#EUpriorities: Ensure the EU steers clear of decisions better taken nationally

As promised, here is the first of the cartoons accompanying our reform mandate for the new European Commission:

We believe that the EU must do more than merely pay lip service to the principle of subsidiarity, i.e. that the EU should not meddle in areas that can better be handled nationally (or locally).

The EU needs a dedicated Commissioner for subsidiarity (although we are open to a more catchy name, like "Common Sense Commissioner") who would be explicitly charged with reviewing both new and existing EU laws to ensure they are proportionate, add value, and could not be better handled at the national or local level. Any laws that do not meet these criteria should be scrapped.

Dutch Foreign Minister Frans Timmermans, who has been nominated to the new Commission and who  looks set to land an important post has strong reformist credentials to fill such a role and helped coin the maxim 'national where possible, European where necessary'.  

Our mandate (published in partnership with Open Europe Berlin) received some good media coverage in Germany today, with Die Welt featuring it on the front page of their economics section, along with our calculation that German taxpayers could save €32bn from the package of reforms that we propose:

With Juncker's full Commission line-up expected to be announced tomorrow or Thursday, stay tuned for more of our ideas in the days to come.

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. 

Schäuble comes out strong for #EUReform

The latest intervention by one of Europe's most important politicians shows that, in the wake of the shock European elections result over the weekend, Europe’s leaders are waking up to smell the coffee.

Writing a guest piece for Die Welt, Germany's Finance Minister Wolfgang Schäuble argues:

What are the lessons of the European elections? Surely not a mindless pursuit of 'More Europe'. We need a more intelligent union.

He continues:

The question 'More or less Europe' - as one alternative or the other- has been posed falsely. On one hand we need a stronger Europe, particularly for the big and overarching questions, that no [one] state can solve alone. And, on the other, we also need a greater willingness to consistently apply the subsidiarity principle.

Setting out what he thinks Europe should be for, Schäuble says:

An intelligently integrated Europe, can in the end, even mean 'less Europe' - if after a critical appraisal, tasks and responsibilities are unbundled and clearly assigned. The EU could concentrate its tasks to the Single Market; trade; financial markets and currency; climate; environment and energy; as well as foreign- and security- policy. In the areas, therefore, where long-term success can only be negotiated on the European level.

He again laid out his view on treaty change, arguing that in order to strengthen the eurozone, it is "unavoidable in the medium term."

However, on the EU's 'democratic deficit', it is less clear exactly what Schäuble has in mind. He argues that:

A cleverly integrated Europe would then, look something like a "multi-level democracy" - a complementary, interlocking system of democracies with a different range and scope of competences: a National-European double democracy. Then the citizens of our national democracies and European democracy would be level.

Fine, but it is the exact balance between the two that is so politically controversial - and it remains unclear how German policymakers intend to square the inbuilt tension between national democracy and European integration, particularly in the eurozone where this tension is greatest.

ECJ sets important legal precedent by striking down Data Retention Directive

The European Court of Justice (ECJ) has this morning struck down the EU's Data Retention Directive by declaring it "invalid". The ECJ had been asked by the Irish High Court and the Austrian Constitutional Court to rule on whether the Directive complied with the EU's Charter of Fundamental Rights.

In one sentence, the Data Retention Directive requests telecommunication services providers and operators to store certain categories of information (date and length of phone calls, senders and recipients of e-mails, etc.), but not the content of conversations, for a minimum of six months to a maximum of two years. It was introduced in 2006 to help national authorities fight serious crime and terrorism.

Interestingly, the UK has 'gold-plated' the Directive by fixing the data retention period to twelve months. But other EU member states were less zealous. Last year, Sweden was issued with a €3 million fine from the ECJ itself for failing to transpose the Directive into national law in time. Germany has been taken to court by the European Commission for the same reason. 

According to today's ECJ ruling,

By requiring the retention of those data and by allowing the competent national authorities to access those data, the Directive interferes in a particularly serious manner with the fundamental rights to respect for private life and to the protection of personal data.

