House of Commons - European Scrutiny

Select Committee on European Scrutiny Seventeenth Report

PART III

TOPICS ON THE IGC AGENDA

43. On the question of its size, the Commission presents the Inter-Governmental Conference with a choice between limiting the number of Commissioners to its current level (twenty) or establishing the rule that the Commission be composed of a national of each Member State. If the number of Commissioners were limited, the Commission suggests that there should be a system of rotation that would treat all Member States strictly equally on the basis of a preset order (pointing out that in a 28 member Union no nationality would be absent for two successive terms of office). If there were no limit on numbers, the Commission proposes enhanced powers for the President to direct the Commission's policy, allocating portfolios and departments to members of the Commission, having a casting vote in its discussions, and having the power to oppose any initiatives he or she deemed inappropriate and to remove Commission members from office. In the Commission's view, an enlarged Commission can retain its coherence only if the powers of the President are so reinforced[46]. In any event, the undertaking given by the members of the present Commission to resign if asked to do so by the President should be incorporated into the Treaty[47].

44. The EP similarly proposes either a Commission limited to twenty-one members (with rotation to ensure equal representation of every Member State "at least every two terms of office") or a Commission composed of one Commissioner per Member State subject to a strengthening of the President's rôle and establishment of an inner hierarchy[48].

45. The EP argues for its own right to apply to the ECJ for the compulsory retirement of an individual Commissioner and for incorporation into the Treaty of the undertaking given by members of the present Commission to resign if asked to do so by the President. It states that the President of the Commission should be empowered to ask Parliament for a vote of confidence, and that the college should be required to resign if it does not get it. It also proposes election of the President of the Commission by the EP on the basis of a list of candidates put forward by the Council.

46. The UK Government has consistently expressed its willingness to give up, along with the other larger Member States, its additional Commissioner in exchange for a re-weighting of votes in the Council in their favour (as in a subsequently reported speech by Keith Vaz MP given at a Wilton Park Conference on 1 November 1999 and in the Foreign Secretary's White Paper on the 2000 IGC[49]). The Government also remains open to argument in favour of setting a limit on the number of Commissioners, although it has no view on how Commissioners should be appointed in those circumstances[50]. It also wishes "effective political and administrative leadership" to be exercised in the college, although its ideas on this score fall far short of the Commission's own proposals for improving the operation of the college in the event of its expansion[51].

47. Austria, the Benelux countries, Denmark, Finland and Greece have all firmly declared themselves in favour of one Commissioner per Member State as being "fundamental to the credibility and legitimacy of the Commission"[52].

Re-weighting of votes

48. On this topic, the Commission distinguishes between the qualified majority threshold (the minimum number of votes required as a percentage of the total number of votes to adopt a measure) and the question of the proportion of the total population of the Union which that threshold represents. Although the threshold has remained more or less constant, the effect of successive enlargements is that the minimum population required for a qualified majority has passed from a peak of 70% to a current 58%. Projecting the current system of weighting, the Commission calculates that in a Union of 27 members, a qualified majority could represent only 50.20% of the total population of the Union[53]. It proposes that re-weighting should ensure a qualified majority represents a minimum of about two thirds of the Union's total population.

49. Alternatively, and in the Commission's view preferably, a radically different approach could be adopted, under which qualified majority as it now exists is replaced by a requirement that the Council act by a simple majority of Member States, representing a majority of the total population of the Union[54]. The EP supports this option[55].

50. The UK Government has as yet no concluded view: both the White Paper and written evidence submitted to us supplementing it are, essentially, descriptive[56]. Nonetheless there are two fundamental principles underlining the UK Government's approach:-

not

(b) in the face of a prospective enlargement which would include a substantial number of smaller Member States within the Union, a redistribution of votes in favour of the more populous Member States is required to avoid the risk of a negation of democratic legitimacy in the Council (if countries representing a minority of the EU's population could outvote the majority). The UK Government prefers a simple re-weighting of votes within the current system to a dual majority system but has no concluded view.

