Is Europe really democratic?

Legislation in the black box: how democratic is the EU?

For almost five years now, Margrethe Vestager has been the EU Commissioner for Competition and is therefore officially responsible for dealing with the cartel brothers and monopolists from all over the world. And the Dane is really doing a good job: since taking office, she has imposed more than 15 billion euros in antitrust fines, almost twice as much as during the tenure of her predecessor, doing a good service to Europe's consumers that is even more valuable because he depresses prices. Last year, Vestager collected € 4.4 billion from Google alone.

It also took action against the governments in Ireland and the Netherlands, which organize tax evasion for global corporations. That is why the Irish Treasury Department had to collect 13 billion euros in taxes from Apple. And that was just one of many cases.

The militant Dane does not shy away from the governments of the large member states France and Germany. Against the will of President Macron and Chancellor Merkel, it banned the planned merger of the railroad divisions of Alsthom and Siemens, and rightly so. Otherwise consumers and taxpayers would have had to pay higher prices for trains and signaling technology.

Vestager has exactly what distinguishes a good European in office: She fights for the European common good, regardless of individual national interests. That is why she is actually an ideal candidate for the top position at the top of the EU Commission. If the EU citizens had a choice, they would certainly have a good chance of succeeding Jean-Claude Juncker as Commission President.

But we don't have that choice. We will elect a new EU Parliament at the end of May. But we, the electoral citizens of the Union, are by no means deciding who will lead the EU Commission. This is first and foremost determined by the heads of government of the EU member states. Parliament can then only agree or reject it. However, the Danish Prime Minister Rasmussen has already said that he will not allow Ms. Vestager to continue her job, let alone to become President of the Commission. Europe's best will in all likelihood lose their office. And even if it does in the end, because Merkel and Macron might be able to pass it on as a compromise candidate, it is not because we, the voters, wanted it that way, but because it fits into the power games of the heads of government.

Democracy overridden

This example already shows that the leaders of the European Union only manage democracy in words. In practice, they continually override them and violate fundamental democratic norms on a large scale. Some may think that this is applied thickly, even completely exaggerated. But I would be happy if it were like that. Because anyone who follows the legislation in the EU and in particular the methods with which the monetary union is managed must come to this conclusion. However, this is by no means the fault of the “bureaucrats in Brussels”, as it is always said. The EU administration is comparatively small with 15,000 civil servants and 27 commissioners. The city of Hamburg alone has four times as many civil servants and ten times as many chiefs. And what is going on in the Commission is largely transparent. Almost all meetings with lobbyists of all kinds are recorded in a public register. Most internal documents are also available on request. The legislative proposals that the civil servants develop often serve specific industrial interests. But in doing so they only reflect what is also common at the national level.

No, the real ongoing scandal is the anti-democratic practices in the Council of the EU, also known as the Council of Ministers. These are not just the rounds of heads of government or ministers as we see them on television. The actual work takes place in around 150 working groups and the Council of Permanent Representatives. This is where officials from the 28 (or soon to be 27) national ministries meet to discuss the legislative proposals that the EU Commission will put before them. These negotiations take place entirely in camera. There are no publicly available minutes and the press has no right to know who is actually taking what position there. For citizens, Europe's most powerful legislator is de facto a black box.

This is dangerous. This makes legislation highly vulnerable to the influence of well-organized economic interests and enables crooked deals with which individual governments enforce their national interests at the expense of the European common good. I saw this in years of tussling over the anti-money laundering law. Wolfgang Schäuble, at that time finance minister, complained grandly that Europe had to take a “leading role” in order to prevent criminals and owners of black money from laundering their illegally acquired assets by means of front companies. But during the negotiations in the relevant working group of the Council, of all people, the representative of the federal government opposed the central reform proposal: The Europe-wide obligation to name the so-called beneficial owners of every company in a public register. If this were actually implemented across the EU, it would end the letterbox companies and the police would track down criminals and tax evaders and get their money.