The statement goes on:

The retention of data required by the directive is not such as to adversely affect the essence of the fundamental rights to respect for private life and to the protection of personal data [...] However, the Court is of the opinion that, by adopting the Data Retention Directive, the EU legislature has exceeded the limits imposed by compliance with the principle of proportionality. 

One of the reasons cited by the ECJ is:

The Directive covers, in a generalised manner, all individuals, all means of electronic communication and all traffic data without any differentiation, limitation or exception being made in the light of the objective of fighting against serious crime.

Therefore, the real problem for the ECJ seems to be the violation of the proportionality principle. Or, put differently: the rationale behind the Directive is correct, but its scope is disproportionate. Now, we would argue, this is a problem affecting many other pieces of EU legislation (think, for instance, EU employment and health and safety rules) - which is what could make today's ruling an important precedent.

The Dutch EU reform agenda - a primer

In previous we've described the Dutch as 'thought leaders' on EU reform. The Dutch Government's 'subsidiarity review' and the Tweede Kamer's report on the role of national parliaments, with its proposals for 'red', 'green' and 'late' cards, all spring to mind.

Many of these ideas were discussed at a seminar in The Hague in January, organised by the Dutch Cingendael and Brussels CEPS think tanks. A short report on the outcome of the meeting is available online and lists over 30 potential reforms to improve democratic legitimacy and accountability. Some are more concrete than others but here are a few of them:

• Give one of the European Commissioners a subsidiarity portfolio.
• Negotiate a political agreement between the Council and the Commission (possibly involving the European Parliament as well), determining certain domains or certain issues where the European institutions will refrain from further initiatives. A closely related alternative is the idea of a moratorium, agreeing not to present new proposals in a specific area for a certain period.
• Establish a separate subsidiarity court to monitor EU legislation.
• Encourage a proactive approach by EU and national legislators to prevent unintended interpretation by the European Court of Justice.
• Ensure that the European Parliament, taking advantage of its role in selecting the next Commission President, does not dictate the agenda to the Commission.
• Introduce ex post subsidiarity control on existing EU legislation to demonstrate whether subsidiarity was respected and to justify the necessity of EU legislative acts on a case-by-case basis. Both member states and the EU institutions should be involved.
• Introduce an informal ‘red card’ for national parliaments, by proposing the political agreement that the Commission will use its discretion to withdraw legislation if one-third of national parliaments raise subsidiarity objections.
• Introduce a ‘late card’, giving national parliaments the opportunity to voice their concerns at a later stage of the ordinary legislative procedure.
• Introduce a ‘green card’ for national parliaments, which would give them the option to table a joint legislative proposal if a substantial number of member states’ parliaments support it.

There are plenty of good ideas here that the Dutch government in particular has been increasingly vocal in supporting. There are many other proposals that we would throw into the mix, from reforming the EU budget by repatriating regional spending to the wealthiest member states to introducing greater legal safeguards for non-eurozone countries.

As our pan-European reform conference showed, there is growing momentum for change in the EU that extends beyond the UK.

Gaining allies for #EUReform: Open Europe / Fresh Start Project's EU Reform Conference is drawing huge levels of interest

Advocates of 'Out' of the EU or the 'Status Quo', are fond of saying that EU reform is impossible - it suits their respective cases. They are wrong. Reform is possible, but will not happen on its own, reformers in the UK need to go out there and win allies and put forward solid thought-through proposals to make the EU more competitive and closer to voters.

This week Open Europe and the Fresh Start Project will attempt to do just that by hosting a ground-breaking conference for EU Reform in London.

It will be a landmark event - and the response to this conference has been absolutely amazing. A reminder to those who say there's "no appetite" for reform in Europe that they may be speaking too soon. There will be 300 delegates from over 30 countries debating a full spectrum of ideas on how to achieve major reform in Europe. Keynote speakers include eight ministers from across the continent, leading business people, MPs, MEPs, former heads of state and a European Commissioner.

Here are some highlights:

• A major contribution from a senior UK Minister.

