The SNP embraces EU reform - but is it trying to have it both ways on treaty change?

Ahead of next month's crucial Scottish independence referendum, the Scottish government has put out its own paper on EU reform, designed to position the SNP on the pro-reform as opposed to the status quo side of the debate. The report has generated very little coverage (our daily press summary being the exception). It's a mixed bag but contains some worthy ideas - we look at the key points below:

Reconnecting European citizens with the EU

The paper notes that "it is important that the EU institutions and the Member States recognise and respond to the challenges to the EU’s wider legitimacy". Its suggestions include:

"the Scottish Government considers that greater observance of the principle of subsidiarity, is one of the key means of maintaining the democratic legitimacy of the EU… it is essential that the procedure for monitoring subsidiarity by national parliaments is extended further to give an enhanced role for both sub-national and local parliaments."

Cutting red tape and EU "competence creep"

The paper notes that warns that “much more remains to be done” to alleviate concerns about EU “competence creep” and excessive “red tape”, and to “restore a balance between the burden of EU legislation and the benefits expected to derive from its implementation.” It adds that:

"the volume and complexity of the EU regulation affecting businesses in Scotland can pose a significant administrative and financial burden on them (particularly SMEs) and is threatening their ability to recover from the economic and financial crisis."

Its recommendations include:

• Consistent regulation - greater adherence to the framework set by the EU Treaties with less ‘competence creep’ without formal amendment of the Treaties,
• Increased flexibility to the member States when incorporating EU law into domestic legal systems and greater use of exemption schemes, in particular for SMEs,
• Further developing the impact assessment tool and applying it at each stage of the EU legislative process where prospective legislation is subject to significant amendment by the Council and/or European Parliament,
• Focusing on overall principles rather than detailed prescriptive measures,
• An increased review of legislation which is no longer appropriate for today’s climate.

The above are good suggestions - indeed ones which Open Europe has been advocating for a while now (see our 2011 report on European localism and our 2010 report on EU over-regulation for example) but as always, the question is how to translate this into practice. 

Still, the report has some pretty big gaps - for example, it barely mentions the EU budget despite this being in radical need of reform (for example, contrary to common perceptions, Scotland would benefit from devolving regional subsidies back to the national level). Likewise beyond some general praise for EU free movement, the report does not discuss whether changes are needed to rules around EU migrants' access to benefits. In some places, the report calls for more protectionist measures at the EU level, such as amending procurement laws to ensure that contractors to pay the living as opposed to the minimum wage. 

The SNP is also keen to distance itself from David Cameron's EU policies and says that changing the EU Treaties is "neither necessary nor desirable". The party claims that its reforms can be accommodated within the existing Treaties. Whatever the rights and wrongs, this is slightly ironic given that Scotland's potential accession to the EU as an independent country rests squarely on the EU Treaties being opened and changed: not only the accession itself (to which all other member states would have to agree) but also to get the opt-outs from the euro and Schengen that the SNP says it wants.

It's also ironic since if SNP has its way, it could deliver the kind of opening of the Treaties that the Tories are hoping for. 

CSU calls for devolution of EU powers and new subsidiarity safeguards

Der Spiegel this morning reports that the CSU has started an "anti-Brussels election campaign" citing an internal CSU strategy paper which will form the basis of the party's campaign for the 2014 European elections entitled "Europas Zukunft: Freiheit, Sicherheit, Regionalität und Bürgernähe" (which translates as Europe's future: Freedom, Security, Localism and closeness to the citizens). The paper is certainly highly critical of many aspects of the EU but it also sets out concrete reform proposals which include:

The return of certain competencies to member states: The possibility of this was already hinted at by Angela Merkel during the recent election campaign but the CSU are going one step further by providing some additional details by specifying regional policy (as recommended by Open Europe and Open Europe Berlin) and "parts of the over-regulated single market". It is not clear what exactly would come under the latter category but it is possible that it could include areas like social and employment law which are not strictly part of the single market but which have come to be seen as ancillary to it.

