schemes

Hats off to the House of Commons.

Earlier today it grasped the nettle and employed the Lisbon Treaty's 'yellow card' procedure for the first time (if nine national parliaments object to a proposal from the Commission on 'subsidiarity' grounds, within an eight-week window, the Commission is obliged to re-consider - but not scrap - the proposal). The House of Lords was slightly quicker off the blocks, using the procedure last week to object to the EU's proposed directive on seasonal workers from third countries.

The Commons provided a "reasoned opinion" on the proposal to amend the so-called Investor Compensation Schemes Directive, objecting to it on subsidiarity grounds.

As we've argued before, this proposal raises various concerns, as under the proposed rules member states would be required to lend to each other should a bank go bust and deposits needed to be guaranteed. As the Swedish Parliament argued, this presents a 'moral hazard' since some member states might be tempted to under-fund their scheme, knowing that someone else would pick up the final bill.

The House of Commons joined its counterparts in Sweden, Germany and Austria in objecting to the proposal.

Only problem is, the deadline for objecting to the proposal expires today. Eight weeks doesn't exactly give national parliaments plenty of time to mobilise, particularly when, as it did now, it coincides with parliamentary recess in most European countries (almost as if it was planned).

We confess to not being up to speed with how many national parliaments actually managed to formally object to the proposal in the end - but will be back shortly with an update.

Regardless, it's good to see MPs taking responsibility.

Illusionary democracy?

We've looked at this issue before, but the Swedish Parliament, the Riksdag, yesterday supported its finance committee in protesting against the Commission's proposed amendments to the Deposit Guarantee Schemes Directive, which would oblige member states to transfer money to another member state's deposit scheme, if that scheme had run out of money. The Riksdag said this would create a moral hazard, as some countries could be tempted to under-fund their schemes, knowing that someone else would ultimately pick up the bill. The German Bundesrat has also objected to the proposal and today the lower house in Germany, the Bundestag, will give its opinion on whether it will formally object to the amended Directive.

This is the first time that national parliaments have tried to use their new 'powers' entailed in the Lisbon Treaty. The Treaty gives parliaments the right to oblige the Commission to re-consider - but not scrap - a proposal, if a third of national parliaments object to the proposed legislation on subsidiarity grounds, within an eight week window. As even Andrew Duff - the liberal MEP who has been a staunch defender of the Lisbon Treaty - has admitted, the Lisbon provision on national parliaments was never intended to be used in practice as it's very difficult to get nine parliaments to debate and then object to a piece of legislation within such a narrow time period as eight weeks.

And the task of getting nine parliaments on board looks very tricky indeed. The deadline for national parliaments to object to the Deposit Guarantee Schemes Directive is 25 October, and according to the "Interparliamentary EU information Exchange" so far only six parliaments have even begun scrutinising the proposal. Typically, the eight week period comes smack in the middle of parliamentary recesses in most countries, making the task even more difficult (although the Commission generously discounted August from the period).

It's hard not to see this provision as mere illusionary democracy, which the EU elite inserted into the Lisbon Treaty to be able to make the case that 'everyone wins'. But still, it's good that national parliaments are giving it a shot.

Surely, the UK Parliament should object too, given that the reservations concern moral hazard, transfer of funds between member states and subsidiarity?

This could be interesting

Do you remember all that talk about how national parliaments would be strenghtened under the Lisbon Treaty (something which the pro-Lisbon camp continuously banged on about, presenting it as a 'fact', when in reality it's anything but)?

We've looked at what post-Lisbon life is like for national parliaments many times before (and it ain't that pretty), but it now appears that national parliaments' "new powers" to challenge proposals from the Commission are being tested for the first time.

The Lisbon Treaty says that, in the event that a third of national parliaments - that's 9 - get together to oppose their governments on a piece of legislation, on the specific grounds of 'subsidiarity', and within an 8-week window, then the legislation would have to be reviewed, following which, it would be open to the institution which originated the proposal to choose whether to maintain, amend or withdraw the proposal.

Hardly practical. But the Swedish Parliament (the Riksdag) is determined to give it a try. The Treasury Committee of the Riksdag has raised objections against the Commission's proposed amendments to the Deposit Guarantee Schemes Directive. Under the amended Directive, deposit guarantee schemes must offer depositors up to €50,000, if their bank collapses. The schemes are to be 75 percent pre-funded from bank contributions, with the remainder coming from other sources. However, the Riksdag's Treasury Committee is opposed to a provision in the Commission's proposal which could see Sweden (or any other member state) being forced to lend money to other member states' funds, if these funds face a shortfall in cash.

