Sovereignty and Integration

13 may 2007

Timofey Bordachev - Director of the Center for Comprehensive European and International Studies at the National Research University–Higher School of Economics, and Director of the Eurasian Program at the Valdai Club Foundation. He holds a Doctorate in Political Science.

Resume: The main lesson from the past 50 years of European history shows that a nation’s involvement in the ongoing integration process does not necessarily cause it to lose its sovereignty. However, the next few decades may prove that a country outside the integration process that declares its sovereignty can in effect lose these rights.

The main lesson from the past 50 years of European history shows that a nation’s involvement in the ongoing integration process does not necessarily cause it to lose its sovereignty. However, the next few decades may prove that a country outside the integration process that declares its sovereignty can in effect lose these rights.

ARE THE EU NATIONS SOVEREIGN STATES?

One of the established myths about the European integration is that a nation must surrender part of its national sovereignty before it may join the group of Old World countries. The popularity of this fallacy stems primarily from the fact that it has become almost a clich? widely used by interested parties on either side of the EU borders.

Officials at the European Commission say that the delegation of part of sovereignty to Brussels is needed to conduct negotiations with external (non-EU) partners, even though the Commission oftentimes lacks corresponding competences. For their part, national governments complain about the purported loss of sovereign rights (“Brussels has decided”) in order to show their voters that they are not responsible for certain unpopular measures. Also, this myth is often used as an explanation why a particular European capital is unable to help an external “strategic partner” tackle particularly delicate issues. Meanwhile, the threat of the allegedly omnipotent euro-bureaucracy, which regulates everything from the diameter of cucumbers to the proportion of zinc in nails – serves as an excuse to evade any discussion with outside strategic partners over the basic aspects of their relations.

Reality, however, is far more complex. An analysis of modern European politics shows that all EU member countries, without exception, retain their sovereign rights in all major areas of political and economic life. The protection of borders with EU neighbors, national defense, energy relations, justice and home affairs, migration policy, and education – all of these areas remain within the exclusive jurisdiction of the national authorities. Other key areas, such as social policy and regulation of the labor market (i.e., the entire social sector), also fall under the complete jurisdiction of national governments. In fact, this national empowerment of the EU nations remains the main impediment to the implementation of some pressing reforms. The lack of such reforms largely impedes progress in implementing the Lisbon Strategy – a plan that was to make the EU the world’s most dynamic economy by 2010.

Even in foreign trade – an area that is purportedly subject to EU regulation to the maximum degree possible – Brussels is unable to take a single step without the consent of the individual EU member states. Even though the national governments say they have completely delegated the powers to regulate foreign trade relations to the supranational level, they retain every right to block any moves by Brussels that could put them at a disadvantage. Under Article 133 of the EU Treaty, the Commission’s authority to approve foreign trade agreements is formalized in a mandate from the Council of the European Union, which lays down detailed parameters for the passage of documents. But even after this formality, Brussels officials must constantly report on the status and substance of their talks with the special intergovernmental Article 133 Committee, which was established by the member states, before carrying out any new directives from the EU Council.
A case in point is the Doha Round of WTO negotiations. Formally, the European Commission, as represented by Trade Commissioner Peter Mandelson, conducts negotiations on behalf of the EU. But the approval of the outcome of these negotiations and EC powers is left to the discretion of member countries, which was stated in no uncertain terms by the French president in the spring of 2005.

Paul Magnette, director of the Institute of European Studies in Brussels, says that of the four principal functions of a modern state – territorial protection, national identity, domestic politics, and market regulation – only the last function is affected by the so-called supranational regulation from Brussels. But even in this case, economic rules are established as a result of the drawn-out and tortuous bargaining of national interests, political lineups and positions of lobbying groups. Only the common agricultural policy, economic and social cohesion and research have a budget redistributive impact, which does not exceed 3 percent of the GDP for countries which benefit the most from the community budget.