A new EU "subsidiarity" or "competences" Court: Der Spiegel quotes the paper as saying that "We need a form of withdrawal therapy for Commissioners intoxicated by regulation". The antidote it would seem will be a new EU subsidiarity or competences Court - composed of national constitutional judges/legal experts - which would mediate in cases where the Commission has allegedly overstepped its limits. This option has been voiced in Germany before but it looks like the CSU will give it a serious push. If combined with new powers for national parliaments, such as binding 'red card', this could be an effective way of keeping the Commission's desire to accrue new powers in check.

The paper also strongly reiterates the party's support for referenda to be held on EU issues in Germany and for shrinking the EU Commission.

Given that Cameron has not enjoyed the best headlines in Europe recently this late Christmas present will be very welcome at Number 10.

9%, 43%, 50%, 60%, 84%: How many domestic laws are linked to EU law? The case of Sweden

It's up there with the origins of the universe as one of the great existential questions of our time (well...): how many national laws stem from Brussels?

European Commissioner Viviane Reding - who does what she can to turn people against the EU - recently told a "Debating Europe" event in Sweden (H/T @AllieRenison):

Did you know that 80% of Swedish laws are not Swedish laws? They are European laws that have been translated into Swedish legislation.

In addition to the comment being ridiculous (it was in reply to a question about the EU costing too much)  she seems to have plucked this number out of thin air. Incidentally, it would top Nigel Farage's much-criticised claim that 75% of all UK laws are made in Brussels. Another example of Better Off Outers and Europhiles agreeing.

As regular readers will know, the Open Europe team has gone to hell and back trying to answer this question, and our conclusion is that it's virtually impossible to determine with any degree of certainty what the share of EU-derived laws is. It all depends on what you count, how you define an EU-derived law and what the counter-factual is.

It most certainly is higher than 9% as some claim. Counting UK Statutory Instruments, which is what the study from which this number is drawn from did, isn't that meaningful as there's no 1-1 correlation between that and EU law. It also doesn't include EU Regulations which, unlike Directives, are directly applicable, giving no rise to separate domestic legislation.

The 84% figure that is often cited originates from an answer to a German parliamentary question, comparing the number of new federal laws and new EU laws in one year. However, this is also too simplistic. For example, counting only federal laws in a federal system isn't particularly meaningful. Germany has 16 Länder that churn out laws as well.

Now, a new Swedish study has thrown in another number to debate. The Riksdag and Departement - the Swedish Parliament's in-house magazine - has reviewed 1,300 Swedish legislative proposals, dating back to 2005. It found that the share of legislative proposals in 2012 originating in the EU stands at 43% - a dramatic increase compared to 2010 when the share was 28%. Of the 104 laws that so far have been proposed by the Riksdag this year, about a third originate in the EU.

This is a quick and dirty study in many ways - it measures only the so-called flow of EU legislation, not its stock. And the flow clearly is subject to a lot of variation. Its proposals and not laws passed. And, as with the German study, it doesn't look at local rules. Local government is important in the Swedish system, with Councils (or municipalities) having plenty of decision-making power. So any serious "EU law count" would have to look at this dimension as well.

But, we're not done yet. A 2010 report by the Swedish Association of Local Authorities and Regions - who should know a thing or two about local decision-making - does address this very question. It says this:

The report shows that, on average, the EU affects 60 percent of items on municipal council agendas. The number is slightly lower for county councils and regions, where the EU influences around 50 percent of agenda items. 

Given that these are local decisions, it does sound high to us, but remember the report doesn't count laws per se, but issues considered by the local government in Sweden (public procurement considerations for example will always be influenced by EU law, despite it not necessarily giving rise to new local rules).

A few conclusions:

• Viviane Reding really must be on the UKIP payroll 
• It remains incredibly difficult to nail down exactly how many laws originate in the EU
• The share of EU laws is best measured in terms of domestic legislation "influenced by" or "linked to" EU decisions, ideally in combination with the measurable impact of these laws (our preferred way) to get a sense of the relative impact
• Any EU law count must also look at the local or regional level.
• Still, a h*** of a lot of domestic laws stem from the EU 

This is welcome stuff: David Lidington says national parliaments could be given a 'red card' over EU proposals

National Parliaments' should be allowed
to show the EU the red card

This is an idea that's very close to our hearts - and an idea that we have promoted for a very long time.