But the black money business is so lucrative for the German banking and real estate industry that the Federal Ministry of Finance would rather be on their side than on the side of their own tax investigators and criminal investigators. While Spain, France, Italy and even Great Britain were in favor, of all things the federal government sided with tax evaders from the Netherlands, Luxembourg and Austria for years. The role of the Germans only came out because an official passed the secret notes from the council to a parliamentarian, who then gave them to me. Nevertheless, the introduction of the register was delayed by a full five years because the Germans had long been a blocking minority in the council.

National governments as a gateway for lobbyism

This episode is no exception. The Corporate Europe Observatory initiative - one of the best NGOs in Brussels - documented this once again in a shocking report in February of this year. [1] Accordingly, the Brussels representations of the national governments are the gateway par excellence to secretly enforce the interests of individual industries and companies, be it by diluting legislative proposals or simply blocking them with a blocking minority. A major victim of this strategy is the financial transaction tax, i.e. a sales tax on all transactions in securities. Its purpose is immediately obvious: not only would the financial sector finally share in the costs that it caused with the crash of 2008. The tax of half a percent to one percent of the trillion turnover on stock exchanges would also throw a spanner in the works of excessive speculation with interest rate and currency derivatives. And after the Lehman crash, everyone except the British was in favor. The EU Commission even presented a well thought-out draft law. But then the financial industry succeeded, through the targeted processing of the governments in France and several small countries, to postpone the whole project with the demand for ever new restrictions. Now, ten years after the great reform promises of 2009, this actually so important, because just project, has de facto died.

The directive on e-privacy proposed by the EU Commission would also be no less important. This is to regulate that data and media groups no longer record what they are looking for, reading or buying on the Internet without the consent of the users. This data extraction is the basis for the billion-dollar business of Google, Facebook and Co. with advertising that is individually tailored to the individual consumer. Such a ban would be necessary if only because these targeted advertisements are also used on a large scale to manipulate voters. This was revealed by my colleague Carole Cadwalladr - a real heroine of our guild - with her reports on the scandal surrounding the Facebook data and the Cambridge Analytica company. [2] Without the intervention of this company run by the radical right-wing US billionaire Mercer, the referendum on Brexit would probably have turned out very differently.

But negotiations on the e-privacy directive have been going on for two years. [3] And according to reports, it is once again the federal government that, under the pressure of the digital industry, is resisting the rule that citizens should be asked for permission. Research by the Netzpolitik magazine revealed that the responsible ministers of economics and state secretaries met no fewer than 32 times with representatives from Google, Facebook, the Axel Springer publishing house and the associated associations to stir up a mood against e-privacy. [ 4] This list could go on and on for a long time. The British government helped the financial industry prevent hedge funds and private equity funds from being more strictly regulated, the Dutch government helped the food industry raise fishing quotas against all common sense, and so on and so forth.

It is also to be feared that the “Company Law Package” [5], which is currently being negotiated, will also run like this again. If the lobbyists on the capital side work effectively, then they will find ways and means to turn it into a law to circumvent German co-determination. For such purposes, the corporations and their associations have a unique lobby power in Brussels. The financial industry alone employs around 1,700 lobbyists. That's four for every EU official somehow involved with these issues. That costs the financial industry around 120 million euros a year, around thirty times as much as is available to all trade unions, consumer and environmental organizations together for their lobbying work on this topic in Brussels.

The logic behind these expensive personnel costs is very simple, one of those involved once explained to me. An effective limitation of risks in the financial sector could quickly cost several hundred million euros annually in income. That is why it is always worthwhile to spend the many millions on lawyers, consultants and agencies that throw sand in the gears. Because the delay of such reforms, even if it only succeeds temporarily, is definitely worth it.

