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EU & Democracy

Democratic Impact of EU Measures

The Eurozone crisis and democracy

Overall, a contradiction between the founding democratic principles of the EU and its new operational structure during the crisis has left the quality of the EU’s democratic order adversely affected. In the spirit of Aristotle’s criterion, then, the EU’s political system of governance does not any longer seem to adhere to the organisation’s principles.

Aristotle suggested that every political system should be tested as to whether there is any contradiction between its founding principles and the implementation of its governance. The Eurozone crisis seems to have generated precisely such a contradiction between the democratic principles of the European Union and its new modus operandi.

The EU’s democratic principles are fundamental to its purpose, and yet it has long been argued that it suffers from an inherent democratic deficit in its operation, given that its added level of supranational decision-making has always lacked the necessary corresponding citizen input.

Of late, in order to tackle the unprecedented situation created by the Eurozone crisis, a number of institutional modifications have been implemented, including most notably the provision of financial assistance to member-states conditional upon structural adjustment. A core initial problem in terms of democratic process was the fact that the ideological basis of the approach adopted seemed to offer no alternatives. From the side of both creditor and borrower states – a division that in itself has been contended to be democratically problematic in terms of the purported equality of EU member-states – fiscal austerity has been presented as the only way forward. In fact, it has been suggested that Germany’s heavy promotion of ordo-liberalism has reached the point of ideational hegemony. What is more, as revealed by multiple demonstrations across the Eurozone, and especially in member-states receiving conditional financial assistance, the European electorate seems increasingly to oppose this ideological direction.

The institutional framework adopted during this period also gives rise to democratically problematic issues. Many of the measures introduced, such as the permanent financial stability mechanism, further enhanced and specified the concept of policy conditionality, linking it directly with core national policies, such as budget-setting, tax levels and even healthcare policies. Moreover, delegation from the national to the supranational level for such intricate and salient national policy-making arenas has not been restricted to member-states in need of financial assistance. Within the Eurozone, the Eurogroup now has the right to review national member-states’ budgets and to request revisions of them. However, neither the Eurogroup, nor indeed the European Commission, are elected, representative bodies and certainly do not enjoy the benefit of adequate safeguards in terms of accountability to the European electorate. The growing influence of supranational technocratic actors in setting not only budgetary policy but also the overall budgetary framework has become manifest with the Fiscal Compact, which stipulates that Eurozone member-states are obliged to introduce a legally-permanent, and potentially constitutionally-founded, deficit ceiling.

Furthermore, as has been very publicly seen, the so-called Troika – the European Central Bank, the European Commission and the International Monetary Fund – has assumed a strong role within the Eurozone, despite the fact that it is an ad hoc cooperation that lacks a clear institutional framework or set of democratic safeguards of any kind. In fact, as argued by the European Parliament, the roles of the EU institutions within the Troika, and more generally across the crisis, appear to suffer from a conflict of interest with their prescribed institutional mandates, from an expansion of their decision-making authority beyond those mandates, and from questionable democratic standards.

For example, the European Central Bank, which is a solely monetary-policy actor, has appeared to acquire increased influence over fiscal policy measures through its participation in the Troika. In addition, across the Six-pack – secondary legislation aimed at tighter fiscal and macroeconomic surveillance – the European Commission has assumed a strengthened position in the areas of setting fines and conducting in-depth surveillance of EU member-states, especially considering the newly adopted voting system in which the Commission’s decision is immediately enforceable unless a blocking majority of Eurozone member-states is assembled.

Across all of the above measures, citizen input remains almost unchanged and is thus effectively reduced, given the increase in decision-making authority attained by these other EU actors. The European Parliament seems to be minimally, if at all, involved within this new EU-Eurozone decision-making framework, with its role restricted in most cases to an informational or advisory capacity that is unable to influence policy. In sum, the only purely representative body within the EU plays a miniscule role in the EU’s new modus operandi.

So, where do we all stand in terms of democracy in relation to what might be called the ‘new’ EU established during the Eurozone crisis? It has become clear that the rigid, ideological foundations of the measures adopted during the crisis have met strong opposition from the European and, more intensely, the Eurozone electorate. This was amply demonstrated in the outcome of the 2014 EU elections, the first to be conducted since the beginning of the crisis. Approximately 30% of MEPs belonged to either far-right or far-left anti-EU parties, with extreme anti-EU sentiments, across several major EU member-states. Even more remarkably perhaps, in the January 2015 Greek elections a left Party, running on an anti-austerity platform, assumed power or the first time in the country’s modern political history, whilst polls show that a similar result might occur in the upcoming end-2015 Spanish election.

Overall, a contradiction between the founding democratic principles of the EU and its new operational structure during the crisis has left the quality of the EU’s democratic order adversely affected. In the spirit of Aristotle’s criterion, then, the EU’s political system of governance does not any longer seem to adhere to the organisation’s principles. The ramifications of such a divergence are truly far-reaching. In particular, EU democracy has been weakened, damaging at the same time the whole moral stance of the EU and the advocacy and promotion of democracy that is at the heart of its foreign policy.

First published on April 22, 2015 at speri.comment

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