The Financial Times reports: “A former adviser to European Commission president José Manuel Barroso has accused the commission of embracing Germany’s austerity-focused response to the eurozone debt crisis in a “strategic” bid to enhance its own powers.” In fact, the sovereign debt crisis has opened the door for further economic and fiscal policy integration.
Several new rules, intended to strengthen economic governance in the EU, have been introduced mainly through the so-called Six Pack, the Two Pack as well as the Treaty on Stability, Coordination and Governance. It is now clear that member states economic and fiscal policies are co-ordinated at EU level. National governments, particularly in the eurozone, are no longer responsible for a great range of domestic economic policies.
The financial crisis has given to the European Commission an unprecedented power to intervene in domestic politics. Almost every measure that has been adopted since the crisis began has increased the powers of the European Commission. The so-called “Two Pack” has given the Commission powers over national budget decision-making. Despite it has no legitimacy or a democratic mandate the Commission is allowed to interfere with member states’ budget decision making and to control national economic policies. It has the power to examine draft national budgets in order to assess whether they are in line with EU economic guidelines and rules on fiscal discipline before being adopted by national parliaments and recommend changes. The Commission is allowed to give instructions on spending and taxation to eurozone member states. It has been empowered to recommend changes and to request a revised draft budgetary plan from the Member States. This is the beginning of the end of budgetary sovereignty for eurozone member states.
It is important to recall that Angela Merkel wanted Brussels to have the power to veto member states budgets. Hence, as a former adviser to European Commission president, Philippe Legrain, observe, according to The Financial Times, “Rather than being sidelined, [the commission] chose to strategically align itself with Germany”, since “it saw a more influential role for itself if Berlin’s emphasis on budget discipline prevailed.” Consequently, according to Philippe Legrain “The EU is now riven between creditors and debtors and the EU institutions have become an instrument for creditors to impose their will on debtors,”. In fact, the euro is creating uncertainty, hostility and a division between north and south of Europe. It is creating social unrest throughout Europe.
Philippe Legrain then slammed the European Commission over austerity measures and stressed “that commission policies often made things worse”. By accepting it, the bailout countries have lost sovereignty over economic and financial policy and this strategy cannot solve any problem. The Eurozone, particularly Greece, Portugal, Ireland, Italy, Spain, and Cyprus have more debt, more unemployment and more recession. The austerity measures imposed by Brussels are not working and social conditions and living standards are getting worse. These countries face a long period of stagnation, high unemployment, and painful structural reform. These measures have been forced onto citizens, however they were not allowed to have a say on such important matter affecting them. The financial crisis and the austerity measures have lead to further democratic deficit and lack of legitimacy not only at Europe but also national level. There have been demonstrations against the austerity measures all over Europe. The Italians, the Portuguese, the Spanish, the Greeks, the Cypriots are extremely unhappy with the EU’s austerity measures and with the lack of democratic legitimacy. They are unwilling to accept more national sovereignty being given away. In fact, they would say NO to a fiscal and political union with an economic policy imposed by Germany. However, they have not been asked whether they would accept it.
The European Commission by proposing to create more powers to itself is clearly ignoring democratic principles. People have been treated with contempt, and it is about time Brussels start listening to people democratic wishes. Yet, the European Commission’s drive for a EU federal state has been revived due to the euro crisis. Jose Manuel Barroso, President of the European Commission, and particularly Viviane Reding, Vice-President of the European Commission are doing everything they can to drive the EU towards a political union as they believe that a creation of a federal Europe is the only possible way to address the causes of the sovereign debt crisis. In fact, they believe that a democratic and effective EU must be based on a stronger political union between its member states. However, the answer is not “more Europe”.