• Agnieszka Pomaska, Chair of the EU Affairs Committee in the Polish Parliament, and Priti Patel MP debating EU free movement and rules on access to benefits.
• Rachida Dati MEP, Deputy President of the French UMP Party, asking if it’s time for a “realist revolution” in Europe.
• Leading German MP Klaus-Peter Willsch and former EU Commissioner and Dutch minister Frits Bolkestein discussing if, and how, powers can flow back from the EU to its member states.
• UK Europe Minister David Lidington and Irish Europe Minister Paschal Donohoe discussing the role of national parliaments with break-out sessions looking at whether national parliaments should be given veto rights over EU law.
• Maria Damanaki, European Commissioner for Fisheries, explaining why EU reform is possible using the case of the EU’s fisheries policy.
• Bruno Maçães, Portuguese Secretary of State for European Affairs, discussing how services liberalisation can be achieved in Europe.
• Serial entrepreneur Luke Johnson and Dr Daniel Mitrenga of the German Association of Family Enterprises identifying ways to cut EU regulation.
• UK Foreign Secretary William Hague addressing the “Reformers’ Reception”.
• Bulgarian Foreign Minister Kristian Vigenin, Estonian Foreign Minister Urmas Paet, and former Slovakian Prime Minister Iveta Radicova, drawing lessons on reform from Eastern and Central Europe.
• Peter Norman, the Swedish Minister for Financial Markets, looking at how the single market can work for economic recovery.
• Young reformers from across Europe setting out their ideas for change in the concluding “Future of Europe” panel.

What do we hope to achieve?One conference will not achieve #EUReform on its own, but ahead of a crucial year in Europe - with the European elections and the selection of a new European Commission - it'll be a hugely important opportunity to really delve into the kind of policies that will achieve sweeping change in Europe. It'ls also be a key testing ground for what kind of reforms David Cameron might achieve ahead of a potential 2017 EU referendum.

We have provided a platform, now lets see what the delegates make of it...


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.

The Dutch are emerging as Europe's thought leaders on reform

The Dutch are quickly becoming Europe's thought leaders on EU reform. The Dutch government's "subsidiarity review" contained numerous interesting ideas for EU reform, the Dutch lower house, Tweede Kamer recently published a paper outlining key proposals for how to strengthen the role of national parliaments. And today, the Dutch foreign minister, Frans Timmermans, used a piece in the FT to set out some new ideas for reform.

Timmermans wraps his ideas in quite friendly language but there are some pretty sharp lines in there.

He says that "During the crisis the European Commission...was relegated to the sidelines and never regained the initiative", adding

"That has not stopped its machine from producing directives and regulations, creating a regulatory burden that bears down on businesses and people." 

He notes the European Parliament

"has been fully empowered by the Treaty of Lisbon. It has an important role to play, but at every turn it demands more resources for more Europe while it attracts ever lower electoral turnouts."

His key ideas include:

• A European Governance Manifesto for the next five years with the member states, laying down what the EU should and should not do. "This will mean more Europe in some areas, and less in others."
• "Create a smaller, reformed commission with a president and vice-presidents heading a limited number of policy clusters. The vice-presidents would have the sole authority to initiate legislation."
• Encouraging "national parliaments to bring Europe back home where it belongs." He throws his weight behind a "red card" for national parliaments - if one-third of them object, a Commission proposal is history. As you know, we love this idea. 

However, he says he doesn't want treaty changes and, interestingly, claims the ideas he put forth can be achieved without such changes. We assume that, for the red card, this would effectively mean a political agreement to the effect that the current yellow card means a red card in practice.

Timmermans concludes:

"In this we do not stand alone. Other partners have put forward proposals that share a similar thrust: a more focused and balanced EU with less burdensome regulation. Let us seize this momentum and start with an in-depth debate on change and reform. For this is our chance to shape “our” Europe together."

Otmar Issing: EU will only live up to expectations when tendency toward centralisation and bureaucratisation resisted

This post is part of a series of interviews carried out by our sister organization, Open Europe Berlin. To read the original interview between Otmar Issing, the former Chief Economist of the European Central Bank, and Open Europe Berlin in German click here.

Otmar Issing addresses the audience at the Open Europe Berlin launch, Oct.2012

OEB: What does Europe mean to you?