The Riksdag, going against the Swedish government, said that such mandatory lending could lead to some member states under-funding their deposit schemes, knowing that someone else would be lender of last resort. It also argued that the provision represents a violation of the EU's subsidiarity principle. The Riksdag will now seek to spread the word amongst other parliaments in a bid to get the Commission to reconsider the proposal.

One tiny problem: many national parliaments around Europe are on recess at the moment - including the UK's. To muster the support of an additional eight will be a difficult task indeed.

This is one to watch.

Ignorance is not bliss for Chris Bryant

The controversial EU-US anti-terrorism data-sharing deal, named the Swift agreement, came under further attack yesterday as an almighty row broke out in the Commons. Labour’s very own Michael Connarty accused the government of treating Parliament with "disdain and contempt" by choosing to bypass the standard eight-week period given to the European Scrutiny Committee to examine such agreements, with Treasury Minister Sarah McCarthy-Fry asked to justify the Government's decision.

The Swift agreement allows the US authorities to access EU citizens’ bank transactions under the name of anti-terrorism. But whilst the Government claims the agreement will protect us from the threat of terrorist attacks we are left wondering, who is protecting us, the citizens, against attacks on our civil liberties?

The Lisbon Treaty was sold with the promise that it would strengthen national parliaments' ability to scrutinse EU legislation. This is a particular concern for matters concerning justice and home affairs where the UK can decide to 'opt in' to a proposal or not. Let us not forget, the negotiated 'opt in' was used by the Government to justify its decision to abandon the promised referendum on the Treaty.

PA report that Connarty, the Chairman of the European Scrutiny Committee, said he had been assured by ministers, including Prime Minister Gordon Brown, that opt-ins would be subject to proper scrutiny. Connarty said that the SWIFT agreement was the first test of the Lisbon Treaty assurance and this was a "very bad start to the new process.”

But it's getting even worse.

In a public lecture at the LSE yesterday evening we asked Chris Bryant, the UK's Europe Minister, to comment on the day's debate in the Commons. And yet, to our surprise (and his), he wasn't even aware that the Commons debate had happened, remarking:

"What on earth does this have to do with Sarah McCarthy-Fry, I don't think this is right". Then calling to an assistant, he asked "Did Sarah McCarthy-Fry answer a question today?". He continued "I'm really perplexed about it because if anyone would be answering EU [questions] it should be me...I don't know if I can say much more."

With the Government so quick to ignore due Parliamentry process and the Minister for Europe totally unaware of what's going on, it’s sure time to recognise that democracy has not been strengthened by the Lisbon Treaty.

Luckily enough we have the episode on the dictaphone, so click here for a listen. Chris does sound very confused...

Who said giving the EP more powers was a good thing?

A new report from the cross-party House of Lord's EU Scrutiny Committee will make yet more uncomfortable reading for all those Yes campaigners who are still, against all the evidence, operating under the illusion (or lie more like) that the Lisbon Treaty will be good for national parliamentary democracy.

The report looks at the meaning and implications of the so-called 'co-decision' procedure, whereby EU ministers meeting in the European Council have a more or less equal say over decisions as the European Parliament. Those decisions which are not subject to co-decision are usually taken by the Council acting alone.

The Lisbon Treaty proposes to extend the use of the co-decision procedure to 40 more policy areas, so that just about all decisions made by the EU are decided jointly with the European Parliament (as oppposed to about 75% currently).

But the House of Lords report finds significant problems with exercising national parliamentary scrutiny of EU legislation under the co-decision procedure, which could be set to worsen if it is extended under Lisbon.

The report reads, "Should the Lisbon Treaty come into force, these difficulties will be magnified by the expansion of codecision into new areas: notably agriculture, fisheries and justice and home affairs."

The report finds that, under co-decision, more and more legislative proposals are reaching a first-reading agreement in the European Parliament and Council, or an early second-reading agreement (as opposed to going to proper second and third readings). This reduces the amount of time that the legislative process takes, but also consequently reduces the (already meagre) amount of time that national parliaments have to scrutinise proposals and give their feedback to government ministers, in order to inform national positions on amendments and negotiations.