The first bits of UK Europe Minister David Lidington's interview with German daily Die Welt have just been published on the paper's webpage. We'll have to wait until tomorrow to see the full version. But from what we can see so far, Lidington's interview is likely to reverberate quite a bit across Europe.

He said,

"Perhaps we should lower the threshold for national parliaments to take action against initiatives from Brussels; perhaps we should introduce the principle of a 'red card' so that a given number of national parliaments can block initiatives from the [European] Commission."

Sounds familiar? Well, the 'red card' was first advocated by Open Europe in 2011 in our report 'The case for European Localism'. And again by Lidington's PPS Tobias Ellwood MP in a publication for Open Europe in December 2012, where he argued:

"Any future [EU] Treaty change should include some system of the red card system with the right quota and powers."

A red card is an improvement over a yellow

Open Europe's Director Mats Persson pushed the idea in the Telegraph here in January. Under the Lisbon Treaty, if a third of national parliaments show the Commission the current 'yellow card', the Commission is obliged to reconsider its proposal and explain why it wants to change it, scrap it or push ahead with it. To date, the Commission has withdrawn a proposal in only one case after being shown the 'yellow card' - the so-called 'Monti II' Regulation on the right to strike.

However, this provision has several weaknesses. First, it doesn't oblige the Commission to actually drop the proposal, but only to reconsider it. So it's a far cry from a veto. Secondly, it's only supposed to happen on 'subsidiarity' grounds - and not on 'proportionality'. Thirdly, a third of parliaments are supposed to agree within an eight-week window, meaning that if the Commission tables a proposal in August or September - when most parliaments are in recess - it can basically push ahead with anything.

In other words, it really doesn't do that much to close the EU's infamous democratic deficit. Nor to strengthen the powers of national MPs - an aspect which, as we've argued repeatedly, is absolutely vital if the EU is to regain democratic legitimately.

Therefore, a 'red card' provision giving a certain number of national parliaments acting in unison (the threshold needs to be discussed) an actual veto right, would be an absolutely massive improvement. This is also an area where the UK will have support from Germany and others if it pitches it right.

In the interview, Lidington also pointed out that several times in the past,

"the content of [EU] treaties has been interpreted in a way which was not desired or expected at the time the treaty changes were decided on. Sometimes, the European Commission or the European Parliament try to expand the boundaries of their competences." 

The Europe Minister also stressed that the EU's single market for services is "painfully underdeveloped". echoing similar remarks on the importance of deepening the single market before. However, this time they come after he said that Open Europe's proposals to reignite the EU's services sector and boost EU-wide GDP by up to €294bn were "interesting" and "worth exploring".

More please!

The view from Sweden: Barroso is making it more difficult to be pro-EU

This is spot-on.

Sara Skyttedal, vice-president of the Youth wing of the European People’s Party – the pan-EU party Commission President Jose Manuel Barroso belongs to – has a blistering piece  in today's Svenska Dagbladet. She takes Barroso to town over his 'State of the Union' address, in which he called for Europe to become a "federation":

"As Vice-Chairman of [the EPP's] youth wing, YEPP, I can only say that representatives such as Barroso make it more difficult to be pro-EU [EU-vän] “

She continues:

"At a time when crises are raging across Europe and when countries need a helping hand, the eurocrats see an opportunity to demand extensive transfers of power and centralisation in return. Barroso suggests the creation of a banking union and argues that the EU in the end must become a federation. This is a frightening development, since even though Barroso himself says that a superstate isn’t the end goal, it is it hard to interpret his vision in any other way.”

She argues that politicians have ”time and again” ignored the subsidiarity principle. Taking aim at the Swedish political class, Skyttedal says:

“Just as there are many signs that the EU makes it harder for member states to fight the centralisation of powers, Sweden has reinforced this tendency on its own”, arguing that the requirement for EU-membership should be deleted from the Swedish Constitution.

“Those of us who are active in the EPP…must take a bigger responsibility for the liberal-conservative family in Europe. In these circles we must dare to bring up the problems that exist. Large parts of our respective parties were once active in the Yes-campaigns, both for EU and euro membership, but it’s time to swallow our pride and take up the fight against supranationalism and to show it’s possible to have a realistic attitude to the EU, which doesn't automatically mean arguing in favour of leaving the project altogether."