Issing: Following the terrible wars and dictatorships of the past, for me, Europe means a continent of peace and freedom.  The freedom to travel, and particularly for young people -- to learn, study, and to make friends beyond national borders. The single market, a barrier-free market serving over 500 million people, is the economic dimension, and the prerequisite for prosperity and employment in Europe. 

OEB: What does the European Union mean to you?

Issing: The European Union embodies the institutional structures, which preserve the aforementioned achievements.  The European Union will live up to expectations only when the tendency towards centralisation and bureaucratisation are resisted. 

What does the euro, the shared currency, mean to you?

Issing:The euro represents a promise of a stable currency to the citizens of the euro area.  During the first 14 years of the euro, the central bank fulfilled this promise by way of its obligatory price stability policy.  However, the existing economic policies of many countries continue to be contradictory to [the ECB's] policy, which is absolutely necessary to the guarantee of long-term stability for the euro and the eurozone. 

"If the euro fails, then Europe fails!" To what extent do you agree or disagree with this statement?  

Issing: Europe is far more than the euro. It is more than currency and economy. But a collapse of the euro, which I consider rather unlikely, would indeed cause considerable economic and political turbulence and it would set European integration back. 

'More Europe' in which form of the EU? In which policy areas should the European Union (a) do more; (b) change its practice; or (c) do less? 

Issing: ‘More Europe’ is a mantra, which in my opinion, lacks concrete content and easily leads to the misguided adoption of ever further centralization.  Should the EU wish to realize its aspiration of becoming the leading voice for Europe on the global stage then it must:

• Create the preconditions for growth and employment;
• Encourage the individual member states to take responsibility for the implementation of necessary reforms;
• Accommodate the principle of subsidiarity, rather than continuing to shift competencies to the European level. 

National democracy pushing back: European Commission shown its second ever 'yellow card'

The European Commission has just been shown its second ever 'yellow card'. Remember, this is the provision introduced by the Lisbon Treaty, stating that if one third or more national parliaments object to an EU proposal on subsidiarity grounds (within an eight week window), then the Commission has to reconsider the proposal. In theory, the Commission can choose to ignore parliaments (one of our long-standing criticisms of the mechanisms). However, in fairness, the last time the yellow card was issued - in the case of the so-called 'Monti II' Regulation on the right to strike - the Commission did scrap the thing.

National parliaments from eleven EU member states - the UK, Czech Republic, Cyprus, France, Hungary, Ireland, Malta, Netherlands, Sweden, Romania and Slovenia - have now complained that plans for a European Public Prosecutor Office (EPPO) breach the subsidiarity principle.

According to the Lisbon Treaty, the establishment of the EPPO requires unanimity, and the UK would have sought to opt out, but that also means that other EU countries could have pressed ahead with this without Britain.

So the move is still significant for a few reasons:

• It is another example of how national parliaments are increasingly pushing back against EU centralisation, and how little appetite there is for 'ever closer union' (the Commission's proposal was limited, with the prosecutor only being responsible for investigating fraud involving EU funds).

• It shows national parliaments can agree. In total, 15 chambers from eleven EU member states objected to the idea. Bear in mind that an objection raised by a chamber from a country whose parliament is unicameral (e.g. Sweden or Cyprus) counts as two votes. Therefore, to some extent, it counters the argument that a new 'red card' system allowing a group of national parliaments to block unwanted EU proposals - which we have supported for a while - would not work because national parliaments would not get their act together. 

The ball is now in the European Commission's court. It will take quite a bit of nerve to ignore 15 more or less democratically elected chambers (*ehum*) in Europe....

Has Martin Schulz been receiving some good PR advice recently?

The EU institutions, and certainly the European Parliament, aren't exactly world renowned for their PR skills. Today we can't blame European Parliament president Martin Schulz for that - perhaps he has a new PR advisor?

In an interview with Dutch magazine Elsevier, asked about the Dutch government's recent 'subsidiarity review' - which concluded that the time for ever closer union in every single policy area was over - he endorses the call for the EU to give some powers back to member states and only focus on essential things:

"Do locally what can be done locally, regionally what can be done regionally, nationally what can be done nationally... I believe we are able to win back trust from citizens."