Blockade in the EU Council of Ministers

An employee of one of the many lobby companies in Brussels told me how it works in practice. One of the most important tricks is to organize a blocking minority in the EU Council of Ministers. For this it is enough to win one of the big ones like France, Germany or Italy and Poland plus a few smaller countries. Governments are particularly vulnerable in the poorer EU countries. It can be enough to hold out a few investments in order to win a council representative. Of course you can never prove a direct connection. There is nothing in writing. But the voting behavior in the Council sometimes makes very strange leaps. What all these processes have in common is that they are completely opaque to citizens. A democratic, Europe-wide discourse often no longer takes place at all. That is not compatible with the rules of democracy.

And that is by no means just my personal opinion. None other than Emily O'Reilly, the EU's official ombudsman, or ombudsman in EU jargon, sees it exactly the same way: "The way the Council of the EU works undermines the right of citizens to hold their governments accountable," she said one of their carefully researched reports last year. This finds its expression in the “disproportionate secrecy” of the proceedings in the Councils of Ministers and their around 150 working groups. This makes it "practically impossible for citizens to follow the discussion of the national representatives about the legislation," she said. [6]

So it is practically official that Europe's most powerful legislative body violates a central principle of democracy: the duty of open, transparent legislation. Behind this is the unwillingness of national government officials to reveal their respective maneuvers and positions in council bodies to citizens. This also has a very welcome advantage for those in power: When it comes to controversial projects, they can always say “Brussels is to blame”, even if they themselves and their own officials were involved. But it is precisely this that continually undermines the trust of the citizens. O‘Reilly put it in a nutshell: "This phenomenon feeds doubts about the democratic legitimacy of the Union and encourages anti-European resentment," she warned. Before the next election, the council should therefore make all its negotiating documents publicly available in order to refute the arguments of the right-wing populists and "reduce the alienation of the citizens". But the Kungler in the European council circles don't give a damn, they simply ignored the demand.

What happens in the councils at least follows the basic rules of the EU treaty. The Court of Auditors controls what the laws bring. Citizens and companies can file a complaint up to the European Court of Justice in Luxembourg. And the EU Parliament at least has a say in legislation, provided that the Council comes to a decision at all. Journalists and interested citizens can follow the legislation at least indirectly.

The Eurogroup - the secret regent

But this does not even apply to a central, perhaps even the most important area of ​​European politics: the monetary union and the regulation of the euro zone. This is because the so-called Euro Group, i.e. the finance ministers of the 19 Euro countries, decides. This is a purely informal body that has no legal basis whatsoever. There are no rules of procedure and no minutes. In the course of the sovereign debt crisis in the southern euro countries and Ireland, it became an anti-democratic monster.

The fault of the euro is to blame. The members share a currency, but they manage their national budgets separately. This is what Article 125.1 of the EU Treaty, also known as the "no assistance" clause, stands for. "The Union is not liable for the obligations of central governments," it says, and the same applies to the member states among themselves. The euro founders, above all Germany's then Chancellor Helmut Kohl, wanted to reassure their critics, who predicted exactly the opposite. That is why there is still no common budget and consequently no common, democratically elected government in the euro zone. But because euro countries operate individually on the capital market, banks and funds can speculate specifically against the more heavily indebted euro countries by driving up the interest rates for the renewal of their government bonds so high that the warning of government bankruptcy becomes a self-fulfilling prophecy .

This is exactly what happened in the spring of 2010 in Greece and shortly afterwards in Ireland, Portugal and Spain. If one of these countries defaulted, Europe's banks would have collapsed again just two years after the Lehman crash. Because they had invested several hundred billion euros there.