Extension of qualified majority voting

51. While it is obvious that EU enlargement will have a direct effect on the composition of the Commission and the relative weighting of votes in Council, the key position of the third element of the Amsterdam Triangle — the extension of qualified majority voting — in the negotiations may require further explanation. The parties to the IGC acknowledge that unanimity is increasingly difficult to obtain the more members of Council there are. Therefore, it is agreed, it would be wise to consider which further policy areas should be transferred to QMV before enlargement takes place. In oral evidence to us, Commissioner Barnier emphasised that the Commission's approach was to decide in which areas it was vital to avoid the potential paralysis that a continued requirement for unanimity could bring[58].

52. The Commission proposes that QMV be the rule and unanimity the exception and it suggests five categories of provisions which ought to remain subject to unanimity[59]:-

(ii) any provision which is fundamental to the organisation and operation of the institutions, and particularly to the balance between them, for example, those on the languages of the institutions;

(iii) on tax and social security, the Commission recognises that decisions in this field should ordinarily remain subject to unanimity because they heavily influence voters' domestic political choices, but nonetheless argues that where unharmonised legislation on these matters interferes with the proper functioning of the internal market, the Council ought to be in a position to adopt legislation by qualified majority[61]; the alternative, in the Commission's view, is that Community law in this area be developed on an ad hoc basis by judgments of the Court of Justice rather than via the political process. Similarly, well established legislation such as Regulation 1408/71 on co-ordination of social security systems ought to be able to be updated by qualified majority vote[62];

(iv) external agreements where the Council acts unanimously for the adoption of the corresponding internal rules (except that, where an international agreement concluded by unanimity requires the adoption of additional implementing measures, those measures should be capable of adoption by qualified majority); and

(v) decisions by the Council to authorise derogations from Treaty rules.

53. The European Parliament takes the view that QMV and co-decision should (together) be the normal method of adopting Community legislation but would reserve unanimity for constitutional matters, that is to say, whenever the Treaty requires the assent of national Parliaments[63].

54. Those Member States that have submitted position papers to the IGC[64] generally agree on the need to keep unanimity for decisions which require national ratification, for those fundamental to the operation of the institutions, and for derogations from Treaty rules (categories (i), (ii) and (v) of the Commission's list outlined above). However, beyond this, their views vary widely. And we understand that, in practice, all Member States are negotiating on the basis of individual lists of articles that should (in their view) remain subject to unanimity, with very little overlap between the lists.

55. The UK Government rejects the endeavour of, for example, the Commission to adopt an approach whereby the participants in the IGC agree rational and "objective" criteria to determine which articles should remain subject to unanimity and which should be transferred to QMV. Instead it prefers a case by case approach in which the sole criterion will be whether or not it is in the national interest to retain unanimity or transfer the matter to QMV[65]. As it itself recognises, decision-making by unanimity becomes more difficult as the Union grows in size, and some extension of qualified majority voting is needed in order to retain efficient decision-making. The Government does not explain how the extension of QMV necessary for efficient decision-making will be achieved by way of a negotiation conducted on the basis of fifteen competing national interests. However, it accepts that where qualified majority is extended to legislative articles, co-decision is likely to be appropriate.

Tentative conclusions on the Amsterdam Triangle

56. In seeking to offer tentative conclusions on the core items on the agenda it makes sense to start with the size of the Commission and the re-weighting of votes in the Council as these two topics have been closely linked since the conclusions of the Amsterdam European Council. No one now seriously argues that the larger Member States can justify retaining their second Commissioner; the question is whether the Commission should in future be composed of one national of each Member State or comprise a number of Commissioners fixed, having regard to its current size and the number of portfolios that can realistically be created, at somewhere between twenty and twenty-five.