“The EPP-family is the biggest one in Europe, but includes members that unfortunately work in the opposite direction to the EU that we rather want to see. What we think the EU needs is less supranationalism, less political interference and definitely not a federation.”

Hear hear.

Sweden isn't exactly a European hegemon (those ambitions pretty much died in 1709) but it's an interesting country for the UK and Europe in at least two respects: first, it's actually doing well, both on the fiscal and banking front. Secondly, how the country responds to the drive for further euro integration will be an interesting proxy for how easy it'll be to reconcile a more tightly knit eurozone block with the EU-27. Most importantly, the banking union with the single market.

70-80% of Swedes oppose joining the euro, and that debate is dead (baring random calls from the occasional politician and opinion former who still cling on to that particular dream - it's almost cute), but the country has fundamental choices ahead of it - such as whether or not it joins the the ECB's banking supervision structure - so Europe needs to be discussed. 

Though a majority of Swedes would echo the sentiment contained in Skyttedal's article, there is still a contingent in Sweden, particularly on the centre-right (associated with Carl Bildt, the Swedish Foreign Minister) that clings on to a vision of an ever-closer integrated EU as a liberal inroads into its dominant domestic social democratic model, and also as a catalyst for Swedish internationalist idealism, i.e. a 'peace project'.

Historically, both of these assumptions contained some truth but firstly, Sweden's social democratic domination has already been broken and secondly, the single currency - clearly - has proven less of a liberal trade project and more an ideological over-reach (think Greece). The eurozone crisis is now causing friction in Europe, rather than the opposite, and it most certainly isn't aiding either Europe in the world or facilitating enlargement (which is a legitimate EU foreign policy tool).

In other words, this traditional Swedish centre-right vision is dated and needs upgrading - which is true for other contingents in the EPP. Skyttedal's article is an important reminder that if we want to save what's good in Europe, Barroso's "federation" vision - which risks a massive popular backlash - is the opposite of what's needed.

The path for true pro-Europeans must lay elsewhere.

The choice facing Europe: Conformity or Diversity?

For German speakers, this op-ed from Berthold Kohler - one of FAZ’s editors-in-chief - is definitely worth a read. We've translated the key bits below.

Without lapsing into populism, Kohler nails the problem with the narrative pushed around by certain politicians that: "the only choice available to Europeans is to seek refuge in a political union". However, as Kohler argues, this is a false dichotomy:

“Among the alleged certainties was one that the organisation of Europe only ever grew in its times of crisis. However, many of the contradictions, differences, and conflicts of interest that led to the previous escalations of crises were merely pushed aside, glossed over or covered up with a lot of (German) money. These skeletons in the closet of the European house played an essential role in ensuring that the over-indebtedness of states evolved into the mother of all EU-crises.”

“By and large, it is no longer seriously disputed that it was a mistake to establish a monetary union without having first laid the foundations for a common budget, fiscal and social policy. The participating states were not ready to accept the relinquishment of sovereignty that this would have entailed; many EU member states are still not ready… Warnings of experts were at best ignored; the euro was portrayed as a miracle healer in of itself… This belief-bubble has, like similar such speculations, burst. Yet the debris of earlier European political axioms have already clumped together to form a new dogma. There is only one choice: giving up the euro and returning to national currencies – regularly associated with the ‘failure’ of Europe and a return to the Middle Ages – or a great leap into a political union which alone can save the euro.”

“The Europeans are thereby told that in truth they have no choice, there is only one way out of the crisis – the one that the majority of them previously did not want to take. For this reason, the descriptions of the political union are made largely vague. The small print is not very popular. Any form of standardization is associated with a loss of diversity and autonomy.”

Kohler concludes that:

“Not only the economic and national conditions in the participating countries, but also their political presumptions and ideals utopias are still too disparate as to be able to be accommodated within a political union. To believe that this variability could be reduced to a common denominator with a single strike of constitutional and political genius, which the peoples of Europe will enthusiastically agree to in the face of all previous experiences, is to underestimate the strength of their cultures, collective memories, myths and mentalities – the very diversity that belongs to the essence of Europe.”