Furthermore, Alan Milword, a UK researcher, correctly points out that full-fledged EU membership has until recently been the strongest guarantee of the European states’ global role, which expanded the capabilities of individual member states. Member states of the Group of Six (Belgium, Germany, Italy, Luxembourg, the Netherlands, and France), which signed the Treaty of Rome in 1957, had emerged from World War II in a state of virtual collapse. By the end of the 1950s, three founding members of the European Community (Belgium, the Netherlands, and France) had either already lost their overseas territories or, amid massive protests throughout the world, were still waging colonial wars for the remains of their former empires. Meanwhile, their partners, Germany and Italy, who had suffered a defeat in the war, received a unique opportunity to rehabilitate themselves, acquiring (thanks to Common Market institutions and policies) international clout over and above their capabilities at that time.

In initiating the integration project, the West European nations had not even theoretically pondered ceding a part of their state sovereignty. This is why the basic concept of European integration posits cooperation and pooling of sovereignties, designed to achieve a substantial synergetic effect. Also, participation in the integration project provides economic and financial clout that goes far beyond national boundaries.

But national bureaucracies, operating within the framework of this cooperation, not only ensure direct material benefits for their countries, but also stimulate the political maturation of the elites and the perfection of foreign and economic activities by each state. The EU’s apparently complex decision-making mechanisms help all participants to master and hone their skills in looking after their own interests. The EU is the unchallenged leader among all other international organizations and political systems in terms of the intensity of debate and the web of intrigue that it spins. At the same time, each EU member follows not so much the established European practice, as national specifics. 

According to Eurobarometer, a regular survey of public opinion that has been conducted by the European Commission in the fall of 2004, 42 percent of EU residents say they have never identified themselves with Europe as a whole, saying that they remain citizens of their own state. Another 37 percent say they occasionally have a sense of European identity, while just 7 percent consider themselves to be, above all, Europeans, followed by the citizenship of their respective countries. The poll also shows that 53 percent of Europeans are certain that EU membership is advantageous to their countries.

These figures provide a fine comment on the main goal of the integration process, which is the pooling of efforts in the interest of making each individual state more viable and competitive. Therefore, European nation-states are the principal beneficiaries of the EU integration project. They remain the sole source of legitimacy, retaining full-fledged sovereignty rights. But their approach toward the use of these rights fundamentally differs from similar practices in other parts of the world.

MINIMALIST ARCHITECTURE

Jacques Delors, who by many is considered to be the most successful president of the European Commission in the entire history of European integration, once called the European Union an “unidentified political object.” Indeed, attempts to classify the institutional basis of the integration process as ‘proto-federation,’ ‘interstate association’ or ‘international regime’ are extremely vulnerable to criticism.

Yet from a practical point of view, this lack of distinctness is an asset rather than a liability. Unsurprisingly, the EU has often been compared to a tale about blind men and an elephant. In one version of the story, a group of blind men (or men in the dark) touch an elephant in order to learn what it is like. Each one touches a different body part, but only one part, such as a flank or a tusk. And each one concludes that the elephant is similar to various things – a wall, snake, spear, tree, fan, or rope – depending upon the spot they touched. Afterwards, they compare notes and discover that they are in complete disagreement over how to describe an elephant. Importantly, in the original story the success of the role played by the elephant is based on the blindness of the men, so it is understandable why the architects of European integration have never welcomed attempts to describe their creation from the perspective of the international relations theory.

Former Secretary of State Henry Kissinger used to lament: “What number do I call when I want to talk to Europe?”  By comparison, our U.S. colleagues do not seem to have this problem anymore: in October 1999, the position of the Secretary General of the Council of the European Union and High Representative for the Common Foreign and Security Policy was established. Today, this position is held by Javier Solana, former secretary general of NATO and one of the most sophisticated diplomats of our times. Nevertheless, the emergence of “Mr. Europe” has introduced few changes to the substantive part of the trans-Atlantic dialog. This is probably just as well, since a partner may still touch the integration elephant and compare it to, for example, Venus.

The modern interest-bargaining system and the related decision-making mechanism are enshrined in the Treaty on the European Union. On February 1992, the heads of state and government of 12 countries signed this document in the Dutch city of Maastricht. This crowned a new stage in the development of European cooperation, initiated in the early 1980s by EU business elites and the European Commission, and led by Jacques Delors. The Maastricht Treaty proclaimed the creation of the European Union, and introduced the Common Foreign and Security Policy, as well as the Common Justice and Home Affairs Policy.