"For a start, we shouldn't call everyone who is critical a eurosceptic. I am an enthusiastic pro-European, but I think that the EU is in a catastrophic situation. In the Netherlands and Germany, people have the feeling that they pay too much and that they get nothing in return. In Greece, that they're under a foreign regime. In order to deal with this, we must return Brussels' tasks to the national states."

"The Union must concentrate on international trade, migration, tax evasion, climate change, organised crime. For these things, the EU needs to be well equipped."

Naturally Schulz adds the usual caveats that the Commission must be an 'EU government' responsible to both the European Parliament and  member states. Moreover, he has expressed similar sentiments before so we are not sure to what extent this will be followed up with concrete action. It is nonetheless interesting that such a self-avowed EU federalist feels the need to publicly make the argument that EU powers can flow both ways.

Dutch government: "Time of ‘ever closer union’ in every possible area is behind us”

Dutch PM Mark Rutte (VVD) and Foreign Minister Frans
Timmermans (PVdA) discussing what the EU should
and should not be doing?

For anyone involved in the EU reform debate, this is a must-read. The Dutch government has today published its “subsidiarity review” – an assessment of what the EU should and shouldn't be involved in. Again, we're first to the punch in publishing an English version of the document on our blog.

This is likely to be welcomed with open arms in Whitehall – and should be studied carefully by MPs in Westminster. Though not all good news for David Cameron’s renegotiation strategy – the Dutch have explicitly said they don’t want EU treaty change for example – this is clearly a major step towards a reformed Europe.

First, it shows that discontent with the EU status quo is not simply a UK phenomenon – or a Tory problem as some commentators would have us believe. Secondly, the ideas the Dutch are putting forward are in themselves pertinent, and would go quite some way in achieving a better functioning, more democratic and better focused EU. Finally – and this is where it gets really good news for Cameron - countries like Sweden. Denmark and Germany are far more likely to be persuaded down the reform path if the Dutch are prepared to take a lead with the UK.

So what does the document say? Well, it sets out nine broad principles and 54 specific recommendations, relating to what the EU should and shouldn't do. Many of the proposals have also been championed by Open Europe in various forms (it’s worth re-visiting our “European localism” paper). Most significantly, in the press release, the Dutch government proclaims that the “time of an ‘ever closer union’ in every possible policy area is behind us”. This is not going to go down well in certain corners in Brussels.

The guiding principle is described as “European where necessary, national where possible”, and the tone of the entire document chimes well with Cameron’s EU speech, calling for a “European Union that is a more modest, more sober and at the same time more effective.” Interestingly, it notes that the Dutch EU Presidency in the first half of 2016 “could play a role in promoting such an agenda” – this could coincide with the beginning of the EU referendum campaign in the UK should Cameron be in power.

The 9 general principles include:

• Where the European Court of Justice interprets EU law in a way that EU legislators had not provided for and/or did not intend, then this should be possible to address by amending the EU rules on which the Court based its ruling (this could well be a key plank in Cameron’s renegotiation strategy. An example of where the ECJ ruled in precisely such a way is the Working Time Directive, where the ECJ's interpretation of rules governing on-call time and rest periods for doctors has caused havoc in the NHS);
• Every EU intervention needs to be motivated by a clear legal basis in the EU Treaties, and the Commission shouldn't be making proposals on a legal basis that is tenuous or insecure. The Dutch Government explicitly mentions the English term “creeping competences” (this is very similar to what the UK government wants); 
• EU legislation should focus on main points to achieve shared goals rather than to prescribe in detail how those goals should be achieved (again echoes Cameron’s speech);
• When there are widely shared objections to EU legislation, there should be a mechanism to stop the Commission taking any further initiative in that area – this is a bid to stop new EU laws in areas where national governments don’t want them.

