David Cameron’s spaghetti bowl

British Prime Minister David Cameron’s
“Europe” speech, delivered on Jan.
23, was powerful, polished, contained a
bold vision and offered good arguments.
In particular, he got three things right. But
translating those arguments into institutional
reality will be a nearly impossible
challenge.
First, Cameron is correct to emphasize
the urgent need for a renewal of popular
support for the European Union. The percentage
of Europeans who believe that the
EU is “a good thing” is dropping steadily.
Democracies require real debate. Yet
too many decisions about the future of Europe
and the euro zone are made in highly
technocratic settings, with most citizens
not really understanding what is going on,
let alone feeling that policy makers care.
One can debate whether a referendum is
the most appropriate vehicle for asking for
their consent, but ask one must.
As he put it: “There is a gap between
the EU and its citizens which has grown
dramatically in recent years and which
represents a lack of democratic accountability
and consent that is — yes — felt
particularly acutely in Britain.” Addressing
the political challenge head on is much
better than trying to evade the debate.
Second, Cameron was right to say that
“the European Union that emerges from
the euro zone crisis . . . will be transformed
beyond recognition by the measures needed
to save the euro zone.” He did not disagree
that the euro zone needs more integration,
but correctly noted that the required
degree of political integration is
beyond the comfort zone of British citizens
and of others in the EU.
Finally, Cameron argues that the EU is
not an end in itself. Rather, it must deliver
better economic performance for its citizens
by emphasizing the challenge of competitiveness,
particularly with respect to
the new emerging countries. His speech
stressed the economic weakness of many
EU members (though some — such as Germany
and the Nordic countries — are actually
doing reasonably well in the global
marketplace).
As a conservative, Cameron lays the
blame for economic weakness on the size
of the state and a high degree of market
regulation, though some Nordic countries
with large government spending and
strong financial and environmental regulations
are in better shape than the U.K.,
which has had less of both. But he is right
that a debate on economic performance is
needed, and that it will be crucial to reform
Europe in a way that maximizes its prospects
in global competition.
It is normal for conservatives to argue
for less government and to place greater
trust in free markets, and for social democrats
and greens to argue for public policies
that deliver less income inequality,
more public goods (such as a clean environment
and public transport), and more
regulation to help markets function with
greater stability and distribute benefits
more evenly. The competitiveness debate
should indeed be part of the debate about
Europe’s renewal.
But Cameron’s vision for Europe’s institutional
future is difficult to translate
into workable specifics. He argues for a
Europe “à la carte,” at least for those outside
the euro zone. He entertains the possibility
that the U.K. and other EU countries
that have opted out of the euro zone
could each negotiate a specific and special
“deal” with the EU, picking and choosing
among its various dimensions those that
suit them best and cost them the least.
Thinking about the consequences that
such a Europe would have on EU institutions,
one must ask how the European
Commission, the European Parliament,
and the Council of Ministers would function.
Would there be one set of sub-institutions
for every country that has made a
special deal with the Union — say, a Commission
for the euro zone and Sweden,
and another for the euro zone and the
U.K.?
And would the European Parliament
become fragmented in similar fashion?
Would the European Council have a diverse
set of memberships? How many
temporary or permanent opt-outs can there
be? How will Europe’s citizens, who already
have enough trouble with the complexities
of European governance, be able
to comprehend such a “spaghetti bowl”
structure?
And yet Cameron is right to believe
that not all EU members will want or be
able to be part of a more integrated eurozone.
There will have to be some flexibility
if the EU is not to shrink, becoming a
smaller eurozone. British membership is
important to many in Europe.
One way to overcome the dilemma
might be to articulate an institutional future
in which there would be essentially
just two types of countries within the EU
and the single market: those in the eurozone
and those with national currencies.
There would have to be two sets of EU
institutions, one for the eurozone and another
for non-euro zone countries, although
they would overlap.
This is already the case in some areas:
consider the EU-wide Ecofin and the euro
zone-only Eurogroup of finance ministers.
Something similar could be created for the
European Parliament, and so on. It would
be complex, but it could be made manageable;
we should discuss how.
A new European treaty would not allow
cherry-picking, but would give each
member state a chance to join, or commit
to, either the politically more integrated
eurozone or the less integrated second
group. There would be clear rules and
decision-making mechanisms for both
sets of countries, subject to democratic
votes by a two-tier European Parliament.
Many details would have to be worked
out. But this may be a vision that gives
Europe a chance to remain big and inclusive,
while retaining the politically integrated
core that the euro zone needs.
Copyright: Project Syndicate, 2013

* The author is vice president of the Brookings Institution, a former member of the European Constitutional Convention and former minister of economic affairs of Turkey.

by Kemal Dervis