Even pro-Lisbon ex-MEP Richard Corbett (who gave evidence to the Committee) admitted that first reading agreements "limit" the "advantage" national Parliaments have, saying second and third reading agreements make Parliamentary scrutiny potentially easier.

'Informal trilogue'

The report finds that, when first-reading agreements are reached, they are often the result of "informal trilogue" meetings which take place before the official readings, in order to negotiate an acceptable text. These trilogue meetings contain representatives from the Commission, the Council and the European Parliament. The French Deputy Permanent Representative to the EU who gave evidence to the committee said, "the real negotiation takes place in the trilogue" and the Lords committee says the use of these has increased to the point that they are now the primary form of negotiation between the European Parliament and the Council.

The problem is that, as the Lords report found: "informal trilogues, whilst helpful to expeditious agreement of legislation, make effective scrutiny of codecided legislation by national parliaments very difficult."

If national Parliaments receive a Commission proposal, they may be scrutinising it while it is already being negotiated and amended by the Council and the EP. Unless national Parliaments receive up-to-date information about how the proposal is changing, scrutiny becomes even more of a redundant exercise, as it fails to reflect what the final outcome of the negotations will look like.

In that respect, the report is critical of both the Government's track record in keeping Parliament in the loop about the development of EU proposals, and the speed of co-decision negotiations, which make updates difficult.

The Lords EU sub-Committee on environment and agriculture said that "the emerging consensus between the European Parliament and Council can be almost impossible to determine. Updates from the Government are usually too infrequent, and negotiations proceed too rapidly and opaquely for accurate tracking of the inter-institutional negotiations."

The same sub-Committee also found that DEFRA was "sluggish" in providing updates on the progress of inter-institutional negotiations, sometimes giving them only when prompted. Notification on the Common Position (the Council's position on the European Parliament's amendments to a proposal) reached on the Plant Protection Products (Pesticides) Regulation was not received until three months after the vote in the Council. This particular proposal was modified in co-decision and subsequently became more controversial in its implications for the UK.

The report also cites the EU's Climate Change Package as a prominent example of how early agreements are being sought on important, and controversial proposals, in order to push legislation through.

The report concludes that the expansion of the scope of the co-decision procedure and the use of these informal trilogues makes national Parliamentary scrutiny increasingly difficult.

Since this is exactly what Lisbon proposes to do, things can only get worse.

National parliaments & the Lisbon Treaty: the myth

BBC Online is running a series of 'Viewpoints' on EU issues. This week it looks at the Lisbon Treaty, with arguments from us here at OE and from the Robert Schuman Foundation in Paris.

We argue that the provisions in the Treaty, which people always point to, that purport to give national parliaments more powers in the EU decision-making process, are pretty useless - as confirmed by both the President of the German Constitutional Court and the House of Common's cross-party EU scrutiny committee.

The President of the Robert Schuman Foundation, Jean-Dominique Giuliani, on the other hand, argues that "National parliaments will be able to challenge decisions that are the prerogative of member states. Under Lisbon, if one-third of the national parliaments agree on something, they can act together to oblige the Commission to cancel and review a wrong decision. They will also be able to refer the matter to the European Court of Justice."

This is plain wrong. National parliaments will be given no power whatsoever to "oblige" the Commission to "cancel" a proposal.

The Treaty says that, in the very unlikely event that a third of national parliaments - that's 9 - get together to oppose their governments on a piece of legislation, on the specific grounds of 'subsidiarity', and within an 8-week window, then the legislation would have to be reviewed, following which, it would be open to the institution which originated the proposal to choose whether to maintain, amend or withdraw the proposal.

So absolutely no obligation to cancel the proposal at all.

The Treaty also states that where the Commission originated a proposal and the proposal was subject to qualified majority voting and co-decision by the Council and the European Parliament (so most of them), in the supremely unlikely event that a majority of national parliaments (so 14!) object to it, again on the narrow grounds of subsidiarity, then again, it would be open to the Commission to maintain, amend or withdraw the proposal. The legislation would only have to fall if the Commission decided to maintain the proposal and then either 55% of the members of the Council, or a majority of the European Parliament agreed with the parliaments that it didn't comply with the principle of subsidiarity.

As the EU Scrutiny Committee has pointed out: "the decision on whether a proposal is compatible with subsidiarity will continue to rest with the EU institutions."