Spot-on.

Writing in Die Welt, politics correspondent Alan Posener makes a similar point:

“The crisis in Europe is not only about money but also the limits of ‘ever closer union’. Jean Monnet’s model of integration by means of the supranational [European] Commission is outdated... This is a good thing…it is time for proper democracy in Europe.”

Outdated indeed.

So what do Lib Dem voters really think about Europe?

Over on Lib Dem Voice's 'Independent View' we've published a guest post looking at the what the party's voters and members really think about the UK and Europe, and how we think the leadership ought to respond:

In the polarised and often exaggerated UK debate on the EU, the Lib Dems have often been caricaturised by much of the press and Tory MPs as being unreservedly in favour of greater EU integration or even an ‘EU super state’. The truth is of course far more nuanced.

That’s why a new YouGov/Cambridge cross-country poll out earlier this week is so interesting. It shows that a majority of UK voters (53%) support either no further EU integration or a looser arrangement. Only 14% said they wanted more integration. These attitudes span the political divide, with 50% of Lib Dem voters saying they wanted either a looser relationship with the EU or outright withdrawal. On the thorny question of whether primary responsibility for specific policy areas should lie with national capitals or Brussels, Lib Dem voters want more national control over areas such as police and crime, employment laws and trade almost as much as the average UK voter, and even more on agriculture.

Source: YouGov-Cambride poll ‘Cross-country attitudes on Europe’, 13 March 2012

Similar trends can be seen in the Voice’s own polling (here and here) suggesting that both Lib Dem members and voters would reject working closer economic and political union in Europe. But while Lib Dem politicians have criticised individual aspects of EU policy, such as the Working Time Directive or the Common Fisheries Policy, on the whole the party leadership has so far not put forward an alternative vision for the EU-UK relationship.

This is worrying for two main reasons: first, as today’s poll show, the gap between what voters and the political party think on Europe is widening – a trend which is seen in party politics acrossEurope. This isn’t healthy in the long-run. Secondly, the eurozone crisis is changing the wayEuropeoperates, pulling those countries that share the single currency closer together, forcing those outside to decide what kind of relationship they want with the core. In short, the status quo is no longer an option. Britain needs a new vision for European cooperation, and so do the Lib Dems.

The principles of localism, which have been overwhelming endorsement by the coalition, and the Lib Dems in particular, could serve as the basis for a new, positive vision of Britain in Europe. In a recent report, entitled “The Case for European Localism”, Open Europe argued that the EU ought to focus more its core competencies of boosting trade and the Single Market, and less on political institution-building. National parliaments would be accorded a more prominent role in EU affairs, something that would increase democratic accountability and transparency. Far more decisions should be made nationally, regionally or locally.

European localism would act as an overarching strategy, within which the UK could chose individual areas where it wanted to maintain a bigger role for the EU, such as environmental policy, but devolve competencies over other areas, such as crime and policing, regional policy, agriculture or social and employment law.

With overwhelming backing from voters, the Lib Dems have a valuable opportunity to capture the centre ground on the EU debate and fashion a new, vibrant and more nuanced narrative that moves beyond the tired in/out debate.

How will the leadership respond?

Max Hastings: "I was wrong" about the EU

In today's Daily Mail, Max Hastings makes a self-described recantation of his formerly "pro-European" stance:

"After much agonising and hesitation, I adopt the conclusion that many of you probably reached years ago: that the EU in its present form has become a disaster, which threatens the future of its major members, unless its terms and powers are drastically recast."

His argument for the change of heart is powerful - although we would argue that pointing out the failings of the EU doesn't mean that Hastings can no longer describe himself as "pro-European", just that he is now a "pro-European" of a different sort.

He cites a long list of burdensome EU regulations, such as the Temporary Agency Workers Directive and the Resale Rights Directive, which are holding back the UK and other EU members from competing with the world's emerging economies:

"At a time when we face a historic challenge from Asia, the EU makes it almost impossible to adopt measures essential to strengthening its members’ competitiveness, above all the relaxation of employment law. This has become, for practical purposes, unemployment law."He lists other failures too. The lack of a meaningful foreign policy, the corruption of the European Parliament and, of course, the failed Single Currency, whose perceived success, in Hasting's words, "was an illusion created by smoke, mirrors, prodigious subsidy and reckless borrowing."

