Wednesday, 7 December 2011

Why the Eurozone crisis may bring about a more democratic Europe

While everyone talks about the Eurocrisis and the economic woes of some countries in the Eurozone, the need to forge a closer fiscal union between Eurocountries may in fact bring about some much desired movement in another area as well: Europe's democratic deficit. 
Over the last decades, the democratic deficit has mainly been a topic for academics and disgruntled Eurosceptics. Yet the problem is real and has always had the potential to undermine the entire European project. As Europe grew closer together and transferred some powers to Brussels, it was never quite clear how to ensure that Brussels' bureaucrats were held to account for what they did. A result of this has been that auditors have refused to sign off the books of the European Commission for the last 13 years. This may sound like an obscure argument but it goes to the heart of budgetary responsibility and democracy. 
In effect, the European Commission has been spending taxpayers money (contributions from European nation-states) without having to say HOW it spent it. Since the European parliament is at best a 'quasselbude' (a place to chatter), the European Commission has also not been held accountable by the elected politicians we sent to Brussels. 
The overall effect is complete impunity for budgetary decisions by the European Commission and Brussels' bureaucrats. This is no small feat in the history of democracy. The European Commission must be the first quango in history that can spend taxpayers money without ever being held to account. 
This may all change now. Why? Pretty much everyone is agreed that the Eurocrisis needs closer fiscal co-operation. Part of that co-operation is supervision of fiscal rectitude in countries that run a deficit and require a bailout such as Greece, Italy, Ireland, Spain and Portugal. 
The obvious choice would be to select those to monitor budgetary responsibility of bailed out countries who pay the bill: the Germans or the IMF. Yet, this is politically impossible. No Italian or Irish government would permit German civil servants to scrutinise the national budget. It would also raise some serious questions about the accountability of those governments to their own electorate. 
The proposal that is emerging instead is that the European Commission or a newly created body in Brussels will take up this task. This brings us back to the democratic deficit. Any monitoring of national budgets in Brussels will require robust democratic legitimacy. So as European leaders muddle through the economic crisis and try to devise a reliable mechanism for budgetary discipline and independent supervision, we may just see some significant progress on creating more democratic European institutions as well. Let's keep fingers crossed, for our sake and for the sake of Europe. 

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