In a mixture of panic and amateurism, the rulers of the euro, under the leadership of German Chancellor Angela Merkel, invented an adventurous concept: They decided once more to save the banks, but the citizens shouldn't notice. To this end, they founded a new state bank, which they called the “European Stabilization Mechanism” or ESM for short. In addition, they guaranteed the affected states 400 billion euros in emergency loans to pay off the creditors. But Merkel and her colleagues unceremoniously declared the creditors' ransom as “solidarity” and “salvation”. And although all governments and investors of all euro countries were jointly responsible for the misery, they left the crisis countries alone with the entire debt burden. That was a strategic mistake and the worst attack on the European project since the founding of the EEC. [7]

In the legal no man's land beyond democracy

Without any public discourse and without even asking the European Parliament, Euroland got a kind of government in this way: the “Euro Group”. And it resides in the legal no man's land beyond democracy. [8] Neither the state bank ESM nor the euro finance ministers and their troika of officials from the ECB, the IMF and the Commission are accountable to any parliament. There are no public minutes of their meetings and even terrible mistakes such as the brutal shrinking of the Greek health service [9] have no consequences for those responsible.And even when it came to crooked deals that smelled of corruption, no prosecutor could investigate. The officials involved enjoy diplomatic immunity.

It is true that all national parliaments had to approve the respective loan programs. But they could always only say yes or no. They could not change the policy prescribed by the programs. The philosopher and renowned pioneer of European unification, Jürgen Habermas, called this regime "post-democratic executive federalism". [10]

Ministers and EU officials make decisions about the lives of millions without having to campaign for a majority among the affected voters. And with the right of the stronger, the creditors, led by the federal government and the then Finance Minister Wolfgang Schäuble, made the balance of the state budget the top priority. The Eurogroup and its Troicans do not feel responsible for combating unemployment and hardship.

Since then, the euro regime has produced the opposite of the original intention: instead of uniting the “peoples of Europe” into an “ever closer union”, as the EU treaty promises, it incites them against one another. In the crisis countries, people see themselves trapped in a forced vicious circle of austerity and recession. In the creditor countries, on the other hand, the citizens rebel against the use of their tax money for states whose economic misery they consider to be their own fault.

And no credible authority is available to explain what is obvious: everyone together caused the undesirable development and only together can they overcome it. Instead, the ministers and the officials authorized by them execute the law of the strongest in a democracy-free area, that is, the creditors against the debtors and the surplus against the deficit countries.

This goes hand in hand with the definition of the entire monetary union on an untenable economic model: All member countries should follow the German model, i.e. lower wages, increase exports and cut government spending. But that only worked in Germany's crisis years because the other euro countries didn't do it that way and - based on loans from Germany - fueled the German economy with their imports. Applied to the entire Union, however, this leads to a race to the bottom and forces the weaker countries into stagnation due to a lack of demand.

Italy - the political time bomb for the euro

This makes Italy in particular a political time bomb for the euro. For ten years, interrupted only by the two years after the bank crash, the local governments have stuck to the deficit rule. But there was a lack of funds for urgently needed investments in education, science and technology, without which the country falls further and further behind - and the EU cannot offer effective aid due to insufficient budgets. No wonder then that the citizens rebelled against the perceived dictate from Berlin and elected the unpredictable rebels of the five-star movement and the right-wing extremist Lega party into government.

Jürgen Habermas recognizes the pattern for the whole of Europe: "The real disappointment that the EU in its current state lacks the ability to act to counter growing social inequality within and between the member states is the underlying cause of the political regression", he wrote. "Right-wing populism is primarily due to the widespread perception that the EU lacks the political will to take action." [11]

And further: a “European Union capable of acting would be the only conceivable force against the further destruction of our much-invoked social model”, he warns. To this end, it "must be equipped with competencies and budgetary resources to intervene to prevent the member states from drifting apart," he demanded. [12] Only in this way could “the economically and politically strongest members keep the broken promise of the common currency for convergent economic developments”.

That sounds apparently utopian. But for a few months in 2017 it looked like this vision could come true. Because with Emmanuel Macron, a president appeared on the European stage in France like never before. He is the first EU top politician to openly admit that the lack of democracy and the lack of a central body capable of acting are a threat to the European project. To explain this, he even made a special trip to Athens to give a revolutionary speech at the place where democracy was invented.