As regards the 54 specific recommendations, they mention individual measures where EU power should be scaled back. There are many overlaps with UK ideas. These include:

• Halting the further harmonisation of social security systems. The document says: “It is necessary to combat the negative impact of labour migration, including the abuse of social security systems” – an issue UK Home Secretary Theresa May has been keen to highlight; 
• Limiting the EU budget - the Dutch hint at scrapping the EU's Globalisation Adjustment Fund and structural funds outside of the poorest regions in the poorest countries on the basis that these do not demonstrate added value (the latter is a proposal Open Europe has championed and which the previous Labour government had pushed for. It’s also gaining traction amongst Tory backbenchers) 
• No expansion of agencies’ remits and no increases in their budgets – Cameron was very critical of EU quangos in his EU speech;
• Working conditions, which should only be regulated in broad outline (health and safety and working time, for example);
• No EU regulation of media pluralism; 
• A two-year freeze in salaries of EU officials;
• Sunset clauses should be incorporated in EU proposals (an old UK demand);
• The Financial Transaction Tax is heavily criticised, because "it has been designed in such a way that even parties outside the FTT area, like Dutch pension funds, will be taxed when they trade financial instruments issued in FTT countries";
• CO2 emissions should be dealt with at the global level rather than via EU legislation.  

There are also some further detailed examples of where the EU has gone too far and where powers should be rolled back. For example, the suggestion is made that flood risk management should only be harmonised at European level for truly trans-boundary water courses. The report also recommends the phasing out of the EU programmes for school milk and school fruit, and heavily criticises the recent proposal to ban refillable olive oil jugs from restaurant (which was eventually dropped by the European Commission).

However, the document also sets out clear limits to what the Dutch government says it is prepared to consider and it does not does call for entire policy areas to be returned to national governments. The Dutch government also says it is “not interested in treaty change or opt-outs” for itself.

Nonetheless, the fact that one of the EU’s founding members has stated that "the time of ever closer union is behind us" is clearly a major development.

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."

Some common sense from the Commission

Here's an encouraging proposal:

As we reported in our press summary yesterday, the European Commission has announced plans to revise its Byzantine state aid rules, potentially making life a bit easier for local and regional authorities. Currently, local bodies have to comply with the EU's jungle of rules, designed to ensure fair competition on the Single Market, even when subsidising or contracting out small projects such as swimming pools, playgrounds or crèches - which is just silly (and which adds unnecessary costs for taxpayers).

But, under the new rules, the Commission would lower the threshold on public procurement rules which - or so we hope - would let local authorities off the hook for public tenders for small-scale public services. As the competent EU Commissioner for Competition, Joaquin Almunia, put it.

"Our state aid rules currently apply also to local services organised by very small municipalities. It seems quite obvious to me that among these services, there are some that will have little impact on trade between member states and little potential to distort competition. I think that we need to adjust our scrutiny here and focus it on the cases that have a clear impact on the single market."

That makes sense. An official quoted over on Euractiv was even blunter:

"Most people [in DG Competition], they are not happy having to deal with a state aid complaint against a Dresden swimming pool. To be honest, it's more a pain in the ass than anything else, because they know very well that these matters should not be dealt with in Brussels."

The Commission says it wants to revise the regime in November (which it can do without asking member states or MEPs, since the EU has exclusive powers over this area). This is exactly the type of common sense that we want to see from Brussels.

But we need more of it - much, much more.

Incidentally, Open Europe will soon publish a list of examples of EU laws and measures that we feel should be revised on similar grounds. So watch this space.)

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?

Since when has breaking the law been a 'competition'?

The European Parliament has today passed a resolution calling for the harmonisation of fines that member states impose on lorry drivers who breach EU working time rules and fail to take adequate rest breaks between journeys. Given the goings on with the new coalition government in the UK and the perpetual trials and tribulations of the euro, this may seem like small-fry but it does nonetheless illustrate why the EU and the European Parliament, in particular, can be so infuriating.

The EPs press release states:

Lorry drivers who break rules on working time, rest periods or working conditions should pay clear and comparable penalties across the EU, says a resolution adopted by Parliament on Tuesday. The resolution criticises wide disparities in EU Member States' fines for similar offences and calls for closer harmonisation and co-ordination of penalties, in the interests of road safety and fair competition.