57. There are weighty arguments in favour of retaining in the Commission one national of each Member State. We do not regard Commissioners as in some sense representing the government of the State of which they bear the nationality. They are, nonetheless, in a position to explain to other members of the Commission how sensitive or controversial proposals might affect their own Member State, to ensure that any characteristics or interests particular to it have been taken into account and to represent, broadly speaking, its political and cultural traditions. The legitimacy of the Commission as a political institution is strengthened by universal representation of the Member States on it. In our visits to applicant States we have been impressed by the importance which they attach to having a voice at the heart of the Union's decision making which, in their view, means being represented on the Commission[66]. Having regard to the range of responsibilities of the European Union and the complexity of modern life, we are not convinced that there is insufficient work to occupy a Commission of twenty-eight, particularly if Commissioners were grouped in teams in which the less experienced members might work under the supervision of the more experienced in a manner akin to that of Ministers of State within the UK Government. But we recognise the force of the Commission's argument that in those circumstances stronger powers of direction would need to be invested in the President to maintain the coherence of the Commission's activities[67]. A President exercising such powers would undoubtedly enjoy a higher political profile and would look more like a Prime Minister in a national government. We are not convinced that such a development is in the UK interest or the interest of Member States generally.

58. On the other hand, the power base of Member States within the EU is the Council, and, with its significant legislative powers, the Council affords States ample opportunity to represent themselves. Moreover, given the multinational character of its staff at senior as much as junior levels (and assuming that the Prodi initiative to require each Commissioner's cabinet to contain nationals of several Member States acquires the status of a convention[68]), there is ample opportunity for the Commission to inform itself of the impact of its proposals on the circumstances of particular Member States. It is therefore arguable that the interests of EU citizens would be better represented by maintaining the character of the Commission as a collegial body than by strict adherence to a "one Member State, one Commissioner" principle. If the members of the Commission were to exceed twenty, not only would the realistic number of substantial portfolios be exceeded, but, more importantly, the Commission would be at or beyond the limit at which it can function as a college but becomes instead a deliberative assembly. If the Commission were to have a maximum membership of twenty, we can see no alternative to the Commission's own proposal that its members be appointed by rotation amongst Member States. Any scheme which seeks to bias selection of Commissioners in favour of the longer established Member States or the more populous States would be unacceptable, and we see no basis upon which Commissioners could realistically be appointed on merit. We see the force of the Commission's argument that no individual Member State would be excluded from membership of two successive Commissions.

59. We note with interest recent press reports on the divisions between Member States on this subject within the IGC. Austria, Belgium, Denmark, Finland, Greece, Luxembourg and the Netherlands have all stated publicly that they favour one Commissioner per Member State[69]; and, according to European Report of 22 March[70], they have been joined by Ireland, Portugal and Sweden. A subsequent edition of European Report[71] states that the largest Member States (the UK, Germany, France, Italy and Spain) back a Commission of fixed size[72]. Only one of these large Member States (Italy) has so far said that it would be prepared to consider a system of rotation of Commissioners. It looks as though the larger Member States are negotiating for a single permanent Commissioner each with some system of rotation for the rest. It is inconceivable that smaller Member States would accept this explicit devaluation of their role[73]. At present, therefore, it seems that the likely outcome of the IGC on this issue is one Commissioner per Member State.

60. We assume that, if the UK Government is advocating a Commission of limited size but with a permanent UK member, then this can only be an opening negotiating position rather than a serious bid — and is probably interpreted by all other Member States as such. So far, the Foreign and Commonwealth Office has given no sign of having seriously considered the practical problems that will arise from having a Commission of 28 or so members. We hope that they are doing so, and expect that they will in due course tell us what steps they consider need to be taken, either through Treaty change or administratively, to enable a significantly larger Commission to operate efficiently and effectively.

61. Linked to the size of the Commission is the issue of the responsibility and accountability of individual Commissioners. Many of the parties to the IGC have suggested that, particularly in a larger Commission, the President's authority should be reinforced. Interest has focussed on whether there should be Treaty amendments to achieve this, or whether the present informal arrangements, including the commitment by the current Commissioners to resign if called upon to do so by the President, are sufficient. Various ideas have been put forward, ranging from the Commission's view that the current undertaking should be formally incorporated in the Treaty[74], to the suggestion that the Council should have the final say on dismissal (put forward by the Netherlands and Italy), to the EP's view[75] that it should have the crucial rôle in deciding whether a Commissioner should be dismissed.