Most importantly, the document introduced an essential new element into the EU structure. Under the provisions of Article 36 of the Treaty, it reads: “In areas which do not fall within its exclusive competence, the Community shall take action, in accordance with the principle of subsidiarity, only if and in so far as the objectives of the proposed action cannot be sufficiently achieved by the Member States and can therefore, by reason of the scale or effects of the proposed action, be better achieved by the Community.” Subsidiarity is the principle which states that matters ought to be handled by the lowest interference from state authority.

It is noteworthy that the idea of subsidiarity occurred to Delors when he was reading one of Pope Pius XI’s encyclicals: “Just as it is wrong to withdraw from the individual and commit to a group what private initiative and effort can accomplish, so too it is an injustice … for a larger and higher association to arrogate to itself functions which can be performed efficiently by smaller and lower associations. This is a fundamental principle…. Of its very nature the true aim of all social activity should be to help members of a social body, and never to destroy or absorb them.”

But even in areas that do fall within its exclusive competence, such as rules of competition, monetary policy, foreign trade and the conservation of the sea bioresources, Brussels does not have the power to independently pass legislation binding on all EU member countries. In all of these areas decisions are made by the EC Council, that is, representatives of the member countries (if not unanimously, at least by a qualified majority) – after extensive consideration and coordination. As is known, 80 percent of laws regulating economic activities in the EU countries bear the “Made in Brussels” stamp. This only means, however, that corresponding decisions were made by national governments at the EU negotiating table. So the allegedly intimidating bureaucratic machine is in fact both a screen and an instrument for the pursuit of national development strategies.

This minimalist architecture for integration was designed when the idea of federalism became popular, that is long before 1991. Fifty years ago, many shared the views of Altiero Spinelli, an Italian advocate of European federalism who is referred to as one of the founding fathers of the European Union. He saw the events in the wartime period of 1939-1945 as evidence that states were unable to guarantee the economic and political security of their citizens.

Nevertheless, the idea of building a European superstate did not have much impact among the majority of the population or political elites. The latter, even though extremely weakened by the war and receiving direct foreign assistance under the Marshall Plan, were not ready to renounce the rights to run their countries.

Artful Jean Monnet, unlike the romantic federalist advocates, was a pragmatist who became the real father of the integration project. He understood the futility of attempting to strip the European states of at least a small portion of their sovereign rights. So he proposed a unique mechanism, enabling the states, on the one hand, to preserve all of their rights, while on the other hand, to receive extra benefits from a synergetic effect. The numerous advantages that the countries received from streamlining and coordinating their economic policies, as well as delegating to Brussels the authority to implement the most unpopular measures, adequately compensated for any perceived losses.

Those extra benefits and solid guarantees for the national governments, which were formulated in the late 1980s by Jacques Delors, became the critical building blocks for a single Europe, the stability of which was undermined only by globalization.

THE LIMITS OF EUROPEANIZATION

The disappearance of the Soviet Union, and with it the Communist system, from the map prompted the doubling of the number of EU member countries in 1995-2004 (from 12 to 25). This increase effectively disabled the mechanism of restraining national elites from pursuing policies that might be destructive for the whole Union. As a result, EU institutions, together with the instruments for bargaining of national interests, began to wane. Today, some moves by individual member states in the field of economics, particularly involving energy policy, are perceived by their EU partners as almost hostile.

But the enlargement of the EU was not the only cause for the crisis. Another problem came in the mid-1990s, when the parties raised extremely high expectations on the integration process. The successful implementation of the Common Market, launched 20 years before, made Europe one of the world’s most prosperous economies. By 2005 (a year that saw the lowest growth rates in Europe), fifteen EU countries accounted for up to 50 percent of the world’s total foreign direct investment. In 2000-05, GDP per capita grew 20 percent, only 1 percent less than in the United States. In 2003, of the world’s 20 largest non-financial companies, thirteen were European.

