Abstract
We analyse the politics surrounding the proposal to create a super-commissioner with exclusive powers to veto national budgets in the European Union (EU). According to liberal institutionalism and liberal inter-governmentalism, there should be no need for a super-commissioner to enforce inter-governmental agreements, because the European Commission (the Commission) is already doing this. So, is the super-commissioner superfluous, or is the theory wrong? To answer this question, we build an analytic narrative aimed at clarifying who wanted what and why, and at explaining how a relatively small coalition of northern creditor-nation governments almost succeeded in amending the EU’s core constitutional principle of executive-level collegiality by threatening to select an altogether different institution. Our findings bear significance not only for current policy debates, but also for our appreciation of the institutional equilibria that sustain the EU, and on the theory of institutional change in international organizations.
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Notes
Initially, neither the exact nature of these powers nor their exclusive character was clearly defined – see Helsingin Sanomat 27 October 2011.
Although Moravcsik (1998, pp. 73–77) joins liberal institutionalists in arguing that national governments delegate powers to supranational institutions to establish the credibility of their mutual commitments, he is himself an inter-governmentalist.
In the text we refer to 53 newspaper articles and six interviews, whose exact title/details can be found on the first author’s webpage. Other newspapers, such as the United Kingdom’s The Guardian, Finland’s Helsingin Sanomat, Germany’s Der Spiegel and Greece’s To Vima, were searched less systematically for reasons pertaining to time and financial resources. A pre-sample that also included those newspapers showed, however, that our final sample does not yield different results.
Countries with a triple-A creditor status can borrow funds in financial markets at preferential (that is, less expensive) rates. That renders the service of their debt, and the payment of civil service wages and pensions cheaper, thus freeing funds for much-needed social programmes. The proximity of the French presidential elections thus made President Sarkozy particularly sensitive to a downgrading.
In our experience, southern Europeans are always impressed by the three meanings of the word schuld/Schuld (debt, but also guilt and fault) in the Dutch and German languages. Apparently, this lent itself to many jokes among northern Finance ministries officials and Commission officials, particularly regarding the alleged untrustworthiness of Italian Prime Minister Silvio Berlusconi – see also The Economist 9 June 2011.
Note the use of the singular ‘I’, as opposed to the more diplomatic ‘we’, or the more common (and legally sanctioned) term ‘the Commission’.
Even among the creditor nations, some segments of opinion were clearly against the method used to create a super-commissioner. On 27 October, the editorial of Helsingin Sanomat likened the procedure to ‘dictatorship; a fascist way of governance’.
Stepping outside the EU framework to find a solution was an idea that was gaining increasing currency at the time (see European Central Bank, 2011; The Economist 11 August 2012; Der Spiegel 12 December 2011). Admittedly, different people interpreted this in different ways, ranging from a reform of the EU treaties in an inter-governmental direction, to the creation of a two-speed Europe (possibly forcing some countries out of the Eurozone), to the negotiation of an altogether different institutional format. The important thing here is that all these solutions worked against the interest of the European Commission.
On 30 December 2012, the yield of the 10-year Italian government bonds was 7.10 per cent, whereas that of the respective German ones was 1.83 per cent – which amounts to a spread of 527 basis points. Source: bloomberg.com, accessed 7 April 2013.
Ten-year Spanish bonds’ yield was 4.9 per cent on 2 March and hit 7.5 per cent on 23 July. Source: bloomberg.com, accessed 7 April 2013.
More specifically, the proposal was not well received by a majority of commissioners, including President Barroso. A minority of commissioners did support the proposal, either because they directly benefited from it, or because they may have thought they might come to benefit from it in the future (interviews with Commission officials 22 November 2012 and 23 November 2012).
‘And, believe me, it will be enough’, he added. Speech by Mario Draghi, President of the European Central Bank at the Global Investment Conference in London, 26 July 2012, http://www.ecb.int/press/key/date/2012/html/sp120726.en.html.
By definition, every decision taken by a state in a veto player environment must conform to veto players theory. That is, it can always be said that a country that accepts a certain proposal does so because it finds it more suitable than any other alternative. However, what we want to stress is that, in a situation marked by urgency and pressure, recognizing and assessing alternatives can be so demanding that the final decision may not necessarily be the one that makes the country better off. Especially when some countries’ beliefs change quickly, it becomes difficult to attribute such change only to rational evaluation – as veto players theory posits.
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Karagiannis, Y., Guidi, M. Institutional change and continuity in the European Union: The super-commissioner saga. Acta Polit 49, 174–195 (2014). https://doi.org/10.1057/ap.2013.21
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DOI: https://doi.org/10.1057/ap.2013.21