62. We are not surprised that the EP should argue for its own right to apply to the ECJ for the compulsory retirement of an individual Commissioner. There are two principles at play here which need to be held in balance; firstly a need to ensure accountability of the Commission for the discharge of its responsibilities and, secondly, the balance between institutions and maintaining a proper degree of independence of one from the other. Recent events have demonstrated that existing arrangements for holding Commissioners to account can work satisfactorily and we are not persuaded that any amendment to those arrangements is yet called for. The EP's proposals (which are related in purpose) to confer on itself the final say in the choice of Commission President and to make that person subject to the benefits and burdens of a vote of confidence procedure may be disposed of in short order. They serve to further its pretention to be in the position of a national parliament to which a government is accountable and can on that account be firmly rejected.

63. There is broad agreement that the present imbalance between the weighting of votes of more and less populous Member States is unacceptable in the face of the imminent accession to the Union of a substantial number of less populous States; and that any system of re-weighting established should be robust enough to cope with the accession of all the current applicant countries — in other words, it should not need readjustment as batches of countries accede to the EU. The key issue has been identified by the Commission, and that is, what proportion of the Union's total population should a qualified majority represent. It clearly must be substantially more than 50%; if it were not, qualified majority voting would soon be seen as oppressive in a number of Member States. However, given historical experience in which the minimum population required for a qualified majority has never exceeded 70%, the Commission's proposal that re-weighting should ensure a qualified majority represents at least two thirds or so of the Union's total population appears reasonable. The second main question of principle is the degree to which smaller Member States remain entitled to a disproportionate share of the total vote. Once decisions on these matters have been made distribution of votes is largely a technical matter. We are disappointed that the UK Government has not been able to be more co-operative with this Committee's inquiry and make available to us more of the preparatory work on this topic that we can only assume it has already undertaken in order to prepare itself, responsibly, for the negotiations in which it is engaged.

64. We are not impressed by the Commission's arguments in favour of a double majority system, which could lead to an unacceptable predominance of a bare majority over a substantial minority. Generally, we take the view that any amendment which further complicates Community decision making, and thus further confuses ordinary voters, requires exceptional arguments to justify it. However, beyond this, the arguments on re-weighting will boil down mainly to horse-trading of influence, and we cannot offer any view as to the outcome.

65. On qualified majority voting the key question is whether it or unanimity should be regarded as the exception to the general rule. Having regard to the obvious difficulty of reaching unanimous agreement in a Union which in the foreseeable future will comprise twenty-five or more States, we take the view that unanimity has to be regarded as the exception to the general rule of qualified majority. This is, in fact, already the case. There remain only 73 Articles or sub-articles which are subject to unanimity. We print at Appendix 3 a list of those Articles supplied by the UK Government. Amongst them are some, such as Article 49 TEU on accession of new Member States or Article 308 EC (residual legal base), which ought almost certainly to remain subject to unanimity. There are others, such as Article 47(2) EC on the free movement of professionals or Article 71(2) EC on transport policy, which ought with equal certainty to move to qualified majority voting as they are not significantly different from other areas of policy already subject to QMV. The difficulty is with those articles which do not clearly fall into either category. It is not sufficient to argue, as does the EP, that it is only those articles which are constitutional in character by virtue of requiring the assent of national parliaments that should remain subject to unanimity; substance must determine procedure, not vice versa. Nor is it sufficient to take up, as does the UK Government, a stance of case by case negotiation in the national interest in the hope that out of the clash of fifteen national interests might emerge some coherent and operationally efficient extension of qualified majority voting. The criteria proposed by the Commission may well be arguable but we see much to commend itself in that approach. We are again disappointed that the UK Government has not seen fit to offer any view on those criteria nor propose any alternatives of its own. We recognise that the UK Government may not wish to expose its negotiating hand too early; against that must be balanced the need for an informed public debate in the United Kingdom on the issues raised by the Inter-Governmental Conference[76]. It would at least be a starting point if the UK Government could make clear those Articles on which debate will focus by making plain which Articles, in its view, will in all probability remain subject to unanimity and which, in all probability, will be passed to QMV.