I have to admit, I loved it. Many citizens turned away from European unification "because they were not heard," he said there. “That is why we Europeans must have the courage to find the path to democracy again”, and that “not with technocrats” who negotiate contracts “secretly in the back room”. Instead, like Habermas, he demanded a budget for the euro zone of "several percent of economic output", in other words a multiple of the current EU budget, so that it can counteract future economic crises on its own. To this end, a European finance minister and a Eurozone parliament would have to be elected, "in order to establish democratic accountability," he demanded. No less a person than the French president confirms the anti-democratic character of the previous euro regime.

But as rousing as Macron was promoting “the re-establishment” of Europe, Chancellor Merkel and her social democratic co-rulers rejected all of his plans just as narrowly. They only want to support an additional budget for investments of symbolic size. Worse still, Merkel and her supporters even pushed through that crisis management in the euro zone should continue to be the responsibility of the unelected technocrats of the euro loan fund ESM, who are not accountable to any parliament. Nothing should change in the constitution of the euro.

But don't we have a European Parliament? Wouldn't it be the foremost task of elected parliamentarians to defend the fundamental democratic rights of their voters? Couldn't they simply force governments in Europe to obey the rules that are taken for granted at home?

Yes, they could. They always have the formal power to do so. Eventually, they could block the budget. But they don't want that at all, at least not the majority - and that reveals the whole sad truth about this Parliament. Because that's not really European at all. Rather, it is an assembly of the delegates from the national parties, who are also only elected nationally. And as such, the majority ultimately only act as an extension of the ruling parties in their home countries. And even then, if they are simply sidelined with all the arrogance of power by Merkel and her colleagues, as happened in the euro crisis. A parliament that actually sees itself as the representative of all EU citizens would never have allowed that.

It would have prevented people from dying in Greece because there were no longer any drugs or doctors. This is exactly what the lenders troika had ordered when they cut public health in half. But only the Greek MPs have to answer to their citizens for this. All alleged Europeans in Parliament do not have to answer for it.

Instead, they enjoy the fact that they are allowed to have a say in legislation, but also preferably in camera. Because if you negotiate with the Council, it happens in the so-called trialogue, where no journalist and no ordinary citizen is allowed to listen.

From Europe as a matter of negotiation to the neoliberal agenda

If you look at all of this together, you come to a dismaying conclusion: no country that is structured like the EU and the euro zone could ever become a member of this union itself. “So what?” You might be thinking now. The EU is not a federal state, just a federation of states that has shared institutions. And the citizens supposedly do not want it any other way. Calling for the United States of Europe does not win an election. As a result, governments just have to pull themselves together somehow. And that wasn't a big problem in the first three decades of the European Community either. Most of the national economies were organized nationally. The governments could rule each for themselves as they and their constituents wanted. And the common affairs had to be negotiated.

But this idea has nothing to do with today's Europe, nothing at all. The radical market reforms of the 1990s fundamentally changed that: namely, the European single market from 1993 and then from 1999 the monetary union and the euro. As a result, the economies are now very closely intertwined. Not only the big corporations, but almost all companies are involved in some form in European supply chains and sales organizations. "Made in Germany" or "Made in Italy" is best for marketing. It has nothing to do with real life. However, this economic merger has radical political consequences: All laws and rules for the manufacture of and trade in goods must apply across the EU and must consequently also be enacted across the EU. Regardless of whether it is about the registration of cars, the packaging of food or the sale of securities, whether it concerns baby diapers, pesticides or the working conditions of truck drivers - the nation states can no longer regulate any of these on their own. This means that the vast majority of the legislation, which is decisive for the everyday life of consumers and employees, does not take place in the national parliaments, but at the EU level.

