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In May 2014, citizens of the European Union (EU) have been called to new elections to choose their members of the European Parliament. These elections are often seen as secondary, which is surprising considering that the European Parliament affects legislative issues with a lot of impact on the everyday lives of Europe's citizens. In fact, much more than voters imagine, especially after the Lisbon Treaty came into force in 2009.

This lack of appreciation of just how important the EU's legislative power can be comes from the complexity of its institutions. The European Parliament may also appear to be a relatively insignificant institution because electors do not see a true «European government» coming out of it, unlike the situation in most parliaments of its member states.

But, in this respect, there is a new element to this month's elections that is significant: although it is not a legal requirement, the President of the European Commission (EC) is expected to be chosen based on the election results and, specifically, he or she should be the candidate proposed by the majority group in the Parliament.

But the EC cannot be considered as a European government as it only has executive powers in a limited number of areas. Moreover, apart from the President, its composition depends on political balances at the level of each member state and not at a European level. Most of the EU's executive functions actually correspond to the European Council which, in its different forms (the Councils for different areas), is no more than the sum of its member state governments, with weighting rules for voting depending on the issues in question. The role of figures such as the President of the Council or the High Representative of the Union for Foreign Affairs and Security Policy is, as in the case of the EC, less important.

This vague relationship between votes for the European Parliament and the mechanisms used to decide a large amount of EU legislation (agreements between the Council and the Parliament based on initiatives proposed by the EC) lies at the root of criticism regarding the lack of democratic legitimacy within European institutions.

If we take into account the huge restrictions imposed by this complex institutional framework, the EU's response to the international financial crisis and the subsequent debt crisis in the EU area has been relatively satisfactory. The few executive tools at the Union's disposal have been used to tackle the crisis and progress has been made in creating new institutions to deal with deficiencies in the European and Monetary Union which the crisis itself revealed.

For some of the more important actions (such as improving fiscal discipline and creating bodies to financially support weaker countries), the EU's actions have ended up being implemented outside the sphere of the current European treaties, using new agreements between governments. This phenomenon, perhaps understandable to tackle emergency situations, has made Europe's institutional framework even more complex and has weakened supranational institutions compared with member states.

Over the next five years of legislature, the new European Parliament will face (together with the rest of the institutions) many challenges, especially to ensure a solid economic recovery and to reduce the Union's high unemployment rate. But perhaps the most important challenge will be to embark on the path towards a more comprehensive institutional reform for Europe. It will be impossible to tackle the Union's goals of economic and social progress solidly and credibly without greater political integration, with the corresponding surrender of national sovereignty by the member states. However, this surrender will only be legitimate if the way the Union is governed can be understood by citizens and perceived as democratic and fair, with the necessary checks and balances to ensure the government's actions at a European level are in line with the interests of its citizens.

Jordi Gual

Chief Economist

30 April 2014

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