It laments that "Fines for exceeding the daily driving time by more than two hours are currently ten times higher in Spain (€4,600) than in Greece (€400)."

While no one wants to trivialise the potential damage that could be done to people's lives by lorry drivers who break the rules by acting irresponsibly, the language and logic used by the Parliament is simply crazy.

Since when has breaking the law been a 'competition'? Are MEPs seriously suggesting that lorry drivers are making a conscious decision to look for the EU country with the lowest fines and then choosing to break the law? And even if this were the case, why can't those national governments of the member states with the most lawless lorry drivers be trusted to implement a system of fines that they, rather than MEPs, deem appropriate?

The proposed resolution goes to a full vote in June and we would hope that by then enough MEPs see that this is a ludicrous proposal that should be knocked on the head and never seen or heard of again.

A vacuous slogan?

The European Parliament today held a hearing entitled "Unity in Diversity", one of the EU's more hypocritical slogans, on the role that religious belief should play in society after ratification of the Lisbon Treaty.

"Unity in diversity" is one of those wishy washy terms that often become rather meaningless. But wouldn't the EU be a much better place if this maxim, rather than that of "ever close union", was the one that prevailed, be it the EU's respect for religious differences to respect for the existing member states' differing legal systems, cultures and social and employment practices?

Guess that's not what the EU really meant though is it..

The Lisbon Treaty and national parliaments: In practice

The true effect of Lisbon, the practice not the theory, is beginning to come to light and, as some of us warned, it is far from pretty.

The House of Commons' European Scrutiny Committee, the body charged with sifting through EU legislation and holding the Government to account, has published its annual report today and has some quite interesting things to say about the Lisbon Treaty's impact on Parliamentary scrutiny of EU proposals - a largely unexciting process but, if it can be effective, one that is key to maintaining a link between our national representatives and the Brussels legislative machine.

Lisbon Treaty advocates have always argued, which we have refuted here, that it would improve national parliaments' scrutiny of new legislation and even increase their powers to enforce subsidiarity - the principle that actions should only be taken at the EU level if they cannot be achieved at the local, regional or member state level.

However, as politicians, the public and the media are starting to realise, the Lisbon Treaty is desperately failing the Ronseal test.

The Committee notes that under the Lisbon Treaty's so-called yellow and orange card procedures, which in theory give member states' national parliaments the right to ask the Commission to withdraw a proposal on the grounds that it infringes subsidiarity, "the legislative decision on subsidiarity would continue to rest with the EU institutions." I.e. the Commission is still free to ignore the views of national parliaments (for more on this see here).

The Committee therefore concludes:

There is, in our view, less to the provisions on subsidiarity than meets the eye. In our experience it has been rare for the entirety of a proposal for legislation to be inconsistent with the principle of subsidiarity. We do not therefore expect frequent use to be made of the yellow and orange cards. Indeed it would be surprising if the mere existence of such provisions gave rise to a growth in the number of well-founded subsidiarity cases.

The point is that subsidiarity is a politically subjective concept and that for as long as the Commission makes the decisions they are only likely to go one way. The European Commission will always find a way to justify EU action if it wants to and, needless to say, it usually does.

These are the challenges facing the Conservatives in their pledge to introduce a Sovereignty Bill which could give the Government the teeth to actually say No when it believes the EU is over-interfering.

The Committee's report raises two more important points. The first is the Government's increased overriding of the Committee's scrutiny reserve. Among other things, the scrutiny reserve obliges ministers to provide the Committee with requested information before they sign up to EU proposals. Between July and December 2008 there were 23 overrides compared with 12 during the corresponding period in 2007. If scrutiny is to be effective, MPs must curb the Government's willingness to circumvent Parliament.

Secondly, the report suggests that the growing use of 'first reading deals', often negotiated in confidentiality between the Council, the European Parliament and the Commission, make it "well nigh impossible" for national parliaments to scrutinise any amendments made to an original Commission proposal in the process. With the Lisbon Treaty now in place this is only going to become more problematic as it has dramatically increased the number of policy areas to which co-decision between the Council and the EP applies.

Stay tuned for more of what they failed to tell you about the implications of the Lisbon Treaty in practice.