Sarko drops a bomb: At least half of EU powers should return to member states

Three days ahead of the European Parliament elections in France, former French President Nicolas Sarkozy has written a bombshell piece on Europe for French weekly Le Point and German daily Die Welt - calling for "at least half" of current EU powers to be handed back to member states.

Here are the key bits:

We need to look at today's European Union with lucidity. It can't work at 28 as it did at six, nine, or even twelve [member states]. I sincerely believe that there will be no alternative to a drastic reduction of the extent of [the EU's] competences. The situation today borders on the ridiculous and condemns us to powerlessness. 

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Europe has ended up creating an administrative labyrinth, with the Commission and its departments, which indeed need to keep themselves busy. The result: hundreds of directives about the most various and often the most pointless issues. 

Today, we need to scrap at least half of [the EU's] current competences - which will have to be taken on by member states tomorrow. We need to regroup Europe's competences into less than ten basic priority policy areas: industry, agriculture, competition, trade negotiations, energy, research...

It would be unfair to use the Commission and its President as convenient scapegoats for our difficulties...That said, the [European] Commission should no longer have legislative competences because there’s a European Parliament, and it is only for it to legislate. 

On the eurozone vs EU-28 issue, Sarko writes:

Let's have the frankness to say that the myth of one Europe fell to pieces after the adoption of the euro by 18 of 28 [EU] countries. There's not one Europe anymore, but two. Furthermore, these two Europes today need to revise their strategies in different directions. More integration for the 18 [member states] that share their monetary sovereignty. 

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At the same time, we need to stop believing the myth of equality of rights and responsibilities among all member states.

That means Sarkozy envisages a eurozone where bigger countries (especially France and Germany, ça va sans dire) have greater decision-making powers.

Finally, on immigration:

It is evident that we need to immediately suspend Schengen I [the EU's passport-free travel area] and replace it with a Schengen II, which member states could only join after they have previously adopted the same immigration policy.

On this blog, we've argued several times (see here and here) that the rise of Front National has pushed part of France's UMP, the main centre-right party, towards a more critical stance on the 'Europe' issue. It should be clear by now that David Cameron could find allies in France who could back his plan for an EU that does less, but does it better. 

However, the French presidential election is still three years away and, as we have said before, Cameron's biggest potential weakness is his 2017 deadline, which means some of his natural allies will not be in power to help him.

Timing, not substance, is the biggest obstacle to David Cameron's reform agenda

Our Director Mats Persson writes on his Telegraph blog:

In a recent Sunday Telegraph article that received surprisingly little attention at the time, David Cameron came close to setting out a “shopping list” of what he wants to change in Europe. He outlined seven areas, though they were more principles than policies: powers flowing back, a beefed-up role for national parliaments, less regulation and more free trade, limiting the influence of European judges (possibly opting out of the ECHR, which is not an EU institution), tightening welfare benefits for EU migrants, tougher controls on future EU accession countries and no more “ever closer union”.

Nick Clegg – in a strange kind of way – has almost endorsed the plan, saying that "Now [Cameron] doesn't even talk about repatriation, instead proposing a mild seven-point plan, most of which wouldn't even require treaty change." European Commission President Jose Manuel Barroso has said that the EU wants to "cater" to the UK without "threatening the Union’s coherence" (though he was all over the place on EU treaty change). And in the Financial Times this week, Jean-Claude Piris, former legal guru of the European Council – the key decision forum for EU leaders – concluded that Cameron's changes could pretty much be done without actually changing the EU treaties.

For Cameron, this is a double-edged sword. Sceptics at home already see Cameron’s starting position as a “sell-out” – mere presentational changes that will allow him to recommend a “Yes” vote in the 2017 referendum. This is a premature accusation as there’s a huge range within the Sunday Telegraph piece, from token reform to sweeping changes.

Cameron could cobble together a decent package without changing the EU treaties. First, areas like toughening up rules on access to benefits, removing trade barriers, signing free trade deals or scrapping red tape – key planks in Cameron’s renegotiation agenda – just fall under normal Brussels decision-making (which doesn’t meant it will be easy. Think European Parliament). Secondly, “repatriating” powers wouldn’t necessarily require EU treaty change but could still be meaningful, for example devolving the EU’s irrational regional policy (saving UK taxpayers £4bn over an EU budget period) or exemptions from maddening working time rules for the NHS.

Finally, the EU specialises in legal acrobatics. When pushed – say when the bloc’s second largest economy risks leaving – it can be amazingly creative. For example, it created a €440bn bailout fund out of thin air and via so-called political agreements, the Danes got four surprisingly effective opt-outs after having rejected the Maastricht Treaty in 1992, which were incorporated when the next EU treaty came around. Something similar can be done for some of the reforms currently being discussed, including giving national parliaments the right to block or revise EU laws.

So it's right that Cameron seeks to maximise the reforms that can happen without EU treaty change. However, not only would a Treaty change be a form of political insurance to the Tory party and public that things have changed but it's also needed since the treaties simply aren’t fit for purpose. With a more integrated eurozone, we need new organisational principles and practical measures to avoid the EU becoming the eurozone, while allowing powers to flow back to countries that wish to be less integrated. A 2017 referendum should be the start of a slimmed down, flexible Europe, not the end destination. A quick and dirty solution will only bring us back to where we are today – and could well generate a referendum result too close to call, solving nothing.

Ironically, the strongest and most plausible contender for a Treaty change is one measure that Cameron – oddly – didn’t mention in his piece: safeguards against the Eurozone writing the rules for the rest of Europe, which will also effectively kill the notion of "ever closer union". Exactly how this principle will be organised needs careful thought (ideas here), but it’s highly desirable that this principle is firmly enshrined in EU law.

Since it’s the eurozone that is now changing the rules via banking union and other measures, not the UK, Cameron would be given a fair hearing in national capitals on this point. It is conducive to a "grand bargain": the Germans and French solve their catch-22, agreeing to beefed up supervision in the Eurozone in return for Berlin underwriting the euro, while the British ask for safeguards against Eurozone stitch-ups in return for nodding through EU treaty change at 28 (which Berlin still prefers). In this scenario, it’s the German-led EU treaty change that may trigger a referendum in France, not the UK’s.

It's whether it can be done before 2017 that remains the biggest question.