For Hastings, "membership of the EU in its present form has become a blight, imposing unacceptable social, cultural, commercial and industrial burdens and constraints" but the option of outright withdrawal is rejected, which he suggests would quickly lead to "lonely isolation":

"I realise that quitting Europe would engage us in a crisis that would sap the entire energy and attentions of any British government for years.

But it has become essential to repatriate powers from Brussels. This is not in furtherance of isolationism, but of the economic imperative to strengthen our competitive position in the world and repair our social fabric."

It's well worth a read in full.

Go local

Today we publish a report, written by ex-head of Policy Exchange Anthony Browne and our Director Mats Persson, suggesting a fresh EU strategy for the UK government - European localism. In yesterday's Sunday Times, we trailed the piece, arguing:

"closer union cannot continue for ever. In some ways the EU is already more centralised than a country — individual American states have more freedom over sales tax than do EU members. And what was right 50 years ago is not necessarily right now. When challenges change, so should institutions.

The euro crisis has tested to destruction the principle of ever closer union — its momentum required Greece to join the euro when it was not ready, directly leading to turmoil. As the crisis has unfolded, the debate has moved to an existential question: what kind of Europe do Europeans want?"

We go on to say:

"Popular support for the EU has plummeted even in the countries that were once most supportive and national parliaments have grown restive because their powers are being usurped. The euro crisis is also forcing Europe to develop a more variable approach to co-operation, with countries integrating at different speeds.

The EU is ripe for change and this presents Britain with an opportunity to push forward its own strategy — which we call European localism. Since it joined in 1973 Britain has never shared the strategic vision of ever closer union, but nor has it had an alternative strategy of its own. As a result it has remained disengaged from Brussels, focusing on defensive tactics limiting the perceived damage of European legislation, rather than trying to steer the direction of the EU. This is an unsatisfactory position."

But, we argue, in the wake of the crisis,

"Britain can position itself as the champion of European localism, taking the principles and rhetoric of localism widely endorsed at a national level and applying them at a European level. The same arguments apply: if you devolve where possible and centralise only where necessary, you get better democratic engagement, more flexibility and better policy making."

As we note in our press release, in terms of concrete proposals, this would include:

• Parliament should be given the right to approve the UK appointment of judges to the European Court of Justice, to hear their views on European integration, just as Congress approves presidential appointments to the Supreme Court in the US;

• The Government should consider taking the European Commission to the European Court of Justice for breaches of subsidiarity, the legal principle underpinning localism that is now enshrined as a founding principle of the EU in the Lisbon Treaty;

• The role of national parliaments should be strengthened by a new “red card” mechanism, whereby if two thirds – or in particularly sensitive areas, half – of national parliaments express concerns about EU legislation or European Court of Justice rulings, then the EU would have to abandon legislation or overturn the ruling;

• The UK Parliament should work with other national parliaments to set up an “Inter-parliamentary Task Force on Localism”, acting independently from EU institutions, to ensure that the EU does not involve itself in issues that should be left to national governments;

• A new mechanism should be introduced enabling member states to repatriate powers over certain policy areas, even if all 27 countries do not want to do so, resulting in a variable, more democratic Europe where powers can flow both to and from Brussels;

• The Government should use its legal rights under the Lisbon Treaty to unilaterally repatriate up to 90 Justice and Home Affairs laws, and should prioritise other areas where it wants to repatriate powers;

• The Government should subject all significant EU proposals to a robust subsidiarity test, and should hold the European Commission to account for rejecting parliament’s complaints about breaches of the subsidiarity principle;

• The Government should lobby for a new European Subsidiarity Court, to uphold breaches of subsidiarity;

• The Foreign Office should set up a ‘European Localism Unit’ to drive the localism agenda across Whitehall departments affected by the EU;

• Form a ‘localism bloc’ of like-minded EU nations, starting with a conference in London.

As we conclude in the Sunday Times piece, This "is a strategy that should command wide cross-party support in Britain and enable us at last to engage fully in the EU."