Eventually, the EU member countries began to expect more from the Union than it could physically deliver. In March 2000, the EU-15 leaders adopted the Lisbon Strategy, aiming to “make Europe, by 2010, the most competitive and the most dynamic knowledge-based economy in the world.” It remained unclear, however, whether the system of cooperation, which was created in the middle of the past century, could ensure success amid global competition. The question becomes even more difficult when we remember that the EU’s inability to compete with the U.S., China or other dynamic players was largely due to European (and still worse, national) protectionism.

In the sphere of international relations, some EU member states were no longer content with the status of “middle-size powers” that was predicated on the “all-European administrative resources.” They wanted the EU to become a superpower that could compete on a nearly equal footing with the U.S. At the same time, the European leaders ignored the fact that before emerging as a global superpower, Europe had to first become a power in the traditional sense of the word – i.e., a single state with a single government, military, police force, etc.

Another serious setback came in the winter of 2002-03 with the failure by France – one of the leading European powers – to mobilize its partners against Washington and its plan to invade Iraq. Despaired of the efficiency of the Common Foreign and Security Policy, Paris was forced to build a rapprochement with Russia, an outside, non-EU force. This decision dealt a crippling blow to relations with the majority of newcomers, as well as France’s confidence about the EU’s effectiveness and functionality.

Another example of how member states see the EU as an instrument for advancing their national interests was its “systemic failure” with respect to Poland’s and the Baltic States’ expectations. In joining the EU, these countries hoped that EU membership would not only ensure them subsidies from the EU budget, but would also help them to stand up to Russia. Thus, in an article published in Cambridge Review of International Affairs (July 2005), Estonian President Toomas Hendrik Ilves suggests that the disagreement between the “East” and “West” of the EU stems from the refusal by the majority of the EU-15 countries to include a tougher approach toward Russia in the EU agenda, which purportedly undermines the rationale behind the newcomers’ involvement in the Common Foreign Policy. Ilves argues that any concessions the EU “seniors” give on the Russia issue would far outweigh the sense of gratitude that the Poles and Baltic nations have for the support that the U.S. gave them during the years of Soviet occupation.

As increasingly ambitious economic and political goals were proclaimed, the EU acquired a new image in the eyes of the public and a substantial part of the elites. However, following a 10-year application of the “stick and carrot” policy based on strict adherence to the Copenhagen criteria for EU membership, together with incentives for the most successful post-Communist candidate members, the EU has emerged as an odd combination of an elite club and charity organization.

The main concern of the European Commission, the body in charge of membership criteria (sticks and carrots), is that the aid given to the candidate nations would not simply disappear, but would be spent on building an image befitting a member of an elite club. Thus, the Commission ceased being a political body, responsible for coordinating cooperation between the member states and facilitating the advancement of their interests on the technical level. Instead, it turned into something resembling a self-important chief accountant at a big state enterprise seeking to address global policy-making issues from the position of a low-level bureaucrat.

However, the EU is not an exclusive charity fund, but an association of states designed to attain their goals and protect their national interests. The difficulties that the organization is facing were not caused by the purported disruption of its homogeneity. As a matter of fact, European homogeneity has never existed. The political culture, traditions, and the level of socio-economic development of Greece, the Netherlands or southern parts of Italy, for example, have always been different. But this situation has never prevented them from successfully cooperating within a single Europe. 

Today, the real problem confronting the European states is the declining effectiveness of EU institutions and their inability to perform their missions as stated by their founders. Richard Leming, a member of the Union of European Federalists Executive Bureau, points out that it is exactly the unreformed EU institutions that are the main impediment to the implementation of common policies designed to raise the living standards in the EU member states.

A NO-RETURN POINT

European integration, since 1992 represented on the political and legal level by the European Union, has entered a crucial state in its development. The systemic crisis, proven by the failure to ratify the EU Constitution Treaty during national referendums in France and the Netherlands (May-June 2005), highlighted the poor state of the mechanisms necessary for interest bargaining and protecting the sovereign rights of the EU member states. As a result, there developed a common feeling that the benefits of EU membership are shrinking and the entire European project is losing sense.