66. Both the EP and the Commission propose that wherever the Council adopts legislation by qualified majority voting, it should do so by co-decision with the EP. The UK Government concludes that where qualified majority voting is newly extended to legislative articles, co-decision is likely to be appropriate. At present about 75% of all Community legislation is subject to the co-decision procedure[77]. In only 20-25% of proposals are the disagreements between the Council and the EP so intractable as to require conciliation to sort them out[78]. Our regular scrutiny work reassures us that the co-decision procedure works effectively; and the oral evidence given to us by MEPs confirmed that that institution is willing to look closely at its procedures to ensure that legislation is not delayed unduly[79]. It appears to us sensible — and a reinforcement of democratic accountability — to adopt as the general rule that where the Council acts in a legislative capacity by qualified majority voting under the EC Treaty, it does so under the co-decision procedure.

67. We conclude that if the negotiations continue as they have started, the IGC will result in only a minimal extension of QMV to new areas. However, there does appear to be a broad consensus among Member States that co-decision should go hand-in-hand with any extensions to QMV.

Flexibility

68. Complex provisions on closer co-operation (the term used in the Treaty for flexibility) were inserted into the TEU and the TEC at Amsterdam. Their aim is to enable a majority of Member States to adopt, under the Treaties, measures which apply only to themselves. The Common Foreign and Security Policy is excluded. Recourse to closer co-operation is hedged about with stiff substantive and procedural requirements.

69. Closer co-operation must affect neither the acquis communautaire nor the interests of Member States which do not participate and must be used as a last resort. Such action under the EC Treaty must, additionally, remain within the limits of EC competence and not distort the conditions of competition between the Member States. Permission to have recourse to these mechanisms either under the EC Treaty or Title VI of the TEU (police and judicial co-operation in criminal matters) depends on a proposal from the Commission (thus its approval is a crucial stage in the process); it is, however, given by the Council, acting by qualified majority vote. But a Member State which objects to a proposal for closer co-operation can require the decision to be taken by the European Council, acting unanimously ("the emergency brake").

70. The Commission and the EP take the view that, in an enlarged Union, these conditions have to be relaxed to avoid forcing groups of Member States to operate outside the institutional framework if they wish to co-operate in initiatives. The Commission therefore proposes that the requirement that a majority of Member States take part be reduced to one third of Member States. The Commission and EP also propose removal of the emergency brake. The EP adds that authorisation should depend on its assent[80]. The UK is not persuaded by the arguments so far presented for amending the provisions on closer co-operation. It remains convinced that more relaxed conditions could lead to flexible co-operation either undermining the single market or damaging the interests of those Member States not taking part in the initiatives[81]. The Greek and Finnish Governments have also stoutly declared their opposition to reopening this question[82].

71. A further amendment has been suggested by the EP and some Member States[83], that the provisions on closer co-operation should be extended to the Second Pillar: the Common Foreign and Security Policy.

Conclusions on flexibility

72. The existing provisions on closer co-operation are so far from having ever been used that not even a proposal for their use has yet been presented. Where there has been a need to enable Member States to pursue policies which not all could accept (such as EMU) the necessary arrangements have always been negotiated on a case by case basis in an IGC. No one has yet identified measures under the existing Treaty provisions on closer co-operation which a number of Member States (whether a majority or a minority) might wish to pursue without the participation of all. It is generally the case that there are sound 'single market' reasons for preferring to legislate for the Community as a whole or not at all.