Which is why MEP Andrew Duff, who was involved in the drafting of the Treaty, admitted to the Scrutiny Committee that "It was understood by those of us involved in its drafting and, then, re-drafting that the mechanism, although a necessary addition to the system of governance of the Union, was not really intended to be used. It is, in Bagehot’s terms, more a dignified part of the European constitutional settlement than an efficient one.”

It may all sound pretty boring and complicated, but the bottom line is that, under Lisbon, Commission proposals can only be "cancelled" in the extremely unlikely event that 14 national parliaments all object to it, in a short 8-week window, and are then backed up by the majority of the Council or the European Parliament. Which is nothing like the argument put forward by our friend at the Robert Schuman Foundation.

Mr. Guiliani also believes "there is no particular need for national referendums on European issues. Those who ask for referendums want to vote against the EU and their own government." Not a particularly positive argument in favour of the Lisbon Treaty, is it?

MPs slam Lisbon Treaty's provisions for parliaments

A new, but belated, report on the Lisbon Treaty's provisions for national parliaments from the cross-party EU Scrutiny Committee makes for very interesting reading.

Just to pull out some of the best bits, the committee concludes: "we doubt whether the Lisbon Treaty's new subsidiarity provisions about the role of national parliaments would make much practical difference to the influence presently enjoyed by the UK Parliament", and says, "we doubt the significance of the 'greater opportunities' for national parliaments to be involved in any meaningful manner in the workings of the EU."

The Committee notes that "if national parliaments trigger the yellow or orange card procedures, the decision on whether a proposal is compatible with subsidiarity will continue to rest with the EU institutions." It also notes that, "There may in future be proposals where it might be difficult to deny that collective action by the EU would be the most effective way to achieve a Treaty objective, but where a national parliament would strenuously object to the proposal because it infringes national sovereignty. If a proposal were objectionable on grounds of sovereignty alone, neither the yellow nor the orange card procedures would be available to national parliaments."

The report quotes Andrew Duff MEP, who told the Committee: "there is a danger that, in assessing the Treaty of Lisbon, national parliaments become obsessed by the early warning mechanism on subsidiarity. It was understood by those of us involved in its drafting and, then re-drafting that the mechanism, although a necessary addition to the system of governance of the Union, was not really intended to be used. It is, in Bagehot's terms, more a dignified part of the European constitutional settlement than an efficient one." Richard Corbett MEP also told the Committee: "in practice, I do not think that the 'yellow' and 'orange' card mechanisms will be extensively used."

It's just a shame this damning opinion on the sham that is the Lisbon Treaty's so-called new provisions for national parliaments wasn't released in time to have an impact on the UK ratification of the Treaty.

Arcane Parliament

PA informs us that following the final ratification of the Lisbon Treaty in the UK, the implementing legislation will be printed... on goatskin.

"Parliamentary officials confirmed later that a goatskin version of the EU Amendment Act would be prepared, and kept in the UK.

The practice of Acts of Parliament and other important documents being printed on vellum has existed since the 15th century. Both Magna Carta and Charles I's death warrant were produced on skin parchment.

There have been several efforts over recent decades to move to paper records, which would be less expensive and potentially save the lives of several goats a year.

They have been successfully resisted by traditionalists."

With these plans out in the open, it's suddenly becomes clear who the first victims of Lisbon will be..

Tories in policy shock

Blimey - this from Theresa May, talking about reforming the European Scrutiny Committee in the Commons:

"I believe that the Scrutiny Reserve should be put on a statutory basis, so that ministers are required to come before the Scrutiny Committee before negotiations at the European Council. It would therefore be impossible to override it. Ministers should have to set out their negotiating positions to the Committee, and gain its approval.

"It makes sense for this to be conducted in private, so that ministers are not put at a disadvantage in Council negotiations. The minutes of these meetings could then be made public after the negotiations are complete. This would work along similar lines to the Danish model, although the committee would need to recognise that there would be occasions on which ministers would need to be given a degree of flexibility."

It reads like they actually mean "council of ministers" rather than "European Council". If so it would reflect something that we have been arguing for (which you can find here)

It would actually give the Committeee some meaniungful power for the first time ever. It sounds boring and dry but it would actually make a huge difference - it would let parliament stop the Government from signing up to EU legislation. For example Danish ministers sometimes send text messages back to their parliament to ask if its OK for them to sign up to a particular proposal. Europhiles won't like this much. But its a really good idea.