Certainly, all of this has been known for some time. But since the neo-nationalists have been up to mischief in Europe, this has to be explained over and over again. We are at the mercy of each other in this integrated Europe, whether we like it or not. Returning to the nation state is not a realistic option. That is exactly the central lesson of the seemingly endless dispute over Brexit. The attempt to dissolve economic integration is like a U-turn on the motorway. Yes, it is technically possible, but the price is unaffordable.

Why then are our governments sticking so firmly to the previous system? Why do they just keep going when it is obviously undemocratic and completely ineffective?

I think there is only one answer to that: the national apparatuses and their zampanos do not want to give up their power and prefer to continue to negotiate everything among themselves. But with that they are only constantly working into the hands of right-wing populists. Because that's how they feed a poisonous illusion. The illusion that one can enforce the respective national interest at the expense of the other.

In fact, this narrow-minded adherence to the outdated model only provides the anti-Europeans with their strongest argument: in this Europe we citizens have nothing to say. That is also behind Brexit: The slogan “Take back control” actually arises from a deeply democratic impulse that has only been maliciously abused.

That is why: Anyone who really wants Europe to remain peaceful and assert itself in the world must fight for European legislation to finally be democratized in such a way that citizens can understand and accept the EU and its institutions.

That would mean: the transfer of the Eurogroup and the ESM into regular institutions of the European Union; real European elections according to the principle - one man, one vote - with Europe-wide lists of candidates, as Macron has proposed; the election of the EU Commission by parliament - regardless of the national origin of the candidates; and the right of initiative for Parliament, which means that Members must also be able to propose laws.

All of this seems utopian at the moment. But it has to go in this direction if we want to prevent Europe from returning to national madness. And even if there is still a long way to go before such a new constitution for the EU, the most important prerequisite for this could now be enforced immediately and without changing the EU Treaty, if only enough pressure were made for it: The secret legislation in the Council and the Eurogroup must definitely come to an end. Because without transparency, democracy is impossible.

Immanuel Kant once wrote: “All actions related to the rights of other people, the maxim of which is incompatible with publicity, are wrong. Because a maxim that must be kept a secret, and to which I cannot publicly admit, without thereby stimulating everyone's resistance to my resolution, cannot have this counter-processing of everyone against me anywhere else than the injustice with which it threatens everyone. "[13]

That is just as true today as it was 224 years ago.

The article is based on a lecture the author gave on February 27 at the conference "Europe, where is codetermination?" Of the Hans Böckler Foundation and IG BCE in Brussels.

[1] See the full report: Initiative Corporate Europe Observatory, Captured states. When EU governments are a channel for corporate interests. The power of lobbies, https://corporate-europe.org, 6.2.2019.

[2] See Carole Cadwalladr, The great British Brexit robbery: how our democracy was hijacked, in: “The Guardian”, 7.5.2017.

[4] See Ingo Dachwitz, Altmaier, Bär and Braun: The government prefers to talk to industry about data protection, www.netzpolitik.org, December 21, 2018.

[5] See: Martin Feldmann, corporate law package, protection of employees in the event of a relocation is regulated, www.mitbestimmen.de, July 24, 2018.

[6] Emily O’Reilly, Recommendation of the European Ombudsman in case 01/2/2017 / TE on the Transparency of the Council legislative process, www.ombudsman.europa.eu, 9.2.2018.

[7] See also the arte / ARD film “Power without control - the Troika”.

[9] See David Stuckler and Sanjay Basu, Greece as an example. How the EU austerity policy ruins a health system, in: "Blätter", 5/2014, pp. 59-71.

[10] Jürgen Habermas, On the Constitution of Europe, Frankfurt a. M. 2011.

[11] See Harald Schumann, Europe in Crisis: The German Irrweg, in: “Der Tagesspiegel”, April 14, 2013.

[12] Jürgen Habermas, Where is the pro-European left ?, in: “Blätter”, 12/2018, pp. 41-46.

[13] Immanuel Kant, For Eternal Peace, Kant-W Vol. 11, p. 245.