The EU can only overcome this crisis by reforming its common institutions and decision-making procedures by adjusting them to the largest possible number of interested parties. In so doing, it is crucial not to violate the basic principle of supra-national cooperation between the sovereign states.

It is quite likely that in the medium term, a single Europe will transform into a more flexible trade and economic association, with elements of political cooperation between individual countries or groups of countries.

But even with a purely interstate form of integration, the existing instruments for strengthening the EU member states’ positions in the world will continue to be relevant. This applies primarily to a common trade policy and creation – within the framework of this policy – of  international trading regimes beneficial to European economies.

Today, needless to say, interest bargaining has become far more complex as the existing mechanisms for cooperation have declined: consider Poland’s veto of the EU Council’s proposal to open negotiations with Moscow concerning a new EU-Russia treaty.

Nevertheless, the EU’s flexibility enables Brussels to conduct foreign trade negotiations (including the formation of a free trade zone) without a comprehensive political mandate. In doing so the European Commission will proceed from the EU’s foreign economic strategy (Article 133 of the Treaty) agreed upon by all member states.

The main principle of Europe’s Neighborhood Policy, which – according to the Priorities of Germany’s EU Presidency – includes Russia, among others, is economic rapprochement between countries located along the perimeter of EU borders, with a common EU market, by opening up their markets and de facto extending EU norms and regulations to their territories. It should be noted that this type of legislation receives approval by EU member countries via EU internal procedures that exclude even an advisory (consultative) role for outside partners.

In any European integration scenario, EU neighbors, including Russia, Turkey and Ukraine, are confronted with a strategic choice between independent development within a single Europe, or dependent status outside it. From every indication, both Ankara and Kiev understand that the latter scenario is preferable to the majority of EU countries.

Nevertheless, both the Ukrainian and Turkish elites keep the issue of EU membership on the agenda. After all, insofar as Europe will imminently become a priority in their foreign economic and political relations, state sovereignty and independence can only be preserved through formal participation in the European harmonization-of-interests process. Otherwise, the formula that neighbors will “share everything but institutions” (proposed by former EC President Romano Prodi back in 2003) could become a reality.

Russia’s situation is somewhat different. Judging by the majority of its political statements, Moscow is committed to staying out of the European integration project. At the same time, the Road Map for the Common Economic Space, adopted at the EU-Russia Summit in May 2005, highlights the need for the harmonization of laws.

It is quite possible that the Road Map will serve as a basis for a future strategic partnership treaty or agreement between the RF and the EU, replacing the 1997 Partnership and Cooperation Agreement. A considerable part of Russia’s political establishment and expert community believe that Russia’s gradual integration into Europe – without a formal accession to the EU – is a promising idea. Meanwhile, domestic business circles embrace both these plans and proposals for creating a free trade zone.

Such a position is largely justified. Compared to the distant United States or the ever-inscrutable China, historically and culturally close Europe is by far the most natural partner for Russia. Despite all of Moscow’s statements about its intention to expand economic cooperation with Asia, the EU’s share in Russia’s foreign trade, which has already exceeded 50 percent, shows no sign of declining. The European market remains by far the most attractive in terms of return on investment and protection of foreign companies’ rights.

At the same time, the EU guideline for the integration of neighboring countries without granting them a decision-making role (and the EU cannot offer Russia anything else today) necessitates a certain measure of caution with respect to plans for the mutual opening up of markets.

It would be much more expedient for Russia to restore the balance between the political, economic, and legal components of these relations. The relations between the EU and the U.S., devoid of any integrationist ambitions, show that the harmonization of laws and complete opening of markets is not an indispensable precondition for constructive cooperation in the political or economic area.

In the future, Russia may consider formal accession to an integration project that will replace the EU after it overcomes its present stagnation. Especially since a way out of this stagnation will most likely be found along traditional lines (Monnet’s functionalism and Delors’ subsidiarity) – by providing states additional guarantees of sovereignty rights and promoting new mechanisms of close cooperation.

Last updated 13 may 2007, 14:15

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