73. However, the Dutch Government has suggested that the provisions could be useful in relation to EU enlargement: in particular those applicants with the greatest difficulty in adopting the entire acquis might be enabled to participate in only some EU policies, leading to a form of "differentiated membership". In contrast, the Greek Government has said that any proposal to review the closer co-operation provisions will give a negative message to the applicants, implying that they will be relegated to second-class EU membership[84]. In practice, any attempt to differentiate between aspects of the acquis is likely to be as problematic for existing Member States as for the applicants: for example, how would existing Member States react if Poland suggested that it might 'opt out' of the environmental acquis in return for being excluded from the CAP?

74. Given that the restrictive conditions do not seem to be the reason for failure to use the provisions on closer co-operation there appears to be little point in relaxing those conditions; it would have no effect in practice. On the other hand the anxieties of the UK Government are equally misplaced. There is no need to retain an emergency brake to prevent a recourse to mechanisms for which no one has yet been able to suggest any practical purpose. Unless anyone can suggest areas in the First and Third Pillars in which closer co-operation might be appropriate[85] — in which case we would wish to give further consideration to this issue — we can see neither benefit nor harm in reviewing the provisions on closer co-operation. Discussion of this issue is a distraction from the essential tasks of the IGC.

75. However, we are more concerned about the suggestion that the closer co-operation provisions should apply also to Common Foreign and Security Policy issues. There already exists within the Treaty on European Union provision for something known as "constructive abstention"[86]. The reasoning is as follows: many CFSP issues are sensitive, and the decisions on them are subject to unanimity; individual Member States may not wish to prevent a decision from being taken by using their veto, but may wish to opt out of the decision. In that case:—

it shall not be obliged to apply the decision, but shall accept that the decision commits the Union

The Article goes on to state that if the Member States wishing to register constructive abstention represent more than a third of the (weighted) votes in Council, then the decision falls.

76. These provisions reflect, amongst other things, the difficulties which the non-aligned Member States (Austria, Finland, Ireland and Sweden) experience with many CFSP issues, and were the result of fairly delicate negotiations leading up to their incorporation in the Amsterdam Treaty.

77. The extension of closer co-operation would undermine this compromise: it would enable Member States that wanted to go further and faster in CFSP issues to act without the support of the others. If the closer co-operation provisions were, moreover, amended to remove the emergency brake and reduce the threshold for participation, individual Member States or groups of countries could find themselves excluded. Furthermore, it would be very difficult for third countries — or even public opinion within the EU — to distinguish between EU actions and those taken by groups of Member States[87], which would probably mean that non-participants in closer co-operation would nevertheless be seriously compromised by it. It is, for example, difficult to see how the Finns could maintain their 'honest broker' rôle between the EU and Russia — which proved useful during the Kosovo crisis — if groups of Member States were co-operating in actions that, in Russia's view, adversely affected her interests but in which Finland had absolutely no say. We therefore consider that the provisions on closer co-operation should not be extended to the CFSP.

46 Commission Opinion, pp 10-12; see also Q 83. Back

47 Commission Opinion, p 10; QQ 89 and 83. Back

48 EP Resolution of 13 April 2000, paragraphs 12 and 13 set out the EP's views on the Commission. Back

49 IGC: Reform for Enlargement, The British approach to the European Union Intergovernmental Conference 2000, Cm 4595, paragraph 44. This document is referred to in this Report in the form "White Paper, paragraph x". Back

50 White Paper, paragraph 46. Back

51 Ibid., paragraph 47. Back

52 See their Position Papers submitted to the IGC: these have been deposited in the Library and are also available on the IGC website: http://db.consilium.eu.int/cig/default.asp?lang=en Back

53 Commission Opinion, p. 23. Back

54 Ibid., pp. 24-25. This view was not shared personally by Commissioner Barnier: see Q 90. Back

55 EP Resolution of 13 April, paragraph 10.1. Again, this view was not shared by Richard Corbett, MEP: see Q 114. Back

56 White Paper, paragraphs 52 and 53; and Appendix 3 below. Back

57 The Minister for Europe was careful to emphasise, for example, that Germany's significantly larger population did not entitle her to more votes than the other 'large' Member States, the UK, France and Italy: QQ 4, 6 and 7. Back